As used in this annual report and unless otherwise indicated, the terms \u201cwe\u201d, \u201cus\u201d, \u201cour\u201d, \u201cUpexi\u201d, and the \u201cCompany\u201d mean Upexi, Inc., a Nevada corporation formed in 2018. The Company has eleven active subsidiaries, which include:
\u00a0
\u00a0 | \u2610 | HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company | ||
\u00a0 | \u2610\u00a0 | Gummy Labs, LLC, a Delaware limited liability company | ||
\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 | Upexi Enterprise, LLC, a Delaware limited liability company | ||
\u00a0 | \u00a0 | o | Upexi Distribution LLC, a Delaware limited liability company | |
\u00a0 | \u00a0 | o | Upexi Distribution Management 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 | \u2610 | Cygnet Online, LLC (\u201cCygnet\u201d), a Delaware limited liability company (100% owned as of September 1, 2023) |
\u00a0
The following subsidiaries had no activity during the years ended June 30, 2024 and 2023:
\u00a0
\u00a0 | \u2610 | Upexi CP, LLC, a Delaware limited liability company |
\u00a0 | \u2610\u00a0 | Upexi CP / Canada Inc., a Canada corporation |
\u00a0 | \u2610 | Prax Products, LLC, a Florida limited liability company |
\u00a0 | \u2610 | Upexi Development and Marketing, LLC., a Delaware limited liability company |
\u00a0 | \u2610 | Trunano Labs, Inc., a Nevada corporation |
\u00a0
The following subsidiaries were divested during the years ended June 30, 2024 and 2023:
\u00a0
\u00a0 | \u2610 | VitaMedica, Inc. a Nevada corporation |
\u00a0 | \u2610\u00a0 | E-Core Technology, Inc. a Florida corporation |
\u00a0 | \u2610 | Infusionz LLC, a Colorado limited liability company |
\u00a0 | \u2610 | Interactive Offers, LLC, a Delaware limited liability company |
\u00a0
In addition, the Company has six wholly owned subsidiaries that had no activity during the years ended June 30, 2024 and 2023. All of the entities were dissolved or cancelled as of June 30, 2024.
\u00a0
\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 |
\u00a0 | \u00b7 | SWCH, LLC, a Delaware limited liability company |
\u00a0 | \u00b7 | Cresco Management, LLC, a California limited liability company |
Our products are distributed in the United States of America and internationally through multiple entities and managed through our locations in Florida.
\u00a0
Upexi operates from our corporate location in Tampa, Florida, where direct to consumer, wholesale 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
\u00a0
MW Products operates from our corporate headquarters and our Tampa, Florida warehouse, managing direct to consumer, wholesale and Amazon sales for multiple brands and develops new products through our research and development team in Henderson, Nevada and Odessa, Florida.
\u00a0
Lucky Tail operates from our Tampa, Florida warehouse with sales and marketing driven by on-site and remote teams that operate the Amazon sales strategy and daily business operations.
\u00a0
HAVZ, LLC, d/b/a/ Steam Wholesale operates manufacturing and/or distribution centers in Odessa, Florida, 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.
\u00a0
Upexi Distribution operates from our Tampa, Florida warehouse providing warehousing, distribution and other services in support of our product sales.\u00a0
"}]},{"name":"rpt:f-482","factDimensions":{"xbrl:concept":"us-gaap:SignificantAccountingPoliciesTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 2. Significant Accounting Policies
\u00a0
The significant accounting policies followed are:
\u00a0
Use of Estimates\u00a0-\u00a0The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
\u00a0
Significant estimates underlying the Company\u2019s reported financial position and results of operations include the allowance for doubtful accounts, useful lives of property and equipment, impairment of long-lived assets, inventory valuation, fair value of stock-based compensation and valuation allowance on deferred tax assets.
\u00a0
Cash\u00a0-\u00a0The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents. Cash\u00a0is maintained at financial institutions and at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances.
\u00a0
Accounts Receivable\u00a0-\u00a0Amounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within a specified time from the invoice date. The trade terms vary based on the customer and typically range from prepaid to 45 days from the invoice date. Interest is not charged by the Company on past due accounts. The carrying amount of receivables is reduced by a valuation allowance for expected credit losses, as necessary, that reflects management\u2019s best estimate of the amount that will not be collected. This estimation takes into consideration historical experience, current conditions and as applicable, reasonable supportable forecasts. Actual results could vary from the estimate. Accounts are charged against the allowance when management deems them to be uncollectible. The net accounts receivable balances at June 30, 2024, 2023 and 2022 were $606,885, 1,125,394 and $760,729, respectively. Based on management\u2019s review of accounts receivable, the valuation allowance was approximately $61,750 and $0 at June 30, 2024 and 2023, respectively. The Company had bad debt expenses of $24,500 and $4,750 for the years ended June 30, 2024 and 2023, respectively.
Inventory\u00a0-\u00a0The Company reviews the inventory level of all products and raw materials quarterly. For most products that have been in the market for one year or more, we consider inventory levels of greater than one year\u2019s sales to be excess or other items that show slower than projected sales. Due to limited market penetration for our products, we have decided to write down 50% of the cost against certain raw materials and finished products. Products that are no longer part of the current product offering are considered obsolete. The potential for re-sale of slow-moving and obsolete inventories is based upon our assumptions about future demand and market conditions. The recorded cost of obsolete inventories is then reduced to zero. The slow-moving and obsolete inventory is written off and recorded as charges to cost of goods sold. All adjustments for obsolete inventory establish a new cost basis for that inventory as we believe such reductions are permanent declines in the market price of our products. Generally, obsolete inventory is sold to companies that specialize in the liquidation, while we continue to market slow-moving inventories until they are sold or become obsolete.
\u00a0
Inventory consists of raw materials and finished goods and is stated at the lower of cost or net realizable value, cost is determined by the weighted average moving cost inventory method. Net realizable value is determined, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors.\u00a0 On June 30, 2024, the Company had $465,535 of raw materials and $966,021 of finished goods inventory.\u00a0 On June 30, 2023, the Company had no raw material inventory and $4,804,299 of finished goods inventory.\u00a0 The Company had inventory reserves at June 30, 2024 and 2023 of $605,470 and $154,400, respectively.
\u00a0
Property and Equipment\u00a0-\u00a0Property and equipment is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 20 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Gains and losses upon disposition are reflected in the Statements of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. The Company disposed of some equipment during 2024 and 2023 which resulted in gains and losses on the sales, shown in the accompanying Statements of Operations.
\u00a0
Business Combinations\u00a0- The Company accounts for its business combinations using the acquisition method of accounting. The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities assumed by the Company to the seller\u2019s cash consideration and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. The excess of (i) the total costs of acquisition over (ii) the fair value of the identifiable net assets of the acquiree is recorded as identifiable intangible assets and goodwill.
\u00a0
Goodwill - The Company evaluates its goodwill for possible impairment, simplifying the test for goodwill impairment at least annually and\u00a0when one or more triggering events or circumstances indicate that the goodwill might be impaired. Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit\u2019s fair value, not to exceed the carrying value of goodwill.\u00a0
The Company performed its annual test as of June 30, 2024 and 2023, respectively.\u00a0
\u00a0
It was determined by management that the goodwill related to Cygnet was completely impaired at June 30, 2024 based on the strategic decision to exit the recommerce business.\u00a0 An impairment of goodwill in the amount of $3,594,745 was recorded at June 30, 2024 eliminating all of the goodwill related to Cygnet.
\u00a0
It was determined by management that the goodwill related to Interactive Offers was completely impaired at June 30, 2023 based on the sale of the business at September 1, 2023.\u00a0 An impairment of goodwill in the amount of $2,889,158 was recorded at June 30, 2023 eliminating all of the goodwill related to Interactive Offers.
\u00a0
Revenue Recognition\u00a0-\u00a0In accordance with ASC No. 606, Revenue from Contracts with Customers, the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay.
The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon the distributors\u2019 resale of the products.
\u00a0
Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with inbound freight, are generally included in cost of revenue.
\u00a0
Our business is subject to contingencies related to customer orders, including:
\u00a0
Right of Return:
\u00a0
A large portion of our revenue comes from the sale of consumable products, which are sold in high-volume and low quantities, and are generally maintained at stock levels of less than ninety days in our facility. Customer returns have historically represented a very small percentage of sales on an annual basis.\u00a0 Other product sales relate to some pet products, including small mechanical devices.\u00a0
\u00a0
Warranties:
\u00a0
The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase. The Company accrues an allowance for refunds, returned deposits and discounts given by customer services post shipment of the product based on historical experience and management\u2019s estimate of future expenses, including replacement, freight charges and other fulfilment expenses.
\u00a0
Conditions of Acceptance:
\u00a0
Sales of our consumable products and pet products, generally do not have customer acceptance terms.
\u00a0
Contract Assets
\u00a0
A contract asset is the Company\u2019s right to consideration in exchange for goods or services that the Company has transferred to a customer. ASC 606, Revenue from Contracts with Customers, distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time. When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company\u2019s right to consideration for its performance. The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued. The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables.
\u00a0
The following table discloses the deferred revenue:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Deferred revenue | \u00a0 | $ | 235,255 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0
The deferred revenue or also referred to as funded backlog was $235,255,\u00a0$0 and $0 at June 30,2024,\u00a0June 30, 2023 and June 30, 2022, respectively.\u00a0We expect to recognize approximately 100% of the deferred revenue as revenue in the year ended June 30, 2025.\u00a0 There was no opening liability balance at June 30, 2023 to be recognized in the year ended June 30, 2024.
Impairment of Long-lived Assets\u00a0-\u00a0Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.\u00a0\u00a0 The Company recognized an impairment on its building of $336,434 during the year ended June 30, 2024, based on the fair market value of the building's pending sale, completed on July 8, 2024.\u00a0 The Company recognized a $569,195 loss on the sale of assets that were either liquidated or abandoned in the move of its manufacturing facility from Nevada to Florida.\u00a0 In addition, the Company recognized an impairment of intangible assets of $4,274,680 for the year ended June 30, 2024.\u00a0 $974,680 of the impairment is related to LuckyTail\u2019s rapid decline of direct-to-consumer sales and $3,300,000 of the impairment is related to the unamortized vendor list of Cygnet, as the Company no longer purchases products from the majority of the original vendors Cygnet was using when the Company purchased Cygnet.\u00a0\u00a0\u00a0\u00a0
\u00a0
The Company recognized an impairment on its long-lived assets during the year ended June 30, 2023, of $857,143 on the assets held for sale, related to Interactive Offers, leaving $716,944 of Interactive\u2019s original intangible assets classified as assets available for sale.\u00a0\u00a0
\u00a0
Advertising\u00a0-\u00a0The Company supports its products with advertising to build brand awareness of the Company\u2019s various products in addition to other marketing programs executed by the Company\u2019s marketing team. The Company believes continual investment in advertising is critical to the development and sale of its branded products. Advertising costs of $3,353,361 and $4,271,469 were expensed as incurred during the years ended June 30, 2024 and 2023, respectively.\u00a0
\u00a0
Stock Based Compensation\u00a0- The Company recognizes all share-based payments to employees, including grants of employee stock options and grants of restricted shares as compensation expense in the consolidated financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately.
\u00a0
Non-employee Stock-based Payments\u00a0-\u00a0The Company\u2019s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of Accounting Standards Codification (ASC) 2018-07, which simplifies the accounting for non-employee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor\u2019s own operations by issuing share-based payment awards. Stock-based payments related to non-employees are accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor\u2019s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.
\u00a0
Fair Value Measurements\u00a0- The Company accounts for financial instruments in accordance with FASB ASC 820 \u201cFair Value Measurement and Disclosures\u201d (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity\u2019s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).
\u00a0
The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
\u00a0
\u00a0 | \u00b7 | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
\u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00b7 | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
\u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00b7 | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. |
The estimated fair value of certain financial instruments, including cash, accounts receivable, accounts payable, accrued expenses, deferred revenue and debt are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
\u00a0
Leases\u00a0-\u00a0The Company determines if a contract contains a lease at inception. A contract contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. Leases with an initial term of 12 months or less are not recorded within the accompanying consolidated balance sheets. GAAP requires that the Company\u2019s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option will result in an economic penalty. All the Company\u2019s real estate leases are classified as operating leases.
\u00a0
Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term for an additional two years. The exercise of lease renewal options is at the Company\u2019s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.
\u00a0
The Company\u2019s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment.
\u00a0
Income Taxes\u00a0-\u00a0Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.\u00a0\u00a0 A $6,100,000 valuation allowance was recorded at June 30, 2024 and no valuation allowance at June 30, 2023.\u00a0
\u00a0
The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
\u00a0
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, \u201cIncome Taxes.\u201d Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity\u2019s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date.\u00a0
\u00a0
ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise\u2019s consolidated financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There are no material uncertain tax positions at June 30, 2024 or June 30, 2023.
\u00a0
On December 22, 2017, the U.S. government enacted the Tax Act, which made significant changes to the Internal Revenue Code of 1986, as amended, including, but not limited to, reducing the U.S. corporate statutory tax rate and the net operating loss incurred after December 31, 2017 can be carried forward indefinitely and the two year net operating loss carried back was eliminated (prohibited).
\u00a0
Reverse Stock Split
\u00a0
On September 18, 2024, we filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of our common stock at a rate of 1-for-20 (the \"Reverse Stock Split\"), which became effective as of October 3, 2024 (the \"Effective Date\"). The Reverse Stock Split was approved by the board of directors in accordance with Nevada law. The Reverse Stock Split did not have any impact on the par value of common stock.
\u00a0
On the Effective Date, every twenty shares of Common Stock issued and outstanding were automatically combined into one share of Common Stock, without any change in the par value per share. As the per-share par value did not change, we reclassified $19,860 from Common Stock to Additional Paid-in-Capital on the Effective Date. The exercise prices and the number of shares issuable upon exercise of outstanding stock options, equity awards and warrants, and the number of shares available for future issuance under the equity incentive plans were adjusted in accordance with their respective terms. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder\u2019s percentage interest in our Common Stock. We did not issue any fractional shares in connection with the Reverse Stock Split. Instead, fractional shares were initially rounded up to the next largest whole number, resulting in the issuance of 8 shares on October 3, 2024, the Effective Date, and an additional issuance of 38 shares on October 8,2024.\u00a0 On October 10, 2024, the transfer agent received additional requests to issue a total of 202,183 shares of common stock for round up of fractional shares.\u00a0 These shares were issued on October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company\u2019s transfer agent.\u00a0 Although the Company did receive the common stock back after issuance, the potential dilution remains a risk, and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk.\u00a0The Reverse Stock Split did not modify the relative rights or preferences of the Common Stock.\u00a0\u00a0\u00a0
\u00a0
Unless otherwise indicated, all issued and outstanding shares of common stock and all outstanding securities entitling their holders to purchase shares of our common stock or acquire shares of our common stock, including stock options, restricted stock units, and warrants per share data, share prices and exercise prices, as required by the terms of those securities, have been adjusted retroactively to reflect the Reverse Stock Split.
\u00a0
On October 17, 2024, Company received written notice (the \u201cCompliance Notice\u201d) from The Nasdaq Stock Market LLC (\u201cNasdaq\u201d) informing the Company that it has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Stock Market maintain a minimum bid price of $1.00 per share.\u00a0 Nasdaq notified the Company in the Compliance Notice that, from October 3, 2024 to October 16, 2024, the closing bid price of the Company\u2019s common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.\u00a0\u00a0
Earnings (loss) per Share\u00a0- Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and upon the conversion of notes. For the year ended, the dilutive common shares are as follows:
\u00a0
\u00a0 | \u00a0 | June 30, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Stock options | \u00a0 | \u00a0 | 200,714 | \u00a0 | \u00a0 | \u00a0 | 241,964 | \u00a0 |
Warrants | \u00a0 | \u00a0 | 52,530 | \u00a0 | \u00a0 | \u00a0 | 11,015 | \u00a0 |
Preferred stock | \u00a0 | \u00a0 | 13,889 | \u00a0 | \u00a0 | \u00a0 | 13,889 | \u00a0 |
Convertible debt | \u00a0 | \u00a0 | 15,500 | \u00a0 | \u00a0 | \u00a0 | 57,883 | \u00a0 |
\u00a0Restricted stock grants | \u00a0 | \u00a0 | 12,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Total potential dilutive weighted average shares outstanding | \u00a0 | \u00a0 | 295,133 | \u00a0 | \u00a0 | \u00a0 | 324,750 | \u00a0 |
\u00a0
The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company\u2019s common stock can result in a greater dilutive effect from potentially dilutive securities. During the year ended June 30, 2024 and 2023, the Company reported a net loss, so the potential effect is not reflected in the consolidated financial statements.
\u00a0
Deferred Revenue\u00a0-\u00a0The Company records deposits as deferred revenue when a customer pays in advance of shipping the product. Once the product is shipped, the deposit is recorded as revenue and the related commissions are paid. All products were shipped related to deposits in deferred revenue, in less than one year.
\u00a0
Convertible Debt and Securities - The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option\u2019s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.
\u00a0
Non-controlling Interests in Consolidated financial statements\u00a0-\u00a0In December 2007, the FASB issued ASC 810-10-65, \u201cNon-controlling Interests in consolidated financial statements\u201d. This ASC clarifies that a non-controlling (minority) interest in subsidiaries is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiaries may exceed their interests in the subsidiary\u2019s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance.
\u00a0
Reclassifications - Certain reclassifications have been made to the consolidated financial statements as of and for the year ended June 30, 2023 to conform to the presentation as of and for the year ended June 30, 2024.
\u00a0
Recent Accounting Pronouncements\u00a0\u2013 From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, (\u201cFASB\u201d), or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company\u2019s financial position or results of operations upon adoption. The Company has considered all other recently issued accounting pronouncements, including the new provisions of ASC 326 (\u201cFinancial Instruments \u2013 Credit Losses\u201d) pertaining to \u201ccurrent expected credit losses. ASC 326 was adopted for fiscal year 2024 and did not have a material effect to the accompanying consolidated financial statements.
"}]},{"name":"rpt:f-483","factDimensions":{"xbrl:concept":"us-gaap:UseOfEstimates","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Use of Estimates\u00a0-\u00a0The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
\u00a0
Significant estimates underlying the Company\u2019s reported financial position and results of operations include the allowance for doubtful accounts, useful lives of property and equipment, impairment of long-lived assets, inventory valuation, fair value of stock-based compensation and valuation allowance on deferred tax assets.
"}]},{"name":"rpt:f-484","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Cash\u00a0-\u00a0The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents. Cash\u00a0is maintained at financial institutions and at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances.
"}]},{"name":"rpt:f-485","factDimensions":{"xbrl:concept":"us-gaap:AccountsAndNontradeReceivableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Accounts Receivable\u00a0-\u00a0Amounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within a specified time from the invoice date. The trade terms vary based on the customer and typically range from prepaid to 45 days from the invoice date. Interest is not charged by the Company on past due accounts. The carrying amount of receivables is reduced by a valuation allowance for expected credit losses, as necessary, that reflects management\u2019s best estimate of the amount that will not be collected. This estimation takes into consideration historical experience, current conditions and as applicable, reasonable supportable forecasts. Actual results could vary from the estimate. Accounts are charged against the allowance when management deems them to be uncollectible. The net accounts receivable balances at June 30, 2024, 2023 and 2022 were $606,885, 1,125,394 and $760,729, respectively. Based on management\u2019s review of accounts receivable, the valuation allowance was approximately $61,750 and $0 at June 30, 2024 and 2023, respectively. The Company had bad debt expenses of $24,500 and $4,750 for the years ended June 30, 2024 and 2023, respectively.
"}]},{"name":"rpt:f-486","factDimensions":{"xbrl:concept":"us-gaap:AccountsReceivableNet","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"606885","decimals":0}]},{"name":"rpt:f-487","factDimensions":{"xbrl:concept":"us-gaap:AccountsReceivableNet","xbrl:period":"2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1125394","decimals":0}]},{"name":"rpt:f-488","factDimensions":{"xbrl:concept":"us-gaap:AccountsReceivableNet","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"760729","decimals":0}]},{"name":"rpt:f-489","factDimensions":{"xbrl:concept":"us-gaap:AllowanceForDoubtfulAccountsReceivable","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"61750","decimals":0}]},{"name":"rpt:f-490","factDimensions":{"xbrl:concept":"us-gaap:AllowanceForDoubtfulAccountsReceivable","xbrl:period":"2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"0","decimals":0}]},{"name":"rpt:f-491","factDimensions":{"xbrl:concept":"upxi:BadDebtExpense","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares"},"factValues":[{"value":"24500","decimals":0}]},{"name":"rpt:f-492","factDimensions":{"xbrl:concept":"upxi:BadDebtExpense","xbrl:period":"2022-07-01T00:00:00/2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares"},"factValues":[{"value":"4750","decimals":0}]},{"name":"rpt:f-493","factDimensions":{"xbrl:concept":"us-gaap:InventoryPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Inventory\u00a0-\u00a0The Company reviews the inventory level of all products and raw materials quarterly. For most products that have been in the market for one year or more, we consider inventory levels of greater than one year\u2019s sales to be excess or other items that show slower than projected sales. Due to limited market penetration for our products, we have decided to write down 50% of the cost against certain raw materials and finished products. Products that are no longer part of the current product offering are considered obsolete. The potential for re-sale of slow-moving and obsolete inventories is based upon our assumptions about future demand and market conditions. The recorded cost of obsolete inventories is then reduced to zero. The slow-moving and obsolete inventory is written off and recorded as charges to cost of goods sold. All adjustments for obsolete inventory establish a new cost basis for that inventory as we believe such reductions are permanent declines in the market price of our products. Generally, obsolete inventory is sold to companies that specialize in the liquidation, while we continue to market slow-moving inventories until they are sold or become obsolete.
\u00a0
Inventory consists of raw materials and finished goods and is stated at the lower of cost or net realizable value, cost is determined by the weighted average moving cost inventory method. Net realizable value is determined, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors.\u00a0 On June 30, 2024, the Company had $465,535 of raw materials and $966,021 of finished goods inventory.\u00a0 On June 30, 2023, the Company had no raw material inventory and $4,804,299 of finished goods inventory.\u00a0 The Company had inventory reserves at June 30, 2024 and 2023 of $605,470 and $154,400, respectively.
"}]},{"name":"rpt:f-494","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterials","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"465535","decimals":0}]},{"name":"rpt:f-495","factDimensions":{"xbrl:concept":"us-gaap:InventoryFinishedGoods","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"966021","decimals":0}]},{"name":"rpt:f-496","factDimensions":{"xbrl:concept":"us-gaap:InventoryFinishedGoods","xbrl:period":"2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"4804299","decimals":0}]},{"name":"rpt:f-497","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterialsNetOfReserves","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"605470","decimals":0}]},{"name":"rpt:f-498","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterialsNetOfReserves","xbrl:period":"2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"154400","decimals":0}]},{"name":"rpt:f-499","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Property and Equipment\u00a0-\u00a0Property and equipment is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 20 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Gains and losses upon disposition are reflected in the Statements of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. The Company disposed of some equipment during 2024 and 2023 which resulted in gains and losses on the sales, shown in the accompanying Statements of Operations.
"}]},{"name":"rpt:f-500","factDimensions":{"xbrl:concept":"upxi:PropertyPlantAndEquipmentUsefulLifes","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:PlanNameAxis":"upxi:BottomMember"},"factValues":[{"value":"P3Y"}]},{"name":"rpt:f-501","factDimensions":{"xbrl:concept":"upxi:PropertyPlantAndEquipmentUsefulLifes","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:PlanNameAxis":"upxi:TopMember"},"factValues":[{"value":"P20Y"}]},{"name":"rpt:f-502","factDimensions":{"xbrl:concept":"upxi:LeaseTerm1","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"P5Y"}]},{"name":"rpt:f-503","factDimensions":{"xbrl:concept":"us-gaap:BusinessCombinationsPolicy","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Business Combinations\u00a0- The Company accounts for its business combinations using the acquisition method of accounting. The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities assumed by the Company to the seller\u2019s cash consideration and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. The excess of (i) the total costs of acquisition over (ii) the fair value of the identifiable net assets of the acquiree is recorded as identifiable intangible assets and goodwill.
"}]},{"name":"rpt:f-504","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Goodwill - The Company evaluates its goodwill for possible impairment, simplifying the test for goodwill impairment at least annually and\u00a0when one or more triggering events or circumstances indicate that the goodwill might be impaired. Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit\u2019s fair value, not to exceed the carrying value of goodwill.\u00a0
The Company performed its annual test as of June 30, 2024 and 2023, respectively.\u00a0
\u00a0
It was determined by management that the goodwill related to Cygnet was completely impaired at June 30, 2024 based on the strategic decision to exit the recommerce business.\u00a0 An impairment of goodwill in the amount of $3,594,745 was recorded at June 30, 2024 eliminating all of the goodwill related to Cygnet.
\u00a0
It was determined by management that the goodwill related to Interactive Offers was completely impaired at June 30, 2023 based on the sale of the business at September 1, 2023.\u00a0 An impairment of goodwill in the amount of $2,889,158 was recorded at June 30, 2023 eliminating all of the goodwill related to Interactive Offers.
"}]},{"name":"rpt:f-505","factDimensions":{"xbrl:concept":"us-gaap:GoodwillImpairmentLoss","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3594745","decimals":0}]},{"name":"rpt:f-506","factDimensions":{"xbrl:concept":"us-gaap:GoodwillImpairmentLoss","xbrl:period":"2022-07-01T00:00:00/2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2889158","decimals":0}]},{"name":"rpt:f-507","factDimensions":{"xbrl:concept":"us-gaap:RevenueRecognitionPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Revenue Recognition\u00a0-\u00a0In accordance with ASC No. 606, Revenue from Contracts with Customers, the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay.
The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon the distributors\u2019 resale of the products.
\u00a0
Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with inbound freight, are generally included in cost of revenue.
\u00a0
Our business is subject to contingencies related to customer orders, including:
\u00a0
Right of Return:
\u00a0
A large portion of our revenue comes from the sale of consumable products, which are sold in high-volume and low quantities, and are generally maintained at stock levels of less than ninety days in our facility. Customer returns have historically represented a very small percentage of sales on an annual basis.\u00a0 Other product sales relate to some pet products, including small mechanical devices.\u00a0
\u00a0
Warranties:
\u00a0
The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase. The Company accrues an allowance for refunds, returned deposits and discounts given by customer services post shipment of the product based on historical experience and management\u2019s estimate of future expenses, including replacement, freight charges and other fulfilment expenses.
\u00a0
Conditions of Acceptance:
\u00a0
Sales of our consumable products and pet products, generally do not have customer acceptance terms.
\u00a0
Contract Assets
\u00a0
A contract asset is the Company\u2019s right to consideration in exchange for goods or services that the Company has transferred to a customer. ASC 606, Revenue from Contracts with Customers, distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time. When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company\u2019s right to consideration for its performance. The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued. The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables.
\u00a0
The following table discloses the deferred revenue:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Deferred revenue | \u00a0 | $ | 235,255 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0
The deferred revenue or also referred to as funded backlog was $235,255,\u00a0$0 and $0 at June 30,2024,\u00a0June 30, 2023 and June 30, 2022, respectively.\u00a0We expect to recognize approximately 100% of the deferred revenue as revenue in the year ended June 30, 2025.\u00a0 There was no opening liability balance at June 30, 2023 to be recognized in the year ended June 30, 2024.
"}]},{"name":"rpt:f-508","factDimensions":{"xbrl:concept":"upxi:ScheduleOfDeferredRevenueTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Deferred revenue | \u00a0 | $ | 235,255 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Impairment of Long-lived Assets\u00a0-\u00a0Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.\u00a0\u00a0 The Company recognized an impairment on its building of $336,434 during the year ended June 30, 2024, based on the fair market value of the building's pending sale, completed on July 8, 2024.\u00a0 The Company recognized a $569,195 loss on the sale of assets that were either liquidated or abandoned in the move of its manufacturing facility from Nevada to Florida.\u00a0 In addition, the Company recognized an impairment of intangible assets of $4,274,680 for the year ended June 30, 2024.\u00a0 $974,680 of the impairment is related to LuckyTail\u2019s rapid decline of direct-to-consumer sales and $3,300,000 of the impairment is related to the unamortized vendor list of Cygnet, as the Company no longer purchases products from the majority of the original vendors Cygnet was using when the Company purchased Cygnet.\u00a0\u00a0\u00a0\u00a0
\u00a0
The Company recognized an impairment on its long-lived assets during the year ended June 30, 2023, of $857,143 on the assets held for sale, related to Interactive Offers, leaving $716,944 of Interactive\u2019s original intangible assets classified as assets available for sale.\u00a0\u00a0
"}]},{"name":"rpt:f-515","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfLongLivedAssetsHeldForUse","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"336434","decimals":0}]},{"name":"rpt:f-516","factDimensions":{"xbrl:concept":"us-gaap:GainsLossesOnSalesOfAssets","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"569195","decimals":0}]},{"name":"rpt:f-517","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfIntangibleAssetsFinitelived","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"4274680","decimals":0}]},{"name":"rpt:f-518","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfIntangibleAssetsFinitelived","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"upxi:LuckyTailMember"},"factValues":[{"value":"974680","decimals":0}]},{"name":"rpt:f-519","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfIntangibleAssetsFinitelived","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"upxi:CygnetOnlineLlcMember"},"factValues":[{"value":"3300000","decimals":0}]},{"name":"rpt:f-520","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfLongLivedAssetsHeldForUse","xbrl:period":"2022-07-01T00:00:00/2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"857143","decimals":0}]},{"name":"rpt:f-521","factDimensions":{"xbrl:concept":"upxi:IntangibleAssetsAvailableForSale","xbrl:period":"2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"716944","decimals":0}]},{"name":"rpt:f-522","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingCostsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Advertising\u00a0-\u00a0The Company supports its products with advertising to build brand awareness of the Company\u2019s various products in addition to other marketing programs executed by the Company\u2019s marketing team. The Company believes continual investment in advertising is critical to the development and sale of its branded products. Advertising costs of $3,353,361 and $4,271,469 were expensed as incurred during the years ended June 30, 2024 and 2023, respectively.\u00a0
"}]},{"name":"rpt:f-523","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingExpense","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3353361","decimals":0}]},{"name":"rpt:f-524","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingExpense","xbrl:period":"2022-07-01T00:00:00/2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"4271469","decimals":0}]},{"name":"rpt:f-525","factDimensions":{"xbrl:concept":"us-gaap:CompensationRelatedCostsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Stock Based Compensation\u00a0- The Company recognizes all share-based payments to employees, including grants of employee stock options and grants of restricted shares as compensation expense in the consolidated financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately.
"}]},{"name":"rpt:f-526","factDimensions":{"xbrl:concept":"upxi:NonEmployeeStockBasedPaymentsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Non-employee Stock-based Payments\u00a0-\u00a0The Company\u2019s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of Accounting Standards Codification (ASC) 2018-07, which simplifies the accounting for non-employee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor\u2019s own operations by issuing share-based payment awards. Stock-based payments related to non-employees are accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor\u2019s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.
"}]},{"name":"rpt:f-527","factDimensions":{"xbrl:concept":"us-gaap:FairValueMeasurementPolicyPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Fair Value Measurements\u00a0- The Company accounts for financial instruments in accordance with FASB ASC 820 \u201cFair Value Measurement and Disclosures\u201d (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity\u2019s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).
\u00a0
The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
\u00a0
\u00a0 | \u00b7 | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
\u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00b7 | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
\u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00b7 | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. |
The estimated fair value of certain financial instruments, including cash, accounts receivable, accounts payable, accrued expenses, deferred revenue and debt are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
"}]},{"name":"rpt:f-528","factDimensions":{"xbrl:concept":"us-gaap:LesseeLeasesPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Leases\u00a0-\u00a0The Company determines if a contract contains a lease at inception. A contract contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. Leases with an initial term of 12 months or less are not recorded within the accompanying consolidated balance sheets. GAAP requires that the Company\u2019s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option will result in an economic penalty. All the Company\u2019s real estate leases are classified as operating leases.
\u00a0
Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term for an additional two years. The exercise of lease renewal options is at the Company\u2019s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.
\u00a0
The Company\u2019s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment.
"}]},{"name":"rpt:f-529","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Income Taxes\u00a0-\u00a0Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.\u00a0\u00a0 A $6,100,000 valuation allowance was recorded at June 30, 2024 and no valuation allowance at June 30, 2023.\u00a0
\u00a0
The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
\u00a0
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, \u201cIncome Taxes.\u201d Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity\u2019s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date.\u00a0
\u00a0
ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise\u2019s consolidated financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There are no material uncertain tax positions at June 30, 2024 or June 30, 2023.
\u00a0
On December 22, 2017, the U.S. government enacted the Tax Act, which made significant changes to the Internal Revenue Code of 1986, as amended, including, but not limited to, reducing the U.S. corporate statutory tax rate and the net operating loss incurred after December 31, 2017 can be carried forward indefinitely and the two year net operating loss carried back was eliminated (prohibited).
"}]},{"name":"rpt:f-530","factDimensions":{"xbrl:concept":"us-gaap:DeferredTaxAssetsValuationAllowance","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"6100000","decimals":0}]},{"name":"rpt:f-531","factDimensions":{"xbrl:concept":"upxi:ReverseStockSplitPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"On September 18, 2024, we filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of our common stock at a rate of 1-for-20 (the \"Reverse Stock Split\"), which became effective as of October 3, 2024 (the \"Effective Date\"). The Reverse Stock Split was approved by the board of directors in accordance with Nevada law. The Reverse Stock Split did not have any impact on the par value of common stock.
\u00a0
On the Effective Date, every twenty shares of Common Stock issued and outstanding were automatically combined into one share of Common Stock, without any change in the par value per share. As the per-share par value did not change, we reclassified $19,860 from Common Stock to Additional Paid-in-Capital on the Effective Date. The exercise prices and the number of shares issuable upon exercise of outstanding stock options, equity awards and warrants, and the number of shares available for future issuance under the equity incentive plans were adjusted in accordance with their respective terms. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder\u2019s percentage interest in our Common Stock. We did not issue any fractional shares in connection with the Reverse Stock Split. Instead, fractional shares were initially rounded up to the next largest whole number, resulting in the issuance of 8 shares on October 3, 2024, the Effective Date, and an additional issuance of 38 shares on October 8,2024.\u00a0 On October 10, 2024, the transfer agent received additional requests to issue a total of 202,183 shares of common stock for round up of fractional shares.\u00a0 These shares were issued on October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company\u2019s transfer agent.\u00a0 Although the Company did receive the common stock back after issuance, the potential dilution remains a risk, and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk.\u00a0The Reverse Stock Split did not modify the relative rights or preferences of the Common Stock.\u00a0\u00a0\u00a0
\u00a0
Unless otherwise indicated, all issued and outstanding shares of common stock and all outstanding securities entitling their holders to purchase shares of our common stock or acquire shares of our common stock, including stock options, restricted stock units, and warrants per share data, share prices and exercise prices, as required by the terms of those securities, have been adjusted retroactively to reflect the Reverse Stock Split.
\u00a0
On October 17, 2024, Company received written notice (the \u201cCompliance Notice\u201d) from The Nasdaq Stock Market LLC (\u201cNasdaq\u201d) informing the Company that it has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Stock Market maintain a minimum bid price of $1.00 per share.\u00a0 Nasdaq notified the Company in the Compliance Notice that, from October 3, 2024 to October 16, 2024, the closing bid price of the Company\u2019s common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.\u00a0\u00a0
"}]},{"name":"rpt:f-532","factDimensions":{"xbrl:concept":"us-gaap:AdditionalPaidInCapitalCommonStock","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"19860","decimals":0}]},{"name":"rpt:f-533","factDimensions":{"xbrl:concept":"upxi:AdditionalIssuanceShares","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares"},"factValues":[{"value":"38","decimals":0}]},{"name":"rpt:f-534","factDimensions":{"xbrl:concept":"upxi:AdditionalIssuanceSharesOfCommonStock","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares"},"factValues":[{"value":"202183","decimals":0}]},{"name":"rpt:f-535","factDimensions":{"xbrl:concept":"us-gaap:EarningsPerSharePolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Earnings (loss) per Share\u00a0- Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and upon the conversion of notes. For the year ended, the dilutive common shares are as follows:
\u00a0
\u00a0 | \u00a0 | June 30, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Stock options | \u00a0 | \u00a0 | 200,714 | \u00a0 | \u00a0 | \u00a0 | 241,964 | \u00a0 |
Warrants | \u00a0 | \u00a0 | 52,530 | \u00a0 | \u00a0 | \u00a0 | 11,015 | \u00a0 |
Preferred stock | \u00a0 | \u00a0 | 13,889 | \u00a0 | \u00a0 | \u00a0 | 13,889 | \u00a0 |
Convertible debt | \u00a0 | \u00a0 | 15,500 | \u00a0 | \u00a0 | \u00a0 | 57,883 | \u00a0 |
\u00a0Restricted stock grants | \u00a0 | \u00a0 | 12,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Total potential dilutive weighted average shares outstanding | \u00a0 | \u00a0 | 295,133 | \u00a0 | \u00a0 | \u00a0 | 324,750 | \u00a0 |
\u00a0
The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company\u2019s common stock can result in a greater dilutive effect from potentially dilutive securities. During the year ended June 30, 2024 and 2023, the Company reported a net loss, so the potential effect is not reflected in the consolidated financial statements.
"}]},{"name":"rpt:f-536","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEarningsPerShareBasicByCommonClassTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | June 30, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Stock options | \u00a0 | \u00a0 | 200,714 | \u00a0 | \u00a0 | \u00a0 | 241,964 | \u00a0 |
Warrants | \u00a0 | \u00a0 | 52,530 | \u00a0 | \u00a0 | \u00a0 | 11,015 | \u00a0 |
Preferred stock | \u00a0 | \u00a0 | 13,889 | \u00a0 | \u00a0 | \u00a0 | 13,889 | \u00a0 |
Convertible debt | \u00a0 | \u00a0 | 15,500 | \u00a0 | \u00a0 | \u00a0 | 57,883 | \u00a0 |
\u00a0Restricted stock grants | \u00a0 | \u00a0 | 12,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Total potential dilutive weighted average shares outstanding | \u00a0 | \u00a0 | 295,133 | \u00a0 | \u00a0 | \u00a0 | 324,750 | \u00a0 |
Deferred Revenue\u00a0-\u00a0The Company records deposits as deferred revenue when a customer pays in advance of shipping the product. Once the product is shipped, the deposit is recorded as revenue and the related commissions are paid. All products were shipped related to deposits in deferred revenue, in less than one year.
"}]},{"name":"rpt:f-549","factDimensions":{"xbrl:concept":"upxi:ConvertibleDebtAndSecuritiesPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Convertible Debt and Securities - The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option\u2019s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.
"}]},{"name":"rpt:f-550","factDimensions":{"xbrl:concept":"upxi:NonControllingInterestsInConsolidatedFinancialStatementsPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Non-controlling Interests in Consolidated financial statements\u00a0-\u00a0In December 2007, the FASB issued ASC 810-10-65, \u201cNon-controlling Interests in consolidated financial statements\u201d. This ASC clarifies that a non-controlling (minority) interest in subsidiaries is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiaries may exceed their interests in the subsidiary\u2019s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance.
"}]},{"name":"rpt:f-551","factDimensions":{"xbrl:concept":"us-gaap:PriorPeriodReclassificationAdjustmentDescription","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Reclassifications - Certain reclassifications have been made to the consolidated financial statements as of and for the year ended June 30, 2023 to conform to the presentation as of and for the year ended June 30, 2024.
"}]},{"name":"rpt:f-552","factDimensions":{"xbrl:concept":"us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Recent Accounting Pronouncements\u00a0\u2013 From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, (\u201cFASB\u201d), or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company\u2019s financial position or results of operations upon adoption. The Company has considered all other recently issued accounting pronouncements, including the new provisions of ASC 326 (\u201cFinancial Instruments \u2013 Credit Losses\u201d) pertaining to \u201ccurrent expected credit losses. ASC 326 was adopted for fiscal year 2024 and did not have a material effect to the accompanying consolidated financial statements.
"}]},{"name":"rpt:f-553","factDimensions":{"xbrl:concept":"us-gaap:BusinessCombinationDisclosureTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 3. Acquisitions
\u00a0
Cygnet Online, LLC
\u00a0
The Company acquired 55% of Cygnet Online, LLC, on April 1, 2022.\u00a0 The purchase price was $5,515,756, as amended.\u00a0
\u00a0
The following table summarizes the consideration transferred to acquire Cygnet and the amount of identified assets acquired, and liabilities assumed at the acquisition date.
\u00a0
Fair value of consideration transferred:
\u00a0
Cash | \u00a0 | $ | 1,500,000 | \u00a0 |
Convertible note payable, convertible at $6.00 per common share | \u00a0 | \u00a0 | 1,050,000 | \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 |
\u00a0
55% of the business was acquired through a stock purchase agreement on March 31, 2022.\u00a0 The purchase agreement provided for an increase in the purchase price of up to $700,000 based on the attainment of certain sales threshold 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.\u00a0 The purchase price was decreased by $950,000 and was repaid to the Company with the reduction in the loan to the seller.\u00a0\u00a0\u00a0 The 55% purchase price allocation is final and is no longer subject to change.\u00a0
\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 4,505 shares of the Company\u2019s common stock valued at $162,727.\u00a0 As of June 30, 2024, the Company has not released the 4,505 shares or paid the remaining $300,000 owed related to this additional acquisition.\u00a0 The seller had access to one of the Company\u2019s bank accounts and withdrew $39,348 and refused to return the funds.\u00a0 The Company recorded this as a reduction of the $300,000, although there is no right of offset in the purchase agreement.\u00a0
\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\u00a0
An impairment of $3,300,000, related to the Cygnet vendor list, was recorded as the Company no longer purchases products from the majority of the original vendors Cygnet was using at the time purchased Cygnet.\u00a0 In addition, it was determined by management that the goodwill related to Cygnet was completely impaired at June 30, 2024 based on the strategic decision to exit the recommerce business.\u00a0 An impairment of goodwill in the amount of $3,594,745 was recorded at June 30, 2024 eliminating all of the goodwill related to Cygnet.
\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
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 a business, including all of 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.\u00a0 The 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.\u00a0 \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 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 The purchase price allocation was performed by a third party and is no longer subject to change.
\u00a0
The Company\u2019s consolidated financial statements for the year ended June 30, 2023, include the actual results of LuckyTail from August 13, 2022 through June 30, 2023.\u00a0 The Company recorded interest on the consideration of $63,282 during the year ended June 30, 2023 and no interest was recorded for the year ended June 30, 2024.
\u00a0
Management determined a $974,680 impairment was necessary based on the rapid decline of the direct-to-consumer during the year ended June 30, 2024.\u00a0
\u00a0 \u00a0
Revenue from acquisitions included in the consolidated financial statements.
\u00a0
Net revenue included in the consolidated financial statements:
\u00a0
\u00a0 | \u00a0 | June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Cygnet | \u00a0 | \u00a0 | 12,154,831 | \u00a0 | \u00a0 | \u00a0 | 23,996,086 | \u00a0 |
LuckyTail | \u00a0 | \u00a0 | 3,098,552 | \u00a0 | \u00a0 | \u00a0 | 4,489,384 | \u00a0 |
\u00a0 | \u00a0 | $ | 15,253,383 | \u00a0 | \u00a0 | $ | 28,485,470 | \u00a0 |
Consolidated pro-forma unaudited consolidated financial statements.
\u00a0
The following unaudited pro forma combined financial information is based on the historical consolidated financial statements of the Company and LuckyTail 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 year ended June 30, 2023, as if the acquisitions occurred on July 1, 2022.\u00a0 The results of operations for LuckyTail are included in the year ended June 30, 2024 and the results of operations for LuckyTail are included from August 13, 2022 to June 30, 2023.\u00a0 \u00a0
\u00a0
Operating expenses have been increased for the amortization expense associated with the fair value adjustment of definite lived intangible assets of LuckyTail at $44,620\u00a0per month.
\u00a0
Pro Forma, Unaudited | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0Proforma | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
Year ended June 30, 2023 | \u00a0 | Upexi, Inc. | \u00a0 | \u00a0 | LuckyTail | \u00a0 | \u00a0 | Adjustments | \u00a0 | \u00a0 | Proforma | \u00a0 | ||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
Net sales | \u00a0 | $ | 36,441,695 | \u00a0 | \u00a0 | $ | 892,270 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 37,333,965 | \u00a0 |
Cost of sales | \u00a0 | $ | 15,421,715 | \u00a0 | \u00a0 | $ | 137,088 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 15,558,803 | \u00a0 |
Operating expenses | \u00a0 | $ | 29,554,402 | \u00a0 | \u00a0 | $ | 383,476 | \u00a0 | \u00a0 | $ | 66,930 | \u00a0 | \u00a0 | $ | 30,004,808 | \u00a0 |
Net income (loss) from continuing operations | \u00a0 | $ | (13,907,590 | ) | \u00a0 | $ | 371,706 | \u00a0 | \u00a0 | $ | (66,930 | ) | \u00a0 | $ | (13,602,814 | ) |
Basic income (loss) per common share | \u00a0 | $ | (15.56 | ) | \u00a0 | $ | - | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | $ | (15.22 | ) | |
Weighted average shares outstanding | \u00a0 | \u00a0 | 893,943 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 893,943 | \u00a0 |
\u00a0
The Company estimated the annual LuckyTail amortization expense at $535,428\u00a0annually and $44,620\u00a0monthly, based on the purchase price allocation.\u00a0 For the year ended June 30, 2023, the proforma adjustment included $66,930 of amortization expense for one and a half months.
\u00a0
Acquisition-related costs are included in the general and administrative expenses on the Company\u2019s condensed consolidated statements of operations. These costs are primarily external legal, accounting and consulting services directly related to completed acquisitions, due diligence, and review of possible target acquisitions.\u00a0
"}]},{"name":"rpt:f-554","factDimensions":{"xbrl:concept":"us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:BusinessAcquisitionAxis":"upxi:CygnetOnlineLlcMember"},"factValues":[{"value":"0.55"}]},{"name":"rpt:f-555","factDimensions":{"xbrl:concept":"upxi:AssetAcquisitionConsiderationTransferredOne","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:BusinessAcquisitionAxis":"upxi:CygnetOnlineLlcMember"},"factValues":[{"value":"5515756","decimals":0}]},{"name":"rpt:f-556","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:BusinessAcquisitionAxis":"upxi:CygnetOnlineLlcMember"},"factValues":[{"value":"Cash | \u00a0 | $ | 1,500,000 | \u00a0 |
Convertible note payable, convertible at $6.00 per common share | \u00a0 | \u00a0 | 1,050,000 | \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 | $ | 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 | \u00a0 | June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Cygnet | \u00a0 | \u00a0 | 12,154,831 | \u00a0 | \u00a0 | \u00a0 | 23,996,086 | \u00a0 |
LuckyTail | \u00a0 | \u00a0 | 3,098,552 | \u00a0 | \u00a0 | \u00a0 | 4,489,384 | \u00a0 |
\u00a0 | \u00a0 | $ | 15,253,383 | \u00a0 | \u00a0 | $ | 28,485,470 | \u00a0 |
Pro Forma, Unaudited | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0Proforma | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
Year ended June 30, 2023 | \u00a0 | Upexi, Inc. | \u00a0 | \u00a0 | LuckyTail | \u00a0 | \u00a0 | Adjustments | \u00a0 | \u00a0 | Proforma | \u00a0 | ||||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||
Net sales | \u00a0 | $ | 36,441,695 | \u00a0 | \u00a0 | $ | 892,270 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 37,333,965 | \u00a0 |
Cost of sales | \u00a0 | $ | 15,421,715 | \u00a0 | \u00a0 | $ | 137,088 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 15,558,803 | \u00a0 |
Operating expenses | \u00a0 | $ | 29,554,402 | \u00a0 | \u00a0 | $ | 383,476 | \u00a0 | \u00a0 | $ | 66,930 | \u00a0 | \u00a0 | $ | 30,004,808 | \u00a0 |
Net income (loss) from continuing operations | \u00a0 | $ | (13,907,590 | ) | \u00a0 | $ | 371,706 | \u00a0 | \u00a0 | $ | (66,930 | ) | \u00a0 | $ | (13,602,814 | ) |
Basic income (loss) per common share | \u00a0 | $ | (15.56 | ) | \u00a0 | $ | - | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | $ | (15.22 | ) | |
Weighted average shares outstanding | \u00a0 | \u00a0 | 893,943 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 893,943 | \u00a0 |
Note 4. Inventory
\u00a0
Inventory consisted of the following:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Raw materials | \u00a0 | $ | 465,535 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Finished goods | \u00a0 | \u00a0 | 966,021 | \u00a0 | \u00a0 | \u00a0 | 4,804,299 | \u00a0 |
\u00a0 | \u00a0 | $ | 1,431,556 | \u00a0 | \u00a0 | $ | 4,804,299 | \u00a0 |
\u00a0
The Company writes off the value of inventory deemed excessive or obsolete. During the years ended June 30, 2024 and 2023, the Company wrote off inventory valued at $1,812,319 and $118,990, respectively.\u00a0 The Company had inventory reserves at June 30, 2024 and 2023 of $605,470 and $154,400, respectively.
"}]},{"name":"rpt:f-638","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfInventoryCurrentTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Raw materials | \u00a0 | $ | 465,535 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Finished goods | \u00a0 | \u00a0 | 966,021 | \u00a0 | \u00a0 | \u00a0 | 4,804,299 | \u00a0 |
\u00a0 | \u00a0 | $ | 1,431,556 | \u00a0 | \u00a0 | $ | 4,804,299 | \u00a0 |
Note 5. Property and Equipment
\u00a0
Property and equipment consist of the following:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Furniture and fixtures | \u00a0 | $ | 127,050 | \u00a0 | \u00a0 | $ | 172,663 | \u00a0 |
Computer equipment | \u00a0 | \u00a0 | 112,397 | \u00a0 | \u00a0 | \u00a0 | 156,283 | \u00a0 |
Internal use software | \u00a0 | \u00a0 | 570,645 | \u00a0 | \u00a0 | \u00a0 | 608,949 | \u00a0 |
Manufacturing equipment | \u00a0 | \u00a0 | 1,927,974 | \u00a0 | \u00a0 | \u00a0 | 3,325,525 | \u00a0 |
Leasehold improvements | \u00a0 | \u00a0 | 767,418 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Building | \u00a0 | \u00a0 | 4,005,516 | \u00a0 | \u00a0 | \u00a0 | 4,611,248 | \u00a0 |
Vehicles | \u00a0 | \u00a0 | 89,359 | \u00a0 | \u00a0 | \u00a0 | 261,362 | \u00a0 |
Property and equipment, gross | \u00a0 | \u00a0 | 7,600,360 | \u00a0 | \u00a0 | \u00a0 | 9,136,030 | \u00a0 |
Less accumulated depreciation | \u00a0 | \u00a0 | (1,268,288 | ) | \u00a0 | \u00a0 | (1,693,407 | ) |
Less building classified as available for sale | \u00a0 | \u00a0 | (4,005,516 | ) | \u00a0 | \u00a0 | (4,611,248 | ) |
\u00a0 | \u00a0 | $ | 2,356,556 | \u00a0 | \u00a0 | $ | 2,831,375 | \u00a0 |
\u00a0
Depreciation expense for the years ended June 30, 2024 and 2023 was $1,268,355\u00a0and $913,246, respectively.\u00a0
"}]},{"name":"rpt:f-650","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Furniture and fixtures | \u00a0 | $ | 127,050 | \u00a0 | \u00a0 | $ | 172,663 | \u00a0 |
Computer equipment | \u00a0 | \u00a0 | 112,397 | \u00a0 | \u00a0 | \u00a0 | 156,283 | \u00a0 |
Internal use software | \u00a0 | \u00a0 | 570,645 | \u00a0 | \u00a0 | \u00a0 | 608,949 | \u00a0 |
Manufacturing equipment | \u00a0 | \u00a0 | 1,927,974 | \u00a0 | \u00a0 | \u00a0 | 3,325,525 | \u00a0 |
Leasehold improvements | \u00a0 | \u00a0 | 767,418 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Building | \u00a0 | \u00a0 | 4,005,516 | \u00a0 | \u00a0 | \u00a0 | 4,611,248 | \u00a0 |
Vehicles | \u00a0 | \u00a0 | 89,359 | \u00a0 | \u00a0 | \u00a0 | 261,362 | \u00a0 |
Property and equipment, gross | \u00a0 | \u00a0 | 7,600,360 | \u00a0 | \u00a0 | \u00a0 | 9,136,030 | \u00a0 |
Less accumulated depreciation | \u00a0 | \u00a0 | (1,268,288 | ) | \u00a0 | \u00a0 | (1,693,407 | ) |
Less building classified as available for sale | \u00a0 | \u00a0 | (4,005,516 | ) | \u00a0 | \u00a0 | (4,611,248 | ) |
\u00a0 | \u00a0 | $ | 2,356,556 | \u00a0 | \u00a0 | $ | 2,831,375 | \u00a0 |
Note 6. Intangible Assets
\u00a0
Intangible assets as of June 30, 2024:
\u00a0
\u00a0 | \u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book Value | \u00a0 | |||
Customer relationships | \u00a0 | 4 years | \u00a0 | $ | 1,834,692 | \u00a0 | \u00a0 | $ | 1,834,692 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Trade name | \u00a0 | 5 years | \u00a0 | \u00a0 | 383,792 | \u00a0 | \u00a0 | \u00a0 | 143,921 | \u00a0 | \u00a0 | \u00a0 | 239,871 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Online sales channels | \u00a0 | 2 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Vender relationships | \u00a0 | 5 years | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | $ | 10,018,484 | \u00a0 | \u00a0 | $ | 9,778,613 | \u00a0 | \u00a0 | $ | 239,871 | \u00a0 |
\u00a0
For the years ended June 30, 2024 and 2023, the Company amortized approximately $2,410,400, and $2,568,500, respectively.\u00a0 For the year ended June 30, 2024 the Company impaired approximately $3,300,000 related to the vendor relationships of Cygnet and impaired approximately $974,700 related to the customer relationships of LuckyTail.\u00a0
\u00a0
Intangible assets as of June 30, 2023:
\u00a0
\u00a0 | \u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \u00a0 | |||
Customer relationships | \u00a0 | \u00a04 years | \u00a0 | $ | 1,834,692 | \u00a0 | \u00a0 | $ | 401,339 | \u00a0 | \u00a0 | $ | 1,433,353 | \u00a0 |
Trade name | \u00a0 | \u00a05 years | \u00a0 | \u00a0 | 383,792 | \u00a0 | \u00a0 | \u00a0 | 67,163 | \u00a0 | \u00a0 | \u00a0 | 316,629 | \u00a0 |
Online sales channels | \u00a0 | \u00a02 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,125,000 | \u00a0 | \u00a0 | \u00a0 | 675,000 | \u00a0 |
Vender relationships | \u00a0 | \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 | \u00a0 | \u00a0 | $ | 10,018,484 | \u00a0 | \u00a0 | $ | 4,237,814 | \u00a0 | \u00a0 | $ | 6,924,982 | \u00a0 |
The following intangible assets were added during the year ended June 30, 2023, 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 |
\u00a0
Future amortization of intangible assets at June 30, 2024 are as follows:
\u00a0
June 30, 2025 | \u00a0 | $ | 76,758 | \u00a0 |
June 30, 2026 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2027 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2028 | \u00a0 | \u00a0 | 9,596 | \u00a0 |
\u00a0 | \u00a0 | $ | 239,871 | \u00a0 |
\u00a0 | \u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book Value | \u00a0 | |||
Customer relationships | \u00a0 | 4 years | \u00a0 | $ | 1,834,692 | \u00a0 | \u00a0 | $ | 1,834,692 | \u00a0 | \u00a0 | $ | - | \u00a0 |
Trade name | \u00a0 | 5 years | \u00a0 | \u00a0 | 383,792 | \u00a0 | \u00a0 | \u00a0 | 143,921 | \u00a0 | \u00a0 | \u00a0 | 239,871 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Online sales channels | \u00a0 | 2 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Vender relationships | \u00a0 | 5 years | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | 6,000,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | $ | 10,018,484 | \u00a0 | \u00a0 | $ | 9,778,613 | \u00a0 | \u00a0 | $ | 239,871 | \u00a0 |
\u00a0 | \u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \u00a0 | |||
Customer relationships | \u00a0 | \u00a04 years | \u00a0 | $ | 1,834,692 | \u00a0 | \u00a0 | $ | 401,339 | \u00a0 | \u00a0 | $ | 1,433,353 | \u00a0 |
Trade name | \u00a0 | \u00a05 years | \u00a0 | \u00a0 | 383,792 | \u00a0 | \u00a0 | \u00a0 | 67,163 | \u00a0 | \u00a0 | \u00a0 | 316,629 | \u00a0 |
Online sales channels | \u00a0 | \u00a02 years | \u00a0 | \u00a0 | 1,800,000 | \u00a0 | \u00a0 | \u00a0 | 1,125,000 | \u00a0 | \u00a0 | \u00a0 | 675,000 | \u00a0 |
Vender relationships | \u00a0 | \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 | \u00a0 | \u00a0 | $ | 10,018,484 | \u00a0 | \u00a0 | $ | 4,237,814 | \u00a0 | \u00a0 | $ | 6,924,982 | \u00a0 |
Customer relationships | \u00a0 | $ | 1,834,692 | \u00a0 |
Trade name | \u00a0 | \u00a0 | 383,792 | \u00a0 |
Intangible Assets from Purchase | \u00a0 | $ | 2,218,484 | \u00a0 |
June 30, 2025 | \u00a0 | $ | 76,758 | \u00a0 |
June 30, 2026 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2027 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2028 | \u00a0 | \u00a0 | 9,596 | \u00a0 |
\u00a0 | \u00a0 | $ | 239,871 | \u00a0 |
Note 7. Prepaid Expense and Other Current Assets
\u00a0
Prepaid and other receivables consist of the following:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Insurance | \u00a0 | $ | 116,074 | \u00a0 | \u00a0 | $ | 187,949 | \u00a0 |
Prepayment to vendors | \u00a0 | \u00a0 | 203,556 | \u00a0 | \u00a0 | \u00a0 | 138,653 | \u00a0 |
Deposits on services | \u00a0 | \u00a0 | 25,550 | \u00a0 | \u00a0 | \u00a0 | 45,678 | \u00a0 |
Prepaid monthly rent | \u00a0 | \u00a0 | 60,041 | \u00a0 | \u00a0 | \u00a0 | 27,813 | \u00a0 |
Subscriptions and services being amortized over the service period | \u00a0 | \u00a0 | 32,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Other deposits | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,826 | \u00a0 |
Stock issued for prepaid interest on convertible note payable | \u00a0 | \u00a0 | 64,320 | \u00a0 | \u00a0 | \u00a0 | 465,595 | \u00a0 |
Other prepaid expenses | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 31,000 | \u00a0 |
Other receivables | \u00a0 | \u00a0 | 148 | \u00a0 | \u00a0 | \u00a0 | 144,765 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 502,188 | \u00a0 | \u00a0 | $ | 1,112,280 | \u00a0 |
\u00a0
All prepaid expenses will be expensed during the following 12 months.
"}]},{"name":"rpt:f-730","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfOtherCurrentAssetsTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Insurance | \u00a0 | $ | 116,074 | \u00a0 | \u00a0 | $ | 187,949 | \u00a0 |
Prepayment to vendors | \u00a0 | \u00a0 | 203,556 | \u00a0 | \u00a0 | \u00a0 | 138,653 | \u00a0 |
Deposits on services | \u00a0 | \u00a0 | 25,550 | \u00a0 | \u00a0 | \u00a0 | 45,678 | \u00a0 |
Prepaid monthly rent | \u00a0 | \u00a0 | 60,041 | \u00a0 | \u00a0 | \u00a0 | 27,813 | \u00a0 |
Subscriptions and services being amortized over the service period | \u00a0 | \u00a0 | 32,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Other deposits | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 70,826 | \u00a0 |
Stock issued for prepaid interest on convertible note payable | \u00a0 | \u00a0 | 64,320 | \u00a0 | \u00a0 | \u00a0 | 465,595 | \u00a0 |
Other prepaid expenses | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 31,000 | \u00a0 |
Other receivables | \u00a0 | \u00a0 | 148 | \u00a0 | \u00a0 | \u00a0 | 144,765 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 502,188 | \u00a0 | \u00a0 | $ | 1,112,280 | \u00a0 |
Note 8. Operating Leases
\u00a0
We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, and equipment. We determine if an arrangement is a lease, or contains a lease, at inception, and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of June 30, 2024, no option to extend the lease was recognized as right-of-use (\u201cROU\u201d) assets and lease liabilities. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our ROU assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Balance Sheets as these leases have a lease term of 12 months or less at lease inception.
During November 2019, the Company entered into a lease for a Nevada facility that commenced on November 13, 2019, and recorded a right of use asset and corresponding lease liability. The Company uses this leased facility for office, manufacturing, and warehouse space. The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases. \u00a0\u00a0Lease expenses for the year ended June 30, 2023 was approximately $723,000 and are included discontinued operations. The operating lease expired during the year ended June 30, 2023 and the Company continued to occupy the facility and pays rent on a month-to-month basis.\u00a0 During the year ended June 30, 2024 the Company used the facility for ongoing operations and recognized approximately $670,200 of expense during the year.\u00a0 The Company moved out of the facility in July 2024.\u00a0 \u00a0
\u00a0
During May 2021, the Company entered into a lease for an additional Nevada facility that commenced on May 1, 2021, and recorded a right of use asset and corresponding lease liability. The Company uses this leased facility for additional warehouse space. The minimum lease payments were $95,548 and $111,796 for the years ended June 30, 2024 and 2023, respectively.\u00a0 The lease expense, including all additional lease expenses was approximately $106,100 and $134,700, respectively.\u00a0 The Company moved out of the facility April of 2024 when the lease term ended.\u00a0\u00a0
\u00a0
During November 2018, the Company entered into a lease for equipment that commenced on November 1, 2018, and recorded a right of use asset and corresponding lease liability. Lease expenses were $7,640 and $6,744 for the years ended June 30, 2024 and June 30, 2023, respectively.
\u00a0
On April 1, 2022, the Company acquired Cygnet which had entered into a lease for a Florida facility that commenced on October 8, 2021, and Cygnet had recorded a right of use asset and corresponding lease liability. The lease expires on October 8, 2026. The Company uses this leased facility for warehouse and office space. The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases and accounted for as non-lease components and not part of the ROU. Lease expenses were $43,180 and $102,228 for the years ended June 30, 2024 and 2023, respectively.\u00a0 The Company abandoned the facility in October of 2023 and recognized a lease impairment of $289,969.
\u00a0
On March 15, 2023, the Company entered into a lease for approximately 20,400 square feet of warehouse and office space, located in Tampa, Florida, to be used as the Company\u2019s distribution center.\u00a0 The initial term of the lease is thirty-eight months and was not completed when the lease was signed.\u00a0 The Company moved into the facility in July 2023 and started operations. The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases and accounted for as non-lease components and not part of the ROU. During the year ended June 30, 2024, the Company recognized approximately $374,500 of expense and approximately $27,800 for the year ended June 30, 2023.\u00a0\u00a0\u00a0
\u00a0
On July 25, 2023, the Company entered into a lease for approximately 5,700 square feet of office space, located in Tampa, Florida, to be used as the Company\u2019s corporate headquarters.\u00a0 The initial term of the lease is sixty-one months. During the year ended June 30, 2024, the Company recognized approximately $140,658 of expense and no expense for the year ended June 30, 2023.\u00a0 \u00a0\u00a0
\u00a0
On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC, which is owned by our CEO, Allan Marshall. The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $20,060 per month. The initial term of the lease is five years.\u00a0 The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases and accounted for as non-lease components and not part of the ROU.\u00a0 The Company spent $611,768 in leasehold improvements to prepare the facility for product manufacturing, which will be amortized over the five year lease term.\u00a0 At June 30, 2024 there was $100,004 accrued for the deposit, three months rent, and three months estimated expenses, that was paid in July 2024 and is now kept current.\u00a0 Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024.\u00a0 During the year ended June 30, 2024 the Company recognized approximately $79,950 of expense.\u00a0
\u00a0
Operating leases are included in operating ROU assets, current and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Balance Sheets. As of June 30, 2024, our finance leases are not material.
The table below reconciles the undiscounted future minimum lease payments (displayed by 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 consolidated balance sheet as of June 30, 2024:
\u00a0
2025 | \u00a0 | $ | 1,031,714 | \u00a0 |
2026 | \u00a0 | \u00a0 | 762,364 | \u00a0 |
2027 | \u00a0 | \u00a0 | 504,795 | \u00a0 |
2028 | \u00a0 | \u00a0 | 486,733 | \u00a0 |
2029 | \u00a0 | \u00a0 | 221,715 | \u00a0 |
Total undiscounted future minimum lease payments | \u00a0 | \u00a0 | 3,007,321 | \u00a0 |
Less: Imputed interest | \u00a0 | \u00a0 | (243,001 | ) |
\u00a0 | \u00a0 | \u00a0 | 2,764,320 | \u00a0 |
Less: current portion | \u00a0 | \u00a0 | (1,031,714 | ) |
Present value of operating lease obligation | \u00a0 | $ | 1,732,606 | \u00a0 |
\u00a0
The liability for the Cygnet lease is included in the undiscounted future minimum lease payments for 2025.\u00a0 The Company continues to work with the lessor to resolve the disputed lease payments.\u00a0
\u00a0
The Company\u2019s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2024 are:
\u00a0
Weighted average remaining lease term | \u00a0 | 47\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
\u00a0
The Company\u2019s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2023 are:
\u00a0
Weighted average remaining lease term | \u00a0 | 29\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
For the years ended June 30, 2024 and 2023, the components of lease expense, included general and administrative expenses and interest expense in the condensed consolidated statement of operations, are as follows:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Finance lease expense: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Amortization of ROU assets | \u00a0 | $ | 669,260 | \u00a0 | \u00a0 | $ | 228,147 | \u00a0 |
Interest expense | \u00a0 | \u00a0 | 99,633 | \u00a0 | \u00a0 | \u00a0 | 28,043 | \u00a0 |
Operating lease cost | \u00a0 | \u00a0 | 16,181 | \u00a0 | \u00a0 | \u00a0 | 16,804 | \u00a0 |
Short-term lease expense | \u00a0 | \u00a0 | 670,173 | \u00a0 | \u00a0 | \u00a0 | 772,929 | \u00a0 |
Variable lease expense | \u00a0 | \u00a0 | 169,309 | \u00a0 | \u00a0 | \u00a0 | 29,113 | \u00a0 |
Total lease cost | \u00a0 | $ | 1,624,556 | \u00a0 | \u00a0 | $ | 1,075,036 | \u00a0 |
2025 | \u00a0 | $ | 1,031,714 | \u00a0 |
2026 | \u00a0 | \u00a0 | 762,364 | \u00a0 |
2027 | \u00a0 | \u00a0 | 504,795 | \u00a0 |
2028 | \u00a0 | \u00a0 | 486,733 | \u00a0 |
2029 | \u00a0 | \u00a0 | 221,715 | \u00a0 |
Total undiscounted future minimum lease payments | \u00a0 | \u00a0 | 3,007,321 | \u00a0 |
Less: Imputed interest | \u00a0 | \u00a0 | (243,001 | ) |
\u00a0 | \u00a0 | \u00a0 | 2,764,320 | \u00a0 |
Less: current portion | \u00a0 | \u00a0 | (1,031,714 | ) |
Present value of operating lease obligation | \u00a0 | $ | 1,732,606 | \u00a0 |
Weighted average remaining lease term | \u00a0 | 47\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
Weighted average remaining lease term | \u00a0 | 29\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Finance lease expense: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Amortization of ROU assets | \u00a0 | $ | 669,260 | \u00a0 | \u00a0 | $ | 228,147 | \u00a0 |
Interest expense | \u00a0 | \u00a0 | 99,633 | \u00a0 | \u00a0 | \u00a0 | 28,043 | \u00a0 |
Operating lease cost | \u00a0 | \u00a0 | 16,181 | \u00a0 | \u00a0 | \u00a0 | 16,804 | \u00a0 |
Short-term lease expense | \u00a0 | \u00a0 | 670,173 | \u00a0 | \u00a0 | \u00a0 | 772,929 | \u00a0 |
Variable lease expense | \u00a0 | \u00a0 | 169,309 | \u00a0 | \u00a0 | \u00a0 | 29,113 | \u00a0 |
Total lease cost | \u00a0 | $ | 1,624,556 | \u00a0 | \u00a0 | $ | 1,075,036 | \u00a0 |
Note 9. Accrued Liabilities and Acquisition Payable
\u00a0
Accrued liabilities consist of the following:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Accrued professional fees | \u00a0 | \u00a0 | 312,500 | \u00a0 | \u00a0 | \u00a0 | 666,495 | \u00a0 |
Accrued sales tax | \u00a0 | \u00a0 | 28,539 | \u00a0 | \u00a0 | \u00a0 | 37,429 | \u00a0 |
Accrued expenses from sale of manufacturing operations | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 1,360,000 | \u00a0 |
Other accrued liabilities | \u00a0 | \u00a0 | 395,368 | \u00a0 | \u00a0 | \u00a0 | 375,870 | \u00a0 |
\u00a0 | \u00a0 | $ | 736,407 | \u00a0 | \u00a0 | $ | 2,439,794 | \u00a0 |
\u00a0
Acquisition Payable consists of the following:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Payments related to the acquisition of Cygnet | \u00a0 | $ | 413,152 | \u00a0 | \u00a0 | $ | 152,500 | \u00a0 |
\u00a0 | \u00a0 | $ | 413,152 | \u00a0 | \u00a0 | $ | 152,500 | \u00a0 |
\u00a0
These payables are amounts estimated by management that are due to the sellers of the 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-804","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfAccruedLiabilitiesTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Accrued professional fees | \u00a0 | \u00a0 | 312,500 | \u00a0 | \u00a0 | \u00a0 | 666,495 | \u00a0 |
Accrued sales tax | \u00a0 | \u00a0 | 28,539 | \u00a0 | \u00a0 | \u00a0 | 37,429 | \u00a0 |
Accrued expenses from sale of manufacturing operations | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 1,360,000 | \u00a0 |
Other accrued liabilities | \u00a0 | \u00a0 | 395,368 | \u00a0 | \u00a0 | \u00a0 | 375,870 | \u00a0 |
\u00a0 | \u00a0 | $ | 736,407 | \u00a0 | \u00a0 | $ | 2,439,794 | \u00a0 |
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Payments related to the acquisition of Cygnet | \u00a0 | $ | 413,152 | \u00a0 | \u00a0 | $ | 152,500 | \u00a0 |
\u00a0 | \u00a0 | $ | 413,152 | \u00a0 | \u00a0 | $ | 152,500 | \u00a0 |
Note 10. Convertible Promissory Notes and Notes Payable
\u00a0
Convertible promissory notes and notes payable outstanding as of June 30, 2024 and 2023 are summarized below:
\u00a0
\u00a0 | \u00a0 | Maturity | \u00a0 | June 30, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | Date | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Convertible Notes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Promissory Note, 21- month term, as amended, 18.11% interest payable with common stock and subordinate to the Convertible Notes. This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly.\u00a0 | \u00a0 | June 1, 2026 | \u00a0 | $ | 1,550,000 | \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 | $ | 1,550,000 | \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 | - | \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 | - | \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, 2024 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | $ | - | \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 | - | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Discount on acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (93,380 | ) |
Acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 5,656,620 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 9,250,000 | \u00a0 |
Discount on acquisition notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (1,644,915 | ) |
Acquisition notes payable, net of current and discount | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 7,605,085 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \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 | 3,761,376 | \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 | 1,002,221 | \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 | \u00a0 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 5,694,327 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 5,447,565 | \u00a0 | \u00a0 | \u00a0 | 795,778 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary, net of current | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 4,898,549 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes Payable on Building for sale: | \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 | $ | 2,634,538 | \u00a0 | \u00a0 | $ | 2,841,566 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Note Payable: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Promissory Note,\u00a021-month term note, 10% cash interest and subordinate to the Convertible Notes.\u00a0 This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly.\u00a0 | \u00a0 | June 1, 2026 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 362,667 | \u00a0 |
Discount on notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (24,193 | ) |
Notes payable, current net of discount | \u00a0 | \u00a0 | \u00a0 | $ | 2,634,538 | \u00a0 | \u00a0 | $ | 338,474 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, long-term\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 197,333 | \u00a0 |
Discount on notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (2,571 | ) | \u00a0 | \u00a0 | (23,521 | ) |
Notes payable, long-term, net | \u00a0 | \u00a0 | \u00a0 | $ | 557,429 | \u00a0 | \u00a0 | $ | 173,812 | \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, 12% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes. November of 2023 extended to June 1, 2026 and interest was adjusted to 12% cash interest, paid monthly | \u00a0 | June 1, 2026 | \u00a0 | $ | 500,000 | \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 | \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 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, long term, net | \u00a0 | \u00a0 | \u00a0 | $ | 500,000 | \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 | $ | 10,689,532 | \u00a0 | \u00a0 | $ | 25,889,239 | \u00a0 |
Future payments on notes payable are as follows:
\u00a0
For the year ended June 30: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||||
\u00a0 | \u00a0 | Note Payable | \u00a0 | \u00a0 | Related Party Note Payable | \u00a0 | \u00a0 | Convertible Notes | \u00a0 | \u00a0 | Cygnet Subsidiary Notes Payable | \u00a0 | \u00a0 | Total | \u00a0 | |||||
2025 | \u00a0 | $ | 2,634,538 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 8,082,103 | \u00a0 |
2026 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 500,000 | \u00a0 | \u00a0 | \u00a0 | 1,550,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 2,610,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | 3,194,538 | \u00a0 | \u00a0 | \u00a0 | 500,000 | \u00a0 | \u00a0 | \u00a0 | 1,550,000 | \u00a0 | \u00a0 | \u00a0 | 5,447,565 | \u00a0 | \u00a0 | \u00a0 | 10,692,103 | \u00a0 |
Note original discount | \u00a0 | \u00a0 | (2,571 | ) | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (2,571 | ) |
\u00a0 | \u00a0 | $ | 3,191,967 | \u00a0 | \u00a0 | $ | 500,000 | \u00a0 | \u00a0 | $ | 1,550,000 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 10,689,532 | \u00a0 |
\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 $120.00\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\u00a02,813\u00a0shares of common stock. The Warrants are exercisable for five years at an exercise price of $88.80\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 canceled.\u00a0\u00a0\u00a0Additionally, 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.\u00a0The principal currently outstanding is $500,000.\u00a0 In addition to this, the Company issued Mr. Marshall a warrant to purchase up to 18,750 shares of the Company\u2019s common stock\u00a0 for five years at a per share price of $22.00.\u00a0 The note has been classified as long-term in the consolidated financial statements.\u00a0 $1,000,000 of the promissory note was used by the investor in the purchase of VitaMedica.
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 March 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% and has paid the original principal and adjusted interest through this report.\u00a0 The building was sold for $4,300,000 on July 8, 2024.\u00a0
\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.\u00a0In addition to this, the Company issued the investor a warrant to purchase up to 6,250 shares of the Company\u2019s common stock for five years at a per share price of $22.00.\u00a0The note has been classified as long-term in the consolidated 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 25,000 shares of the Company\u2019s common stock at a per share price of $22.00.\u00a0 In addition, $100,000 of the promissory note was used by the investor in the purchase of VitaMedica.\u00a0 The note has been classified as long-term in the consolidated financial statements.
"}]},{"name":"rpt:f-821","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfDebtTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | Maturity | \u00a0 | June 30, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | Date | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Convertible Notes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Promissory Note, 21- month term, as amended, 18.11% interest payable with common stock and subordinate to the Convertible Notes. This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly.\u00a0 | \u00a0 | June 1, 2026 | \u00a0 | $ | 1,550,000 | \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 | $ | 1,550,000 | \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 | - | \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 | - | \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, 2024 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | $ | - | \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 | - | \u00a0 | \u00a0 | \u00a0 | 5,750,000 | \u00a0 |
Discount on acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (93,380 | ) |
Acquisition notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 5,656,620 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 9,250,000 | \u00a0 |
Discount on acquisition notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (1,644,915 | ) |
Acquisition notes payable, net of current and discount | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 7,605,085 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \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 | 3,761,376 | \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 | 1,002,221 | \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 | \u00a0 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 5,694,327 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 5,447,565 | \u00a0 | \u00a0 | \u00a0 | 795,778 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary, net of current | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 4,898,549 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes Payable on Building for sale: | \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 | $ | 2,634,538 | \u00a0 | \u00a0 | $ | 2,841,566 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Note Payable: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Promissory Note,\u00a021-month term note, 10% cash interest and subordinate to the Convertible Notes.\u00a0 This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly.\u00a0 | \u00a0 | June 1, 2026 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 362,667 | \u00a0 |
Discount on notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (24,193 | ) |
Notes payable, current net of discount | \u00a0 | \u00a0 | \u00a0 | $ | 2,634,538 | \u00a0 | \u00a0 | $ | 338,474 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, long-term\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 197,333 | \u00a0 |
Discount on notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (2,571 | ) | \u00a0 | \u00a0 | (23,521 | ) |
Notes payable, long-term, net | \u00a0 | \u00a0 | \u00a0 | $ | 557,429 | \u00a0 | \u00a0 | $ | 173,812 | \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, 12% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes. November of 2023 extended to June 1, 2026 and interest was adjusted to 12% cash interest, paid monthly | \u00a0 | June 1, 2026 | \u00a0 | $ | 500,000 | \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 | \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 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, long term, net | \u00a0 | \u00a0 | \u00a0 | $ | 500,000 | \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 | $ | 10,689,532 | \u00a0 | \u00a0 | $ | 25,889,239 | \u00a0 |
For the year ended June 30: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||||||
\u00a0 | \u00a0 | Note Payable | \u00a0 | \u00a0 | Related Party Note Payable | \u00a0 | \u00a0 | Convertible Notes | \u00a0 | \u00a0 | Cygnet Subsidiary Notes Payable | \u00a0 | \u00a0 | Total | \u00a0 | |||||
2025 | \u00a0 | $ | 2,634,538 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 8,082,103 | \u00a0 |
2026 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 500,000 | \u00a0 | \u00a0 | \u00a0 | 1,550,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 2,610,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | 3,194,538 | \u00a0 | \u00a0 | \u00a0 | 500,000 | \u00a0 | \u00a0 | \u00a0 | 1,550,000 | \u00a0 | \u00a0 | \u00a0 | 5,447,565 | \u00a0 | \u00a0 | \u00a0 | 10,692,103 | \u00a0 |
Note original discount | \u00a0 | \u00a0 | (2,571 | ) | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (2,571 | ) |
\u00a0 | \u00a0 | $ | 3,191,967 | \u00a0 | \u00a0 | $ | 500,000 | \u00a0 | \u00a0 | $ | 1,550,000 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 10,689,532 | \u00a0 |
Note 11. Related Party Transactions
\u00a0
In June 2024, Allan Marshall, the Company\u2019s CEO advanced the Company $100,000 to enable the Company to purchase equipment needed for the new warehouse facility.\u00a0 This advance was paid in July 2024.\u00a0 No interest or other fees were paid related to this transaction.\u00a0
\u00a0
On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC, which is owned by our CEO, Allan Marshall.\u00a0 The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $20,060 per month on a triple net basis.\u00a0 The initial term of the lease is five years.\u00a0\u00a0 The Company spent $611,768 in leasehold improvements to prepare the facility for product manufacturing, which will be amortized over the five year lease term.\u00a0 At June 30, 2024 there was $100,004 accrued for the deposit, 3 months\u2019 rent, and 3 months estimated expenses, this was paid in July 2024 and is now kept current.\u00a0 Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024.\u00a0
\u00a0
On June 13, 2024, the Company entered into a Stock Purchase Agreement (\u201cSPA\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 VitaMedica, Inc. to three investors (the \u201cBuyers\u201d). One of the minority interest buyers is Allan Marshall, the Company\u2019s CEO.\u00a0 The purchase price for the stock was Six Million Dollars ($6,000,000), subject to certain customary post-closing adjustments.\u00a0 The proceeds of the transaction will be used for working capital, the reduction of debt and the reduction of other liabilities currently outstanding.
\u00a0
In June 2022, the Company entered into a promissory note with a member of management.\u00a0 The loan was for $1,500,000 and has a two-year term with an interest rate of 8.5% per annum with an additional PIK of 3.5% 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 $1,000,000 of the principal was used as part of the VitaMedica purchase price.\u00a0 The principal outstanding and accrued interest at June 30, 2024 was $500,000 and $169,662, respectively.\u00a0 The accrued interest was paid in July of 2024.\u00a0 In addition, the Company issued Mr. Marshall a warrant to purchase up to 18,750 shares of the Company\u2019s common stock for five years at a per share price of $22.00.\u00a0 The note has been classified as long-term in the consolidated financial statements.\u00a0
\u00a0
The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties.
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12. Equity Transactions
\u00a0
Convertible Preferred Stock
\u00a0
The Company has 25,000\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\u00a01.8 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 year ended June 30, 2023:
\u00a0
The Company issued\u00a062,370\u00a0shares of common stock for the acquisition of E-Core Technologies Inc., a Florida corporation, valued at $6,000,000.
\u00a0
The Company issued 6,700 shares of common stock for prepayment of interest on a note payable.\u00a0 The shares were valued at $607,020 or $90.60 per common share and recorded as prepaid interest as the shares were issued at that time.
\u00a0
The Company agreed to sell 100,061 shares of common stock for a purchase price of approximately\u00a0$7,000,000. After deducting the underwriter\u2019s commissions, discounts, and offering expenses payable by the company, the Company expects to receive net proceeds of approximately $6,060,000.\u00a0 In addition, the Company issued warrants to purchase approximately 8,450 shares of the Company\u2019s common stock at a purchase price of $95.48 per common share.\u00a0\u00a0
\u00a0
In September of 2023, the Company issued 4,505 shares of common stock for the purchase of the remaining 45% of Cygnet Online, LLC.\u00a0 The shares were valued at $162,727 or $36.12 per common share.\u00a0 These shares were held due to a dispute with the seller.\u00a0
\u00a0
On January 18, 2024, the Company issued 25,081 shares of common stock as repayment of $500,000 of the Company\u2019s long-term debt. The shares were valued at $500,000 or 19.94 per common share.\u00a0
\u00a0
On March 18, 2024, the Company issued\u00a05,000 shares of common stock as an incentive-restricted stock grant to certain employees.\u00a0The shares were valued at $85,000 or $17 per common share.\u00a0 \u00a0
\u00a0
The Company effectuated a reverse stock split, at a rate of 20 to 1, effective at 12:01 am ET, October 3, 2024.\u00a0 The total issued and outstanding shares of the Company\u2019s common stock, post reverse stock split was 1,040,886.\u00a0 The Depository Trust Company (\u201cDTC\u201d) has requested an additional 202,183 shares of the Company\u2019s common stock to round up, pursuant to the terms of the reverse stock split, the holdings of DTC\u2019s beneficial holders.\u00a0 These shares were issued on\u00a0 October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company\u2019s transfer agent. Although the Company did receive the common stock back after issuance, the potential dilution remains a risk, and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk. The Reverse Stock Split did not modify the relative rights or preferences of the Common Stock.\u00a0\u00a0\u00a0
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Stock Based Compensation
\u00a0
The Company has established a Company an incentive plan, 2019 Equity Incentive Plan (the \u201c2019 Plan\u201d). The plan grants incentives to select persons who can make, are making and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restructured stock. The 2019 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2019 Plan (the \u201cCommittee\u201d). The Committee has full authority to administer and interpret the provisions of the 2019 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2019 Plan. On February 8, 2021, the Shareholders consented, and the Board of Directors approved, the amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder by 138,889 Shares to 277,778 Shares. On May 24, 2022, the Shareholders consented, and the Board of Directors approved the amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder by 222,222 Shares to 500,000 Shares.
\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 10 years from the date of the grant.
\u00a0
The following table reflects the continuity of stock options for the years ended June 30, 2024 and 2023:
\u00a0
A summary of stock option activity is as follows:
\u00a0
\u00a0 | \u00a0 | \u00a0 | \u00a0 | Weighted | \u00a0 | \u00a0 | Average | \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, 2022 | \u00a0 | \u00a0 | 213,994 | \u00a0 | \u00a0 | $ | 61.00 | \u00a0 | \u00a0 | \u00a0 | 7.42 | \u00a0 | \u00a0 | $ | 4,919,182 | \u00a0 |
Granted | \u00a0 | \u00a0 | 52,150 | \u00a0 | \u00a0 | \u00a0 | 92.60 | \u00a0 | \u00a0 | \u00a0 | 10 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | (24,180 | ) | \u00a0 | \u00a0 | 30.60 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Outstanding at June 30, 2023 | \u00a0 | \u00a0 | 241,964 | \u00a0 | \u00a0 | $ | 66.20 | \u00a0 | \u00a0 | \u00a0 | 6.23 | \u00a0 | \u00a0 | $ | 1,342,280 | \u00a0 |
Granted | \u00a0 | \u00a0 | 23,900 | \u00a0 | \u00a0 | \u00a0 | 26.59 | \u00a0 | \u00a0 | \u00a0 | 5 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | (65,150 | ) | \u00a0 | \u00a0 | 79.56 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Outstanding at June 30, 2024 | \u00a0 | \u00a0 | 200,714 | \u00a0 | \u00a0 | $ | 57.40 | \u00a0 | \u00a0 | \u00a0 | 5.83 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
Options exercisable at June 30, 2024 (vested) | \u00a0 | \u00a0 | 196,972 | \u00a0 | \u00a0 | \u00a0 | 58.20 | \u00a0 | \u00a0 | \u00a0 | 5.85 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
Options exercisable at June 30, 2023(vested) | \u00a0 | \u00a0 | 217,490 | \u00a0 | \u00a0 | \u00a0 | 62.40 | \u00a0 | \u00a0 | \u00a0 | 6.41 | \u00a0 | \u00a0 | $ | 3,131,855 | \u00a0 |
\u00a0
The average fair value of stock options granted was estimated to be 3.40 per share for the period ended June 30, 2024, and the closing stock price on June 30, 2024, was $7.20 per common share.
\u00a0
The average fair value of stock options granted was estimated to be $92.60 per share for the period ended June 30, 2023, and the closing stock price on June 30, 2023, was approximately $45.00 per common share.
\u00a0
Stock-based compensation expense attributable to stock options was approximately $1,169,803 and $3,664,500 for the years ended June 30, 2024 and 2023, respectively. As of June 30, 2024, there was approximately $265,200 unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 2 years.
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 years ended June 30, 2024 and 2023:
\u00a0
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Dividend rate | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Risk free interest rate | \u00a0 | 3.95%-4.53 | % | \u00a0 | 2.70%-4.38 | % | ||
Expected term | \u00a0 | \u00a0 | 5 | \u00a0 | \u00a0 | \u00a0 | 6.5 | \u00a0 |
Expected volatility | \u00a0 | 58%-107 | % | \u00a0 | 68%-117 | % | ||
Grant date stock price | \u00a0 | $ | \u00a00.53-1.47 | \u00a0 | \u00a0 | $ | \u00a01.62 \u2013 5.30 | \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 0% for each of the years ended June 30, 2024 and 2023, respectively.
\u00a0
There were 213,214 shares available for issuance as of November 11, 2024, under the 2019 Plan as amended.
"}]},{"name":"rpt:f-993","factDimensions":{"xbrl:concept":"upxi:StockOptionsSharesIssuedIncreased","xbrl:period":"2021-02-01T00:00:00/2021-02-09T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:FinancialInstrumentAxis":"us-gaap:StockOptionMember","us-gaap:PlanNameAxis":"upxi:BottomMember"},"factValues":[{"value":"138889","decimals":0}]},{"name":"rpt:f-994","factDimensions":{"xbrl:concept":"upxi:StockOptionsSharesIssuedIncreased","xbrl:period":"2021-02-01T00:00:00/2021-02-09T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:FinancialInstrumentAxis":"us-gaap:StockOptionMember","us-gaap:PlanNameAxis":"upxi:TopMember"},"factValues":[{"value":"277778","decimals":0}]},{"name":"rpt:f-995","factDimensions":{"xbrl:concept":"upxi:StockOptionsSharesIssuedIncreased","xbrl:period":"2022-05-01T00:00:00/2022-05-25T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:FinancialInstrumentAxis":"us-gaap:StockOptionMember","us-gaap:PlanNameAxis":"upxi:BottomMember"},"factValues":[{"value":"222222","decimals":0}]},{"name":"rpt:f-996","factDimensions":{"xbrl:concept":"upxi:StockOptionsSharesIssuedIncreased","xbrl:period":"2022-05-01T00:00:00/2022-05-25T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:FinancialInstrumentAxis":"us-gaap:StockOptionMember","us-gaap:PlanNameAxis":"upxi:TopMember"},"factValues":[{"value":"500000","decimals":0}]},{"name":"rpt:f-997","factDimensions":{"xbrl:concept":"upxi:GrantDate","xbrl:period":"2022-07-01T00:00:00/2023-07-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:FinancialInstrumentAxis":"us-gaap:StockOptionMember"},"factValues":[{"value":"P10Y"}]},{"name":"rpt:f-998","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | \u00a0 | \u00a0 | Weighted | \u00a0 | \u00a0 | Average | \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, 2022 | \u00a0 | \u00a0 | 213,994 | \u00a0 | \u00a0 | $ | 61.00 | \u00a0 | \u00a0 | \u00a0 | 7.42 | \u00a0 | \u00a0 | $ | 4,919,182 | \u00a0 |
Granted | \u00a0 | \u00a0 | 52,150 | \u00a0 | \u00a0 | \u00a0 | 92.60 | \u00a0 | \u00a0 | \u00a0 | 10 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | (24,180 | ) | \u00a0 | \u00a0 | 30.60 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Outstanding at June 30, 2023 | \u00a0 | \u00a0 | 241,964 | \u00a0 | \u00a0 | $ | 66.20 | \u00a0 | \u00a0 | \u00a0 | 6.23 | \u00a0 | \u00a0 | $ | 1,342,280 | \u00a0 |
Granted | \u00a0 | \u00a0 | 23,900 | \u00a0 | \u00a0 | \u00a0 | 26.59 | \u00a0 | \u00a0 | \u00a0 | 5 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | (65,150 | ) | \u00a0 | \u00a0 | 79.56 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Outstanding at June 30, 2024 | \u00a0 | \u00a0 | 200,714 | \u00a0 | \u00a0 | $ | 57.40 | \u00a0 | \u00a0 | \u00a0 | 5.83 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
Options exercisable at June 30, 2024 (vested) | \u00a0 | \u00a0 | 196,972 | \u00a0 | \u00a0 | \u00a0 | 58.20 | \u00a0 | \u00a0 | \u00a0 | 5.85 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
Options exercisable at June 30, 2023(vested) | \u00a0 | \u00a0 | 217,490 | \u00a0 | \u00a0 | \u00a0 | 62.40 | \u00a0 | \u00a0 | \u00a0 | 6.41 | \u00a0 | \u00a0 | $ | 3,131,855 | \u00a0 |
\u00a0 | \u00a0 | June 30, 2024 | \u00a0 | \u00a0 | June 30, 2023 | \u00a0 | ||
Dividend rate | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Risk free interest rate | \u00a0 | 3.95%-4.53 | % | \u00a0 | 2.70%-4.38 | % | ||
Expected term | \u00a0 | \u00a0 | 5 | \u00a0 | \u00a0 | \u00a0 | 6.5 | \u00a0 |
Expected volatility | \u00a0 | 58%-107 | % | \u00a0 | 68%-117 | % | ||
Grant date stock price | \u00a0 | $ | \u00a00.53-1.47 | \u00a0 | \u00a0 | $ | \u00a01.62 \u2013 5.30 | \u00a0 |
14. Income Taxes
\u00a0
The components of the provision for income taxes are as follows:
\u00a0
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Current tax provision | \u00a0 | $ | 12,700 | \u00a0 | \u00a0 | $ | 349,260 | \u00a0 |
Deferred tax provision | \u00a0 | \u00a0 | (344,801 | ) | \u00a0 | \u00a0 | (3,601,298 | ) |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Provision for income taxes (benefit) | \u00a0 | $ | (332,101 | ) | \u00a0 | $ | (3,049,293 | ) |
\u00a0
The differences between income taxes calculated at the statutory US federal income tax rate and the Company\u2019s provision for income taxes are as follows:
\u00a0
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Income tax provision at statutory federal and state tax rate | \u00a0 | \u00a0 | 21 | % | \u00a0 | \u00a0 | 21.00 | % |
State taxes, net of federal benefit | \u00a0 | \u00a0 | 0.27 | % | \u00a0 | \u00a0 | 5.04 | % |
Nondeductible expense | \u00a0 | \u00a0 | (0.05 | )% | \u00a0 | \u00a0 | (0.24 | )% |
Tax return to provision | \u00a0 | \u00a0 | 0.00 | % | \u00a0 | \u00a0 | (2.67 | )% |
State tax rate change | \u00a0 | \u00a0 | .07 | % | \u00a0 | \u00a0 | 1.81 | % |
Other, net | \u00a0 | \u00a0 | 5.53 | % | \u00a0 | \u00a0 | 0.90 | % |
Valuation allowance | \u00a0 | \u00a0 | (25.43 | )% | \u00a0 | - | %\u00a0 | |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Provision for income taxes | \u00a0 | \u00a0 | 1.38 | % | \u00a0 | \u00a0 | 25.83 | % |
The net deferred income tax asset balance related to the following:
\u00a0
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Net operating losses carry forward | \u00a0 | $ | 4,405,547 | \u00a0 | \u00a0 | $ | 752,863 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Right of use assets | \u00a0 | \u00a0 | 98,987 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Inventory write off | \u00a0 | \u00a0 | 981,758 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Impairment loss | \u00a0 | \u00a0 | 3,159,477 | \u00a0 | \u00a0 | \u00a0 | 1,015,997 | \u00a0 |
Intangible assets | \u00a0 | \u00a0 | 1,034,959 | \u00a0 | \u00a0 | \u00a0 | 1,741,870 | \u00a0 |
Stock Options | \u00a0 | \u00a0 | 2,323,784 | \u00a0 | \u00a0 | \u00a0 | 1,999,688 | \u00a0 |
Allowance for doubtful accounts | \u00a0 | \u00a0 | 16,797 | \u00a0 | \u00a0 | \u00a0 | 56,112 | \u00a0 |
Accrued compensation | \u00a0 | \u00a0 | 27,540 | \u00a0 | \u00a0 | \u00a0 | 19,323 | \u00a0 |
Deferred revenue | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 18,196 | \u00a0 |
Other, net | \u00a0 | \u00a0 | 7 | \u00a0 | \u00a0 | \u00a0 | 7 | \u00a0 |
Valuation allowances | \u00a0 | \u00a0 | (6,100,000 | ) | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Deferred tax asset | \u00a0 | $ | 5,948,858 | \u00a0 | \u00a0 | $ | 5,604,056 | \u00a0 |
\u00a0
There were approximately $44,916,500 and $21,258,000 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely as of June 30, 2024 and June 30, 2023, respectively.
\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. As of June 30, 2024 and 2023, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. 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. The Company used $2,506,514 of the federal net operating loss carryover during the year ended June 30, 2022.\u00a0 During the years ended June 30, 2024 and June 30, 2023 the federal net operating loss increased significantly and management recorded a valuation reserve of $6,100,000.
\u00a0
We file federal and state income tax returns in jurisdictions with varying statutes of limitations. Income tax returns generally remain subject to examination by federal and most state tax authorities. We are not currently under examination in any federal or state jurisdiction.
"}]},{"name":"rpt:f-1054","factDimensions":{"xbrl:concept":"upxi:ScheduleOfIncomeTaxTableTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Current tax provision | \u00a0 | $ | 12,700 | \u00a0 | \u00a0 | $ | 349,260 | \u00a0 |
Deferred tax provision | \u00a0 | \u00a0 | (344,801 | ) | \u00a0 | \u00a0 | (3,601,298 | ) |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Provision for income taxes (benefit) | \u00a0 | $ | (332,101 | ) | \u00a0 | $ | (3,049,293 | ) |
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Income tax provision at statutory federal and state tax rate | \u00a0 | \u00a0 | 21 | % | \u00a0 | \u00a0 | 21.00 | % |
State taxes, net of federal benefit | \u00a0 | \u00a0 | 0.27 | % | \u00a0 | \u00a0 | 5.04 | % |
Nondeductible expense | \u00a0 | \u00a0 | (0.05 | )% | \u00a0 | \u00a0 | (0.24 | )% |
Tax return to provision | \u00a0 | \u00a0 | 0.00 | % | \u00a0 | \u00a0 | (2.67 | )% |
State tax rate change | \u00a0 | \u00a0 | .07 | % | \u00a0 | \u00a0 | 1.81 | % |
Other, net | \u00a0 | \u00a0 | 5.53 | % | \u00a0 | \u00a0 | 0.90 | % |
Valuation allowance | \u00a0 | \u00a0 | (25.43 | )% | \u00a0 | - | %\u00a0 | |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Provision for income taxes | \u00a0 | \u00a0 | 1.38 | % | \u00a0 | \u00a0 | 25.83 | % |
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Net operating losses carry forward | \u00a0 | $ | 4,405,547 | \u00a0 | \u00a0 | $ | 752,863 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Right of use assets | \u00a0 | \u00a0 | 98,987 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Inventory write off | \u00a0 | \u00a0 | 981,758 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Impairment loss | \u00a0 | \u00a0 | 3,159,477 | \u00a0 | \u00a0 | \u00a0 | 1,015,997 | \u00a0 |
Intangible assets | \u00a0 | \u00a0 | 1,034,959 | \u00a0 | \u00a0 | \u00a0 | 1,741,870 | \u00a0 |
Stock Options | \u00a0 | \u00a0 | 2,323,784 | \u00a0 | \u00a0 | \u00a0 | 1,999,688 | \u00a0 |
Allowance for doubtful accounts | \u00a0 | \u00a0 | 16,797 | \u00a0 | \u00a0 | \u00a0 | 56,112 | \u00a0 |
Accrued compensation | \u00a0 | \u00a0 | 27,540 | \u00a0 | \u00a0 | \u00a0 | 19,323 | \u00a0 |
Deferred revenue | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 18,196 | \u00a0 |
Other, net | \u00a0 | \u00a0 | 7 | \u00a0 | \u00a0 | \u00a0 | 7 | \u00a0 |
Valuation allowances | \u00a0 | \u00a0 | (6,100,000 | ) | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Deferred tax asset | \u00a0 | $ | 5,948,858 | \u00a0 | \u00a0 | $ | 5,604,056 | \u00a0 |
Note 15. 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.
"}]},{"name":"rpt:f-1107","factDimensions":{"xbrl:concept":"us-gaap:DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 16.\u00a0 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 managements 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 was not moved from the Henderson, Nevada location to the buyers location in Daytona, Florida.\u00a0
\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 At June 30, 2023, there was a receivable balance from the buyer of 845,443, net of a reserve of $1,179,498.\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 |
\u00a0
For several reasons, including but not limited to the non-payment per the terms of several agreements and the continuous delay in getting the business transitioned, the Company notified Bloomios of its termination of the transition agreement.\u00a0 Management accrued a reserve on the receivable balance of $1,179,498 leaving a receivable balance of $845,443 on June 30, 2023.\u00a0 Accrued interest and the gain from the original issue discount were reversed and the remaining balance was expensed to loss from discontinued operations during the year ended June 30, 2023.\u00a0 For the year ended June 30, 2024, the Company had accrual for wind down expenses of employee compensation, travel expenses and others for the expected shutdown of the facility in Henderson, Nevada after the transition was completed to Bloomios.\u00a0\u00a0\u00a0 The final reconciliation of all these accrued expenses resulting in and over accrual of $71,976 and was recognized as income from discontinued operations for the year ended June 30, 2024.\u00a0\u00a0
\u00a0 | \u00a0 | Years ended June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 3,042,878 | \u00a0 |
Cost of sales | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,803,643 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | (71,976 | ) | \u00a0 | $ | 1,300,102 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | \u00a0 | \u00a0 | $ | 10,576 | \u00a0 | |
Income (loss) from discontinued operations, net of tax | \u00a0 | $ | 71,976 | \u00a0 | \u00a0 | $ | (338,418 | ) |
\u00a0
The investments originally recorded at the date of the sale were fully reserved as of June 30, 2023.
\u00a0
Investments - Bloomios:
\u00a0
Senior secured convertible debenture, net of unamortized original issue discount | \u00a0 | $ | 5,218,209 | \u00a0 |
Series D convertible preferred stock | \u00a0 | \u00a0 | 8,500,000 | \u00a0 |
Convertible Secured Subordinate Promissory Note | \u00a0 | \u00a0 | 5,000,000 | \u00a0 |
Reserve on Investments - Bloomios | \u00a0 | \u00a0 | (18,718,209 | ) |
Total Investments - Bloomios | \u00a0 | $ | - | \u00a0 |
\u00a0
Senior Secured convertible debenture:
\u00a0
The Company received a senior secured convertible debenture of $4,500,000, net of the original issue discount. The Debentures have a maturity date of October 26, 2024, an interest rate of 10% and are convertible into shares of Bloomios common stock.\u00a0 The debenture contains customary representations, warranties and indemnification provisions. The Debentures are secured by a senior security interest in all assets of the Company and its subsidiaries.
\u00a0
In addition, the Company received a warrant to purchase shares of Bloomios common stock.\u00a0 The Company did not place any value on this warrant.\u00a0 Bloomios has agreed to use commercially reasonable efforts to complete a Qualified Offering within six months of October 26, 2022, to file a registration statement covering the resale of the warrant shares and the underlying shares convertible with the debenture.\u00a0
\u00a0
Series D convertible preferred stock
\u00a0
We received 85,000 shares of Series D preferred stock.\u00a0 The preferred shares have a stated value per share of $100 and we are to receive dividends equal to 8.5% per year on a monthly basis, 30 days in arrears, for each month during which the Series D Preferred shares remain outstanding.\u00a0 The preferred stock shall not receive the declared dividends until the senior secured debentures are all repaid in full for all investors, including the debentures held by the Company.\u00a0
\u00a0
Convertible Secured Subordinate Promissory Note
\u00a0
The note has an interest rate of eight and one-half percent (8.5%) per annum and requires Bloomios to make a prepayment to the note in the amount equal to 40% of the net proceeds received by Bloomios in connection with any offering of securities conducted in connection with an up listing.\u00a0 Interest is due monthly and the note is convertible, at the Company\u2019s option, into shares of Bloomios common stock at a conversion price of $5.00 per share subject to adjustments.\u00a0\u00a0 The full principal and interest is due on or before October 26, 2024.
\u00a0
The note is secured by a subordinated security interest in all assets of Infusionz pursuant to a certain pledge and security agreement, dated as of October 26, 2022, which security interest shall rank junior to all liens and security interests granted by Bloomios to the senior secured convertible note, which the Company is a holder of a portion of this security.
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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 |
\u00a0 | \u00a0 | Years ended June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 3,042,878 | \u00a0 |
Cost of sales | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,803,643 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | (71,976 | ) | \u00a0 | $ | 1,300,102 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | \u00a0 | \u00a0 | $ | 10,576 | \u00a0 | |
Income (loss) from discontinued operations, net of tax | \u00a0 | $ | 71,976 | \u00a0 | \u00a0 | $ | (338,418 | ) |
Senior secured convertible debenture, net of unamortized original issue discount | \u00a0 | $ | 5,218,209 | \u00a0 |
Series D convertible preferred stock | \u00a0 | \u00a0 | 8,500,000 | \u00a0 |
Convertible Secured Subordinate Promissory Note | \u00a0 | \u00a0 | 5,000,000 | \u00a0 |
Reserve on Investments - Bloomios | \u00a0 | \u00a0 | (18,718,209 | ) |
Total Investments - Bloomios | \u00a0 | $ | - | \u00a0 |
Note 17. 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 | Years ended June\u00a030, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 158,147 | \u00a0 | \u00a0 | $ | 1,442,279 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 | \u00a0 | $ | 446,332 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 333,168 | \u00a0 | \u00a0 | $ | 2,118,480 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 607,103 | \u00a0 |
Loss from discontinued operations | \u00a0 | $ | (187,003 | ) | \u00a0 | $ | (1,729,636 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 67,467 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 2,835 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,026,043 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0 | \u00a0 | Years ended June\u00a030, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 158,147 | \u00a0 | \u00a0 | $ | 1,442,279 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 | \u00a0 | $ | 446,332 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 333,168 | \u00a0 | \u00a0 | $ | 2,118,480 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 607,103 | \u00a0 |
Loss from discontinued operations | \u00a0 | $ | (187,003 | ) | \u00a0 | $ | (1,729,636 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 67,467 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 2,835 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 1,026,043 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \u00a0 |
Note 18. Discontinued Operations \u2013 Sale of VitaMedica
\u00a0
On June 13, 2024, the Company sold VitaMedica, Inc. to three investors and had an effective day of June 1, 2024.\u00a0 One of the minority interest investors is Allan Marshall, the Company\u2019s Chief Executive Officer. The purchase price for the stock was $6,000,000, subject to certain customary post-closing adjustments. In addition, the Buyers are obligated to pay the Company for services provided according to the Transition Services Agreement.\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.\u00a0 Discontinued operations of VitaMedica included in the consolidated financial statements ended June 30, 2024 are for the period from July 1, 2023 to May 31, 2024.\u00a0
\u00a0
Summary of discontinued operations:
\u00a0
\u00a0 | \u00a0 | Years ended June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 8,707,268 | \u00a0 | \u00a0 | $ | 7,610,949 | \u00a0 |
Cost of sales | \u00a0 | $ | 2,051,854 | \u00a0 | \u00a0 | $ | 1,362,036 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 6,076,257 | \u00a0 | \u00a0 | $ | 5,891,301 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 425,263 | \u00a0 | \u00a0 | $ | 527,634 | \u00a0 |
Other expenses | \u00a0 | $ | (59,742 | ) | \u00a0 | $ | 212,427 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | 213,636 | \u00a0 | \u00a0 | $ | (382,449 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 289,416 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 83,840 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 4,875,757 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $\u00a0 | \u00a0 | \u00a0 |
Fair value of consideration the Company was paid:
\u00a0
Cash | \u00a0 | $ | 2,100.000 | \u00a0 |
Reduction of liabilities | \u00a0 | \u00a0 | 1,900,000 | \u00a0 |
Note payable | \u00a0 | \u00a0 | 1,000,000 | \u00a0 |
Working capital payment | \u00a0 | \u00a0 | 1,000,000 | \u00a0 |
\u00a0 | \u00a0 | $ | 6,000,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets, liabilities and intangible assets transferred: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 37,267 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 416,374 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 1,747,150 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 518,280 | \u00a0 |
Fixed assets | \u00a0 | \u00a0 | 111,305 | \u00a0 |
Other assets | \u00a0 | \u00a0 | 184,800 | \u00a0 |
Liabilities | \u00a0 | \u00a0 | (512,926 | ) |
Total identifiable assets | \u00a0 | \u00a0 | 2,502,250 | \u00a0 |
Total goodwill and intangible assets | \u00a0 | \u00a0 | 1,549,212 | \u00a0 |
Total assets transferred | \u00a0 | \u00a0 | 4,051,462 | \u00a0 |
Purchase price | \u00a0 | $ | 6,000,000 | \u00a0 |
Gain on sale of VitaMedica | \u00a0 | $ | 1,948,538 | \u00a0 |
\u00a0 | \u00a0 | Years ended June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 8,707,268 | \u00a0 | \u00a0 | $ | 7,610,949 | \u00a0 |
Cost of sales | \u00a0 | $ | 2,051,854 | \u00a0 | \u00a0 | $ | 1,362,036 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 6,076,257 | \u00a0 | \u00a0 | $ | 5,891,301 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 425,263 | \u00a0 | \u00a0 | $ | 527,634 | \u00a0 |
Other expenses | \u00a0 | $ | (59,742 | ) | \u00a0 | $ | 212,427 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | 213,636 | \u00a0 | \u00a0 | $ | (382,449 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 289,416 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 83,840 | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 4,875,757 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $\u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 2,100.000 | \u00a0 |
Reduction of liabilities | \u00a0 | \u00a0 | 1,900,000 | \u00a0 |
Note payable | \u00a0 | \u00a0 | 1,000,000 | \u00a0 |
Working capital payment | \u00a0 | \u00a0 | 1,000,000 | \u00a0 |
\u00a0 | \u00a0 | $ | 6,000,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets, liabilities and intangible assets transferred: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 37,267 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 416,374 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 1,747,150 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 518,280 | \u00a0 |
Fixed assets | \u00a0 | \u00a0 | 111,305 | \u00a0 |
Other assets | \u00a0 | \u00a0 | 184,800 | \u00a0 |
Liabilities | \u00a0 | \u00a0 | (512,926 | ) |
Total identifiable assets | \u00a0 | \u00a0 | 2,502,250 | \u00a0 |
Total goodwill and intangible assets | \u00a0 | \u00a0 | 1,549,212 | \u00a0 |
Total assets transferred | \u00a0 | \u00a0 | 4,051,462 | \u00a0 |
Purchase price | \u00a0 | $ | 6,000,000 | \u00a0 |
Gain on sale of VitaMedica | \u00a0 | $ | 1,948,538 | \u00a0 |
Note 19. Discontinued Operations \u2013 Sale of E-Core
\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\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
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 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets acquired, and liabilities assumed: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \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 |
The business was acquired through 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.\u00a0 The 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 three notes payable were discounted by $2,707,393.\u00a0 The discount amortization for the year ended June 30, 2024 and June 30, 2023 was $1,112,676 and $969,098, respectively.
\u00a0
On August 1, 2024, the Company closed a sale transaction in which, effective as of June 30, 2024, it sold 100% of the outstanding stock of its wholly owned subsidiary E-Core Technology, Inc., a Florida corporation (d/b/a New England Technology, Inc.) (\u201cE-core\u201d), to E-Core Holdings, LLC, a Florida limited liability company (the \u201cBuyer\u201d) pursuant to the terms of an Agreement to Unwind Securities Purchase Agreement dated July 31, 2024 (the \u201cAgreement\u201d).\u00a0 The principals of the Buyer are the three individuals from whom the Company acquired E-core in October 2022.\u00a0 The purchase price in the transaction was $2,000,000 paid by the Buyer to the Company at closing.\u00a0 In addition, in connection with the closing of the transaction (i) the Company was released as a guarantor from E-core\u2019s commercial loan facility, and (ii) all subordinated promissory notes issued by the Company in connection with the Company\u2019s initial acquisition of E-core were cancelled and any outstanding principal and interest thereunder was deemed paid in full.\u00a0 The Agreement contains standard representations and warranties, conditions to closing, and covenants, for a transaction of this nature.
\u00a0
Summary of discontinued operations:
\u00a0
\u00a0 | \u00a0 | Years ended June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 8,707,268 | \u00a0 | \u00a0 | $ | 36,623,864 | \u00a0 |
Cost of sales | \u00a0 | $ | 2,051,854 | \u00a0 | \u00a0 | $ | 30,334,483 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 6,076,257 | \u00a0 | \u00a0 | $ | 4,026,910 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 425,263 | \u00a0 | \u00a0 | $ | 1,144,313 | \u00a0 |
Other expenses | \u00a0 | $ | (59,742 | ) | \u00a0 | $ | 37,824 | \u00a0 |
Income from discontinued operations | \u00a0 | $ | 213,636 | \u00a0 | \u00a0 | $ | 1,080,379 | \u00a0 |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,796,903 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 22,400,484 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 3,401,983 | \u00a0 |
\u00a0
Fair value of consideration the Company was paid:
\u00a0
Acquisition payable, paid August 5, 2024 | \u00a0 | $ | 2,000.000 | \u00a0 |
Assumption of debt and accrued interest | \u00a0 | \u00a0 | 10,636,309 | \u00a0 |
\u00a0 | \u00a0 | $ | 12,636,309 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets, liabilities and intangible assets transferred: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 51,976 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 5,301,212 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 1,870,687 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 56,476 | \u00a0 |
Fixed assets | \u00a0 | \u00a0 | - | \u00a0 |
Liabilities | \u00a0 | \u00a0 | (3,428,549 | ) |
Total identifiable assets | \u00a0 | \u00a0 | 3,851,802 | \u00a0 |
Total goodwill and intangible assets | \u00a0 | \u00a0 | 10,521,833 | \u00a0 |
Total assets transferred | \u00a0 | \u00a0 | 14,373,635 | \u00a0 |
Purchase price | \u00a0 | $ | 12,636,309 | \u00a0 |
Loss on sale of E-core | \u00a0 | $ | 1,737,326 | \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 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets acquired, and liabilities assumed: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \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 | Years ended June 30, | \u00a0 | |||||
\u00a0 | \u00a0 | 2024 | \u00a0 | \u00a0 | 2023 | \u00a0 | ||
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Revenue | \u00a0 | $ | 8,707,268 | \u00a0 | \u00a0 | $ | 36,623,864 | \u00a0 |
Cost of sales | \u00a0 | $ | 2,051,854 | \u00a0 | \u00a0 | $ | 30,334,483 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 6,076,257 | \u00a0 | \u00a0 | $ | 4,026,910 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 425,263 | \u00a0 | \u00a0 | $ | 1,144,313 | \u00a0 |
Other expenses | \u00a0 | $ | (59,742 | ) | \u00a0 | $ | 37,824 | \u00a0 |
Income from discontinued operations | \u00a0 | $ | 213,636 | \u00a0 | \u00a0 | $ | 1,080,379 | \u00a0 |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 5,796,903 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 22,400,484 | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 3,401,983 | \u00a0 |
Acquisition payable, paid August 5, 2024 | \u00a0 | $ | 2,000.000 | \u00a0 |
Assumption of debt and accrued interest | \u00a0 | \u00a0 | 10,636,309 | \u00a0 |
\u00a0 | \u00a0 | $ | 12,636,309 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Recognized amounts of identifiable assets, liabilities and intangible assets transferred: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash | \u00a0 | $ | 51,976 | \u00a0 |
Accounts receivable | \u00a0 | \u00a0 | 5,301,212 | \u00a0 |
Inventory | \u00a0 | \u00a0 | 1,870,687 | \u00a0 |
Prepaid expenses | \u00a0 | \u00a0 | 56,476 | \u00a0 |
Fixed assets | \u00a0 | \u00a0 | - | \u00a0 |
Liabilities | \u00a0 | \u00a0 | (3,428,549 | ) |
Total identifiable assets | \u00a0 | \u00a0 | 3,851,802 | \u00a0 |
Total goodwill and intangible assets | \u00a0 | \u00a0 | 10,521,833 | \u00a0 |
Total assets transferred | \u00a0 | \u00a0 | 14,373,635 | \u00a0 |
Purchase price | \u00a0 | $ | 12,636,309 | \u00a0 |
Loss on sale of E-core | \u00a0 | $ | 1,737,326 | \u00a0 |