Note 1. Background Information
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As used in this quarterly 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:
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\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) |
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The following subsidiaries had no activity during the\u00a0three months\u00a0ended\u00a0September 30, 2024 and 2023:
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\u00a0 | \u2610 | Upexi CP, LLC, a Delaware limited liability company |
\u00a0 | \u2610\u00a0 | Upexi CP / Canada Inc., a Canadian 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 |
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The following subsidiaries were divested during the year ended June 30, 2024 and all activity for the three months ended September 30, 2023 was classified as discontinued operations:
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\u00a0 | \u2610 | VitaMedica, Inc. a Nevada corporation |
\u00a0 | \u2610\u00a0 | E-Core Technology, Inc. a Florida corporation |
\u00a0 | \u2610 | Interactive Offers, LLC, a Delaware limited liability company |
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In addition, the Company has six wholly owned subsidiaries that had no activity during the three months ended September 30, 2023. All of the entities were dissolved or cancelled as of June 30, 2024.
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\u00a0 | \u00b7 | Steam Distribution, LLC, a California limited liability company |
\u00a0 | \u00b7 | One Hit Wonder, Inc., a California corporation |
\u00a0 | \u00b7 | One Hit Wonder Holdings, LLC, a California limited liability company |
\u00a0 | \u00b7 | Vape Estate, Inc., a Nevada Corporation |
\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.
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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
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MW Products operates from our corporate headquarters and our Tampa, Florida warehouse, managing direct to consumer, wholesale and Amazon sales for multiple brands and developing new products through our research and development team in Henderson, Nevada and Odessa, Florida.
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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.
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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.
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Upexi Distribution operates from our Tampa, Florida warehouse providing warehousing, distribution and other services in support of our product sales.\u00a0
"}]},{"name":"rpt:f-335","factDimensions":{"xbrl:concept":"us-gaap:SignificantAccountingPoliciesTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 2. Significant Accounting Policies
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The significant accounting policies followed are:
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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.
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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.
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Cash-\u00a0The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents. Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances.
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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 September 30, 2024 June 30, 2024, September 30, 2023, and June 30, 2023 were $801,452, $606,885, $2,605,958 and $1,125,394, respectively. Based on management\u2019s review of accounts receivable, the valuation allowance was approximately $61,750 at September 30, 2024 and June 30, 2024. The Company had no bad debt expenses for the three months ended September 30, 2024 or the three months ended September 30, 2023.
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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.
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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 September 30, 2024, the Company had $497,160 of raw materials and $1,139,259 of finished goods inventory.\u00a0 On June 30, 2024, the Company had $465,535 of raw material and $966,021 of finished goods inventory.\u00a0 The Company had an\u00a0inventory reserve at June 30, 2024 of $605,994 and as of September 30, 2024, and 2023 and inventory reserve of $605,470 and $65,994 respectively.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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.
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Our business is subject to contingencies related to customer orders, including:
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Right of Return:
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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
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Warranties:
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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.
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Conditions of Acceptance:
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Sales of our consumable products and pet products, generally do not have customer acceptance terms.
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Contract Assets
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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.
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The following table discloses disaggregated revenue:
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\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | September \u00a030, 2023 | \u00a0 | ||
Primary geographical markets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
United States of America | \u00a0 | $ | 4,280,593 | \u00a0 | \u00a0 | $ | 8,162,728 | \u00a0 |
Other | \u00a0 | \u00a0 | 75,922 | \u00a0 | \u00a0 | \u00a0 | 111,962 | \u00a0 |
\u00a0 | \u00a0 | $ | 4,356,515 | \u00a0 | \u00a0 | $ | 8,274,690 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Product source | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Internally manufactured | \u00a0 | $ | 2,166,341 | \u00a0 | \u00a0 | $ | 3,076,342 | \u00a0 |
Contract manufactured | \u00a0 | \u00a0 | 578,316 | \u00a0 | \u00a0 | \u00a0 | 802,503 | \u00a0 |
Purchased as finished good | \u00a0 | \u00a0 | 1,611,858 | \u00a0 | \u00a0 | \u00a0 | 4,395,845 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 4,356,515 | \u00a0 | \u00a0 | $ | 8,274,690 | \u00a0 |
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The following table discloses the deferred revenue:
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\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Deferred revenue | \u00a0 | $ | 178,016 | \u00a0 | \u00a0 | $ | 235,255 | \u00a0 |
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The deferred revenue or also referred to as funded backlog was $178,016 and $235,255, at September 30,2024 and June 30, 2024, respectively.\u00a0 We recognized approximately $210,000 during the three months ended September 30, 2024 and 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 on June 30, 2023 to be recognized in the three months ended September 30, 2023.
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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.
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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 $194,774 and $287,146 were expensed as incurred during the three months ended September 30, 2024, and 2023, respectively.\u00a0
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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.
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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.
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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).
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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:
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\u00a0 | \u00b7 | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
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\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. |
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\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.
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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.
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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.
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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.
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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 $6,535,000 and a $6,100,000 valuation allowance was recorded at September 30, 2024 and June 30, 2024, respectively.\u00a0 \u00a0
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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.
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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
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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 September 30, 2024 or June 30, 2024.
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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).
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Reverse Stock Split
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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.
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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.\u00a0 The Reverse Stock Split did not modify the relative rights or preferences of the Common Stock.\u00a0\u00a0\u00a0
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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.
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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
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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.
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 three months ended September 30, 2023 to conform to the presentation as of and for the three months \u00a0ended September 30, 2024.
\u00a0
Basis of Presentation and Principles of Consolidation - The Company\u2019s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (\u201cGAAP\u201d). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of September 30, 2024 and June 30, 2024.
\u00a0
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending June 30, 2025. \u00a0Certain notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2024 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended June 30, 2024 included in the Company\u2019s Form 10-K as filed with the Securities and Exchange Commission on December 16, 2024.\u00a0
\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-336","factDimensions":{"xbrl:concept":"us-gaap:UseOfEstimates","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-337","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Cash-\u00a0The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents. Cash is 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-338","factDimensions":{"xbrl:concept":"us-gaap:AccountsAndNontradeReceivableTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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 September 30, 2024 June 30, 2024, September 30, 2023, and June 30, 2023 were $801,452, $606,885, $2,605,958 and $1,125,394, respectively. Based on management\u2019s review of accounts receivable, the valuation allowance was approximately $61,750 at September 30, 2024 and June 30, 2024. The Company had no bad debt expenses for the three months ended September 30, 2024 or the three months ended September 30, 2023.
"}]},{"name":"rpt:f-339","factDimensions":{"xbrl:concept":"us-gaap:AccountsReceivableNet","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"801452","decimals":0}]},{"name":"rpt:f-340","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-341","factDimensions":{"xbrl:concept":"us-gaap:AccountsReceivableNet","xbrl:period":"2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2605958","decimals":0}]},{"name":"rpt:f-342","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-343","factDimensions":{"xbrl:concept":"us-gaap:AllowanceForDoubtfulAccountsReceivable","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"61750","decimals":0}]},{"name":"rpt:f-344","factDimensions":{"xbrl:concept":"us-gaap:InventoryPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0
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 September 30, 2024, the Company had $497,160 of raw materials and $1,139,259 of finished goods inventory.\u00a0 On June 30, 2024, the Company had $465,535 of raw material and $966,021 of finished goods inventory.\u00a0 The Company had an\u00a0inventory reserve at June 30, 2024 of $605,994 and as of September 30, 2024, and 2023 and inventory reserve of $605,470 and $65,994 respectively.
"}]},{"name":"rpt:f-345","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterials","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"497160","decimals":0}]},{"name":"rpt:f-346","factDimensions":{"xbrl:concept":"us-gaap:InventoryFinishedGoods","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1139259","decimals":0}]},{"name":"rpt:f-347","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterials","xbrl:period":"2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"465535","decimals":0}]},{"name":"rpt:f-348","factDimensions":{"xbrl:concept":"us-gaap:InventoryFinishedGoods","xbrl:period":"2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"966021","decimals":0}]},{"name":"rpt:f-349","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterialsNetOfReserves","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"605994","decimals":0}]},{"name":"rpt:f-350","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterialsNetOfReserves","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"605470","decimals":0}]},{"name":"rpt:f-351","factDimensions":{"xbrl:concept":"us-gaap:InventoryRawMaterialsNetOfReserves","xbrl:period":"2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"65994","decimals":0}]},{"name":"rpt:f-352","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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.
"}]},{"name":"rpt:f-353","factDimensions":{"xbrl:concept":"us-gaap:PublicUtilitiesPropertyPlantAndEquipmentFuelUsefulLife","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:PlanNameAxis":"upxi:BottomMember"},"factValues":[{"value":"P3Y"}]},{"name":"rpt:f-354","factDimensions":{"xbrl:concept":"us-gaap:PublicUtilitiesPropertyPlantAndEquipmentFuelUsefulLife","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:PlanNameAxis":"upxi:TopMember"},"factValues":[{"value":"P20Y"}]},{"name":"rpt:f-355","factDimensions":{"xbrl:concept":"us-gaap:SaleLeasebackTransactionLeaseTerm","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"P5Y"}]},{"name":"rpt:f-356","factDimensions":{"xbrl:concept":"us-gaap:BusinessCombinationsPolicy","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-357","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-358","factDimensions":{"xbrl:concept":"us-gaap:GoodwillImpairmentLoss","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3594745","decimals":0}]},{"name":"rpt:f-359","factDimensions":{"xbrl:concept":"us-gaap:GoodwillImpairmentLoss","xbrl:period":"2023-07-01T00:00:00/2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2889158","decimals":0}]},{"name":"rpt:f-360","factDimensions":{"xbrl:concept":"us-gaap:RevenueRecognitionPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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.
\u00a0
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.
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 disaggregated revenue:
\u00a0
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | September \u00a030, 2023 | \u00a0 | ||
Primary geographical markets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
United States of America | \u00a0 | $ | 4,280,593 | \u00a0 | \u00a0 | $ | 8,162,728 | \u00a0 |
Other | \u00a0 | \u00a0 | 75,922 | \u00a0 | \u00a0 | \u00a0 | 111,962 | \u00a0 |
\u00a0 | \u00a0 | $ | 4,356,515 | \u00a0 | \u00a0 | $ | 8,274,690 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Product source | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Internally manufactured | \u00a0 | $ | 2,166,341 | \u00a0 | \u00a0 | $ | 3,076,342 | \u00a0 |
Contract manufactured | \u00a0 | \u00a0 | 578,316 | \u00a0 | \u00a0 | \u00a0 | 802,503 | \u00a0 |
Purchased as finished good | \u00a0 | \u00a0 | 1,611,858 | \u00a0 | \u00a0 | \u00a0 | 4,395,845 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 4,356,515 | \u00a0 | \u00a0 | $ | 8,274,690 | \u00a0 |
\u00a0
The following table discloses the deferred revenue:
\u00a0
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Deferred revenue | \u00a0 | $ | 178,016 | \u00a0 | \u00a0 | $ | 235,255 | \u00a0 |
\u00a0
The deferred revenue or also referred to as funded backlog was $178,016 and $235,255, at September 30,2024 and June 30, 2024, respectively.\u00a0 We recognized approximately $210,000 during the three months ended September 30, 2024 and 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 on June 30, 2023 to be recognized in the three months ended September 30, 2023.
\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.
"}]},{"name":"rpt:f-361","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEarningsPerShareBasicByCommonClassTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | September \u00a030, 2023 | \u00a0 | ||
Primary geographical markets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
United States of America | \u00a0 | $ | 4,280,593 | \u00a0 | \u00a0 | $ | 8,162,728 | \u00a0 |
Other | \u00a0 | \u00a0 | 75,922 | \u00a0 | \u00a0 | \u00a0 | 111,962 | \u00a0 |
\u00a0 | \u00a0 | $ | 4,356,515 | \u00a0 | \u00a0 | $ | 8,274,690 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Product source | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Internally manufactured | \u00a0 | $ | 2,166,341 | \u00a0 | \u00a0 | $ | 3,076,342 | \u00a0 |
Contract manufactured | \u00a0 | \u00a0 | 578,316 | \u00a0 | \u00a0 | \u00a0 | 802,503 | \u00a0 |
Purchased as finished good | \u00a0 | \u00a0 | 1,611,858 | \u00a0 | \u00a0 | \u00a0 | 4,395,845 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 4,356,515 | \u00a0 | \u00a0 | $ | 8,274,690 | \u00a0 |
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Deferred revenue | \u00a0 | $ | 178,016 | \u00a0 | \u00a0 | $ | 235,255 | \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.
"}]},{"name":"rpt:f-383","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingCostsPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\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 $194,774 and $287,146 were expensed as incurred during the three months ended September 30, 2024, and 2023, respectively.\u00a0
"}]},{"name":"rpt:f-384","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingExpense","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"194774","decimals":0}]},{"name":"rpt:f-385","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingExpense","xbrl:period":"2023-07-01T00:00:00/2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"287146","decimals":0}]},{"name":"rpt:f-386","factDimensions":{"xbrl:concept":"us-gaap:CompensationRelatedCostsPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-387","factDimensions":{"xbrl:concept":"upxi:NonEmployeeStockBasedPaymentsPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-388","factDimensions":{"xbrl:concept":"us-gaap:FairValueMeasurementPolicyPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-389","factDimensions":{"xbrl:concept":"us-gaap:LesseeLeasesPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-390","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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 $6,535,000 and a $6,100,000 valuation allowance was recorded at September 30, 2024 and June 30, 2024, respectively.\u00a0 \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 September 30, 2024 or June 30, 2024.
\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-391","factDimensions":{"xbrl:concept":"us-gaap:DeferredTaxAssetsValuationAllowance","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"6535000","decimals":0}]},{"name":"rpt:f-392","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-393","factDimensions":{"xbrl:concept":"upxi:ReverseStockSplitPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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.\u00a0 The 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-394","factDimensions":{"xbrl:concept":"us-gaap:AdditionalPaidInCapitalCommonStock","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"19860","decimals":0}]},{"name":"rpt:f-395","factDimensions":{"xbrl:concept":"upxi:AdditionalIssuanceShares","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares"},"factValues":[{"value":"38","decimals":0}]},{"name":"rpt:f-396","factDimensions":{"xbrl:concept":"upxi:AdditionalIssuanceSharesOfCommonStock","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares"},"factValues":[{"value":"202183","decimals":0}]},{"name":"rpt:f-397","factDimensions":{"xbrl:concept":"us-gaap:DeferredChargesPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"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-398","factDimensions":{"xbrl:concept":"upxi:ConvertibleDebtAndSecuritiesPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-399","factDimensions":{"xbrl:concept":"upxi:NonControllingInterestsInConsolidatedFinancialStatementsPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-400","factDimensions":{"xbrl:concept":"us-gaap:PriorPeriodReclassificationAdjustmentDescription","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Reclassifications - Certain reclassifications have been made to the consolidated financial statements as of and for the three months ended September 30, 2023 to conform to the presentation as of and for the three months \u00a0ended September 30, 2024.
"}]},{"name":"rpt:f-401","factDimensions":{"xbrl:concept":"us-gaap:BasisOfPresentationAndSignificantAccountingPoliciesTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Basis of Presentation and Principles of Consolidation - The Company\u2019s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (\u201cGAAP\u201d). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of September 30, 2024 and June 30, 2024.
\u00a0
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending June 30, 2025. \u00a0Certain notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2024 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended June 30, 2024 included in the Company\u2019s Form 10-K as filed with the Securities and Exchange Commission on December 16, 2024.\u00a0
"}]},{"name":"rpt:f-402","factDimensions":{"xbrl:concept":"us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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-403","factDimensions":{"xbrl:concept":"us-gaap:InventoryDisclosureTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 3. Inventory
\u00a0
Inventory consisted of the following:
\u00a0
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Raw materials | \u00a0 | $ | 497,160 | \u00a0 | \u00a0 | $ | 465,535 | \u00a0 |
Finished goods | \u00a0 | \u00a0 | 1,139,259 | \u00a0 | \u00a0 | \u00a0 | 966,021 | \u00a0 |
\u00a0 | \u00a0 | $ | 1,636,419 | \u00a0 | \u00a0 | $ | 1,431,556 | \u00a0 |
\u00a0
The Company writes off the value of inventory deemed excessive or obsolete. During the three months ended September 30, 2024 and September 30, 2023, the Company wrote off inventory valued at $42,370 and $46,050, respectively.\u00a0 The Company had inventory reserves at September 30, 2024 and June 30, 2024 of $605,470 and $605,470, respectively.
"}]},{"name":"rpt:f-404","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfInventoryCurrentTableTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Raw materials | \u00a0 | $ | 497,160 | \u00a0 | \u00a0 | $ | 465,535 | \u00a0 |
Finished goods | \u00a0 | \u00a0 | 1,139,259 | \u00a0 | \u00a0 | \u00a0 | 966,021 | \u00a0 |
\u00a0 | \u00a0 | $ | 1,636,419 | \u00a0 | \u00a0 | $ | 1,431,556 | \u00a0 |
Note 4. Property and Equipment
\u00a0
Property and equipment consist of the following:
\u00a0
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Furniture and fixtures | \u00a0 | $ | 127,029 | \u00a0 | \u00a0 | $ | 127,050 | \u00a0 |
Computer equipment | \u00a0 | \u00a0 | 98,735 | \u00a0 | \u00a0 | \u00a0 | 112,397 | \u00a0 |
Internal use software | \u00a0 | \u00a0 | 570,645 | \u00a0 | \u00a0 | \u00a0 | 570,645 | \u00a0 |
Manufacturing equipment | \u00a0 | \u00a0 | 2,054,928 | \u00a0 | \u00a0 | \u00a0 | 1,927,974 | \u00a0 |
Leasehold improvements | \u00a0 | \u00a0 | 814,157 | \u00a0 | \u00a0 | \u00a0 | 767,418 | \u00a0 |
Vehicles | \u00a0 | \u00a0 | 89,359 | \u00a0 | \u00a0 | \u00a0 | 89,359 | \u00a0 |
Property and equipment, gross | \u00a0 | \u00a0 | 3,754,853 | \u00a0 | \u00a0 | \u00a0 | 7,600,360 | \u00a0 |
Less accumulated depreciation | \u00a0 | \u00a0 | (1,416,654 | ) | \u00a0 | \u00a0 | (1,268,288 | ) |
\u00a0 | \u00a0 | $ | 2,338,199 | \u00a0 | \u00a0 | $ | 2,356,556 | \u00a0 |
\u00a0
Depreciation expense for the three months ended September 30, 2024, and 2023 was $239,905 and $194,497, respectively.\u00a0
"}]},{"name":"rpt:f-416","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Furniture and fixtures | \u00a0 | $ | 127,029 | \u00a0 | \u00a0 | $ | 127,050 | \u00a0 |
Computer equipment | \u00a0 | \u00a0 | 98,735 | \u00a0 | \u00a0 | \u00a0 | 112,397 | \u00a0 |
Internal use software | \u00a0 | \u00a0 | 570,645 | \u00a0 | \u00a0 | \u00a0 | 570,645 | \u00a0 |
Manufacturing equipment | \u00a0 | \u00a0 | 2,054,928 | \u00a0 | \u00a0 | \u00a0 | 1,927,974 | \u00a0 |
Leasehold improvements | \u00a0 | \u00a0 | 814,157 | \u00a0 | \u00a0 | \u00a0 | 767,418 | \u00a0 |
Vehicles | \u00a0 | \u00a0 | 89,359 | \u00a0 | \u00a0 | \u00a0 | 89,359 | \u00a0 |
Property and equipment, gross | \u00a0 | \u00a0 | 3,754,853 | \u00a0 | \u00a0 | \u00a0 | 7,600,360 | \u00a0 |
Less accumulated depreciation | \u00a0 | \u00a0 | (1,416,654 | ) | \u00a0 | \u00a0 | (1,268,288 | ) |
\u00a0 | \u00a0 | $ | 2,338,199 | \u00a0 | \u00a0 | $ | 2,356,556 | \u00a0 |
Note 5. Intangible Assets
\u00a0
Intangible assets as of September 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 | 163,111 | \u00a0 | \u00a0 | \u00a0 | 220,681 | \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 | $ | 9,797,803 | \u00a0 | \u00a0 | $ | 220,681 | \u00a0 |
\u00a0
For the three months ended September 30, 2024 and 2023, the Company amortized approximately $19,190 and $1,186,800.\u00a0
\u00a0
Intangible assets as of June 30, 2024:
\u00a0
\u00a0 | \u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \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 |
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 |
Future amortization of intangible assets at September 30, 2024 are as follows:
\u00a0
June 30, 2025 | \u00a0 | $ | 57,568 | \u00a0 |
June 30, 2026 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2027 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2028 | \u00a0 | \u00a0 | 9,597 | \u00a0 |
\u00a0 | \u00a0 | $ | 220,681 | \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 | 163,111 | \u00a0 | \u00a0 | \u00a0 | 220,681 | \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 | $ | 9,797,803 | \u00a0 | \u00a0 | $ | 220,681 | \u00a0 |
\u00a0 | \u00a0 | Estimated Life | \u00a0 | Cost | \u00a0 | \u00a0 | Accumulated Amortization | \u00a0 | \u00a0 | Net Book\u00a0Value | \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 |
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 |
June 30, 2025 | \u00a0 | $ | 57,568 | \u00a0 |
June 30, 2026 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2027 | \u00a0 | \u00a0 | 76,758 | \u00a0 |
June 30, 2028 | \u00a0 | \u00a0 | 9,597 | \u00a0 |
\u00a0 | \u00a0 | $ | 220,681 | \u00a0 |
Note 6. Prepaid Expense and Other Current Assets
\u00a0
Prepaid and other receivables consist of the following:
\u00a0
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Insurance | \u00a0 | $ | 98,764 | \u00a0 | \u00a0 | $ | 116,074 | \u00a0 |
Prepayment to vendors | \u00a0 | \u00a0 | 208,869 | \u00a0 | \u00a0 | \u00a0 | 203,556 | \u00a0 |
Deposits on services | \u00a0 | \u00a0 | 21,512 | \u00a0 | \u00a0 | \u00a0 | 25,550 | \u00a0 |
Prepaid monthly rent | \u00a0 | \u00a0 | 38,452 | \u00a0 | \u00a0 | \u00a0 | 60,041 | \u00a0 |
Subscriptions and services being amortized over the service period | \u00a0 | \u00a0 | 16,000 | \u00a0 | \u00a0 | \u00a0 | 32,500 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Stock issued for prepaid interest on convertible note payable | \u00a0 | \u00a0 | 7,213 | \u00a0 | \u00a0 | \u00a0 | 64,320 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Other receivables | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 147 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 390,810 | \u00a0 | \u00a0 | $ | 502,188 | \u00a0 |
\u00a0
All prepaid expenses will be expensed during the following 12 months.
"}]},{"name":"rpt:f-486","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfOtherCurrentAssetsTableTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Insurance | \u00a0 | $ | 98,764 | \u00a0 | \u00a0 | $ | 116,074 | \u00a0 |
Prepayment to vendors | \u00a0 | \u00a0 | 208,869 | \u00a0 | \u00a0 | \u00a0 | 203,556 | \u00a0 |
Deposits on services | \u00a0 | \u00a0 | 21,512 | \u00a0 | \u00a0 | \u00a0 | 25,550 | \u00a0 |
Prepaid monthly rent | \u00a0 | \u00a0 | 38,452 | \u00a0 | \u00a0 | \u00a0 | 60,041 | \u00a0 |
Subscriptions and services being amortized over the service period | \u00a0 | \u00a0 | 16,000 | \u00a0 | \u00a0 | \u00a0 | 32,500 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Stock issued for prepaid interest on convertible note payable | \u00a0 | \u00a0 | 7,213 | \u00a0 | \u00a0 | \u00a0 | 64,320 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Other receivables | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 147 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total | \u00a0 | $ | 390,810 | \u00a0 | \u00a0 | $ | 502,188 | \u00a0 |
Note 7. 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 September 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.
\u00a0
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. During the year ended June 30, 2024 the Company used the facility for ongoing operations and recognized approximately $195,000 of expense during the three months ended September 30, 2023.\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 $0 and $32,850 for the three months ended September 30, 2024 and 2023, respectively.\u00a0The Company moved out of the facility in 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 $1,910 and $1,910 for the three months ended September 30, 2024 and 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 $0 and $27,158 for the three months\u00a0 ended September 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 three months ended September 30, 2024, the Company recognized approximately $100,756 of expense and approximately $83,439 for the three months ended September 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 three months ended September 30, 2024, the Company recognized approximately $49,244 of expense and no expense for the year ended September 30, 2023.\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.\u00a0Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024.\u00a0 During the three months ended September 30, 2024, the Company recognized approximately $79,944 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.
\u00a0
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 September 30, 2024:
\u00a0
2025 | \u00a0 | $ | 853,420 | \u00a0 |
2026 | \u00a0 | \u00a0 | 770,004 | \u00a0 |
2027 | \u00a0 | \u00a0 | 507,343 | \u00a0 |
2028 | \u00a0 | \u00a0 | 486,733 | \u00a0 |
2029 | \u00a0 | \u00a0 | 221,715 | \u00a0 |
Total undiscounted future minimum lease payments | \u00a0 | \u00a0 | 2,839,215 | \u00a0 |
Less: Imputed interest | \u00a0 | \u00a0 | (214,900 | ) |
\u00a0 | \u00a0 | \u00a0 | 2,624,315 | \u00a0 |
Less: current portion | \u00a0 | \u00a0 | (781,810 | ) |
Present value of operating lease obligation | \u00a0 | $ | 1,842,505 | \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 September 30, 2024 are:
\u00a0
Weighted average remaining lease term | \u00a0 | 45\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 September 30, 2023 are:
\u00a0
Weighted average remaining lease term | \u00a0 | 44\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
\u00a0
For the three months ended September 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 | September\u00a030, 2024 | \u00a0 | \u00a0 | September 30, 2023 | \u00a0 | ||
Finance lease expense: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Amortization of ROU assets | \u00a0 | $ | 185,148 | \u00a0 | \u00a0 | $ | 170,970 | \u00a0 |
Interest expense | \u00a0 | \u00a0 | 28,853 | \u00a0 | \u00a0 | \u00a0 | 26,347 | \u00a0 |
Operating lease cost | \u00a0 | \u00a0 | 3,784 | \u00a0 | \u00a0 | \u00a0 | 4,803 | \u00a0 |
Short-term lease expense | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 174,212 | \u00a0 |
Variable lease expense | \u00a0 | \u00a0 | 51,835 | \u00a0 | \u00a0 | \u00a0 | 29,084 | \u00a0 |
Total lease cost | \u00a0 | $ | 269,621 | \u00a0 | \u00a0 | $ | 405,416 | \u00a0 |
2025 | \u00a0 | $ | 853,420 | \u00a0 |
2026 | \u00a0 | \u00a0 | 770,004 | \u00a0 |
2027 | \u00a0 | \u00a0 | 507,343 | \u00a0 |
2028 | \u00a0 | \u00a0 | 486,733 | \u00a0 |
2029 | \u00a0 | \u00a0 | 221,715 | \u00a0 |
Total undiscounted future minimum lease payments | \u00a0 | \u00a0 | 2,839,215 | \u00a0 |
Less: Imputed interest | \u00a0 | \u00a0 | (214,900 | ) |
\u00a0 | \u00a0 | \u00a0 | 2,624,315 | \u00a0 |
Less: current portion | \u00a0 | \u00a0 | (781,810 | ) |
Present value of operating lease obligation | \u00a0 | $ | 1,842,505 | \u00a0 |
Weighted average remaining lease term | \u00a0 | 45\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
Weighted average remaining lease term | \u00a0 | 44\u00a0Months | \u00a0 | |
Weighted average incremental borrowing rate | \u00a0 | \u00a0 | 5.0 | % |
\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | September 30, 2023 | \u00a0 | ||
Finance lease expense: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | ||
Amortization of ROU assets | \u00a0 | $ | 185,148 | \u00a0 | \u00a0 | $ | 170,970 | \u00a0 |
Interest expense | \u00a0 | \u00a0 | 28,853 | \u00a0 | \u00a0 | \u00a0 | 26,347 | \u00a0 |
Operating lease cost | \u00a0 | \u00a0 | 3,784 | \u00a0 | \u00a0 | \u00a0 | 4,803 | \u00a0 |
Short-term lease expense | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 174,212 | \u00a0 |
Variable lease expense | \u00a0 | \u00a0 | 51,835 | \u00a0 | \u00a0 | \u00a0 | 29,084 | \u00a0 |
Total lease cost | \u00a0 | $ | 269,621 | \u00a0 | \u00a0 | $ | 405,416 | \u00a0 |
Note 8. Accrued Liabilities
\u00a0
Accrued liabilities consisted of the following:
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Accrued professional fees | \u00a0 | \u00a0 | 169,222 | \u00a0 | \u00a0 | \u00a0 | 312,500 | \u00a0 |
Accrued sales tax | \u00a0 | \u00a0 | 25,394 | \u00a0 | \u00a0 | \u00a0 | 28,539 | \u00a0 |
Other accrued liabilities | \u00a0 | \u00a0 | 111,483 | \u00a0 | \u00a0 | \u00a0 | 395,368 | \u00a0 |
\u00a0 | \u00a0 | $ | 306,099 | \u00a0 | \u00a0 | $ | 736,407 | \u00a0 |
\u00a0
Acquisition Payable consists of the following:
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Payments related to the acquisition of Cygnet | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 413,152 | \u00a0 |
\u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 413,152 | \u00a0 |
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Accrued professional fees | \u00a0 | \u00a0 | 169,222 | \u00a0 | \u00a0 | \u00a0 | 312,500 | \u00a0 |
Accrued sales tax | \u00a0 | \u00a0 | 25,394 | \u00a0 | \u00a0 | \u00a0 | 28,539 | \u00a0 |
Other accrued liabilities | \u00a0 | \u00a0 | 111,483 | \u00a0 | \u00a0 | \u00a0 | 395,368 | \u00a0 |
\u00a0 | \u00a0 | $ | 306,099 | \u00a0 | \u00a0 | $ | 736,407 | \u00a0 |
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 | \u00a0 | September\u00a030, 2024 | \u00a0 | \u00a0 | June 30, 2024 | \u00a0 | ||
Payments related to the acquisition of Cygnet | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 413,152 | \u00a0 |
\u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | 413,152 | \u00a0 |
Note 9. Convertible Promissory Notes and Notes Payable
\u00a0
Convertible promissory notes and notes payable outstanding as of September 30, 2024 and June 30, 2024 are summarized below:
\u00a0
\u00a0 | \u00a0 | Maturity | \u00a0 | September\u00a030, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | Date | \u00a0 | 2024 | \u00a0 | \u00a0 | 2024 | \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 | $ | 1,550,000 | \u00a0 |
Less current portion of notes payable | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 387,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, net of current portion | \u00a0 | \u00a0 | \u00a0 | $ | 1,162,500 | \u00a0 | \u00a0 | $ | 1,550,000 | \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 | 3,761,376 | \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 | 1,000,290 | \u00a0 | \u00a0 | \u00a0 | 1,002,221 | \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 | 685,899 | \u00a0 | \u00a0 | \u00a0 | 683,968 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 5,447,565 | \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 | 5,447,565 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary, net of current | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \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 | $ | - | \u00a0 | \u00a0 | $ | 2,634,538 | \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 | 140,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Discount on notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, current net of discount | \u00a0 | \u00a0 | \u00a0 | $ | 140,000 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, long-term\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 420,000 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 |
Discount on notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (2,571 | ) |
Notes payable, long-term, net | \u00a0 | \u00a0 | \u00a0 | $ | 420,000 | \u00a0 | \u00a0 | $ | 557,429 | \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 | $ | 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 | 125,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, current, net of discount | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \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 | $ | 375,000 | \u00a0 | \u00a0 | $ | 500,000 | \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 | $ | 8,057,565 | \u00a0 | \u00a0 | $ | 10,689,532 | \u00a0 |
Future payments on notes payable are as follows:
\u00a0
For the three months ended September 30: | \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 | |||||
12-months | \u00a0 | $ | 140,000 | \u00a0 | \u00a0 | $ | 125,000 | \u00a0 | \u00a0 | $ | 387,500 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 6,100,065 | \u00a0 |
1-year | \u00a0 | \u00a0 | 420,000 | \u00a0 | \u00a0 | \u00a0 | 375,000 | \u00a0 | \u00a0 | \u00a0 | 1,162,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 1,957,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 500,000 | \u00a0 | \u00a0 | \u00a0 | 1,550,000 | \u00a0 | \u00a0 | \u00a0 | 5,447,565 | \u00a0 | \u00a0 | \u00a0 | 8,057,565 | \u00a0 |
Note original discount | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | $ | 560,000 | \u00a0 | \u00a0 | $ | 500,000 | \u00a0 | \u00a0 | $ | 1,550,000 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 8,057,565 | \u00a0 |
\u00a0
In June 2022, the Company executed a promissory note with Allan Marshall, the Company\u2019s Chief Executive Officer, in the original principal amount of $1,500,000\u00a0(\u201cMarshall Loan\u201d). The promissory note has a 2-year term and bears cash interest at the rate of\u00a08.5% per annum with an additional PIK of\u00a03.5% per annum. The promissory note provides for monthly payments of principal, on an even line 36-month basis, plus cash interest, with a balloon payment of all outstanding principal, cash interest, and PIK interest at maturity. The Company received and deposited the principal amount on July 31, 2022. \u00a0On November 15, 2023, the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025.\u00a0 The principal currently outstanding is $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 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.
\u00a0
On October 19, 2022, Upexi, Inc. (the \u201cCompany\u201d) and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement, promissory note and related agreements with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company\u2019s principal office in N. Clearwater, Florida. The Company received $3,000,000\u00a0in connection with the transaction. The principal is to be repaid to Professional Bank over a term of ten years. The proceeds of the loan were utilized by the Company to pay down its loan facility with Acorn Capital, LLC in the amount of $2,780,200.\u00a0 As of 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
On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $560,000.\u00a0 On November 15, 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12-month period, starting in June of 2025.\u00a0 The principal currently outstanding is $560,000.\u00a0 In addition to this, the Company issued the investor a warrant to purchase up to 6,250 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
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 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-567","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfDebtTableTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"\u00a0 | \u00a0 | Maturity | \u00a0 | September\u00a030, | \u00a0 | \u00a0 | June 30, | \u00a0 | ||
\u00a0 | \u00a0 | Date | \u00a0 | 2024 | \u00a0 | \u00a0 | 2024 | \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 | $ | 1,550,000 | \u00a0 |
Less current portion of notes payable | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 387,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, net of current portion | \u00a0 | \u00a0 | \u00a0 | $ | 1,162,500 | \u00a0 | \u00a0 | $ | 1,550,000 | \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 | 3,761,376 | \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 | 1,000,290 | \u00a0 | \u00a0 | \u00a0 | 1,002,221 | \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 | 685,899 | \u00a0 | \u00a0 | \u00a0 | 683,968 | \u00a0 |
Total | \u00a0 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 5,447,565 | \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 | 5,447,565 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, Cygnet subsidiary, net of current | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \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 | $ | - | \u00a0 | \u00a0 | $ | 2,634,538 | \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 | 140,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Discount on notes payable, current | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, current net of discount | \u00a0 | \u00a0 | \u00a0 | $ | 140,000 | \u00a0 | \u00a0 | $ | - | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Notes payable, long-term\u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 420,000 | \u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 |
Discount on notes payable, long-term | \u00a0 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | (2,571 | ) |
Notes payable, long-term, net | \u00a0 | \u00a0 | \u00a0 | $ | 420,000 | \u00a0 | \u00a0 | $ | 557,429 | \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 | $ | 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 | 125,000 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Notes payable, current, net of discount | \u00a0 | \u00a0 | \u00a0 | $ | - | \u00a0 | \u00a0 | $ | - | \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 | $ | 375,000 | \u00a0 | \u00a0 | $ | 500,000 | \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 | $ | 8,057,565 | \u00a0 | \u00a0 | $ | 10,689,532 | \u00a0 |
For the three months ended September 30: | \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 | |||||
12-months | \u00a0 | $ | 140,000 | \u00a0 | \u00a0 | $ | 125,000 | \u00a0 | \u00a0 | $ | 387,500 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 6,100,065 | \u00a0 |
1-year | \u00a0 | \u00a0 | 420,000 | \u00a0 | \u00a0 | \u00a0 | 375,000 | \u00a0 | \u00a0 | \u00a0 | 1,162,500 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | 1,957,000 | \u00a0 |
\u00a0 | \u00a0 | \u00a0 | 560,000 | \u00a0 | \u00a0 | \u00a0 | 500,000 | \u00a0 | \u00a0 | \u00a0 | 1,550,000 | \u00a0 | \u00a0 | \u00a0 | 5,447,565 | \u00a0 | \u00a0 | \u00a0 | 8,057,565 | \u00a0 |
Note original discount | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
\u00a0 | \u00a0 | $ | 560,000 | \u00a0 | \u00a0 | $ | 500,000 | \u00a0 | \u00a0 | $ | 1,550,000 | \u00a0 | \u00a0 | $ | 5,447,565 | \u00a0 | \u00a0 | $ | 8,057,565 | \u00a0 |
Note 10. 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.
"}]},{"name":"rpt:f-671","factDimensions":{"xbrl:concept":"us-gaap:PaymentsForRepurchaseOfCommonStock","xbrl:period":"2024-06-01T00:00:00/2024-06-14T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:PlanNameAxis":"upxi:StockPurchaseAgreementMember"},"factValues":[{"value":"100000","decimals":0}]},{"name":"rpt:f-672","factDimensions":{"xbrl:concept":"upxi:LeaseSpace","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"utr:sqft","us-gaap:PlanNameAxis":"upxi:LeaseAgreementMember","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MFATwoFiveOneZeroMerchantLLCsMember"},"factValues":[{"value":"10000"}]},{"name":"rpt:f-673","factDimensions":{"xbrl:concept":"us-gaap:PaymentsForRent","xbrl:period":"2023-07-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:PlanNameAxis":"upxi:LeaseAgreementMember","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MFATwoFiveOneZeroMerchantLLCsMember"},"factValues":[{"value":"20060","decimals":0}]},{"name":"rpt:f-674","factDimensions":{"xbrl:concept":"upxi:ExpensesOfLeaseholdImprovements","xbrl:period":"2024-03-30T00:00:00/2024-04-02T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:PlanNameAxis":"upxi:LeaseAgreementMember","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MFATwoFiveOneZeroMerchantLLCsMember"},"factValues":[{"value":"611768","decimals":0}]},{"name":"rpt:f-675","factDimensions":{"xbrl:concept":"us-gaap:AccruedLiabilitiesCurrent","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:PlanNameAxis":"upxi:LeaseAgreementMember","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MFATwoFiveOneZeroMerchantLLCsMember"},"factValues":[{"value":"100004","decimals":0}]},{"name":"rpt:f-676","factDimensions":{"xbrl:concept":"us-gaap:DebtInstrumentIncreaseDecreaseForPeriodNet","xbrl:period":"2022-06-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1500000","decimals":0}]},{"name":"rpt:f-677","factDimensions":{"xbrl:concept":"us-gaap:ShortTermDebtInterestRateIncrease","xbrl:period":"2022-06-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"0.085"}]},{"name":"rpt:f-678","factDimensions":{"xbrl:concept":"upxi:AdditionalPercentageRate","xbrl:period":"2022-06-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"0.035"}]},{"name":"rpt:f-679","factDimensions":{"xbrl:concept":"upxi:DescriptionOfAmendmentOFPromissoryNote","xbrl:period":"2023-11-01T00:00:00/2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter, the amortization of the note over a 12-month period, starting in June of 2025"}]},{"name":"rpt:f-680","factDimensions":{"xbrl:concept":"upxi:PrincipalAmountOfDebtUsed","xbrl:period":"2022-06-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"1000000","decimals":0}]},{"name":"rpt:f-681","factDimensions":{"xbrl:concept":"upxi:PrincipalOutstandingAmount","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"500000","decimals":0}]},{"name":"rpt:f-682","factDimensions":{"xbrl:concept":"us-gaap:DepositLiabilitiesAccruedInterest","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"169662","decimals":0}]},{"name":"rpt:f-683","factDimensions":{"xbrl:concept":"upxi:CommonStockSharePurchase","xbrl:period":"2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"xbrla:shares","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"18750","decimals":0}]},{"name":"rpt:f-684","factDimensions":{"xbrl:concept":"upxi:CommonStockPerSharePrice","xbrl:period":"2023-11-16T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"upxi:MrMarshallMember"},"factValues":[{"value":"22.00"}]},{"name":"rpt:f-685","factDimensions":{"xbrl:concept":"us-gaap:StockholdersEquityNoteDisclosureTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 11. 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 1.8 shares of preferred stock for a single share\u00a0of the Company\u2019s common stock at the holder\u2019s option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock.
\u00a0
Common Stock
\u00a0
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
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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\u00a0
The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares. The options are exercisable for a period of up to\u00a010\u00a0years from the date of the grant.
\u00a0
The following table reflects the continuity of stock options for the three months ended September 30, 2024 and 2023:
\u00a0
A summary of stock option activity for the three months ended September 30, 2024 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, 2024 | \u00a0 | \u00a0 | 217,490 | \u00a0 | \u00a0 | $ | 57.40 | \u00a0 | \u00a0 | \u00a0 | 5.83 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
Exercised | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Granted | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Options outstanding at September 30, 2024 | \u00a0 | \u00a0 | 217,490 | \u00a0 | \u00a0 | $ | 57.40 | \u00a0 | \u00a0 | \u00a0 | 5.57 | \u00a0 | \u00a0 | \u00a0 | 0.00 | \u00a0 |
Options exercisable at September 30, 2024 (vested) | \u00a0 | \u00a0 | 197,610 | \u00a0 | \u00a0 | $ | 58.10 | \u00a0 | \u00a0 | \u00a0 | 5.59 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
\u00a0
A summary of stock option activity for the three months ended September 30, 2023 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, 2023 | \u00a0 | \u00a0 | 241,964 | \u00a0 | \u00a0 | $ | 66.20 | \u00a0 | \u00a0 | \u00a0 | 6.23 | \u00a0 | \u00a0 | $ | 1,342,280 | \u00a0 |
Exercised | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | (18,900 | ) | \u00a0 | $ | 86.80 | \u00a0 | \u00a0 | \u00a0 | 3.78 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Granted | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Options outstanding at September 30, 2023 | \u00a0 | \u00a0 | 223,064 | \u00a0 | \u00a0 | $ | 63.40 | \u00a0 | \u00a0 | \u00a0 | 6.30 | \u00a0 | \u00a0 | \u00a0 | 372,856 | \u00a0 |
Options exercisable at September 30, 2023 (vested) | \u00a0 | \u00a0 | 204,989 | \u00a0 | \u00a0 | $ | 60.60 | \u00a0 | \u00a0 | \u00a0 | 6.49 | \u00a0 | \u00a0 | $ | 372,856 | \u00a0 |
\u00a0
Stock-based compensation expense attributable to stock options was $141,298\u00a0and $421,887\u00a0for the three months ended September 30, 2024, and 2023, respectively.\u00a0 As of September 30, 2024, there was approximately $123,900\u00a0of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was approximately\u00a02\u00a0years.
\u00a0
There were no stock options granted during the three months ended September 30, 2024 or 2023.
\u00a0
There were 213,214 shares available for issuance as of September 30, 2024, under the 2019 Plan as amended.
"}]},{"name":"rpt:f-701","factDimensions":{"xbrl:concept":"upxi:GrantDate","xbrl:period":"2023-07-01T00:00:00/2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","us-gaap:FinancialInstrumentAxis":"us-gaap:StockOptionMember"},"factValues":[{"value":"P10Y"}]},{"name":"rpt:f-702","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","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, 2024 | \u00a0 | \u00a0 | 217,490 | \u00a0 | \u00a0 | $ | 57.40 | \u00a0 | \u00a0 | \u00a0 | 5.83 | \u00a0 | \u00a0 | $ | 0.00 | \u00a0 |
Exercised | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Granted | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Options outstanding at September 30, 2024 | \u00a0 | \u00a0 | 217,490 | \u00a0 | \u00a0 | $ | 57.40 | \u00a0 | \u00a0 | \u00a0 | 5.57 | \u00a0 | \u00a0 | \u00a0 | 0.00 | \u00a0 |
Options exercisable at September 30, 2024 (vested) | \u00a0 | \u00a0 | 197,610 | \u00a0 | \u00a0 | $ | 58.10 | \u00a0 | \u00a0 | \u00a0 | 5.59 | \u00a0 | \u00a0 | $ | 0.00 | \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, 2023 | \u00a0 | \u00a0 | 241,964 | \u00a0 | \u00a0 | $ | 66.20 | \u00a0 | \u00a0 | \u00a0 | 6.23 | \u00a0 | \u00a0 | $ | 1,342,280 | \u00a0 |
Exercised | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Forfeited | \u00a0 | \u00a0 | (18,900 | ) | \u00a0 | $ | 86.80 | \u00a0 | \u00a0 | \u00a0 | 3.78 | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Granted | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 | \u00a0 | \u00a0 | - | \u00a0 |
Options outstanding at September 30, 2023 | \u00a0 | \u00a0 | 223,064 | \u00a0 | \u00a0 | $ | 63.40 | \u00a0 | \u00a0 | \u00a0 | 6.30 | \u00a0 | \u00a0 | \u00a0 | 372,856 | \u00a0 |
Options exercisable at September 30, 2023 (vested) | \u00a0 | \u00a0 | 204,989 | \u00a0 | \u00a0 | $ | 60.60 | \u00a0 | \u00a0 | \u00a0 | 6.49 | \u00a0 | \u00a0 | $ | 372,856 | \u00a0 |
Note 13. Income Taxes
\u00a0
The Company computed the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income and adjusted for discrete tax items in the period. For the three months ended September 30, 2024 the Company reserved 100% of the benefit calculated as income tax benefit and calculated a benefit of $472,367 for the three months ended September 30, 2023.\u00a0
\u00a0
For the three months ended September 30, 2024, the difference between the U.S. statutory rate and the Company\u2019s effective tax rate is due to the full valuation allowance on the Company\u2019s deferred tax assets.\u00a0 The income tax benefit for the three months ended September 30, 2023, was primarily attributable to federal and state income taxes and nondeductible expenses for an effective tax rate of approximately\u00a025.83%.
\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 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, however 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 As of September 30, 2024 the Company had a valuation reserve of approximately $6,535,000.
\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-747","factDimensions":{"xbrl:concept":"upxi:IncomeTaxExpenseBenefitReserve","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"1"}]},{"name":"rpt:f-748","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxExpenseBenefit","xbrl:period":"2023-07-01T00:00:00/2023-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"472367","decimals":0}]},{"name":"rpt:f-749","factDimensions":{"xbrl:concept":"upxi:ffectiveIncomeTaxRate","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"0.2583"}]},{"name":"rpt:f-750","factDimensions":{"xbrl:concept":"upxi:ValuationReservesForInventory","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2506514","decimals":0}]},{"name":"rpt:f-751","factDimensions":{"xbrl:concept":"upxi:ValuationReservesForInventory","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"6100000","decimals":0}]},{"name":"rpt:f-752","factDimensions":{"xbrl:concept":"upxi:ValuationReservesForInventory","xbrl:period":"2024-10-01T00:00:00","xbrl:entity":"cik:0001775194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"6535000","decimals":0}]},{"name":"rpt:f-753","factDimensions":{"xbrl:concept":"upxi:RisksAndUncertaintiesDisclosureTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 14. Risks and Uncertainties
\u00a0
There is substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the scope of operation of Farm Bill-compliant hemp programs relative to the emerging regulation of cannabinoids. These different opinions include, but are not limited to, the regulation of cannabinoids by the U.S. Drug Enforcement Administration, or DEA, and/or the FDA and the extent to which manufacturers of products containing Farm Bill-compliant cultivators and processors may engage in interstate commerce. The uncertainties cannot be resolved without further federal, and perhaps even state-level, legislation, regulation or a definitive judicial interpretation of existing legislation and rules. If these uncertainties continue, they may have an adverse effect upon the introduction of our products in different markets.
"}]},{"name":"rpt:f-754","factDimensions":{"xbrl:concept":"upxi:DiscontinuedOperationsSaleOfInteractiveOffersDisclosureTextBlock","xbrl:period":"2024-07-01T00:00:00/2024-10-01T00:00:00","xbrl:entity":"cik:0001775194"},"factValues":[{"value":"Note 15. Discontinued Operations \u2013 Sale of Interactive Offers
\u00a0
On August 31, 2023, the Company sold Interactive offers to Amplifyir Inc. The purchase price is $1,250,000 with a provision to adjust the final purchase price based on the business being transferred to Amplifyer Inc. with a net zero working capital. In addition, the Buyer is obligated to pay the Company two-and one-half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing. Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented.
\u00a0
Summary of discontinued operations:
\u00a0
\u00a0 | \u00a0 | Three months ended September\u00a030, 2023 | \u00a0 | |
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | |
Revenue | \u00a0 | $ | 158,147 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 339,205 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | (193,040 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 |
\u00a0 | \u00a0 | Three months ended September\u00a030, 2023 | \u00a0 | |
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | |
Revenue | \u00a0 | $ | 158,147 | \u00a0 |
Cost of sales | \u00a0 | $ | 11,982 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 339,205 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | - | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | (193,040 | ) |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | - | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 |
Total assets | \u00a0 | $ | - | \u00a0 |
Total liabilities | \u00a0 | $ | - | \u00a0 |
Note 16. 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 for the three months ended September 30, 2023 are as follows:
\u00a0
Summary of discontinued operations:
\u00a0
\u00a0 | \u00a0 | Three months ended September\u00a030, 2023 | \u00a0 | |
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | |
Revenue | \u00a0 | $ | 1,980,396 | \u00a0 |
Cost of sales | \u00a0 | $ | 365,384 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 1,412,774 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 132,558 | \u00a0 |
Other expenses | \u00a0 | $ | 274 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | 69,406 | \u00a0 |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | 306,550 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | 77,006 | \u00a0 |
Total assets | \u00a0 | $ | 4,935,215 | \u00a0 |
Total liabilities | \u00a0 | $ | 507,807 | \u00a0 |
\u00a0 | \u00a0 | Three months ended September\u00a030, 2023 | \u00a0 | |
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | |
Revenue | \u00a0 | $ | 1,980,396 | \u00a0 |
Cost of sales | \u00a0 | $ | 365,384 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 1,412,774 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 132,558 | \u00a0 |
Other expenses | \u00a0 | $ | 274 | \u00a0 |
Income (loss) from discontinued operations | \u00a0 | $ | 69,406 | \u00a0 |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | 306,550 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | 77,006 | \u00a0 |
Total assets | \u00a0 | $ | 4,935,215 | \u00a0 |
Total liabilities | \u00a0 | $ | 507,807 | \u00a0 |
Note 17. Discontinued Operations \u2013 Sale of E-Core
\u00a0
E-Core, Technology Inc. and its subsidiaries
\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
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.\u00a0Discontinued operations of E-core included in the consolidated financial statements for the three months ended September 30, 2023 are as follows:
\u00a0
Summary of discontinued operations:
\u00a0
\u00a0 | \u00a0 | Three months ended September\u00a030, 2023 | \u00a0 | |
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | |
Revenue | \u00a0 | $ | 17,092,372 | \u00a0 |
Cost of sales | \u00a0 | $ | 15,425,799 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 1,005,697 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 403,875 | \u00a0 |
Other expenses | \u00a0 | $ | 32,650 | \u00a0 |
Income from discontinued operations | \u00a0 | $ | 224,351 | \u00a0 |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | 6,683,194 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 |
Total assets | \u00a0 | $ | 21,924,064 | \u00a0 |
Total liabilities | \u00a0 | $ | 2,701,212 | \u00a0 |
\u00a0 | \u00a0 | Three months ended September\u00a030, 2023 | \u00a0 | |
Discontinued Operations | \u00a0 | \u00a0 | \u00a0 | |
Revenue | \u00a0 | $ | 17,092,372 | \u00a0 |
Cost of sales | \u00a0 | $ | 15,425,799 | \u00a0 |
Sales, general and administrative expenses | \u00a0 | $ | 1,005,697 | \u00a0 |
Depreciation and amortization | \u00a0 | $ | 403,875 | \u00a0 |
Other expenses | \u00a0 | $ | 32,650 | \u00a0 |
Income from discontinued operations | \u00a0 | $ | 224,351 | \u00a0 |
Accounts receivable net of allowance for doubtful accounts | \u00a0 | $ | 6,683,194 | \u00a0 |
Fixed assets, net of accumulated depreciation | \u00a0 | $ | - | \u00a0 |
Total assets | \u00a0 | $ | 21,924,064 | \u00a0 |
Total liabilities | \u00a0 | $ | 2,701,212 | \u00a0 |