You should read the following discussion and analysis of our financial condition
and results of operations together with our financial statements and the related
notes appearing elsewhere in this Annual Report. References in this Management's
Discussion and Analysis of Financial Condition and Results of Operations to
"us," "we," "our," and similar terms refer to Galaxy Next Generation, Inc., a
Nevada corporation, and its subsidiaries. This discussion includes
forward-looking statements, as that term is defined in the federal securities
laws, based upon current expectations that involve risks and uncertainties, such
as plans, objectives, expectations and intentions. Actual results and the timing
of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors. Words such as
"anticipate," "estimate," "plan," "continuing," "ongoing," "expect," "believe,"
"intend," "may," "will," "should," "could," and similar expressions are used to
identify forward-looking statements.
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We caution you that these statements are not guarantees of future performance or
events and are subject to a number of uncertainties, risks and other influences,
many of which are beyond our control, which may influence the accuracy of the
statements and the projections upon which the statements are based. See "Special
Note Regarding Forward-Looking Statements." Our actual results could differ
materially from those anticipated in the forward-looking statements as a result
of certain factors discussed in "Risk Factors" and elsewhere in this Annual
Report. Any one or more of these uncertainties, risks and other influences could
materially affect our results of operations and whether forward-looking
statements made by us ultimately prove to be accurate. Our actual results,
performance and achievements could differ materially from those expressed or
implied in these forward-looking statements. We undertake no obligation to
publicly update or revise any forward-looking statements, whether from new
information, future events or otherwise.
Company Overview
Galaxy is a manufacturer and U.S. distributor of interactive learning technology
hardware and software that allows the presenter and participant to engage in a
fully collaborative instructional environment. Galaxy's product offerings
include Galaxy's own private-label interactive touch screen panel, its own
Intercom, Bell, and Paging solution, Emergency Communication platform, as well
as an audio amplification line of products that is currently supported direct
and by OEM relationships. Galaxy's distribution channel consists of a direct
sales model, as well as approximately 44 resellers across the U.S. who primarily
sell the products offered by Galaxy within the commercial and educational
market. Galaxy does not control where the resellers focus their reselling
efforts; however, the K-12 education market is the largest customer base for
Galaxy products comprising nearly 90% of Galaxy's sales. In addition, Galaxy's
OEM division also manufacturers products for other vendors in its industry and
white labels the products under other brands.
We believe the market space for interactive technology in the classroom is a
perpetual highway of business opportunity, especially in light of the COVID-19
pandemic as school systems have sought to expand their ability to operate
remotely. Public and private school systems are in a continuous race to
modernize their learning environments. Our goal is to be an early provider of
the best and most modern technology available.
We are striving to become the leader in the market for interactive flat panel
technology, associated software, and peripheral devices for classrooms. Our goal
is to provide an intuitive system to enhance the learning environment and create
easy to use technology for the teacher, increasing student engagement and
achievement. Our products are developed and backed by a management team with
more than 30 combined years in the classroom technology space.
We were originally organized as a corporation in 2001. Our principal executive
offices are located at 285 Big A Road Toccoa, Georgia 30577, and our telephone
number is (706) 391-5030. Our website address is www.galaxynext.us. Information
contained in our website does not form part of this Annual Report and is
intended for informational purposes only.
On June 22, 2018, we consummated a reverse triangular merger whereby Galaxy Next
Generation, Inc., a private company (co-founded by our now executives, Gary
LeCroy (CEO) and Magen McGahee (CFO)), merged with and into our newly formed
subsidiary, Galaxy MS, Inc. (Galaxy MS or Merger Sub), which was formed
specifically for the transaction. Under the terms of the merger, the private
company shareholders transferred all their outstanding shares of common stock to
Galaxy MS, in return for shares of our Series C Preferred Stock. Prior to the
merger, we operated under the name Full Circle Registry, Inc.'s (FLCR) and our
operations were based upon our ownership of Georgetown 14 Cinemas, a
fourteen-theater movie complex located on approximately seven acres in
Indianapolis, Indiana. Prior to the merger, our sole business and source of
revenue was from the operation of the theater, and as part of the merger
agreement, we had the right to spinout the theater to the prior shareholders of
FLCR. Effective February 6, 2019, we sold our interest in the theater to focus
our resources on our technology operations.
On September 3, 2019, we acquired 100% of the outstanding capital stock of both
Interlock Concepts, Inc. (Concepts) and Ehlert Solutions Group, Inc. (Solutions)
pursuant to the terms of a stock purchase agreement that we entered into with
Concepts and Solutions. The purchase price for the acquisition was 1,350,000
shares of common stock and a two year note payable to the seller in the
principal amount of $3,000,000. The note payable to the seller is subject to
adjustment based on the achievement of certain future earnings goals and
successful completion of certain pre-acquisition withholding tax issues of
Concepts and Solutions. The note has been adjusted and is reflecting under
related party notes payable in the consolidated financial statements.
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Solutions and Concepts are Arizona-based audio design and manufacturing
companies creating innovative products that provide fundamental tools for
building notification systems primarily to K-12 education market customers
located primarily in the north and northwest United States. These products and
services allow institutions access to intercom, scheduling, and notification
systems with improved ease of use. The products provide an open architecture
solution to customers which allows the products to be used in both existing and
new environments. Intercom, public announcement (PA), bell and control solutions
are easily added and integrated within the open architecture design and software
model. These products combine elements over a common internet protocol (IP)
network, which minimizes infrastructure requirements and reduces costs by
combining systems.
On October 15, 2020, we acquired the assets of Classroom Technologies Solutions,
Inc. ("Classroom Tech") for consideration of (a) paying off a secured Classroom
Tech loan, not to exceed the greater of 50% of the value of the Classroom Tech
assets acquired or $120,000; (b) the issuance of a promissory note in the amount
of $44,526 to a Classroom Tech designee; and (c) the issuance of 10 million
shares (50,000 shares after reverse split) of common stock to the seller of
Classroom Tech. Classroom Tech provides cutting-edge presentation products to
schools, training facilities, churches, corporations and retail establishments.
Their high-quality solutions are customized to meet a variety of needs and
budgets in order to provide the best in education and presentation technology.
Classroom Tech direct-sources and imports many devices and components which
allows us to be innovative, nimble, and capable of delivering a broad range of
cost-effective solutions. Classroom Tech also offers in-house service and repair
facilities and carries many top brands.
This Annual Report contains references to our trademarks and to trademarks
belonging to other entities. Solely for convenience, trademarks and trade names
referred to in this Annual Report, including logos, artwork and other visual
displays, may appear without the ® or TM symbols, but such references are not
intended to indicate, in any way, that we will not assert, to the fullest extent
under applicable law, our rights or the rights of the applicable licensor to
these trademarks and trade names. We do not intend our use or display of other
companies' trade names or trademarks to imply a relationship with, or
endorsement or sponsorship of us by, any other companies.
The financial statements after the completion of the merger and acquisition
include the consolidated assets and liabilities of the combined company
(collectively Galaxy Next Generation, Inc., Interlock Concepts, Inc., Ehlert
Solutions Group, Inc. and Classroom Tech referred to collectively as the
"Company").
All intercompany transactions and accounts have been eliminated in the
consolidation.
Our common stock is traded on over-the-counter markets under the stock symbol
"GAXY."
Reverse Stock Split
Effective March 7, 2022, we effected a one-for-two hundred reverse stock split
of our authorized and outstanding shares of common stock. All per share numbers
reflect the one-for-two hundred reverse stock split.
Recent Events
On August 31, 2022, we entered into a Securities Purchase Agreement (the
"Securities Purchase Agreement") with an investor pursuant to which we issued a
12% promissory note in the principal amount of $900,000 (the "Note") for net
proceeds of $765,000, together with a warrant (the "Warrant") to purchase
1,000,000 shares of our common stock (the "Warrant Shares") and an agreement to
issue 3,000,000 shares of our common stock to the investor as commitment fee
shares (the "Commitment Fee Shares") in respect of a $450,000 commitment fee.
We applied $400,000 of the proceeds from the sale of the Note and the Warrant
to repay principal and interest obligations accrued under a 12% Promissory Note,
dated June 21, 2022, issued by us in the principal amount of $600,000 to the
investor.
The Note bears interest at 12% per annum and is due and payable on August 31,
2023 (the "Maturity Date"). Any amount of principal or interest on the Note
which is not paid when due will bear default interest at the rate of the lesser
of (i) eighteen percent (18%) per annum and (ii) the maximum amount permitted
under law. In the event we receive gross proceeds of at least $5,000,000 in
connection with any debt or equity financing, we have agreed to apply a portion
of the proceeds from such financing to repay the Note in full.
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The Note is convertible in the event of a default into common stock at a
conversion price (the "Conversion Price") equal to the lowest trading price (i)
during the previous twenty (20) trading day period ending on the date of
issuance of the Note, or (ii) during the previous twenty (20) trading day period
ending on the conversion date. If in the case that our common stock is not
deliverable by DWAC, an additional 10% discount will apply for all future
conversions until DWAC delivery becomes available. If in the case that our
common stock is "chilled" for deposit into the DTC system and only eligible for
clearing deposit, an additional 15% discount will apply for all future
conversions under all Note until such chill is lifted. Additionally, if we cease
to be a 1934 Act reporting company or if the Note cannot be converted into free
trading shares after one hundred eighty-one (181) days from the issue date
(other than as a result of the holder's status as our affiliate), an additional
15% discount will be attributed to the conversion price. If we fail to maintain
its status as "DTC Eligible" for any reason, the principal amount of the Note
will increase by $5,000 and the conversion price will be redefined to mean 70%
multiplied by the market price of the common stock.
So long as the Note is outstanding, upon any issuance by us or any of our
subsidiaries of any security with any term more favorable to the holder of such
security or with a term in favor of the holder of such security that was not
similarly provided to the holder of the Note, then we shall notify the holder
of such additional or more favorable term and such term, at holder's option,
will become a part of the transaction documents with the holder. If while the
Note is outstanding a third party has the right to convert monies owed into
common stock at a discount to market greater than the Conversion Price in effect
at that time (before all other applicable adjustments in the Note), then the
holder, in holder's sole discretion, may utilize such greater discount
percentage. In no event will the holder be entitled to convert any portion of
the Note in excess of that portion which would result in beneficial ownership by
the holder and its affiliates of more than 9.99% of the outstanding shares of
common stock.
So long as we have any obligation under the Note, we may not, without the
holder's written consent, create, incur, assume guarantee, or otherwise become
liable upon the obligation of any person or entity, except by the endorsement of
negotiable instruments for deposit or collection, or suffer to exist any
liability for borrowed money, except (a) borrowings in existence or committed on
the date the Note was issued and of which the Company has informed holder, (b)
indebtedness to trade creditors financial institutions or other lenders incurred
in the ordinary course of business, (c) borrowings, the proceeds of which shall
be used to repay the Note, or (d) borrowings which are expressly subordinated to
the Note.
Upon the occurrence of certain events of default specified in the Note, such as
a failure to honor a conversion request, failure to maintain our listing or our
failure to comply with its obligations under Securities Exchange Act of 1934, as
amended, 200% of all amounts owed to holder under the Note, including default
interest if any, shall then become due and payable. Upon the occurrence of other
events of default specified in the Note, such as a breach of the Company's
representations or covenants or the failure register the Commitment Fee Shares
as required by the Securities Purchase Agreement or the Warrant Shares as
required by the Warrant, all amounts owed to holder under the Note, including
default interest if any, shall then become due and payable. Further, if we fail
to maintain its listing, fail to comply with its obligations under Securities
Exchange Act of 1934, as amended, or lose the "bid" price for its common stock
for a period of five (5) days after written notice thereof to us, after the
nine-month anniversary of the Note, then the principal amount of the Note will
increase by $15,000 and the holder shall be entitled to use the lowest trading
price during the delinquency period as a base price for the conversion and the
conversion price shall be redefined to mean forty percent (40%) multiplied by
the market price of the common stock.
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The Warrant is exercisable, commencing on the earlier of (i) the date that is
one hundred eighty-one (181) calendar days after its issuance date or (ii) the
date that we consummate an Uplist Offering (as defined in this Warrant), for a
period of five years at an initial exercise price of $.01, subject to adjustment
for stock splits, stock dividends or similar event, provided, however, that if
we consummates an Uplist Offering on or before the date that is one hundred
eighty (180) calendar days after the issuance date, then the exercise price will
equal the lower of (i) offering price per share of common stock (or unit, if
units are offered in the Uplist Offering) at which the Uplist Offering is made
or (ii) the exercise price of any warrant(s) issued by us in connection with the
Uplist Offering. If while the Warrant is outstanding, we issue or sell, or are
deemed to have issued or sold, any warrant or option to purchase common stock
and/or common stock equivalents other than in connection with an exempt issuance
(as defined), with a purchase price per share less than the exercise price in
effect immediately prior to such issuance or sale or deemed issuance or sale,
then immediately after such issuance or sale or deemed issuance or sale, the
exercise price then in effect will be reduced to an amount equal to the new
issuance price. In the event the Company fails to timely file a registration
statement for the shares issuable upon exercise of the Warrant the Warrant may
be exercised on a cashless basis. In no event will the holder be entitled to
exercise any portion of the Warrant in excess of that portion which would result
in beneficial ownership by the holder and its affiliates of more than 9.99% of
the outstanding shares of common stock.
We agreed to include the shares exercisable upon exercise of the Warrant and the
Commitment Fee Shares in a registration statement filed by us no later than the
date that is thirty (30) days following the later of (i) the consummation of the
Uplist Offering, or (ii) the Maturity Date, and to cause the registration
statement to be declared effective within ninety (90) days of its filing.
The Securities Purchase Agreement provides that if we issue any shares of common
stock at a price per share of less than $0.15 during the period beginning on the
date which is the six (6) month anniversary of the closing date (the "Adjustment
Period"), we will issue to investor additional Commitment Fee Shares such that
the price per share of the aggregate amount of Commitment Fee Shares (including
such additional Commitment Fee Shares) equals such lower price per share. The
Securities Purchase Agreement further provides that the investor may elect
during the Adjustment Period to provide us with a reconciliation statement
showing the net proceeds actually received from the sale of the Commitment Fee
Shares (the "Sale Reconciliation"). If, as of the date of the delivery by
investor of the Sale Reconciliation, the investor has not realized net proceeds
from the sale of such Commitment Fee Shares equal to at least the Commitment
Fee, then the Company is obligated to pay, within five (5) business days, the
applicable shortfall amount in cash or immediately take all required action
necessary to cause the issuance of additional shares of common stock to the
investor in an amount sufficient such that, when sold and the net proceeds
thereof are added to the net proceeds from the sale of any of the previously
issued and sold Commitment Fee Shares, the investor will have received total net
funds equal to the Commitment Fee. The Securities Purchase Agreement provides
that the Commitment Fee Shares shall be issued to the investor upon the earlier
of: (i) the consummation of the Uplist Offering, (ii) August 31, 2023, or (iii)
the repayment in full of the Company's obligations under the Note.
Critical Accounting Policies and Estimates
Management's Discussion and Analysis discusses our consolidated financial
statements which have been prepared in accordance with United States Generally
Accepted Accounting Principles (U.S. GAAP). The preparation of these
consolidated financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the balance sheet date and reported amounts
of revenue and expenses during the reporting period. On an ongoing basis, we
evaluate our estimates and judgments. We base our estimates and judgments on
historical experience and on various other factors that are reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.
-35-
We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.
Revenue recognition
We recognize revenue to depict the transfer of promised goods to the customer in
an amount the reflects the consideration to which we expect to be entitled in
exchange for those goods in accordance with the provisions of ASC 606, "Revenue
from Contracts with Customers."
Stock Compensation
We record stock-based compensation in accordance with the provisions set forth
in ASC 718. ASC 718 requires companies to recognize the cost of employee
services received in exchange for awards of equity instruments based upon the
grant date fair value of those awards. We, from time to time, may issue common
stock to acquire services or goods from non-employees. Common stock issued to
persons other than employees or directors are recorded on the basis of their
fair value.
Business Combinations
We account for business combinations under the acquisition method of accounting.
Under this method, acquired assets, including separately identifiable intangible
assets, and any assumed liabilities are recorded at their acquisition date
estimated fair value. The excess of purchase price over the fair value amounts
assigned to the assets acquired and liabilities assumed represents the goodwill
amount resulting from the acquisition. Determining the fair value of assets
acquired and liabilities assumed involves the use of significant estimates and
assumptions.
Goodwill
Goodwill is not amortized, but is reviewed for impairment at least annually, or
more frequently when events or changes in circumstances indicate that the
carrying value may not be recoverable. Judgements regarding indicators of
potential impairment are based on market conditions and operational performance
of the business. If management concludes, based on its assessment of relevant
events, facts and circumstances that it is more likely than not that a reporting
unit's carrying value is greater than its fair value, then a goodwill impairment
charge is recognized for the amount in excess, not to exceed the total amount of
goodwill allocated to that reporting unit.
Intangible Assets
Intangible assets are stated at the lower of cost or fair value. Intangible
assets are amortized on a straight- line basis over periods ranging from two to
six years, representing the period over which we expect to receive future
economic benefits from these assets.
Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted
For a description of recent accounting pronouncements, including the expected
dates of adoption and estimated effects, if any, on our consolidated financial
statements, see Part II, Item 8, Note 1, "Summary of Significant Accounting
Policies" to the consolidated financial statements in this Annual Report.
-36-
Results of Operations for the Years Ended June 30, 2022 and 2021
Financial Results and Performance Metrics Overview
The table below presents an analysis of selected line items period-over-period
in our Consolidated Statements of Operations for the periods indicated.
Revenue
Total revenues recognized were $3,941,832 and $3,773,605 for the years ended
June 30, 2022 and 2021, respectively, an increase of 4%. Additionally, deferred
revenue amounted to $175,436 and $453,862 as of June 30, 2022 and 2021,
respectively. Revenues during the years ended June 30, 2022 and 2021
substantially consisted of revenues from sales of technology interactive panels
and related products, bell paging and intercom system installations, and audio
amplification OEM sales. Revenues increased during the year ended June 30, 2022
due to the increases in the customer base for our products, partially as a
result of the pandemic, as well as additional revenues received through our OEM
channel.
Cost of Sales and Gross Profit
Our cost of sales was $3,387,490 and $2,077,342 for the years ended June 30,
2022 and 2021, respectively, an increase of approximately 63%. Cost of sales for
the years ended June 30, 2022 and 2021 consists primarily of manufacturing,
freight, amortization of capitalized development costs, delivery and
installation. Gross profit decreased due to amortization of capitalized
development costs and increased costs for freight and delivery. In addition, we
reduced pricing on certain products due to competition and our product mix
changed to lower margin items in the current year. Our gross profit as a
percentage of total revenues was 14% and 45% for the years ended June 30, 2022
and 2021, respectively.
General and Administrative
The tables below represent an annual comparison discussed in the financial
statements:
Year ended June 30, 2022 June 30, 2021
Stock issued for services and donated $ 172,852 $ 2,778,550
General and administrative 5,108,441 5,089,979
Total General and Administrative Expenses $ 5,281,293 $ 7,868,529
Total general and administrative expenses were $5,281,293 and $7,868,529 for the
years ended June 30, 2022 and 2021, respectively, a decrease of approximately
33%. General and administrative expenses for the years ended June 30, 2022 and
June 30, 2021 consist primarily of salaries and stock issued for consulting
services and donation expenses, insurance, rent, marketing, travel,
amortization, and professional fees. Of this amount, $172,852 and $2,778,550
represent stock issued for consulting services and donations, which did not
impact cash, for the years ended June 30, 2022 and 2021, respectively.
The decrease was due to the increase in costs capitalized for product
development, and reductions of costs associated with remote and virtual
tradeshows, professional fees and other cost savings strategies implemented by
management.
Other Income (Expense)
Year ended June 30, 2022 June 30, 2021
Other income $ 7,878 $ 456,579
Expenses related to convertible notes payable:
Change in fair value of derivative
liability 1,842,000 (1,619,583)
Interest accretion (91,143) (382,436)
Interest expense related to equity purchase
agreement (2,143,500) (8,462,297)
Interest expense (1,139,240) (8,254,333)
Total Other Income (Expense) $ (1,524,005) $ (18,262,070)
Interest expense amounted to $1,139,240 and $8,254,333 for the years ended June
30, 2022 and 2021, respectively. Interest expense related to the equity purchase
agreement decreased to $2,143,500 for the year ended June 30, 2022 as compared
to $8,462,297 for the year ended June 30, 2021. The decrease in interest expense
was due to the expiration of our equity purchase agreement and a reduction of
notes payable.
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During the years ended June 30, 2022 and 2021, we amortized $91,143 and $382,436
of original issue debt discount on notes payable to interest accretion.
Net Loss for the Period
As a result of the foregoing, net loss incurred for the years ended June 30,
2022 and 2021 was $6,250,956 and $24,434,336, respectively, a decrease of 74%.
Noncash contributing factors for the net loss incurred for the years ended June
30, 2022 and 2021 is as follows:
a) $172,852 and $2,778,550 representing stock issued for consulting services and
donation expenses for the years ended June 30, 2022 and 2021, respectively.
b) amortization of intangible assets and capitalized development costs for the
years ended June 30, 2022 and 2021 totaling $525,307 and $474,635, respectively;
and
c) impairment charges taken of $195,346 and $0 on acquired assets for the years
ended June 30, 2022 and 2021.
Off-Balance Sheet Arrangements
Other than our commitments discussed in Note 10 to our audited financial
statements for the years ended June 30, 2022 and 2021, we did not have any
off-balance sheet arrangements.
Liquidity and Capital Resources
To date our revenues generated from operations have been insufficient to support
our operational activities and have been supplemented by the proceeds from the
issuance of securities, including equity and debt issuances. As stated in Note
14 of the notes to the consolidated financial statements included in this Annual
Report, our ability to continue as a going concern is dependent upon
management's ability to raise capital from the sale of its equity and,
ultimately, the achievement of operating revenues. If our revenues continue to
be insufficient to support our operational activities, we intend to raise
additional capital through the sale of equity securities or borrowings from
financial institutions and possibly from related and nonrelated parties who may
in fact lend to us on reasonable terms. Management believes that its actions to
secure additional funding will allow us to continue as a going concern. We
currently do not have any committed sources of financing other than our accounts
receivable factoring agreement, which requires us to meet certain conditions to
utilize. During the years ended June 30, 2022 and 2021, we raised $500,000 from
the sale of 500,000 shares of our common stock under a purchase agreement with
an investor and $5,073,438 from the sale of 3,279,693 shares of our common stock
under the Amended and Restated Equity Purchase Agreement with Tysadco Partners
LLC. In addition, during the year ended June 30, 2022, we received proceeds of
$2,490,500 from the issuance of notes. There can be no assurance that we will
meet all or any of the requirements pursuant to our accounts receivable
factoring agreement, and therefore the financing option may be unavailable to
us. There is no guarantee we will be successful in raising capital outside of
our current sources, and if so, that we will be able to do so on favorable
terms.
Our cash totaled $300,899 at June 30, 2022, as compared with $541,591 at June
30, 2021, a decrease of 44%. Net cash of $1,178,009 was used in operations for
the year ended June 30, 2022. Net cash of $6,316,265 was used in operations for
the year ended June 30, 2021. Net cash of $763,013 was used in investing
activities for the year ended June 30, 2022. Net cash of $1,700,330 was provided
by financing activities for the year ended June 30, 2022. The majority of this
cash was used in the investment of product for orders already received to stay
ahead of the potential product shortages we may experience in the future. During
the years ended June 30, 2022 and 2021, we raised $2,490,500 and $2,697,730 from
the issuance of convertible and nonconvertible notes.
Total liabilities amounted to $6,796,581 and $8,760,482 as of June 30, 2022 and
2021, respectively, primarily consists of borrowings under notes payable,
related party notes payable and a line of credit, derivative liability, accounts
payable, and deferred revenue.
To implement our business plan, we may require additional financing. Additional
financing may come from future equity or debt offerings that could result in
dilution to our stockholders. Further, adverse capital and credit market
conditions could limit our access to capital. We may be unable to raise capital
or bear an unattractive cost of capital that could reduce our financial
flexibility.
Our long-term liquidity requirements will depend on many factors, including the
rate at which we grow our business and footprint in the industries. To the
extent that the funds generated from operations are insufficient to fund our
activities in the long term, we may be required to raise additional funds
through public or private financing. No assurance can be given that additional
financing will be available or that, if it is available, it will be on terms
acceptable to us.
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Non-GAAP Disclosure
Net loss less stock compensation, and general and administrative expense, less
stock compensation and impairment expenses, noted below, are non-GAAP measures
and do not have standardized definitions under GAAP. The tables below provide a
reconciliation of the non-GAAP financial measures, presented herein, to the most
directly comparable financial measures calculated and presented in accordance
with GAAP. These non-GAAP financial measures are presented because management
has evaluated the financial results both including and excluding the adjusted
items and believe that the non-GAAP financial measures provide additional
perspective and insights when analyzing the core operating performance of the
business. The non-GAAP financial measures should not be considered superior to,
as a substitute for, or as an alternative to, and should be considered in
conjunction with, the GAAP financial measures presented.
Year ended June 30, 2022 June 30, 2021
Revenue $ 3,941,832 $ 3,773,605
Gross profit 554,342 1,696,263
General and administrative expense, less stock 5,108,441 5,089,979
issued for services and donated
Net Loss less stock issued for services and $(5,662,783) $(3,393,743)
donated
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