Quarterly report pursuant to Section 13 or 15(d)

Restatement of Prior Financial Information

v3.20.1
Restatement of Prior Financial Information
9 Months Ended
Mar. 31, 2020
Accounting Changes and Error Corrections [Abstract]  
Restatement of Prior Financial Information
3.

Restatement of Prior Financial Information

  Subsequent to our external auditor's periodic review of the Form 10-Q for the Periods Ended September 30, 2019 and December 31, 2019 and, in the process of review, the current Form 10-Q for the Period Ended March 31, 2020, the Company conducted further reviews of the financial statements. Based on such reviews, the following determinations were made:
       
      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 )