| Summary of Significant Accounting Policies |
| 2. |
Summary of
Significant
Accounting Policies |
● |
Management
is responsible for the fair presentation of the Company's financial statements, prepared in accordance with U.S.
generally accepted accounting principles (GAAP).
The
consolidated financial statements include the accounts of Nightfood Holdings, Inc. and its wholly owned subsidiaries,
NightFood, Inc. and MJ Munchies, Inc. The Company consolidates all majority-owned and controlled subsidiaries in accordance
with applicable standards. All material intercompany accounts and balances have been eliminated in consolidation.
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Use of Estimates |
● |
The preparation
of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Estimates are used in the determination of beneficial conversion features, derivative
liabilities, depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income
taxes and contingencies, among others. |
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Beneficial Conversion
Feature |
● |
For
conventional convertible debt where the rate of conversion is below market value, the Company records any "beneficial
conversion feature" ("BCF") intrinsic value as additional paid in capital and related debt discount.
When
the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of
the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying
debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
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Debt Issue Costs |
● |
The Company may
pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other
consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of
operations as amortization of debt discount. |
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Original Issue
Discount |
● |
If debt is issued
with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the
note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion
of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
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Valuation of
Derivative Instruments |
● |
ASC 815 "Derivatives
and Hedging" requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative
instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining
the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the
embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares
at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment. |
| |
Reclassification |
● |
The Company may make certain reclassifications to prior period amounts to conform with the current year's presentation. These reclassifications did not have a material effect on its consolidated statement of financial position, results of operations or cash flows. |
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Recent Accounting Pronouncements |
|
The Company reviews all of the Financial
Accounting Standard Board's updates periodically to ensure the Company's compliance of its accounting policies and
disclosure requirements to the Codification Topics.
In May 2014, the Financial Accounting Standards
Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes
the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry
Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the
contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price,
(iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies
a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue
and cash flows arising from contracts with customers.
The standard became effective for us beginning
on July 1, 2018 and did not have a material impact on our financial statements.
In January 2016, the FASB issued ASU 2016-01,Financial
Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities,
which requires all investments in equity securities with readily determinable fair value to be measured at fair value with changes
in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those
that result in consolidation of the investee). ASU 2016-01 is intended to enhance the reporting model for financial instruments
to provide users of financial statements with more decision-useful information and removes the requirement to disclose the methods
and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance
sheet. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim
periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual
periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company
evaluated the impact on the financial statements and implemented the provisions of ASU 2016-01 for the annual financial statements
for the year ended June 30, 2020. This new standard did not have a material impact on our financial statements or related
disclosures.
In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 842) and subsequently amended the guidance relating largely to transition considerations under the standard
in January 2017, to increase transparency and comparability among organizations by requiring the recognition of right-of-use ("ROU")
assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets
and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures
are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash
flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning
of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.
The standard became effective for us beginning
July 1, 2019. We have reviewed this and have determined that there is no material impact on our financial statements.
In July 2017, the FASB issued ASU No. 2017-11,
Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging, which changes the accounting and
earnings per share for certain instruments with down round features. The amendments in this ASU should be applied using a cumulative-effect
adjustment as of the beginning of the fiscal year or retrospective adjustment to each period presented and is effective for annual
periods beginning after December 15, 2018, and interim periods within those periods. We adopted this guidance effective July
1, 2019. The adoption of this guidance did not materially impact our financial statements
and related disclosures.
In February 2018, the Financial Accounting
Standards Board ("FASB") issued ASC Update No 2018-02 (Topic 220) Income Statement – Reporting Comprehensive
Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASC update allows for a
reclassification into retained earnings of the stranded tax effects in accumulated other comprehensive income ("AOCI")
resulting from the enactment of the Tax Cuts and Jobs Act ("TCJA"). The updated guidance is effective for interim and
annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The
adoption of this guidance did not materially impact our financial statements and related disclosures.
|
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|
|
In
June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based
Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and
services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees.
Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value
on the grant date The probability of satisfying performance conditions must be considered for equity-classified nonemployee
share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15,
2018, with early adoption permitted. We adopted this guidance effective July 1, 2019. The
adoption of this guidance did not materially impact our financial statements and related disclosures.
In
July 2018, the FASB issued ASU 2018-09 to provide clarification and correction of errors to the Codification. The amendments in
this update cover multiple Accounting Standards Updates. Some topics in the update may require transition guidance with effective
dates for annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The
adoption of this guidance did not materially impact our financial statements and related disclosures.
The
Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements.
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Derivative
Financial Instruments |
● |
The
Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency
risks. The Company evaluates all of its financial instruments to determine if such instruments are
derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is initially recorded at its fair
value and then is revalued at each reporting date, with changes in fair value reported in the consolidated
statement of operations. For stock based derivative financial instruments, Fair value accounting requires
bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity
instruments, and measurement of their fair value for accounting purposes. In determining the appropriate
fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt
instruments, management determines if the convertible debt host instrument is conventional convertible
debt and further if there is a beneficial conversion feature requiring measurement. If the instrument
is not considered conventional convertible debt, the Company will continue its evaluation process of
these instruments as derivative financial instruments.
Once
determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase
or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair
market value of derivative liabilities.
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|
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Cash and Cash Equivalents |
● |
The Company classifies
as cash and cash equivalents amounts on deposit in the banks and cash temporarily in various instruments with original maturities
of three months or less at the time of purchase. |
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|
|
|
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Fair Value of Financial Instruments |
● |
Statement of financial
accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose
estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for
assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. |
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|
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Inventories |
● |
Inventories consisting
of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for
spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period
spoilage is incurred. |
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Advertising Costs |
● |
Advertising costs
are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations.
Included in this category are expenses related to public relations, investor relations, new package design, website
design, design of promotional materials, cost of trade shows, cost of products given away as promotional samples, and paid
advertising. The Company recorded advertising costs of $403,639 and $732,297 for the years ended June 30, 2020
and 2019, respectively. |
| |
Income Taxes |
● |
The
Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided. |
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|
● |
Deferred income
taxes are reported for timing differences between items of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with FASB Topic 740, "Accounting for Income Taxes", which requires
the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable
to temporary differences and carry-forwards when realization is more likely than not. |
| |
|
● |
A valuation
allowance has been recorded to fully offset the deferred tax asset even though the Company believes it is more likely than
not that the assets will be utilized. |
| |
|
|
|
| |
|
● |
The Company's
effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary
timing differences as well as a valuation allowance. |
| |
Revenue Recognition |
● |
The
Company generates its revenue by selling its nighttime snack products wholesale and direct to consumer. |
| |
|
● |
All
sources of revenue are recorded pursuant to FASB Topic 606 Revenue Recognition, to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. This includes a five-step framework that requires an entity to: (i) identify the contract(s)
with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate
the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies
a performance obligation. In addition, this revenue generation requires disclosure of the nature, amount, timing, and uncertainty
of revenue and cash flows arising from contracts with customers. |
| |
|
|
|
| |
|
● |
The Company offers
sales incentives through various programs, consisting primarily of advertising related credits. The Company records advertising
related credits with customers as a reduction to revenue as no identifiable benefit is received in exchange for credits claimed
by the customer. |
| |
|
|
|
| |
|
● |
The
Company revenue from contracts with customers provides that an entity should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for those goods or services.
The
Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected
to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying
product revenue. As this policy election is in line with the Company's previous accounting practices, the treatment
of shipping and handling activities under FASB Topic 606 did not have any impact on the Company's results of operations,
financial condition and/or financial statement disclosures.
The
adoption of ASC 606 did not result in a change to the accounting for any of the Company's revenue streams that are
within the scope of the amendments. The Company's services that fall within the scope of ASC 606 are recognized
as revenue as the Company satisfies its obligation to the customer.
|
| |
|
|
In May
2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating
to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein,
beginning after July 1, 2018. The Company adopted ASU 2014-09 and its related amendments (collectively known as "ASC
606") during the first quarter of fiscal 2019 using the full retrospective method. |
| |
|
|
Management
reviewed ASC 606-10-32-25 which states "Consideration payable to a customer includes cash amounts that an entity
pays, or expects to pay, to the customer (or to other parties that purchase the entity's goods or services from the
customer). Consideration payable to a customer also includes credit or other items (for example, a coupon or voucher) that
can be applied against amounts owed to the entity (or to other parties that purchase the entity's goods or services
from the customer). An entity shall account for consideration payable to a customer as a reduction of the transaction price
and, therefore, of revenue unless the payment to the customer is in exchange for a distinct good or service (as described
in paragraphs 606-10-25-18 through 25-22) that the customer transfers to the entity. If the consideration payable to a customer
includes a variable amount, an entity shall estimate the transaction price (including assessing whether the estimate of variable
consideration is constrained) in accordance with paragraphs 606-10-32-5 through 32-13." |
| |
|
|
If the
consideration payable to a customer is a payment for a distinct good service, then in accordance with ASC 606-10-32-26, the
entity should account for it the same way that it accounts for other purchases from suppliers (expense). Further, "if
the amount of consideration payable to the customer exceeds the fair value of the distinct good or service that the entity
receives from the customer, then the entity shall account for such an excess as a reduction of the transaction price. If the
entity cannot reasonably estimate the fair value of the good or service received from the customer, it shall account for all
of the consideration payable to the customer as a reduction of the transaction price." |
| |
|
|
Under
ASC 606-10-32-27, if the consideration payable to a customer is accounted for as a reduction of the transaction price, "an
entity shall recognize the reduction of revenue when (or as) the later of either of the following events occurs: |
| |
|
|
|
| |
|
|
a) |
The
entity recognizes revenue for the transfer of the related goods or services to the customer. |
| |
|
|
b) |
The
entity pays or promises to pay the consideration (even if the payment is conditional on a future event). That promise might
be implied by the entity's customary business practices." |
| |
|
|
|
|
| |
|
|
Management
reviewed each arrangement to determine if each fee paid is for a distinct good or service and should be expensed as incurred
or if the Company should recognize the payment as a reduction of revenue. |
| |
|
|
|
|
|
| |
|
|
The
Company recognizes revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy
election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers
are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount
accrued within cost of sales for amounts paid to applicable carriers. |
| |
Concentration of Credit
Risk |
● |
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at
financial institutions. At various times during the year, the Company may exceed the federally insured limits. To
mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management
believes the risk of loss is minimal. At June 30, 2020 and 2019 the Company did not have any uninsured cash deposits. |
| |
|
|
|
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|
|
|
| |
Receivables Concentration |
● |
As
of June 30, 2020, the Company had receivables due from seven customers, two of whom accounted
for over 20% of the outstanding balance. Four of the other five accounted for over 10% of
the total balance. As of June 30, 2019, the Company had receivables due from six customers,
three of whom accounted for over 20% of the outstanding balance. |
| |
|
|
|
| |
Beneficial Conversion Feature |
● |
For
conventional convertible debt where the rate of conversion is below market value, the Company
records any "beneficial conversion feature" ("BCF") intrinsic value
as additional paid in capital and related debt discount.
When
the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of
the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying
debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
|
| |
Debt Issue Costs |
● |
The
Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not
or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the
statement of operations as amortization of debt discount. |
| |
|
|
|
| |
Original Issue Discount |
● |
If debt is issued
with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the
note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion
of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
| |
|
|
|
| |
Valuation of Derivative Instruments |
● |
ASC 815 "Derivatives
and Hedging" requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative
instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining
the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the
embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares
at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment. |
| |
Income Per Share |
● |
Net
income per share data for both the years ending June 30, 2020 and 2019, is based on net
income available to common shareholders divided by the weighted average of the number
of common shares outstanding. |
| |
|
|
|
| |
Impairment of Long-lived Assets |
● |
The
Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for
the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported
at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on
quoted market value, discounted cash flows or internal and external appraisals, as applicable.
During
the years ended June 30, 2020 and 2019, the Management determined and impaired $500,000 and $-0-, respectively as impairment
on intangible asset
|
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|
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|
|
ASC
350-50-05-01 states " on accounting for costs incurred to develop a website, including whether to capitalize or expense
the following types of costs: |
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|
|
|
| |
|
|
a) |
Costs
incurred in the planning stage |
| |
|
|
b) |
Costs incurred
in the website application and infrastructure development stage |
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|
|
c) |
Costs incurred
to develop graphics |
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|
|
d) |
Costs incurred
to develop content |
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|
|
e) |
Costs incurred
in the operating stage." |
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|
|
|
| |
|
|
ASC
350-50-25-6 states "Costs incurred to purchase software tools, or costs incurred during the application development
stage for internally developed tools, shall be capitalized unless they are used in research and development and meet either
of the following conditions: |
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|
|
|
| |
|
|
a) |
They do not have
any alternative future uses. |
| |
|
|
b) |
They are internally
developed and represent a pilot project or are being used in a specific research and development project (see paragraph 350-40-15-7)." |
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|
|
|
| |
|
|
Further,
at ASC 350-50-25-7, "Costs to obtain and register an Internet domain shall be capitalized under Section 350-30-25." |
| |
|
|
|
| |
|
|
During
the years ended June 30, 2020 and 2019, the Management determined and capitalized $1,000,000 and $-0-, respectively, under
ASC 350-50 and accounted as an intangible asset and amortized the costs over the life of the relationship. |
| |
|
|
|
| |
Derivative Financial Instruments |
● |
The
Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency
risks. The Company evaluates all of its financial instruments to determine if such instruments are
derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is initially recorded at its fair
value and then is revalued at each reporting date, with changes in fair value reported in the consolidated
statement of operations. For stock based derivative financial instruments, fair value accounting requires
bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity
instruments, and measurement of their fair value for accounting purposes. In determining the appropriate
fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt
instruments, management determines if the convertible debt host instrument is conventional convertible
debt and further if there is a beneficial conversion feature requiring measurement. If the instrument
is not considered conventional convertible debt, the Company will continue its evaluation process of
these instruments as derivative financial instruments.
Once
determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase
or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair
market value of derivative liabilities.
|
| |
Restatement of Prior Financial
Information |
|
Subsequent
to Form 10K for the year ended June 30, 2019 filing, during the interims review and based on such reviews, the following determinations
were made by the Company: |
| |
|
|
|
| |
|
|
Error in Accounting
for Slotting and Set-up Fees |
| |
|
|
|
| |
|
|
During our review,
we determined that the accounting treatment for the recognition of slotting fees and other fees paid or payable by the Company
to certain strategic partners was incorrect. Specifically, it has been determined that revenue relating to the slotting fee,
which was originally capitalized and amortized into expense over an 18-month period should instead be treated as a reduction
in revenue at the later of recognition of revenue for the transfer of the Nightfood product or when the Company pays or promised
to pay the slotting fee. In addition, certain fees related to platforms to launch our products and advertising efforts should
have been capitalized and recorded as an intangible asset. The Company previously recorded a portion of this fee as an intangible
asset – placement fee and expensed the remaining amount as advertising expense in the Period Ended December 31, 2019. |
| |
|
|
|
| |
|
|
In accordance with
the guidance provided by the SEC's Staff Accounting Bulletin 99, Materiality ("SAB 99") and Staff
Accounting Bulletin 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements ("SAB 108"), the Company has determined that the impact of adjustments relating
to the corrections of this accounting error are not material to previously issued annual audited and unaudited financial statements.
Accordingly, these changes are disclosed herein and will be disclosed prospectively. |
| |
|
As
of June 30, 2019 (A) |
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidated
Balance Sheet |
|
|
|
|
|
|
|
|
|
| Current
assets |
|
$ |
482,667 |
|
|
$ |
487,500 |
|
|
$ |
970,167 |
|
| Current liabilities |
|
$ |
2,955,272 |
|
|
$ |
223,333 |
|
|
$ |
3,178,605 |
|
| Working capital
(deficit) |
|
$ |
(2,472,605 |
) |
|
$ |
264,167 |
|
|
$ |
(2,208,438 |
) |
| Total assets |
|
$ |
482,667 |
|
|
$ |
487,500 |
|
|
$ |
970,167 |
|
| Total liabilities |
|
$ |
2,955,272 |
|
|
$ |
223,333 |
|
|
$ |
3,178,605 |
|
| Total stockholders'
deficit |
|
$ |
(2,472,605 |
) |
|
$ |
264,167 |
|
|
$ |
(2,208,438 |
) |
|
(A) |
The
balance sheet impact of the errors was corrected in the quarter ended September 30, 2019. |
| |
|
As
of September 30, 2019 |
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidated
Balance Sheet |
|
|
|
|
|
|
|
|
|
| Current
assets |
|
$ |
858,216 |
|
|
$ |
387,917 |
|
|
$ |
1,246,133 |
|
| Current liabilities |
|
$ |
3,287,252 |
|
|
$ |
1,151,666 |
|
|
$ |
4,438,918 |
|
| Working capital
(deficit) |
|
$ |
(2,429,036 |
) |
|
$ |
(763,749 |
) |
|
$ |
(3,192,785 |
) |
| Total assets |
|
$ |
858,216 |
|
|
$ |
1,221,250 |
|
|
$ |
2,079,466 |
|
| Total liabilities |
|
$ |
3,287,252 |
|
|
$ |
1,151,666 |
|
|
$ |
4,438,918 |
|
| Total stockholders'
deficit |
|
$ |
(2,429,036 |
) |
|
$ |
69,584 |
|
|
$ |
(2,359,452 |
) |
| |
|
As
of December 31, 2019 |
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidate
Balance Sheet |
|
|
|
|
|
|
|
|
|
| Current
assets |
|
$ |
577,944 |
|
|
$ |
408,294 |
|
|
$ |
986,238 |
|
| Current liabilities |
|
$ |
4,514,446 |
|
|
$ |
249,007 |
|
|
$ |
4,763,453 |
|
| Working capital
(deficit) |
|
$ |
(3,936,502 |
) |
|
$ |
159,287 |
|
|
$ |
(3,777,215 |
) |
| Total assets |
|
$ |
1,550,298 |
|
|
$ |
102,607 |
|
|
$ |
1,652,905 |
|
| Total liabilities |
|
$ |
4,514,446 |
|
|
$ |
249,007 |
|
|
$ |
4,763,453 |
|
| Total stockholders'
deficit |
|
$ |
(2,964,148 |
) |
|
$ |
(146,400 |
) |
|
$ |
(3,110,548 |
) |
| |
|
For
the Year Ended June 30, 2019 (A) |
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidated
Statements of Operations |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
352,172 |
|
|
$ |
- |
|
|
$ |
352,172 |
|
| Operating expenses |
|
$ |
2,263,722 |
|
|
$ |
(264,167 |
) |
|
$ |
1,999,555 |
|
| Loss from operations |
|
$ |
(1,911,550 |
) |
|
$ |
264,167 |
|
|
$ |
(1,647,383 |
) |
| Other income (expenses) |
|
$ |
2,686,793 |
|
|
$ |
- |
|
|
$ |
2,686,793 |
|
| Net income (loss) |
|
$ |
(4,598,343 |
) |
|
$ |
264,167 |
|
|
$ |
(4,334,176 |
) |
| Basic & diluted
EPS |
|
$ |
(0.09 |
) |
|
$ |
- |
|
|
$ |
(0.09 |
) |
|
(A) |
The
income statement impact of the errors was corrected in the quarter ended September 30,
2019. |
| |
|
For
the Three Months Ended
September
30, 2019
|
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidated
Statements of Operations |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
206,497 |
|
|
$ |
(160,000 |
) |
|
$ |
46,497 |
|
| Operating expenses |
|
$ |
570,858 |
|
|
$ |
(229,584 |
) |
|
$ |
341,274 |
|
| Loss from operations |
|
$ |
(364,361 |
) |
|
$ |
69,584 |
|
|
$ |
(294,777 |
) |
| Other income (expenses) |
|
$ |
218,803 |
|
|
$ |
- |
|
|
$ |
218,803 |
|
| Net income (loss) |
|
$ |
(583,164 |
) |
|
$ |
69,584 |
|
|
$ |
(513,580 |
) |
| Basic & diluted
EPS |
|
$ |
(0.01 |
) |
|
$ |
- |
|
|
$ |
(0.01 |
) |
| |
|
For
the Six Months Ended
December
31, 2019
|
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidated
Statements of Operations |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
379,488 |
|
|
$ |
(271,706 |
) |
|
$ |
107,782 |
|
| Operating expenses |
|
$ |
1,326,290 |
|
|
$ |
(125,306 |
) |
|
$ |
1,200,984 |
|
| Loss from operations |
|
$ |
(946,802 |
) |
|
$ |
(146,400 |
) |
|
$ |
(1,093,202 |
) |
| Other income (expenses) |
|
$ |
557,320 |
|
|
$ |
- |
|
|
$ |
557,320 |
|
| Net income (loss) |
|
$ |
(1,504,122 |
) |
|
$ |
(146,400 |
) |
|
$ |
(1,650,522 |
) |
| Basic & diluted
EPS |
|
$ |
(0.02 |
) |
|
$ |
- |
|
|
$ |
(0.02 |
) |
| |
|
For
the Three Months Ended
December
31, 2019
|
|
| |
|
Previously
Reported |
|
|
Adjustments |
|
|
As
Corrected |
|
| Consolidated
Statements of Operations |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
172,991 |
|
|
$ |
(111,706 |
) |
|
$ |
61,285 |
|
| Operating expenses |
|
$ |
755,432 |
|
|
$ |
104,278 |
|
|
$ |
859,710 |
|
| Loss from operations |
|
$ |
(582,441 |
) |
|
$ |
(215,984 |
) |
|
$ |
(798,425 |
) |
| Other income (expenses) |
|
$ |
338,517 |
|
|
$ |
- |
|
|
$ |
338,517 |
|
| Net income (loss) |
|
$ |
(920,958 |
) |
|
$ |
(215,984 |
) |
|
$ |
(1,136,942 |
) |
| Basic & diluted
EPS |
|
$ |
(0.02 |
) |
|
$ |
- |
|
|
$ |
(0.02 |
) |
|