Annual report pursuant to Section 13 and 15(d)

Settlement of Accounts Payable

v3.22.2.2
Settlement of Accounts Payable
12 Months Ended
Jun. 30, 2022
Intangible Assets [Abstract]  
Settlement of Accounts Payable
8. Settlement of Accounts Payable

 

In April, 2020, the Company successfully negotiated a Debt Incentive Agreement with a creditor to whom it owed $947,260. This Debt Incentive Agreement provided for the elimination of the entire debt should the Company make payments prior to December 1, 2020 totaling $166,224 in cash, and delivery of approximately 4,000 pints of ice cream. Because this reduction in debt was conditional, the full $947,260 was included in the liabilities section of the Company’s balance sheet as of June 30, 2020. Due to the circumstances surrounding the original payable, and the business environment at the time, in April of 2021, the creditor agreed to settle for $20,000 in cash. The Company recorded a gain on extinguishment of accounts payable in the amount of $715,075.

 

Below is a reconciliation of the gain on accounts payable settlement as presented on the Company’s statement of operations for the fiscal year ended June 30, 2021:

 

Written off accounts payable   $ 947,260  
Written of prepaid advertising costs in other assets     (212,185 )
Cash payment     (20,000 )
Gain on accounts payable settlement   $ 715,075