Note 1. Background Information
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Upexi is a multi-faceted brand owner with established brands in health, wellness, pet, beauty, and other growing markets.\u00a0 We operate in emerging industries with high growth trends and look to drive organic growth of our current brands.\u00a0 We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into. The growth of our current customer database has been key to the year-over-year gains in sales and profits. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies. We utilize our in-house SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands.
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Upexi, Inc. (the \u201cCompany\u201d) is a Nevada corporation with fourteen active subsidiaries through which the Company primarily conducts its business.\u00a0 The Company\u2019s fourteen active subsidiaries are as follows:
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\u00a0 | \u2610 | HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company | ||
\u00a0 | \u00a0 | o | SWCH, LLC, a Delaware limited liability company | |
\u00a0 | \u00a0 | o | Cresco Management, LLC, a California limited liability company | |
\u00a0 | \u2610\u00a0 | Trunano Labs, Inc., a Nevada corporation | ||
\u00a0 | \u2610 | MW Products, Inc., a Nevada corporation | ||
\u00a0 | \u2610 | Upexi Holding, LLC, a Delaware limited liability company | ||
\u00a0 | \u00a0 | o | Upexi Pet Products, LLC, a Delaware limited liability company | |
\u00a0 | \u2610 | VitaMedica, Inc., a Nevada corporation | ||
\u00a0 | \u2610 | Upexi Enterprise, LLC, a Delaware limited liability company | ||
\u00a0 | \u00a0 | o | Upexi Property & Assets, LLC, a Delaware limited liability company | |
\u00a0 | \u00a0 | \u00a0 | \u25a0 | Upexi 17129 Florida, LLC, a Delaware limited liability company |
\u00a0 | \u00a0 | o | E-Core Technology, Inc. | |
\u00a0 | \u00a0 | o | Upexi Distribution Management LLC, a Delaware limited liability company | |
\u00a0 | \u2610 | Cygnet Online, LLC (\u201cCygnet\u201d), a Delaware limited liability company. |
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In addition, the Company has four wholly owned subsidiaries that had no activity during the three and six months ended December 31, 2023 and December 31, 2022, respectively.
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\u00a0 | \u00b7 | Steam Distribution, LLC, a California limited liability company |
\u00a0 | \u00b7 | One Hit Wonder, Inc., a California corporation |
\u00a0 | \u00b7 | One Hit Wonder Holdings, LLC, a California limited liability company |
\u00a0 | \u00b7 | Vape Estate, Inc., a Nevada Corporation |
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Our products are distributed in the United States of America and internationally through multiple entities and managed through our locations in Florida, California, and Nevada.
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Upexi operates from our corporate location in Tampa, Florida where direct to consumer and Amazon sales are driven by on-site and remote teams for all brands. The Tampa location also supports all the other locations with accounting, corporate oversight, day-to-day finances, business development and operational management operating from this location.\u00a0
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VitaMedica operates mainly from our California location with product development and day-to-day management with the primary fulfillment center located in Tampa Florida.\u00a0
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Cygnet Online operates from our South Florida location with a full on-site GMP warehouse and distribution center, day to day operations of our Amazon liquidation business team from this location with support of remote team members.
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Lucky Tail operates from our Clearwater, Florida location with sales and marketing driven by on-site and remote teams that operate the Amazon sales strategy and daily business operations.
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HAVZ, LLC, d/b/a/ Steam Wholesale operates manufacturing and/or distribution centers in Henderson, Nevada supporting our health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations. We have continued to manage these operations with corporate focus on larger opportunities that have warranted the majority of corporate focus and investments for the future.
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Business Acquisitions
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On April 1, 2022, the Company entered into a securities purchase agreement with a single investor to acquire 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability corporation. The agreement also enables the Company to purchase the remaining 45% over the following two years. On September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500,000 cash, 90,909 shares of the Company\u2019s common stock and a $300,000 cash payment due on September 1, 2024.\u00a0\u00a0
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On August 12, 2022, the Company entered into an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (\u201cLuckyTail\u201d), pursuant to which the Company acquired substantially all \u00a0the assets of LuckyTail. LuckyTail sells pet nail grinders and other pet products through various sales channels including some international sales channels.\u00a0
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On October 31, 2022, the Company and its wholly owned subsidiary Upexi Enterprise, LLC, entered into a securities purchase agreement to purchase the outstanding stock of E-Core Technology, Inc. d/b/a New England Technology, Inc. (\u201cE-Core\u201d), a\u00a0Florida\u00a0corporation.\u00a0 E-Core distributes non-owned branded products to national retail distributors and has branded products in the toy industry that E-Core sells direct to consumers through online sales channels and sells to national retail distributors.\u00a0
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Business Divested
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On October 26, 2022, the Company entered into a membership interest purchase agreement to sell 100% of the membership interests of Infusionz LLC, a Colorado limited liability company (\u201cInfusionz\u201d), included in the sale was all the rights to Infusionz brands and the manufacturing of certain private label business.\u00a0\u00a0 Infusionz was originally purchased by the Company in July of 2020.\u00a0 The divestiture of Infusionz and related private label manufacturing represents a strategic shift in our operations and will allow us to become a predominantly product distribution focused company for both our Company owned brands and non-owned brands. As a result, the results of the business were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for all periods presented.
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On August 31, 2023, Upexi, Inc. (the \u201cCompany\u201d) entered into an Equity Interest Purchase Agreement (\u201cEIPA\u201d) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the \u201cInterests\u201d) of its wholly owned subsidiary Interactive Offers, LLC (\u201cInteractive\u201d) to Amplifyir Inc. (the \u201cBuyer\u201d). The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one- half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing.\u00a0 Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented.
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Basis of Presentation and Principles of Consolidation
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The Company\u2019s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (\u201cGAAP\u201d). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of December 31, 2023, and June 30, 2023.
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In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.
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Discontinued Operations
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A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographic area of options and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations.\u00a0 In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities, and activity of Infusionz and certain manufacturing business have been reclassified as discontinued operations for all periods presented.\u00a0
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Fair Value of Financial Instruments
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ASC Topic 820,\u00a0Fair Value Measurement\u00a0(\u201cASC 820\u201d), establishes a fair value hierarchy for instruments measured at fair value that distinguished between assumptions based on market data (observable inputs) and the Company\u2019s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company\u2019s assumption about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
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ASC 820 identified fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 established a three-tier fair value hierarchy that distinguishes between the following:
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Level\u00a01\u2014Quoted market prices (unadjusted) in active markets for identical assets or liabilities.
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Level\u00a02\u2014Inputs other than quoted prices included within Level\u00a01 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.
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Level\u00a03\u2014Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use.
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To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level\u00a03. A financial instrument\u2019s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
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The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature.\u00a0 For the three months ended September 30, 2022, management believed it necessary to record a reserve against the debt and equity instruments obtained in the sale of Infusionz of $8,500,000.
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Reclassification
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Certain reclassifications have been made to the condensed consolidated financial statements as of and for the three and six months ended December 31, 2023, and for the three and six month periods ended December 31, 2022 to conform to the presentation as of and for the three and six months ended December 31, 2023.
"}]},{"name":"rpt:f-487","factDimensions":{"xbrl:concept":"upxi:BusinessAcquisitionPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"On April 1, 2022, the Company entered into a securities purchase agreement with a single investor to acquire 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability corporation. The agreement also enables the Company to purchase the remaining 45% over the following two years. On September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500,000 cash, 90,909 shares of the Company\u2019s common stock and a $300,000 cash payment due on September 1, 2024.\u00a0\u00a0
\u00a0
On August 12, 2022, the Company entered into an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (\u201cLuckyTail\u201d), pursuant to which the Company acquired substantially all \u00a0the assets of LuckyTail. LuckyTail sells pet nail grinders and other pet products through various sales channels including some international sales channels.\u00a0
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On October 31, 2022, the Company and its wholly owned subsidiary Upexi Enterprise, LLC, entered into a securities purchase agreement to purchase the outstanding stock of E-Core Technology, Inc. d/b/a New England Technology, Inc. (\u201cE-Core\u201d), a\u00a0Florida\u00a0corporation.\u00a0 E-Core distributes non-owned branded products to national retail distributors and has branded products in the toy industry that E-Core sells direct to consumers through online sales channels and sells to national retail distributors.\u00a0
"}]},{"name":"rpt:f-488","factDimensions":{"xbrl:concept":"upxi:AgreementDescription","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:BusinessAcquisitionAxis":"upxi:SecuritiesPurchaseAgreementMember"},"factValues":[{"value":"the Company entered into a securities purchase agreement with a single investor to acquire 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability corporation. The agreement also enables the Company to purchase the remaining 45% over the following two years. On September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500,000 cash, 90,909 shares of the Company\u2019s common stock and a $300,000 cash payment due on September 1, 2024"}]},{"name":"rpt:f-489","factDimensions":{"xbrl:concept":"us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:BusinessAcquisitionAxis":"upxi:CygnetOnlineLlcMember"},"factValues":[{"value":"0.55"}]},{"name":"rpt:f-490","factDimensions":{"xbrl:concept":"upxi:BusinessDivestedPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"On October 26, 2022, the Company entered into a membership interest purchase agreement to sell 100% of the membership interests of Infusionz LLC, a Colorado limited liability company (\u201cInfusionz\u201d), included in the sale was all the rights to Infusionz brands and the manufacturing of certain private label business.\u00a0\u00a0 Infusionz was originally purchased by the Company in July of 2020.\u00a0 The divestiture of Infusionz and related private label manufacturing represents a strategic shift in our operations and will allow us to become a predominantly product distribution focused company for both our Company owned brands and non-owned brands. As a result, the results of the business were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for all periods presented.
\u00a0
On August 31, 2023, Upexi, Inc. (the \u201cCompany\u201d) entered into an Equity Interest Purchase Agreement (\u201cEIPA\u201d) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the \u201cInterests\u201d) of its wholly owned subsidiary Interactive Offers, LLC (\u201cInteractive\u201d) to Amplifyir Inc. (the \u201cBuyer\u201d). The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one- half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing.\u00a0 Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented.
"}]},{"name":"rpt:f-491","factDimensions":{"xbrl:concept":"us-gaap:EquityMethodInvestmentOwnershipPercentage","xbrl:period":"2022-10-27T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:InfusionzLLCMember"},"factValues":[{"value":"1"}]},{"name":"rpt:f-492","factDimensions":{"xbrl:concept":"upxi:AgreementDescription","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:PlanNameAxis":"upxi:EquityInterestPurchaseAgreementMember"},"factValues":[{"value":"the Company sold one hundred percent (100%) of the issued and outstanding equity (the \u201cInterests\u201d) of its wholly owned subsidiary Interactive Offers, LLC (\u201cInteractive\u201d) to Amplifyir Inc. (the \u201cBuyer\u201d). The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one- half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing"}]},{"name":"rpt:f-493","factDimensions":{"xbrl:concept":"upxi:BasisOfPresentationAndPrinciplesOfConsolidationPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"The Company\u2019s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (\u201cGAAP\u201d). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of December 31, 2023, and June 30, 2023.
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In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.
"}]},{"name":"rpt:f-494","factDimensions":{"xbrl:concept":"us-gaap:DiscontinuedOperationsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographic area of options and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations.\u00a0 In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities, and activity of Infusionz and certain manufacturing business have been reclassified as discontinued operations for all periods presented.\u00a0
"}]},{"name":"rpt:f-495","factDimensions":{"xbrl:concept":"us-gaap:FairValueOfFinancialInstrumentsPolicy","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"ASC Topic 820,\u00a0Fair Value Measurement\u00a0(\u201cASC 820\u201d), establishes a fair value hierarchy for instruments measured at fair value that distinguished between assumptions based on market data (observable inputs) and the Company\u2019s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company\u2019s assumption about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
\u00a0
ASC 820 identified fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 established a three-tier fair value hierarchy that distinguishes between the following:
\u00a0
Level\u00a01\u2014Quoted market prices (unadjusted) in active markets for identical assets or liabilities.
\u00a0
Level\u00a02\u2014Inputs other than quoted prices included within Level\u00a01 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.
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Level\u00a03\u2014Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use.
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To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level\u00a03. A financial instrument\u2019s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
\u00a0
The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature.\u00a0 For the three months ended September 30, 2022, management believed it necessary to record a reserve against the debt and equity instruments obtained in the sale of Infusionz of $8,500,000.
"}]},{"name":"rpt:f-496","factDimensions":{"xbrl:concept":"upxi:ReservesAgainstDebtAndEquityInstruments","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:InfusionzLLCMember"},"factValues":[{"value":"8500000","decimals":0}]},{"name":"rpt:f-497","factDimensions":{"xbrl:concept":"us-gaap:PriorPeriodReclassificationAdjustmentDescription","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Certain reclassifications have been made to the condensed consolidated financial statements as of and for the three and six months ended December 31, 2023, and for the three and six month periods ended December 31, 2022 to conform to the presentation as of and for the three and six months ended December 31, 2023.
"}]},{"name":"rpt:f-498","factDimensions":{"xbrl:concept":"upxi:AssetAcquisitionDisclosureTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 2. Acquisitions
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Cygnet Online, LLC
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The Company acquired 55% of Cygnet Online, LLC, on April 1, 2022.\u00a0 The purchase price was $5,515,756, as amended.\u00a0
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The following table summarizes the consideration transferred to acquire Interactive and the amount of identified assets acquired, and liabilities assumed at the acquisition date.
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Fair value of consideration transferred:
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Cash | \u00a0 | $ | 1,500,000 | \u00a0 |
Convertible note payable, convertible at $6.00 per common share | \u00a0 | \u00a0 | 1,050,000 | \u00a0 |
Earnout payment | \u00a0 | \u00a0 | - | \u00a0 |
Common stock, 555,489 shares valued at $5.34 per common share, the closing price on April 1, 2022. | \u00a0 | \u00a0 | 2,965,756 | \u00a0 |
\u00a0 | \u00a0 | $ | 5,515,756 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 471,237 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 860,882 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 2,337,208 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 6,900 | \u00a0 |
Property and equipment | \u00a0 | \u00a0 | 7,602 | \u00a0 |
Right to use asset | \u00a0 | \u00a0 | 410,365 | \u00a0 |
Other asset | \u00a0 | \u00a0 | 6,545 | \u00a0 |
Online sales channels | \u00a0 | \u00a0 | 1,800,000 | \u00a0 |
Vendor relationships | \u00a0 | \u00a0 | 6,000,000 | \u00a0 |
Accrued liabilities | \u00a0 | \u00a0 | (701,606 | ) |
Notes payable | \u00a0 | \u00a0 | (7,298,353 | ) |
Operating lease | \u00a0 | \u00a0 | (422,479 | ) |
Total identifiable net assets | \u00a0 | $ | 3,478,301 | \u00a0 |
Goodwill | \u00a0 | $ | 2,037,455 | \u00a0 |
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55% of the business was acquired through a stock purchase agreement on April 1, 2022.\u00a0The purchase agreement provided for an increase in the purchase price of up to $700,000 based on the attainment of certain sales thresholds in the first year.\u00a0 Our management believed that the attainment of those sales threshold at the time of acquisition was unlikely and valued the contingency at $0.\u00a0 The sales thresholds were not met, and no consideration was recorded for the contingency.\u00a0 The equity interest purchase agreement has standard provisions to adjust the purchase price based on the final working capital transferred to the Company.\u00a0The purchase price was decreased by $950,000 and was repaid to the Company with\u00a0a reduction in the loan to the seller.\u00a0\u00a0The 55% purchase price allocation is final and is no longer subject to change.\u00a0
\u00a0
The Company\u2019s consolidated financial statements for the three and six months ended December 31, 2023 and 2022, include the actual results of Cygnet.
\u00a0
On September 1, 2023, the Company completed the acquisition of the remaining 45% interest for structured cash payments equaling $800,000, the forgiveness of advances of $89,416 and 90,909 shares of the Company\u2019s common stock valued at $162,727.\u00a0
\u00a0
Fair value of consideration transferred:
\u00a0
Cash | \u00a0 | $ | 800,000 | \u00a0 |
Noncontrolling interest | \u00a0 | \u00a0 | 505,147 | \u00a0 |
Forgiveness of advances | \u00a0 | \u00a0 | 89,416 | \u00a0 |
Common stock, 90,909 shares valued at $1.79 per common share, the closing price on September 1, 2023. | \u00a0 | \u00a0 | 162,727 | \u00a0 |
\u00a0 | \u00a0 | $ | 1,557,290 | \u00a0 |
\u00a0
The additional consideration was recorded as goodwill by management and will be subject to change based on the final purchase price allocation.
\u00a0
The acquisition of Cygnet provided the Company with the opportunity to expand its operations as an Amazon and eCommerce seller. The resulting combination increased Cygnet\u2019s product offerings through the Company\u2019s distributors and partnerships as it continues to focus on over-the-counter supplements and beauty products. Cygnet will be the anchor company for Upexi\u2019s Amazon strategy. These are the factors of goodwill recognized in the acquisition.
\u00a0
LuckyTail
\u00a0
On August 13, 2022, the Company acquired the pet product brand and the rights to the products of LuckyTail from GA Solutions, LLC.\u00a0
\u00a0
The following table summarizes the consideration transferred to acquire LuckyTail and the amount of identified assets acquired, and liabilities assumed at the acquisition date.
\u00a0
Fair value of consideration transferred: | \u00a0 | \u00a0 | \u00a0 | |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | |
Cash | \u00a0 | $ | 2,000,000 | \u00a0 |
Cash payment, 90 days after close | \u00a0 | \u00a0 | 484,729 | \u00a0 |
Cash payment, 180 days after close | \u00a0 | \u00a0 | 469,924 | \u00a0 |
Contingent consideration | \u00a0 | \u00a0 | 112,685 | \u00a0 |
Cash payment, working capital adjustment | \u00a0 | \u00a0 | 460,901 | \u00a0 |
\u00a0 | \u00a0 | $ | 3,528,239 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets acquired, and liabilities assumed: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Inventory | \u00a0 | $ | 460,901 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 383,792 | \u00a0 |
Customer list | \u00a0 | \u00a0 | 1,834,692 | \u00a0 |
Total identifiable net assets | \u00a0 | $ | 2,679,385 | \u00a0 |
Goodwill | \u00a0 | $ | 848,854 | \u00a0 |
\u00a0
The business was acquired through an asset purchase agreement, that acquired all elements of the business, including all the tangible and intangible assets of the LuckyTail business.\u00a0 The purchase agreement provided for an increase in the purchase price based on the attainment of certain sales thresholds in the first six months.\u00a0 The Company estimated the value of this at approximately $150,000 at the time of purchase.\u00a0The sales calculated to a $112,685 payout and the purchase price was adjusted.\u00a0The asset purchase agreement has standard provisions to adjust the purchase price based on the final working capital transferred to the Company.\u00a0The purchase price was increased by $460,901 for the excess working capital that was transferred in the business and the final purchase price allocation was completed by an independent consulting firm and is no longer subject to change.\u00a0
\u00a0
The Company\u2019s consolidated financial statements for the three months ended September 30, 2023, include the actual results of LuckyTail.\u00a0The consolidated financial statements for the three months ended September 30, 2022, include the actual results of LuckyTail from August 13, 2022 through September 30, 2022. The Company recorded interest on the consideration of $63,282 during the year ended June 30, 2023.
\u00a0
The acquisition of LuckyTail provided the Company with a foothold in the pet care industry and a strong presence on Amazon and its eCommerce store, offering nutritional and grooming products domestically and internationally. The acquisition provided both top line growth and improved EBITDA for the Company. These are the factors of goodwill recognized in the acquisition.
\u00a0
E-Core, Technology Inc., and its subsidiaries
\u00a0
On October 21, 2022, the Company acquired E-Core Technology, Inc. (\u201cE-Core\u201d) d/b/a New England Technology, Inc., a Florida corporation (\u201cNew England Technology\u201d).\u00a0
\u00a0
The following table summarizes the consideration transferred to acquire E-Core and the amount of identified assets acquired, and liabilities assumed at the acquisition date.
\u00a0
Fair value of consideration transferred: | \u00a0 | \u00a0 | \u00a0 | |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | |
Cash | \u00a0 | $ | 100,000 | \u00a0 |
Cash payment, 120 days | \u00a0 | \u00a0 | 3,000,000 | \u00a0 |
Note payable | \u00a0 | \u00a0 | 5,189,718 | \u00a0 |
Note payable 2 | \u00a0 | \u00a0 | 4,684,029 | \u00a0 |
Convertible note payable, convertible at $4.81 per common share | \u00a0 | \u00a0 | 2,418,860 | \u00a0 |
Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. | \u00a0 | \u00a0 | 6,000,000 | \u00a0 |
\u00a0 | \u00a0 | $ | 21,039,765 | \u00a0 |
\u00a0
Recognized amounts of identifiable assets acquired, and liabilities assumed:
\u00a0
Cash | \u00a0 | $ | 1,014,610 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 6,699,945 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 7,750,011 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 75,721 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 1,727,249 | \u00a0 |
Customer relationships | \u00a0 | \u00a0 | 5,080,305 | \u00a0 |
Accrued liabilities | \u00a0 | \u00a0 | (192,051 | ) |
Line of credit | \u00a0 | \u00a0 | (7,201,079 | ) |
Total identifiable net assets | \u00a0 | $ | 14,635,673 | \u00a0 |
Goodwill | \u00a0 | $ | 6,404,092 | \u00a0 |
\u00a0
The business was acquired through a membership interest purchase agreement on October 21, 2022.\u00a0 There was no contingent consideration payable under the asset purchase agreement, although a provision was used to adjust the purchase price based on the final working capital transferred to the Company.\u00a0The purchase price was decreased by $33,803, net and was repaid to the Company with an adjustment to the $3,000,000 cash payment.\u00a0 The final purchase price allocation was completed by an independent consulting firm and is no longer subject to change.\u00a0
\u00a0
The Company\u2019s consolidated financial statements for the three months ended September 30, 2023, include the actual results of E-Core.\u00a0The Company recorded interest on the consideration of $969,098 during the year ended June 30, 2023.\u00a0At June 30, 2023 there was $1,738,295 of unamortized debt discount that will be expensed over the next two years.\u00a0
\u00a0
The acquisition of E-Core provided the Company with an entrance into the children\u2019s toy sector as well as national retail distribution for owned and non-owned branded products. The acquisition expands the Company\u2019s ability to leverage direct-to-consumer distribution and further develops the broad distribution capabilities of E-Core. These are the factors of goodwill recognized in the acquisition.
\u00a0
Revenue from acquisitions included in the financial statements.
\u00a0
\u00a0 | \u00a0 | Six months ended December 31, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Cygnet | \u00a0 | \u00a0 | 8,672,811 | \u00a0 | \u00a0 | \u00a0 | 14,607,180 | \u00a0 |
LuckyTail | \u00a0 | \u00a0 | 1,545,373 | \u00a0 | \u00a0 | \u00a0 | 2,219,234 | \u00a0 |
E-Core | \u00a0 | \u00a0 | 29,403,620 | \u00a0 | \u00a0 | \u00a0 | 13,647,412 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | $ | 39,621,804 | \u00a0 | \u00a0 | $ | 30,473,826 | \u00a0 |
\u00a0
\u00a0 | \u00a0 | Three months ended December 31, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Cygnet | \u00a0 | \u00a0 | 4,003,444 | \u00a0 | \u00a0 | \u00a0 | 7,359,661 | \u00a0 |
LuckyTail | \u00a0 | \u00a0 | 742,869 | \u00a0 | \u00a0 | \u00a0 | 1,394,459 | \u00a0 |
E-Core | \u00a0 | \u00a0 | 12,311,248 | \u00a0 | \u00a0 | \u00a0 | 13,647,412 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | $ | 17,057,561 | \u00a0 | \u00a0 | $ | 22,401,532 | \u00a0 |
\u00a0
Consolidated pro-forma unaudited financial statements.
\u00a0
The following unaudited pro forma combined financial information is based on the historical financial statements of the Company, LuckyTail and E-Core after giving effect to the Company\u2019s acquisitions as if the acquisitions occurred on July 1, 2022.\u00a0\u00a0
\u00a0
The following unaudited pro forma information does not purport to present what the Company\u2019s actual results would have been had the acquisitions occurred on July 1, 2022, nor is the financial information indicative of the results of future operations. The following table represents the unaudited consolidated pro forma results of operations for the three and six months ended December 31, 2022, as if the acquisitions occurred on July 1, 2022.\u00a0 The results of operations for VitaMedica, Cygnet and LuckyTail are included in the three months ended December 31, 2022.\u00a0 The results of operations for VitaMedica and Cygnet are included in the six months ended December 31, 2022.\u00a0 The results of operations for the results of operations include LuckyTail from August 13, 2022 to December 31, 2022 and E-Core from October 21, 2022 to December 31, 2022.\u00a0
\u00a0
Operating expenses for the three months ended September 30, 2022 have been increased for the amortization expense associated with the fair value adjustment of definite lived intangible assets of LuckyTail and E-Core by approximately $44,619, and $134,625, per month respectively and $363,415 of interest expense.\u00a0
\u00a0
Pro Forma, Unaudited | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0Proforma | \u00a0 | \u00a0 | \u00a0 | |||||||||
Six months ended December 31, 2022 | \u00a0 | Upexi, Inc. | \u00a0 | \u00a0 | LuckyTail | \u00a0 | \u00a0 | E-Core | \u00a0 | \u00a0 | Adjustments | \u00a0 | \u00a0 | Proforma | \u00a0 | |||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | |||||
Net sales | \u00a0 | $ | 37,960,361 | \u00a0 | \u00a0 | $ | 892,270 | \u00a0 | \u00a0 | $ | 12,905,836 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 51,758,467 | \u00a0 | |
Cost of sales | \u00a0 | $ | 22,056,433 | \u00a0 | \u00a0 | $ | 137,088 | \u00a0 | \u00a0 | $ | 11,177,032 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 33,370,553 | \u00a0 | |
Operating expenses | \u00a0 | $ | 19,981,782 | \u00a0 | \u00a0 | $ | 383,476 | \u00a0 | \u00a0 | $ | 1,050,602 | \u00a0 | \u00a0 | $ | 567,721 | \u00a0 | \u00a0 | $ | 21,983,581 | \u00a0 |
Net income (loss) from continuing operations | \u00a0 | $ | (161,422 | ) | \u00a0 | $ | 371,706 | \u00a0 | \u00a0 | $ | 660,860 | \u00a0 | \u00a0 | $ | (567,721 | ) | \u00a0 | $ | 303,423 | \u00a0 |
Basic income (loss) per common share | \u00a0 | $ | (0.01 | ) | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 0.85 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 0.02 | \u00a0 | |
Weighted average shares outstanding | \u00a0 | \u00a0 | 17,126,886 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 779,626 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 17,960,748 | \u00a0 |
\u00a0
Pro Forma, Unaudited | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0Proforma | \u00a0 | \u00a0 | \u00a0 | |||||||
Three months ended December 31, 2022 | \u00a0 | Upexi, Inc. | \u00a0 | \u00a0 | E-Core | \u00a0 | \u00a0 | Adjustments | \u00a0 | \u00a0 | Proforma | \u00a0 | ||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
Net sales | \u00a0 | $ | 11,218,799 | \u00a0 | \u00a0 | $ | 9,420,927 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 21,531,996 | \u00a0 | |
Cost of sales | \u00a0 | $ | 5,501,316 | \u00a0 | \u00a0 | $ | 8,208,282 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 13,746,686 | \u00a0 | |
Operating expenses | \u00a0 | $ | 8,194,881 | \u00a0 | \u00a0 | $ | 635,608 | \u00a0 | \u00a0 | $ | 97,222 | \u00a0 | \u00a0 | $ | 10,048,184 | \u00a0 |
Net income (loss) from continuing operations | \u00a0 | $ | (2,745,520 | ) | \u00a0 | $ | 578,037 | \u00a0 | \u00a0 | $ | (97,222 | ) | \u00a0 | $ | (2,629,996 | ) |
Basic income (loss) per common share | \u00a0 | $ | (0.16 | ) | \u00a0 | $ | 0.46 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | (0.15 | ) | |
Weighted average shares outstanding | \u00a0 | \u00a0 | 16,713,345 | \u00a0 | \u00a0 | \u00a0 | 1,247,403 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 17,960,748 | \u00a0 |
\u00a0
The LuckyTail annual amortization expense is $532,992\u00a0annually and $44,619\u00a0monthly, based on the allocation of the purchase price. For the one and a half months ended December 31, 2022, the proforma adjustment included $66,624, one and a half months of amortization expense.
\u00a0
The E-Core annual amortization expense is $1,615,500\u00a0annually and $134,625\u00a0monthly, based on the allocation of the purchase price.\u00a0 For the six months ended December 31, 2022, the proforma adjustment included $501,097 of amortization expense and for the three months ended December 31, 2022, the proforma adjustment included 97,222 of amortization expense.
\u00a0
External legal, accounting and consulting services directly related to completed acquisitions, due diligence, and review of possible target acquisitions are included in the general and administrative expenses on the Company\u2019s condensed consolidated statements of operations.\u00a0\u00a0\u00a0
"}]},{"name":"rpt:f-499","factDimensions":{"xbrl:concept":"upxi:PurchasePriceSaleOfShares","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:BusinessAcquisitionAxis":"upxi:CygnetOnlineLlcMember"},"factValues":[{"value":"5515756","decimals":0}]},{"name":"rpt:f-500","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Cash | \u00a0 | $ | 1,500,000 | \u00a0 |
Convertible note payable, convertible at $6.00 per common share | \u00a0 | \u00a0 | 1,050,000 | \u00a0 |
Earnout payment | \u00a0 | \u00a0 | - | \u00a0 |
Common stock, 555,489 shares valued at $5.34 per common share, the closing price on April 1, 2022. | \u00a0 | \u00a0 | 2,965,756 | \u00a0 |
\u00a0 | \u00a0 | $ | 5,515,756 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 471,237 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 860,882 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 2,337,208 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 6,900 | \u00a0 |
Property and equipment | \u00a0 | \u00a0 | 7,602 | \u00a0 |
Right to use asset | \u00a0 | \u00a0 | 410,365 | \u00a0 |
Other asset | \u00a0 | \u00a0 | 6,545 | \u00a0 |
Online sales channels | \u00a0 | \u00a0 | 1,800,000 | \u00a0 |
Vendor relationships | \u00a0 | \u00a0 | 6,000,000 | \u00a0 |
Accrued liabilities | \u00a0 | \u00a0 | (701,606 | ) |
Notes payable | \u00a0 | \u00a0 | (7,298,353 | ) |
Operating lease | \u00a0 | \u00a0 | (422,479 | ) |
Total identifiable net assets | \u00a0 | $ | 3,478,301 | \u00a0 |
Goodwill | \u00a0 | $ | 2,037,455 | \u00a0 |
Cash | \u00a0 | $ | 800,000 | \u00a0 |
Noncontrolling interest | \u00a0 | \u00a0 | 505,147 | \u00a0 |
Forgiveness of advances | \u00a0 | \u00a0 | 89,416 | \u00a0 |
Common stock, 90,909 shares valued at $1.79 per common share, the closing price on September 1, 2023. | \u00a0 | \u00a0 | 162,727 | \u00a0 |
\u00a0 | \u00a0 | $ | 1,557,290 | \u00a0 |
Fair value of consideration transferred: | \u00a0 | \u00a0 | \u00a0 | |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | |
Cash | \u00a0 | $ | 2,000,000 | \u00a0 |
Cash payment, 90 days after close | \u00a0 | \u00a0 | 484,729 | \u00a0 |
Cash payment, 180 days after close | \u00a0 | \u00a0 | 469,924 | \u00a0 |
Contingent consideration | \u00a0 | \u00a0 | 112,685 | \u00a0 |
Cash payment, working capital adjustment | \u00a0 | \u00a0 | 460,901 | \u00a0 |
\u00a0 | \u00a0 | $ | 3,528,239 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets acquired, and liabilities assumed: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Inventory | \u00a0 | $ | 460,901 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 383,792 | \u00a0 |
Customer list | \u00a0 | \u00a0 | 1,834,692 | \u00a0 |
Total identifiable net assets | \u00a0 | $ | 2,679,385 | \u00a0 |
Goodwill | \u00a0 | $ | 848,854 | \u00a0 |
Fair value of consideration transferred: | \u00a0 | \u00a0 | \u00a0 | |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | |
Cash | \u00a0 | $ | 100,000 | \u00a0 |
Cash payment, 120 days | \u00a0 | \u00a0 | 3,000,000 | \u00a0 |
Note payable | \u00a0 | \u00a0 | 5,189,718 | \u00a0 |
Note payable 2 | \u00a0 | \u00a0 | 4,684,029 | \u00a0 |
Convertible note payable, convertible at $4.81 per common share | \u00a0 | \u00a0 | 2,418,860 | \u00a0 |
Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. | \u00a0 | \u00a0 | 6,000,000 | \u00a0 |
\u00a0 | \u00a0 | $ | 21,039,765 | \u00a0 |
Cash | \u00a0 | $ | 1,014,610 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 6,699,945 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 7,750,011 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 75,721 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 1,727,249 | \u00a0 |
Customer relationships | \u00a0 | \u00a0 | 5,080,305 | \u00a0 |
Accrued liabilities | \u00a0 | \u00a0 | (192,051 | ) |
Line of credit | \u00a0 | \u00a0 | (7,201,079 | ) |
Total identifiable net assets | \u00a0 | $ | 14,635,673 | \u00a0 |
Goodwill | \u00a0 | $ | 6,404,092 | \u00a0 |
\u00a0 | \u00a0 | Six months ended December 31, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Cygnet | \u00a0 | \u00a0 | 8,672,811 | \u00a0 | \u00a0 | \u00a0 | 14,607,180 | \u00a0 |
LuckyTail | \u00a0 | \u00a0 | 1,545,373 | \u00a0 | \u00a0 | \u00a0 | 2,219,234 | \u00a0 |
E-Core | \u00a0 | \u00a0 | 29,403,620 | \u00a0 | \u00a0 | \u00a0 | 13,647,412 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | $ | 39,621,804 | \u00a0 | \u00a0 | $ | 30,473,826 | \u00a0 |
\u00a0 | \u00a0 | Three months ended December 31, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Cygnet | \u00a0 | \u00a0 | 4,003,444 | \u00a0 | \u00a0 | \u00a0 | 7,359,661 | \u00a0 |
LuckyTail | \u00a0 | \u00a0 | 742,869 | \u00a0 | \u00a0 | \u00a0 | 1,394,459 | \u00a0 |
E-Core | \u00a0 | \u00a0 | 12,311,248 | \u00a0 | \u00a0 | \u00a0 | 13,647,412 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | $ | 17,057,561 | \u00a0 | \u00a0 | $ | 22,401,532 | \u00a0 |
Pro Forma, Unaudited | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0Proforma | \u00a0 | \u00a0 | \u00a0 | |||||||||
Six months ended December 31, 2022 | \u00a0 | Upexi, Inc. | \u00a0 | \u00a0 | LuckyTail | \u00a0 | \u00a0 | E-Core | \u00a0 | \u00a0 | Adjustments | \u00a0 | \u00a0 | Proforma | \u00a0 | |||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | |||||
Net sales | \u00a0 | $ | 37,960,361 | \u00a0 | \u00a0 | $ | 892,270 | \u00a0 | \u00a0 | $ | 12,905,836 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 51,758,467 | \u00a0 | |
Cost of sales | \u00a0 | $ | 22,056,433 | \u00a0 | \u00a0 | $ | 137,088 | \u00a0 | \u00a0 | $ | 11,177,032 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 33,370,553 | \u00a0 | |
Operating expenses | \u00a0 | $ | 19,981,782 | \u00a0 | \u00a0 | $ | 383,476 | \u00a0 | \u00a0 | $ | 1,050,602 | \u00a0 | \u00a0 | $ | 567,721 | \u00a0 | \u00a0 | $ | 21,983,581 | \u00a0 |
Net income (loss) from continuing operations | \u00a0 | $ | (161,422 | ) | \u00a0 | $ | 371,706 | \u00a0 | \u00a0 | $ | 660,860 | \u00a0 | \u00a0 | $ | (567,721 | ) | \u00a0 | $ | 303,423 | \u00a0 |
Basic income (loss) per common share | \u00a0 | $ | (0.01 | ) | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 0.85 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 0.02 | \u00a0 | |
Weighted average shares outstanding | \u00a0 | \u00a0 | 17,126,886 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 779,626 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 17,960,748 | \u00a0 |
Pro Forma, Unaudited | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0Proforma | \u00a0 | \u00a0 | \u00a0 | |||||||
Three months ended December 31, 2022 | \u00a0 | Upexi, Inc. | \u00a0 | \u00a0 | E-Core | \u00a0 | \u00a0 | Adjustments | \u00a0 | \u00a0 | Proforma | \u00a0 | ||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
Net sales | \u00a0 | $ | 11,218,799 | \u00a0 | \u00a0 | $ | 9,420,927 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 21,531,996 | \u00a0 | |
Cost of sales | \u00a0 | $ | 5,501,316 | \u00a0 | \u00a0 | $ | 8,208,282 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | 13,746,686 | \u00a0 | |
Operating expenses | \u00a0 | $ | 8,194,881 | \u00a0 | \u00a0 | $ | 635,608 | \u00a0 | \u00a0 | $ | 97,222 | \u00a0 | \u00a0 | $ | 10,048,184 | \u00a0 |
Net income (loss) from continuing operations | \u00a0 | $ | (2,745,520 | ) | \u00a0 | $ | 578,037 | \u00a0 | \u00a0 | $ | (97,222 | ) | \u00a0 | $ | (2,629,996 | ) |
Basic income (loss) per common share | \u00a0 | $ | (0.16 | ) | \u00a0 | $ | 0.46 | \u00a0 | \u00a0 | $ | \u00a0 | \u00a0 | $ | (0.15 | ) | |
Weighted average shares outstanding | \u00a0 | \u00a0 | 16,713,345 | \u00a0 | \u00a0 | \u00a0 | 1,247,403 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 17,960,748 | \u00a0 |
Note 3. Inventory
\u00a0
Inventory consisted of the following:
\u00a0
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Raw materials | \u00a0 | $ | 1,128,325 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Finished goods | \u00a0 | \u00a0 | 13,535,583 | \u00a0 | \u00a0 | \u00a0 | 11,557,128 | \u00a0 |
\u00a0 | \u00a0 | $ | 14,663,908 | \u00a0 | \u00a0 | $ | 11,557,128 | \u00a0 |
\u00a0
The Company writes off the value of inventory deemed excessive or obsolete.
\u00a0
During the three and six months ended December 31, 2023, the Company wrote off inventory valued at $35,509\u00a0and $90,030, respectively.\u00a0
"}]},{"name":"rpt:f-641","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfInventoryCurrentTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Raw materials | \u00a0 | $ | 1,128,325 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Finished goods | \u00a0 | \u00a0 | 13,535,583 | \u00a0 | \u00a0 | \u00a0 | 11,557,128 | \u00a0 |
\u00a0 | \u00a0 | $ | 14,663,908 | \u00a0 | \u00a0 | $ | 11,557,128 | \u00a0 |
Note 4. Property and Equipment
\u00a0
Property and equipment consist of the following:
\u00a0
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Furniture and fixtures | \u00a0 | $ | 212,322 | \u00a0 | \u00a0 | $ | 172,663 | \u00a0 |
Computer equipment | \u00a0 | \u00a0 | 167,346 | \u00a0 | \u00a0 | \u00a0 | 156,283 | \u00a0 |
Internal use software | \u00a0 | \u00a0 | 637,889 | \u00a0 | \u00a0 | \u00a0 | 608,949 | \u00a0 |
Manufacturing equipment | \u00a0 | \u00a0 | 3,519,841 | \u00a0 | \u00a0 | \u00a0 | 3,325,525 | \u00a0 |
Leasehold improvements | \u00a0 | \u00a0 | 146,794 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Building | \u00a0 | \u00a0 | 5,191,327 | \u00a0 | \u00a0 | \u00a0 | 4,923,462 | \u00a0 |
Vehicles | \u00a0 | \u00a0 | 261,362 | \u00a0 | \u00a0 | \u00a0 | 261,362 | \u00a0 |
Property and equipment, gross | \u00a0 | \u00a0 | 10,136,881 | \u00a0 | \u00a0 | \u00a0 | 9,455,848 | \u00a0 |
Less accumulated depreciation | \u00a0 | \u00a0 | (2,536,483 | ) | \u00a0 | \u00a0 | (1,921,780 | ) |
\u00a0 | \u00a0 | $ | 7,600,398 | \u00a0 | \u00a0 | $ | 7,526,463 | \u00a0 |
\u00a0
Depreciation expense for the three months ended December 31, 2023, and 2022 was $286,084\u00a0and $240,958, respectively.\u00a0
\u00a0
Depreciation expense for the six months ended December 31, 2023, and 2022 was $614,703 and $435,455, respectively.
"}]},{"name":"rpt:f-651","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Furniture and fixtures | \u00a0 | $ | 212,322 | \u00a0 | \u00a0 | $ | 172,663 | \u00a0 |
Computer equipment | \u00a0 | \u00a0 | 167,346 | \u00a0 | \u00a0 | \u00a0 | 156,283 | \u00a0 |
Internal use software | \u00a0 | \u00a0 | 637,889 | \u00a0 | \u00a0 | \u00a0 | 608,949 | \u00a0 |
Manufacturing equipment | \u00a0 | \u00a0 | 3,519,841 | \u00a0 | \u00a0 | \u00a0 | 3,325,525 | \u00a0 |
Leasehold improvements | \u00a0 | \u00a0 | 146,794 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Building | \u00a0 | \u00a0 | 5,191,327 | \u00a0 | \u00a0 | \u00a0 | 4,923,462 | \u00a0 |
Vehicles | \u00a0 | \u00a0 | 261,362 | \u00a0 | \u00a0 | \u00a0 | 261,362 | \u00a0 |
Property and equipment, gross | \u00a0 | \u00a0 | 10,136,881 | \u00a0 | \u00a0 | \u00a0 | 9,455,848 | \u00a0 |
Less accumulated depreciation | \u00a0 | \u00a0 | (2,536,483 | ) | \u00a0 | \u00a0 | (1,921,780 | ) |
\u00a0 | \u00a0 | $ | 7,600,398 | \u00a0 | \u00a0 | $ | 7,526,463 | \u00a0 |
Note 5. Intangible Assets
\u00a0
Intangible assets as of December 31, 2023:
\u00a0
\u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \u00a0 | |||
Customer relationships, amortized over four years | 4 years | \u00a0 | $ | 8,243,897 | \u00a0 | \u00a0 | $ | 2,968,085 | \u00a0 | \u00a0 | $ | 5,275,812 | \u00a0 |
Trade name, amortized over five years | 5 years | \u00a0 | \u00a0 | 2,574,041 | \u00a0 | \u00a0 | \u00a0 | 746,743 | \u00a0 | \u00a0 | \u00a0 | 1,827,298 | \u00a0 |
Non-compete agreements | Term of\u00a0 agreement | \u00a0 | \u00a0 | 143,000 | \u00a0 | \u00a0 | \u00a0 | 143,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Online sales channels | 2 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,575,000 | \u00a0 | \u00a0 | \u00a0 | 225,000 | \u00a0 |
Vender relationships | 5 years | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | 2,100,000 | \u00a0 | \u00a0 | \u00a0 | 3,900,000 | \u00a0 |
Tytan Tiles Patents | 15 years | \u00a0 | \u00a0 | 70,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | $ | 22,280,000 | \u00a0 | \u00a0 | $ | 3,567,591 | \u00a0 | \u00a0 | $ | 18,712,409 | \u00a0 |
\u00a0
For the three months ended December 31, 2023 and 2022, the Company amortized approximately $1,157,029 and $1,102,756, respectively.
\u00a0
For the six months ended December 31, 2023 and 2022, the Company amortized approximately $2,343,850\u00a0and $1,832,665, respectively.
\u00a0
The following intangible asset was added during the six months ended December 31, 2023:
\u00a0
Patent | \u00a0 | $ | 70,000 | \u00a0 |
\u00a0
Intangible assets as of June 30, 2023:
\u00a0
\u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \u00a0 | |||
Customer relationships, amortized over four years | \u00a04 years | \u00a0 | $ | 8,243,897 | \u00a0 | \u00a0 | $ | 1,937,595 | \u00a0 | \u00a0 | $ | 6,306,302 | \u00a0 |
Trade name, amortized over five years | \u00a05 years | \u00a0 | \u00a0 | 2,574,041 | \u00a0 | \u00a0 | \u00a0 | 489,341 | \u00a0 | \u00a0 | \u00a0 | 2,084,700 | \u00a0 |
Non-compete agreements | \u00a0Term of agreement | \u00a0 | \u00a0 | 143,000 | \u00a0 | \u00a0 | \u00a0 | 137,042 | \u00a0 | \u00a0 | \u00a0 | 5,958 | \u00a0 |
Online sales channels | \u00a02 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,125,000 | \u00a0 | \u00a0 | \u00a0 | 675,000 | \u00a0 |
Vender relationships | \u00a05 years | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | 1,500,000 | \u00a0 | \u00a0 | \u00a0 | 4,500,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | $ | 18,760,938 | \u00a0 | \u00a0 | $ | 5,188,978 | \u00a0 | \u00a0 | $ | 13,571,960 | \u00a0 |
\u00a0
The following intangible assets were added during the year ended June 30, 2022, from the acquisitions noted below:
\u00a0
LuckyTail
\u00a0
Customer relationships | \u00a0 | $ | 1,834,692 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 383,792 | \u00a0 |
Intangible Assets from Purchase | \u00a0 | $ | 2,218,484 | \u00a0 |
E-Core: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Customer relationships | \u00a0 | $ | 5,080,205 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 1,727,249 | \u00a0 |
Intangible Assets from Purchase | \u00a0 | $ | 6,807,454 | \u00a0 |
\u00a0
Future amortization of intangible assets at December 31, 2023 are as follows:
\u00a0
June 30, 2024 | \u00a0 | $ | 2,115,225 | \u00a0 |
June 30, 2025 | \u00a0 | \u00a0 | 3,780,449 | \u00a0 |
June 30, 2026 | \u00a0 | \u00a0 | 3,780,449 | \u00a0 |
June 30, 2027 | \u00a0 | \u00a0 | 1,568,320 | \u00a0 |
June 30, 2028 | \u00a0 | \u00a0 | 4,667 | \u00a0 |
Thereafter | \u00a0 | \u00a0 | 49,000 | \u00a0 |
\u00a0 | \u00a0 | $ | 11,298,110 | \u00a0 |
\u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \u00a0 | |||
Customer relationships, amortized over four years | 4 years | \u00a0 | $ | 8,243,897 | \u00a0 | \u00a0 | $ | 2,968,085 | \u00a0 | \u00a0 | $ | 5,275,812 | \u00a0 |
Trade name, amortized over five years | 5 years | \u00a0 | \u00a0 | 2,574,041 | \u00a0 | \u00a0 | \u00a0 | 746,743 | \u00a0 | \u00a0 | \u00a0 | 1,827,298 | \u00a0 |
Non-compete agreements | Term of\u00a0 agreement | \u00a0 | \u00a0 | 143,000 | \u00a0 | \u00a0 | \u00a0 | 143,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Online sales channels | 2 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,575,000 | \u00a0 | \u00a0 | \u00a0 | 225,000 | \u00a0 |
Vender relationships | 5 years | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | 2,100,000 | \u00a0 | \u00a0 | \u00a0 | 3,900,000 | \u00a0 |
Tytan Tiles Patents | 15 years | \u00a0 | \u00a0 | 70,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | $ | 22,280,000 | \u00a0 | \u00a0 | $ | 3,567,591 | \u00a0 | \u00a0 | $ | 18,712,409 | \u00a0 |
\u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \u00a0 | |||
Customer relationships, amortized over four years | \u00a04 years | \u00a0 | $ | 8,243,897 | \u00a0 | \u00a0 | $ | 1,937,595 | \u00a0 | \u00a0 | $ | 6,306,302 | \u00a0 |
Trade name, amortized over five years | \u00a05 years | \u00a0 | \u00a0 | 2,574,041 | \u00a0 | \u00a0 | \u00a0 | 489,341 | \u00a0 | \u00a0 | \u00a0 | 2,084,700 | \u00a0 |
Non-compete agreements | \u00a0Term of agreement | \u00a0 | \u00a0 | 143,000 | \u00a0 | \u00a0 | \u00a0 | 137,042 | \u00a0 | \u00a0 | \u00a0 | 5,958 | \u00a0 |
Online sales channels | \u00a02 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,125,000 | \u00a0 | \u00a0 | \u00a0 | 675,000 | \u00a0 |
Vender relationships | \u00a05 years | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | 1,500,000 | \u00a0 | \u00a0 | \u00a0 | 4,500,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | $ | 18,760,938 | \u00a0 | \u00a0 | $ | 5,188,978 | \u00a0 | \u00a0 | $ | 13,571,960 | \u00a0 |
Customer relationships | \u00a0 | $ | 1,834,692 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 383,792 | \u00a0 |
Intangible Assets from Purchase | \u00a0 | $ | 2,218,484 | \u00a0 |
E-Core: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Customer relationships | \u00a0 | $ | 5,080,205 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 1,727,249 | \u00a0 |
Intangible Assets from Purchase | \u00a0 | $ | 6,807,454 | \u00a0 |
June 30, 2024 | \u00a0 | $ | 2,115,225 | \u00a0 |
June 30, 2025 | \u00a0 | \u00a0 | 3,780,449 | \u00a0 |
June 30, 2026 | \u00a0 | \u00a0 | 3,780,449 | \u00a0 |
June 30, 2027 | \u00a0 | \u00a0 | 1,568,320 | \u00a0 |
June 30, 2028 | \u00a0 | \u00a0 | 4,667 | \u00a0 |
Thereafter | \u00a0 | \u00a0 | 49,000 | \u00a0 |
\u00a0 | \u00a0 | $ | 11,298,110 | \u00a0 |
Note 6. Prepaid Expense and Other Current Assets
\u00a0
Prepaid and other receivables consist of the following:
\u00a0
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Insurance | \u00a0 | $ | 156,596 | \u00a0 | \u00a0 | $ | 187,949 | \u00a0 |
Prepayment to vendors | \u00a0 | \u00a0 | 87,233 | \u00a0 | \u00a0 | \u00a0 | 263,652 | \u00a0 |
Deposits on services | \u00a0 | \u00a0 | 20,413 | \u00a0 | \u00a0 | \u00a0 | 45,678 | \u00a0 |
Prepaid monthly rent | \u00a0 | \u00a0 | 81,508 | \u00a0 | \u00a0 | \u00a0 | 27,813 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Prepaid sales tax | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,021 | \u00a0 |
Other deposits | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,826 | \u00a0 |
Stock issued for prepaid interest on convertible note payable | \u00a0 | \u00a0 | 240,929 | \u00a0 | \u00a0 | \u00a0 | 465,595 | \u00a0 |
Other prepaid expenses | \u00a0 | \u00a0 | 110,880 | \u00a0 | \u00a0 | \u00a0 | 31,000 | \u00a0 |
Other receivables | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 144,765 | \u00a0 |
Total | \u00a0 | $ | 697,559 | \u00a0 | \u00a0 | $ | 1,307,299 | \u00a0 |
\u00a0
All prepaid expenses will be expensed in the following 12 months.\u00a0
"}]},{"name":"rpt:f-747","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfOtherCurrentAssetsTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Insurance | \u00a0 | $ | 156,596 | \u00a0 | \u00a0 | $ | 187,949 | \u00a0 |
Prepayment to vendors | \u00a0 | \u00a0 | 87,233 | \u00a0 | \u00a0 | \u00a0 | 263,652 | \u00a0 |
Deposits on services | \u00a0 | \u00a0 | 20,413 | \u00a0 | \u00a0 | \u00a0 | 45,678 | \u00a0 |
Prepaid monthly rent | \u00a0 | \u00a0 | 81,508 | \u00a0 | \u00a0 | \u00a0 | 27,813 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Prepaid sales tax | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,021 | \u00a0 |
Other deposits | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,826 | \u00a0 |
Stock issued for prepaid interest on convertible note payable | \u00a0 | \u00a0 | 240,929 | \u00a0 | \u00a0 | \u00a0 | 465,595 | \u00a0 |
Other prepaid expenses | \u00a0 | \u00a0 | 110,880 | \u00a0 | \u00a0 | \u00a0 | 31,000 | \u00a0 |
Other receivables | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 144,765 | \u00a0 |
Total | \u00a0 | $ | 697,559 | \u00a0 | \u00a0 | $ | 1,307,299 | \u00a0 |
Note 7. Operating Leases
\u00a0
The Company has operating leases for corporate offices,\u00a0warehouses and office equipment that have remaining\u00a0lease terms of 1 year to 5 years.
\u00a0
The table below reconciles the undiscounted future minimum lease payments (displayed by fiscal year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized in the condensed consolidated balance sheet as of December 31, 2023:
\u00a0
2024 | \u00a0 | $ | 280,190 | \u00a0 |
2025 | \u00a0 | \u00a0 | 508,665 | \u00a0 |
2026 | \u00a0 | \u00a0 | 529,284 | \u00a0 |
2027 | \u00a0 | \u00a0 | 266,602 | \u00a0 |
2028 | \u00a0 | \u00a0 | 246,013 | \u00a0 |
Thereafter | \u00a0 | \u00a0 | \u00a021,114 | \u00a0 |
Total undiscounted future minimum lease payments | \u00a0 | \u00a0 | 1,851,868 | \u00a0 |
Less: Imputed interest | \u00a0 | \u00a0 | (155,447 | ) |
Accrued adverse lease obligation | \u00a0 | \u00a0 | 289,968 | \u00a0 |
Present value of operating lease obligation | \u00a0 | $ | 1,986,389 | \u00a0 |
\u00a0
In October of 2023, the Company consolidated its Delray Beach facility with the Tampa Bay facility and recognized a lease impairment of $289,968 that is accrued as part of the $823,702 current portion of operating lease payable.\u00a0
\u00a0
The Company\u2019s weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2023 are:
\u00a0
Weighted average remaining lease term | \u00a0 | 43\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
\u00a0
For the three and six months ended December 31, 2023, the components of lease expense, included in general and administrative expenses and interest expense in the condensed consolidated statement of operations, are as follows:
\u00a0
\u00a0 | \u00a0 | Three Months Ended December 31, 2023 | \u00a0 | \u00a0 | Six Months Ended December 31, 2023 | \u00a0 | ||
Operating lease cost: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Operating lease cost | \u00a0 | $ | 120,846 | \u00a0 | \u00a0 | $ | 295,058 | \u00a0 |
Amortization of ROU assets | \u00a0 | \u00a0 | 118,037 | \u00a0 | \u00a0 | \u00a0 | 289,007 | \u00a0 |
Interest expense | \u00a0 | \u00a0 | 17,492 | \u00a0 | \u00a0 | \u00a0 | 43,839 | \u00a0 |
Total lease cost | \u00a0 | $ | 256,375 | \u00a0 | \u00a0 | $ | 627,904 | \u00a0 |
\u00a0
In October of 2023, the Company consolidated its Delray Beach facility with the Tampa Bay facility and recognized a lease impairment of $289,968 that is accrued as part of operating lease payable.\u00a0
"}]},{"name":"rpt:f-768","factDimensions":{"xbrl:concept":"upxi:LeaseTerm","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"1 year to 5 years"}]},{"name":"rpt:f-769","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfFutureMinimumLeasePaymentsForCapitalLeasesTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"2024 | \u00a0 | $ | 280,190 | \u00a0 |
2025 | \u00a0 | \u00a0 | 508,665 | \u00a0 |
2026 | \u00a0 | \u00a0 | 529,284 | \u00a0 |
2027 | \u00a0 | \u00a0 | 266,602 | \u00a0 |
2028 | \u00a0 | \u00a0 | 246,013 | \u00a0 |
Thereafter | \u00a0 | \u00a0 | \u00a021,114 | \u00a0 |
Total undiscounted future minimum lease payments | \u00a0 | \u00a0 | 1,851,868 | \u00a0 |
Less: Imputed interest | \u00a0 | \u00a0 | (155,447 | ) |
Accrued adverse lease obligation | \u00a0 | \u00a0 | 289,968 | \u00a0 |
Present value of operating lease obligation | \u00a0 | $ | 1,986,389 | \u00a0 |
Weighted average remaining lease term | \u00a0 | 43\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
\u00a0 | \u00a0 | Three Months Ended December 31, 2023 | \u00a0 | \u00a0 | Six Months Ended December 31, 2023 | \u00a0 | ||
Operating lease cost: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Operating lease cost | \u00a0 | $ | 120,846 | \u00a0 | \u00a0 | $ | 295,058 | \u00a0 |
Amortization of ROU assets | \u00a0 | \u00a0 | 118,037 | \u00a0 | \u00a0 | \u00a0 | 289,007 | \u00a0 |
Interest expense | \u00a0 | \u00a0 | 17,492 | \u00a0 | \u00a0 | \u00a0 | 43,839 | \u00a0 |
Total lease cost | \u00a0 | $ | 256,375 | \u00a0 | \u00a0 | $ | 627,904 | \u00a0 |
Note 8. Accrued Liabilities and Acquisition Payable
\u00a0
Accrued liabilities consist of the following:
\u00a0
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Accrued interest | \u00a0 | $ | 1,009,079 | \u00a0 | \u00a0 | \u00a0 | 655,187 | \u00a0 |
Accrued vendor liabilities | \u00a0 | \u00a0 | 143,275 | \u00a0 | \u00a0 | \u00a0 | 861,664 | \u00a0 |
Accrued sales tax | \u00a0 | \u00a0 | 38,971 | \u00a0 | \u00a0 | \u00a0 | 47,070 | \u00a0 |
Accrued expenses from sale of manufacturing operations | \u00a0 | \u00a0 | 1,198,132 | \u00a0 | \u00a0 | \u00a0 | 1,360,000 | \u00a0 |
Other accrued liabilities | \u00a0 | \u00a0 | 268,890 | \u00a0 | \u00a0 | \u00a0 | 441,641 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | $ | 2,658,347 | \u00a0 | \u00a0 | $ | 3,365,562 | \u00a0 |
\u00a0
Acquisition Payable consists of the following:
\u00a0
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Payments related to the acquisition of Cygnet | \u00a0 | $\u00a0 | 300,000 | \u00a0 | \u00a0 | $\u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | $ | 300,000 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0
These payables are amounts estimated by management that are due to the sellers of and acquisition and include the original purchase price installment payments not represented with a debt, equity, or other instrument, estimates of excess or deficiencies in working capital and estimates of future earnout payments.\u00a0
"}]},{"name":"rpt:f-795","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfAccruedLiabilitiesTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Accrued interest | \u00a0 | $ | 1,009,079 | \u00a0 | \u00a0 | \u00a0 | 655,187 | \u00a0 |
Accrued vendor liabilities | \u00a0 | \u00a0 | 143,275 | \u00a0 | \u00a0 | \u00a0 | 861,664 | \u00a0 |
Accrued sales tax | \u00a0 | \u00a0 | 38,971 | \u00a0 | \u00a0 | \u00a0 | 47,070 | \u00a0 |
Accrued expenses from sale of manufacturing operations | \u00a0 | \u00a0 | 1,198,132 | \u00a0 | \u00a0 | \u00a0 | 1,360,000 | \u00a0 |
Other accrued liabilities | \u00a0 | \u00a0 | 268,890 | \u00a0 | \u00a0 | \u00a0 | 441,641 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | $ | 2,658,347 | \u00a0 | \u00a0 | $ | 3,365,562 | \u00a0 |
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Payments related to the acquisition of Cygnet | \u00a0 | $\u00a0 | 300,000 | \u00a0 | \u00a0 | $\u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | $ | 300,000 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Note 9. Convertible Promissory Notes and Notes Payable
\u00a0
Convertible promissory notes and notes payable outstanding as of December 31, 2023 and June 30, 2023 are summarized below:
\u00a0
\u00a0 | \u00a0 | Maturity | \u00a0 | December 31, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | Date | \u00a0 | 2023 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Convertible Notes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Promissory Note, 21- month term note, 18.11% interest payable with common stock and subordinate to the Convertible Notes | \u00a0 | June 1, 2026 | \u00a0 | $ | 2,150,000 | \u00a0 | \u00a0 | $ | 2,150,000 | \u00a0 |
Less current portion of notes payable | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 1,254,167 | \u00a0 |
Notes payable, net of current portion | \u00a0 | \u00a0 | \u00a0 | $ | 2,150,000 | \u00a0 | \u00a0 | $ | 895,833 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition Notes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Convertible Notes,\u00a036-month term notes, 0% cash interest, collateralized with all the assets of the Company | \u00a0 | October 31, 2025 | \u00a0 | \u00a0 | 3,500,000 | \u00a0 | \u00a0 | \u00a0 | 3,500,000 | \u00a0 |
Subordinated Promissory Notes, 24-month term notes, 4% cash interest, collateralized with all the assets of the Company | \u00a0 | October 31, 2024 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Subordinated Promissory Notes, 12-month term notes, 4% cash interest, collateralized with all the assets of the Company | \u00a0 | October 31, 2023 | \u00a0 | \u00a0 | 3,436,182 | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | $ | 12,686,182 | \u00a0 | \u00a0 | $ | 15,000,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition notes payable\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a09,186,182 | \u00a0 | \u00a0 | \u00a0 | \u00a05,750,000 | \u00a0 |
Discount on acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (703,154 | ) | \u00a0 | \u00a0 | (93,380 | ) |
Acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 8,483,028 | \u00a0 | \u00a0 | \u00a0 | 5,656,620 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a03,500,000 | \u00a0 | \u00a0 | \u00a0 | \u00a09,250,000 | \u00a0 |
Discount on acquisition notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (300,317 | ) | \u00a0 | \u00a0 | (1,503,843 | ) |
Acquisition notes payable, net of current and discount | \u00a0 | \u00a0 | \u00a0 | $ | 3,199,683 | \u00a0 | \u00a0 | $ | 7,746,157 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes Payable: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building | \u00a0 | September 26, 2032 | \u00a0 | $\u00a0 | 2,720,278 | \u00a0 | \u00a0 | $\u00a0 | 2,841,566 | \u00a0 |
Promissory Note,\u00a021-month term note, 10% cash interest and subordinate to the Convertible Notes | \u00a0 | November 22, 2024 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 |
SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company | \u00a0 | October 6, 2021 | \u00a0 | \u00a0 | 3,742,526 | \u00a0 | \u00a0 | \u00a0 | 3,910,767 | \u00a0 |
Inventory consignment note,\u00a060 monthly payments, with first payment due June 30, 2022, 3.5% interest rate and no security interest in the assets of the business | \u00a0 | June 30, 2027 | \u00a0 | \u00a0 | 1,008,291 | \u00a0 | \u00a0 | \u00a0 | 1,099,592 | \u00a0 |
GF Note, 6 annual payments,\u00a0with first payment due December 31, 2022, 3.5% interest rate and no security interest in the assets of the business | \u00a0 | November 7, 2026 | \u00a0 | \u00a0 | 683,968 | \u00a0 | \u00a0 | \u00a0 | 683,968 | \u00a0 |
Total notes payable | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 8,715,063 | \u00a0 | \u00a0 | \u00a0 | 9,095,893 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a04,223,617 | \u00a0 | \u00a0 | \u00a0 | 1,326,214 | \u00a0 |
Discount on notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (17,143 | ) | \u00a0 | \u00a0 | (24,193 | ) |
Notes payable, current net of discount | \u00a0 | \u00a0 | \u00a0 | $ | 4,206,474 | \u00a0 | \u00a0 | $ | 1,302,021 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, long-term\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a04,483,445 | \u00a0 | \u00a0 | \u00a0 | \u00a07,769,679 | \u00a0 |
Discount on notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (13,428 | ) | \u00a0 | \u00a0 | (23,522 | ) |
Notes payable, long-term, net | \u00a0 | \u00a0 | \u00a0 | $ | 4,470,017 | \u00a0 | \u00a0 | $ | 7,746,157 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Related Notes Payable: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Marshall Loan,\u00a02-year term note, 8.5% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes. November of 2023 extended to 2.5 year term note | \u00a0 | December 28, 2026 | \u00a0 | \u00a0$ | 1,500,000 | \u00a0 | \u00a0 | $\u00a0 | 1,500,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Discount on related party note payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | (70,644 | ) | |
Notes payable, current, net of discount | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,429,356 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Discount on related party note payable, long term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (40,369 | ) | \u00a0 | \u00a0 | - | |
Notes payable, long term net | \u00a0 | \u00a0 | \u00a0 | $ | 1,459,631 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total convertible notes payable, acquisition notes payable, notes payable and related party note payable | \u00a0 | \u00a0 | \u00a0 | $ | 23,968,832 | \u00a0 | \u00a0 | $ | 25,889,239 | \u00a0 |
\u00a0
Future payments on notes payable are as follows:
\u00a0
2024 | \u00a0 | $ | 13,417,799 | \u00a0 |
2025 | \u00a0 | \u00a0 | 3,418,695 | \u00a0 |
2026 | \u00a0 | \u00a0 | 5,771,873 | \u00a0 |
2027 | \u00a0 | \u00a0 | 611,749 | \u00a0 |
2028 | \u00a0 | \u00a0 | 313,044 | \u00a0 |
Thereafter | \u00a0 | \u00a0 | 1,518,085 | \u00a0 |
\u00a0 | \u00a0 | $ | 25,051,245 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Convertible notes, original discount and related fees and costs | \u00a0 | \u00a0 | (1,082,413 | ) |
\u00a0 | \u00a0 | $ | 23,968,832 | \u00a0 |
\u00a0
On August 1, 2021, the Company entered into a non-negotiable convertible promissory note related to the purchase of VitaMedica in the original principal amount of $500,000\u00a0(\u201cVitaMedica Note\u201d), convertible at $5.00\u00a0per share for a total of\u00a0100,000\u00a0shares of Company Common Stock. The Company repaid the note in full during August of 2022.
\u00a0
On April 15, 2022, the Company entered into a non-negotiable convertible promissory note in the original principal amount of $1,050,000, as adjusted, (\u201cCygnet Note\u201d) which can be converted into common stock of the Company at a price of $6.00\u00a0per share and is payable in full, to the extent not previously converted, on\u00a0April 15, 2023.
\u00a0
In June 2022, the Company entered into a securities purchase agreement with two accredited investors pursuant to which the Company could receive up to $15,000,000\u00a0during the following twelve months of the agreement. The Company received $6,678,506\u00a0for Convertible Notes in the original principal amount of $7,500,000\u00a0(the \u201cConvertible Notes\u201d), representing the original purchase amount, less fees, costs, and a $500,000\u00a0holdback by the investors. In addition to the Convertible Notes, the investors received Common Stock Purchase Warrants (the \u201cWarrants\u201d) to acquire an aggregate of\u00a056,250\u00a0shares of common stock. The Warrants are exercisable for five years at an exercise price of $4.44\u00a0per share, provide for customary anti-dilution protection, and an investor put right to require the Company to redeem the Warrants for a total of $250,000. \u00a0There was a loss of $3,540\u00a0for the change in the derivative liability for the period ended December 31, 2022.\u00a0 On October 31, 2022, the Company entered into a letter agreement with the accredited investors in which all amounts owed were paid in full and the related convertible notes and all security interests were cancelled. Additionally, the Company terminated the related Form S-3 registration statement.
\u00a0
In June 2022, the Company executed a promissory note with Allan Marshall, the Company\u2019s Chief Executive Officer, in the original principal amount of $1,500,000\u00a0(\u201cMarshall Loan\u201d). The promissory note has a 2-year term and bears cash interest at the rate of\u00a08.5% per annum with an additional PIK of\u00a03.5% per annum. The promissory note provides for monthly payments of principal, on an even line 36-month basis, plus cash interest, with a balloon payment of all outstanding principal, cash interest, and PIK interest at maturity. The Company received and deposited the principal amount on July 31, 2022. \u00a0On November 15, 2023, the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025.\u00a0 The principal currently outstanding is $1,500,000.\u00a0 In addition to this, the Company issued Mr. Marshall a warrant to purchase up to 375,000 shares of the Company\u2019s common stock at a per share price of $1.10.\u00a0 The note has been classified as long-term in the financial statements.\u00a0
\u00a0
On October 19, 2022, Upexi, Inc. (the \u201cCompany\u201d) and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement, promissory note and related agreements with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company\u2019s principal office in N. Clearwater, Florida. The Company received $3,000,000\u00a0in connection with the transaction. The principal is to be repaid to Professional Bank over a term of ten years. The proceeds of the loan were utilized by the Company to pay down its loan facility with Acorn Capital, LLC in the amount of $2,780,200.\u00a0 As of December 31, 2023, the Company was not in compliance with the debt service ratio.\u00a0 The Company received a forbearance agreement from the bank until June 30, 2024 to return to compliance of the debt service ratio of 1.25 to 1, until that time the Company will pay an interest rate of 10% instead of the contractual terms of 4.8%.
\u00a0
On October 31, 2022, the Company and its wholly owned subsidiary, Upexi Enterprises, LLC entered into a securities purchase agreement with E-Core Technology, Inc. d/b/a New England Technology, Inc., a Florida corporation, and its three principals. The Company entered into a series of promissory notes with the principal parties: (a) promissory notes in the total original principal amount of $5,750,000 payable upon maturity with a term of 12 months at an interest rate of 4%, $600,000 of which shall be satisfied through the cancellation of an equal amount owed by one of the principals to the Company; (b) promissory notes in the total original principal amount of $5,750,000 payable upon maturity with a term of 24 months at an interest rate of 4%; and (c) promissory notes in the original principal amounts of $3,500,000 with a term of 36 months at an interest rate of 0.0%. The principals may convert the notes into shares of the Company\u2019s restricted common stock at a conversion price equal to $4.81. If the principals do not exercise their conversion rights, the principal balance of the notes will be paid in 12 equal monthly payments commencing on the two-year anniversary of the issuance of the notes, subject to adjustments based on the Company\u2019s EBITDA over the term of the notes.
\u00a0
On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $560,000.\u00a0 On November 15, 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025.\u00a0 The principal currently outstanding is $560,000.\u00a0 In addition to this, the Company issued the investor a warrant to purchase up to 125,000 shares of the Company\u2019s common stock at a per share price of $1.10.\u00a0 The note has been classified as long-term in the financial statements.\u00a0
\u00a0
On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $2,150,000.\u00a0\u00a0 In November of\u00a0 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025. The principal currently outstanding is $2,150,000.\u00a0 In addition to this, the Company issued the investor a warrant to purchase up to 500,000 shares of the Company\u2019s common stock at a per share price of $1.10.\u00a0 The note has been classified as long-term in the financial statements.\u00a0\u00a0
"}]},{"name":"rpt:f-814","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfDebtTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | Maturity | \u00a0 | December 31, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | Date | \u00a0 | 2023 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Convertible Notes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Promissory Note, 21- month term note, 18.11% interest payable with common stock and subordinate to the Convertible Notes | \u00a0 | June 1, 2026 | \u00a0 | $ | 2,150,000 | \u00a0 | \u00a0 | $ | 2,150,000 | \u00a0 |
Less current portion of notes payable | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 1,254,167 | \u00a0 |
Notes payable, net of current portion | \u00a0 | \u00a0 | \u00a0 | $ | 2,150,000 | \u00a0 | \u00a0 | $ | 895,833 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition Notes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Convertible Notes,\u00a036-month term notes, 0% cash interest, collateralized with all the assets of the Company | \u00a0 | October 31, 2025 | \u00a0 | \u00a0 | 3,500,000 | \u00a0 | \u00a0 | \u00a0 | 3,500,000 | \u00a0 |
Subordinated Promissory Notes, 24-month term notes, 4% cash interest, collateralized with all the assets of the Company | \u00a0 | October 31, 2024 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Subordinated Promissory Notes, 12-month term notes, 4% cash interest, collateralized with all the assets of the Company | \u00a0 | October 31, 2023 | \u00a0 | \u00a0 | 3,436,182 | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | $ | 12,686,182 | \u00a0 | \u00a0 | $ | 15,000,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Acquisition notes payable\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a09,186,182 | \u00a0 | \u00a0 | \u00a0 | \u00a05,750,000 | \u00a0 |
Discount on acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (703,154 | ) | \u00a0 | \u00a0 | (93,380 | ) |
Acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 8,483,028 | \u00a0 | \u00a0 | \u00a0 | 5,656,620 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a03,500,000 | \u00a0 | \u00a0 | \u00a0 | \u00a09,250,000 | \u00a0 |
Discount on acquisition notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (300,317 | ) | \u00a0 | \u00a0 | (1,503,843 | ) |
Acquisition notes payable, net of current and discount | \u00a0 | \u00a0 | \u00a0 | $ | 3,199,683 | \u00a0 | \u00a0 | $ | 7,746,157 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes Payable: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building | \u00a0 | September 26, 2032 | \u00a0 | $\u00a0 | 2,720,278 | \u00a0 | \u00a0 | $\u00a0 | 2,841,566 | \u00a0 |
Promissory Note,\u00a021-month term note, 10% cash interest and subordinate to the Convertible Notes | \u00a0 | November 22, 2024 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 |
SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company | \u00a0 | October 6, 2021 | \u00a0 | \u00a0 | 3,742,526 | \u00a0 | \u00a0 | \u00a0 | 3,910,767 | \u00a0 |
Inventory consignment note,\u00a060 monthly payments, with first payment due June 30, 2022, 3.5% interest rate and no security interest in the assets of the business | \u00a0 | June 30, 2027 | \u00a0 | \u00a0 | 1,008,291 | \u00a0 | \u00a0 | \u00a0 | 1,099,592 | \u00a0 |
GF Note, 6 annual payments,\u00a0with first payment due December 31, 2022, 3.5% interest rate and no security interest in the assets of the business | \u00a0 | November 7, 2026 | \u00a0 | \u00a0 | 683,968 | \u00a0 | \u00a0 | \u00a0 | 683,968 | \u00a0 |
Total notes payable | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 8,715,063 | \u00a0 | \u00a0 | \u00a0 | 9,095,893 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a04,223,617 | \u00a0 | \u00a0 | \u00a0 | 1,326,214 | \u00a0 |
Discount on notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (17,143 | ) | \u00a0 | \u00a0 | (24,193 | ) |
Notes payable, current net of discount | \u00a0 | \u00a0 | \u00a0 | $ | 4,206,474 | \u00a0 | \u00a0 | $ | 1,302,021 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, long-term\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a04,483,445 | \u00a0 | \u00a0 | \u00a0 | \u00a07,769,679 | \u00a0 |
Discount on notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (13,428 | ) | \u00a0 | \u00a0 | (23,522 | ) |
Notes payable, long-term, net | \u00a0 | \u00a0 | \u00a0 | $ | 4,470,017 | \u00a0 | \u00a0 | $ | 7,746,157 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Related Notes Payable: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Marshall Loan,\u00a02-year term note, 8.5% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes. November of 2023 extended to 2.5 year term note | \u00a0 | December 28, 2026 | \u00a0 | \u00a0$ | 1,500,000 | \u00a0 | \u00a0 | $\u00a0 | 1,500,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Discount on related party note payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | (70,644 | ) | |
Notes payable, current, net of discount | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,429,356 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Discount on related party note payable, long term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (40,369 | ) | \u00a0 | \u00a0 | - | |
Notes payable, long term net | \u00a0 | \u00a0 | \u00a0 | $ | 1,459,631 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total convertible notes payable, acquisition notes payable, notes payable and related party note payable | \u00a0 | \u00a0 | \u00a0 | $ | 23,968,832 | \u00a0 | \u00a0 | $ | 25,889,239 | \u00a0 |
2024 | \u00a0 | $ | 13,417,799 | \u00a0 |
2025 | \u00a0 | \u00a0 | 3,418,695 | \u00a0 |
2026 | \u00a0 | \u00a0 | 5,771,873 | \u00a0 |
2027 | \u00a0 | \u00a0 | 611,749 | \u00a0 |
2028 | \u00a0 | \u00a0 | 313,044 | \u00a0 |
Thereafter | \u00a0 | \u00a0 | 1,518,085 | \u00a0 |
\u00a0 | \u00a0 | $ | 25,051,245 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Convertible notes, original discount and related fees and costs | \u00a0 | \u00a0 | (1,082,413 | ) |
\u00a0 | \u00a0 | $ | 23,968,832 | \u00a0 |
Note 10. Related Party Transactions
\u00a0
During the year ended June 30, 2022, the Company entered into a promissory note with a member of management.\u00a0 The loan was for $1,500,000\u00a0and has a two-year term with an interest rate of\u00a08.5% per annum with an additional PIK of\u00a03.5% per annum.\u00a0\u00a0 On November 15, 2023, the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025.\u00a0 The principal currently outstanding is $1,500,000.\u00a0 In addition to this, the Company issued Mr. Marshall a warrant to purchase up to 375,000 shares of the Company\u2019s common stock at a per share price of $1.10.\u00a0 The note has been classified as long-term in the financial statements.\u00a0
"}]},{"name":"rpt:f-941","factDimensions":{"xbrl:concept":"us-gaap:DebtInstrumentIncreaseDecreaseForPeriodNet","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1500000","decimals":0}]},{"name":"rpt:f-942","factDimensions":{"xbrl:concept":"us-gaap:ShortTermDebtInterestRateIncrease","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"0.085"}]},{"name":"rpt:f-943","factDimensions":{"xbrl:concept":"upxi:AdditionalPercentageRate","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"0.035"}]},{"name":"rpt:f-944","factDimensions":{"xbrl:concept":"upxi:DescriptionOfAmendmentOFPromissoryNote","xbrl:period":"2023-11-01T00:00:00/2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025"}]},{"name":"rpt:f-945","factDimensions":{"xbrl:concept":"upxi:PrincipalOutstandingAmount","xbrl:period":"2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"1500000","decimals":0}]},{"name":"rpt:f-946","factDimensions":{"xbrl:concept":"upxi:CommonStockSharePurchase","xbrl:period":"2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"375000","decimals":0}]},{"name":"rpt:f-947","factDimensions":{"xbrl:concept":"us-gaap:CommonStockParOrStatedValuePerShare","xbrl:period":"2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"1.10"}]},{"name":"rpt:f-948","factDimensions":{"xbrl:concept":"us-gaap:StockholdersEquityNoteDisclosureTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 11. Equity Transactions
\u00a0
Convertible Preferred Stock
\u00a0
The Company has 500,000\u00a0shares of Preferred Stock issued and outstanding to Allan Marshall, CEO. The preferred stock is convertible into the Company\u2019s common stock at a ratio of 1.8 shares of preferred stock for a single share\u00a0of the Company\u2019s common stock at the holder\u2019s option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock.
\u00a0
Common Stock
\u00a0
During the six months ended December 31, 2022, the Company issued\u00a01,247,403\u00a0shares of common stock for the acquisition of E-Core Technologies Inc., a Florida corporation, valued at $6,000,000.
\u00a0
During the six months ended December 31, 2023, the Company issued\u00a090,909 shares of common stock for the acquisition of the remaining 45% of Cygnet Online, LLC.\u00a0 The shares were valued at $162,727 or $1.79 per common share.\u00a0
\u00a0
During the six months ended December 31, 2023, the Company issued\u00a0100,000 shares of common stock as an incentive restricted stock grant to certain employees.\u00a0\u00a0 The shares were valued at $85,000 or $0.85 per common share.\u00a0
\u00a0
On January 18, 2024, the Company issued 501,605 shares of common stock as repayment of $500,000 of the Company\u2019s long-term debt.\u00a0 The shares were valued at 500,000 or .09868 per common share.\u00a0
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\u00a0
The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares. The options are exercisable for a period of up to\u00a010\u00a0years from the date of the grant.
\u00a0
The following table reflects the continuity of stock options for the six months ended December 31, 2023:
\u00a0
A summary of stock option activity is as follows:
\u00a0
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | Weighted | \u00a0 | \u00a0 | Average | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | Average | \u00a0 | \u00a0 | Remaining | \u00a0 | \u00a0 | Aggregated | \u00a0 | ||||
\u00a0 | \u00a0 | Options | \u00a0 | \u00a0 | Exercise | \u00a0 | \u00a0 | Contractual | \u00a0 | \u00a0 | Intrinsic | \u00a0 | ||||
\u00a0 | \u00a0 | Outstanding | \u00a0 | \u00a0 | Price | \u00a0 | \u00a0 | Life (Years) | \u00a0 | \u00a0 | Value | \u00a0 | ||||
Outstanding at June 30, 2023 | \u00a0 | \u00a0 | 4,839,278 | \u00a0 | \u00a0 | $ | 3.31 | \u00a0 | \u00a0 | \u00a0 | 6.23 | \u00a0 | \u00a0 | $ | 1,342,280 | \u00a0 |
Canceled | \u00a0 | \u00a0 | (448,000 | ) | \u00a0 | \u00a0 | 4.34 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Granted | \u00a0 | \u00a0 | 400,000 | \u00a0 | \u00a0 | \u00a0 | 1.47 | \u00a0 | \u00a0 | \u00a0 | 1 | \u00a0 | \u00a0 | \u00a0 | 32,000 | \u00a0 |
Options outstanding at December 31, 2023 | \u00a0 | \u00a0 | 4,791,278 | \u00a0 | \u00a0 | $ | 3.36 | \u00a0 | \u00a0 | \u00a0 | 5.65 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Options exercisable at December 31, 2023 (vested) | \u00a0 | \u00a0 | 4,573,986 | \u00a0 | \u00a0 | $ | 2.92 | \u00a0 | \u00a0 | \u00a0 | 5.74 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0
Stock-based compensation expense attributable to stock options was $330,584\u00a0and $1,052,847\u00a0for the three months ended December 31, 2023, and 2022, respectively.\u00a0 Stock-based compensation expense attributable to stock options was $752,471\u00a0and $1,980,173\u00a0for the six months ended December 31, 2023, and 2022, respectively.\u00a0 As of December 31, 2023, there was $441,416\u00a0of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was approximately\u00a01.5\u00a0years.
\u00a0
The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the six months ended December 31, 2023:
\u00a0
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | |
Dividend rate | \u00a0 | \u00a0 | - | \u00a0 |
Risk free interest rate | \u00a0 | \u00a0 | 3.95 | % |
Expected term | \u00a0 | \u00a0 | 1 | \u00a0 |
Expected volatility | \u00a0 | \u00a0 | 63 | % |
Grant date stock price | \u00a0 | $ | 1.47 | \u00a0 |
\u00a0
The basis for the above assumptions are as follows: the dividend rate is based upon the Company\u2019s history of dividends; the risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was calculated based on the Company\u2019s historical pattern of options granted and the period of time they are expected to be outstanding; and expected volatility was calculated based upon historical trends in the Company\u2019s stock prices.
\u00a0
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on historical experience of forfeitures, the Company estimated forfeitures at\u00a00% for each of the six months ended December 31, 2023, and 2022.
"}]},{"name":"rpt:f-962","factDimensions":{"xbrl:concept":"upxi:ExercisableOptionPeriod","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:FinancialInstrumentAxis":"upxi:StockBasedCompensationMember"},"factValues":[{"value":"P10Y"}]},{"name":"rpt:f-963","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | Weighted | \u00a0 | \u00a0 | Average | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | Average | \u00a0 | \u00a0 | Remaining | \u00a0 | \u00a0 | Aggregated | \u00a0 | ||||
\u00a0 | \u00a0 | Options | \u00a0 | \u00a0 | Exercise | \u00a0 | \u00a0 | Contractual | \u00a0 | \u00a0 | Intrinsic | \u00a0 | ||||
\u00a0 | \u00a0 | Outstanding | \u00a0 | \u00a0 | Price | \u00a0 | \u00a0 | Life (Years) | \u00a0 | \u00a0 | Value | \u00a0 | ||||
Outstanding at June 30, 2023 | \u00a0 | \u00a0 | 4,839,278 | \u00a0 | \u00a0 | $ | 3.31 | \u00a0 | \u00a0 | \u00a0 | 6.23 | \u00a0 | \u00a0 | $ | 1,342,280 | \u00a0 |
Canceled | \u00a0 | \u00a0 | (448,000 | ) | \u00a0 | \u00a0 | 4.34 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Granted | \u00a0 | \u00a0 | 400,000 | \u00a0 | \u00a0 | \u00a0 | 1.47 | \u00a0 | \u00a0 | \u00a0 | 1 | \u00a0 | \u00a0 | \u00a0 | 32,000 | \u00a0 |
Options outstanding at December 31, 2023 | \u00a0 | \u00a0 | 4,791,278 | \u00a0 | \u00a0 | $ | 3.36 | \u00a0 | \u00a0 | \u00a0 | 5.65 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Options exercisable at December 31, 2023 (vested) | \u00a0 | \u00a0 | 4,573,986 | \u00a0 | \u00a0 | $ | 2.92 | \u00a0 | \u00a0 | \u00a0 | 5.74 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | December 31, 2023 | \u00a0 | |
Dividend rate | \u00a0 | \u00a0 | - | \u00a0 |
Risk free interest rate | \u00a0 | \u00a0 | 3.95 | % |
Expected term | \u00a0 | \u00a0 | 1 | \u00a0 |
Expected volatility | \u00a0 | \u00a0 | 63 | % |
Grant date stock price | \u00a0 | $ | 1.47 | \u00a0 |
Note 13. Income Taxes
\u00a0
The Company computed the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income and adjusted for discrete tax items in the period. The Company\u2019s income tax benefit was $694,807 and $1,167,174\u00a0for the three and six months ended December 31, 2023, respectively, and $755,253 and $47,052\u00a0for the three and six months ended December 31, 2022, respectively.
\u00a0
The income tax expense for the three and six months ended December 31, 2022, was primarily attributable to federal and state income taxes and nondeductible expenses for an effective tax rate of approximately\u00a029%. For the three and six months ended December 31, 2022, the difference between the U.S. statutory rate and the Company\u2019s effective tax rate is due to the full valuation allowance on the Company\u2019s deferred tax assets.
\u00a0
Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The Company also considered whether there was any currently available information about future years. The Company determined that it is more likely than not that the Company will have future taxable income to fully realize the Company\u2019s deferred tax asset.
\u00a0
As of December 31, 2023, there was approximately $5,535,710 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely.
"}]},{"name":"rpt:f-997","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxExpenseBenefit","xbrl:period":"2023-10-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"694807","decimals":0}]},{"name":"rpt:f-998","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxExpenseBenefit","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1167174","decimals":0}]},{"name":"rpt:f-999","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxExpenseBenefit","xbrl:period":"2022-10-01T00:00:00/2023-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-755253","decimals":0}]},{"name":"rpt:f-1000","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxExpenseBenefit","xbrl:period":"2022-07-01T00:00:00/2023-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-47052","decimals":0}]},{"name":"rpt:f-1001","factDimensions":{"xbrl:concept":"us-gaap:EffectiveIncomeTaxRateReconciliationDeductions","xbrl:period":"2022-10-01T00:00:00/2023-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"0.29"}]},{"name":"rpt:f-1002","factDimensions":{"xbrl:concept":"us-gaap:DeferredTaxAssetsOtherLossCarryforwards","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"5535710","decimals":0}]},{"name":"rpt:f-1003","factDimensions":{"xbrl:concept":"us-gaap:UnusualRisksAndUncertaintiesTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 14. Risks and Uncertainties
\u00a0
There is substantial uncertainty and different interpretations among federal, state, and local regulatory agencies, legislators, academics, and businesses as to the scope of operation of Farm Bill-compliant hemp programs relative to the emerging regulation of cannabinoids. These different opinions include, but are not limited to, the regulation of cannabinoids by the U.S. Drug Enforcement Administration, or DEA, and/or the FDA and the extent to which manufacturers of products containing Farm Bill-compliant cultivators and processors may engage in interstate commerce. The uncertainties cannot be resolved without further federal, and perhaps even state-level, legislation, regulation or a definitive judicial interpretation of existing legislation and rules. If these uncertainties continue, they may have an adverse effect upon the introduction of our products in different markets.
\u00a0
In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company has transition to a combination of work from home and social distancing operations and there has been minimal impact to our internal operations from the transition. The Company is unable to determine if there will be a material future impact to its customers\u2019 operations and ultimately an impact to the Company\u2019s overall revenues.
"}]},{"name":"rpt:f-1004","factDimensions":{"xbrl:concept":"us-gaap:DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-01-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 15. Discontinued Operations \u2013 Sale of Infusionz to Bloomios
\u00a0
On October 28, 2022, the Company determined that the best course of action related to Infusionz, LLC and certain manufacturing business was to accept an offer to sell those operations. \u00a0
\u00a0
The Company received from Bloomios, Inc., (OTCQB:BLMS), the purchaser (i) $5,500,000 paid at closing; (ii) a convertible secured subordinated promissory note in the original principal amount of $5,000,000; (iii) 85,000 shares of Series D convertible preferred stock, with a total stated value of $8,500,000; (iv) a senior secured convertible debenture with a subscription amount of $4,500,000, after original issue discount of $779,117; and (v) a common stock purchase warrant to purchase up to 2,853,910 shares of Bloomios\u2019s common stock.\u00a0 The Company recorded the consideration received at the estimated value at the time of the transaction and as part of that estimate valued the additional warrants to purchase Bloomios shares of common stock at $8,500,000 and a valuation allowance of $8,500,000.
\u00a0
The assets transferred were recorded at their respective book values, the accrued and incurred expenses estimated by management were recorded and the consideration received was recorded at management's estimated fair value based on the balance sheet on October 26, 2022, the effective closing date.
\u00a0
Tangible assets, inventory / working capital* | \u00a0 | $ | (1,344,000 | ) |
Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation* | \u00a0 | \u00a0 | (679,327 | ) |
Goodwill | \u00a0 | \u00a0 | (2,413,814 | ) |
Intangible assets, net of accumulated amortization | \u00a0 | \u00a0 | (946,996 | ) |
Accrued and incurred expenses related to the transaction and additional working capital* | \u00a0 | \u00a0 | (2,051,500 | ) |
Consideration received, including cash, debt and equity, net | \u00a0 | \u00a0 | 15,000,000 | \u00a0 |
Total gain recognized | \u00a0 | $ | 7,564,363 | \u00a0 |
\u00a0
*During the continuing transition period, all of the inventory or working capital has not been transferred to the buyer.
\u00a0
At closing, the Company provided working capital, in the form of inventory, in excess of the working capital agreement and during the transition period, there are certain expenses and purchases incurred that are to be netted against funds collected on behalf of the buyer.\u00a0 June 30, 2023, there was a receivable balance from the buyer of $845,443, net of a reserve of $931,613.\u00a0 \u00a0\u00a0
\u00a0
Advance for payroll | \u00a0 | $ | 50,000 | \u00a0 |
Operating expense | \u00a0 | \u00a0 | 652,891 | \u00a0 |
Management fees | \u00a0 | \u00a0 | 685,600 | \u00a0 |
Excess working capital | \u00a0 | \u00a0 | 388,565 | \u00a0 |
Accrued Interest | \u00a0 | \u00a0 | 247,885 | \u00a0 |
Subtotal due from Bloomios | \u00a0 | $ | 2,024,941 | \u00a0 |
Reserve | \u00a0 | \u00a0 | 1,179,498 | \u00a0 |
Total due from Bloomios | \u00a0 | $ | 845,443 | \u00a0 |
Tangible assets, inventory / working capital* | \u00a0 | $ | (1,344,000 | ) |
Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation* | \u00a0 | \u00a0 | (679,327 | ) |
Goodwill | \u00a0 | \u00a0 | (2,413,814 | ) |
Intangible assets, net of accumulated amortization | \u00a0 | \u00a0 | (946,996 | ) |
Accrued and incurred expenses related to the transaction and additional working capital* | \u00a0 | \u00a0 | (2,051,500 | ) |
Consideration received, including cash, debt and equity, net | \u00a0 | \u00a0 | 15,000,000 | \u00a0 |
Total gain recognized | \u00a0 | $ | 7,564,363 | \u00a0 |
Advance for payroll | \u00a0 | $ | 50,000 | \u00a0 |
Operating expense | \u00a0 | \u00a0 | 652,891 | \u00a0 |
Management fees | \u00a0 | \u00a0 | 685,600 | \u00a0 |
Excess working capital | \u00a0 | \u00a0 | 388,565 | \u00a0 |
Accrued Interest | \u00a0 | \u00a0 | 247,885 | \u00a0 |
Subtotal due from Bloomios | \u00a0 | $ | 2,024,941 | \u00a0 |
Reserve | \u00a0 | \u00a0 | 1,179,498 | \u00a0 |
Total due from Bloomios | \u00a0 | $ | 845,443 | \u00a0 |
Note 16. Discontinued Operations \u2013 Sale of Interactive Offers
\u00a0
On August 31, 2023, the Company sold Interactive offers to Amplifyir Inc. The purchase price is $1,250,000 with a provision to adjust the final purchase price based on the business being transferred to Amplifyer Inc. with a net zero working capital. In addition, the Buyer is obligated to pay the Company two-and-one-half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing. Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented.
\u00a0
Summary of discontinued operations:
\u00a0
\u00a0 | \u00a0 | Three months ended December \u00a030, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 158,147 | \u00a0 | \u00a0 | $ | 604,625 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 | \u00a0 | $ | 230,967 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 339,205 | \u00a0 | \u00a0 | $ | 971,657 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,798 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | (193,040 | ) | \u00a0 | $ | (928,215 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 56,961 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,195 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 405,721 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 562,953 | \u00a0 |
\u00a0
\u00a0 | \u00a0 | Six months ended December \u00a030, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 158,147 | \u00a0 | \u00a0 | $ | 1,560,387 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 | \u00a0 | $ | 961,273 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 339,205 | \u00a0 | \u00a0 | $ | 1,635,435 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 11,593 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | (193,040 | ) | \u00a0 | $ | (1,376,332 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 56,961 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,195 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 405,721 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 562,953 | \u00a0 |
\u00a0 | \u00a0 | Three months ended December \u00a030, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 158,147 | \u00a0 | \u00a0 | $ | 604,625 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 | \u00a0 | $ | 230,967 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 339,205 | \u00a0 | \u00a0 | $ | 971,657 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,798 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | (193,040 | ) | \u00a0 | $ | (928,215 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 56,961 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,195 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 405,721 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 562,953 | \u00a0 |
\u00a0 | \u00a0 | Six months ended December \u00a030, | \u00a0 | |||||
\u00a0 | \u00a0 | 2023 | \u00a0 | \u00a0 | 2022 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 158,147 | \u00a0 | \u00a0 | $ | 1,560,387 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 | \u00a0 | $ | 961,273 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 339,205 | \u00a0 | \u00a0 | $ | 1,635,435 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 11,593 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | (193,040 | ) | \u00a0 | $ | (1,376,332 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 56,961 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,195 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 405,721 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 562,953 | \u00a0 |
Note 17. Subsequent Events
\u00a0
On January 18, 2024, the Company received a notice from the promissory note holder to convert $500,000 of the principal balance for 501,605 shares or at the closing Company common stock price of $0.9968 per share. The conversion was accepted and the shares were issued, lowering the outstanding balance and the future interest payments on the loan.\u00a0
"}]},{"name":"rpt:f-1072","factDimensions":{"xbrl:concept":"us-gaap:ConvertibleNotesPayableCurrent","xbrl:period":"2024-01-19T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:SubsequentEventTypeAxis":"us-gaap:SubsequentEventMember"},"factValues":[{"value":"500000","decimals":0}]},{"name":"rpt:f-1073","factDimensions":{"xbrl:concept":"upxi:ConvertiblePromissoryNotePrincipalBalance","xbrl:period":"2024-01-19T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:SubsequentEventTypeAxis":"us-gaap:SubsequentEventMember"},"factValues":[{"value":"501605","decimals":0}]},{"name":"rpt:f-1074","factDimensions":{"xbrl:concept":"us-gaap:CommonStockParOrStatedValuePerShare","xbrl:period":"2024-01-19T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:SubsequentEventTypeAxis":"us-gaap:SubsequentEventMember"},"factValues":[{"value":"0.9968"}]}]}}