S-1/A

As filed with the Securities and Exchange Commission on July 22, 2021

Registration Statement No. 333-258055

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

TROIKA MEDIA GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada	7311	83-0401552
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

1715 N. Gower St.

Los Angeles, CA 90028

(323) 965-1650

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Robert Machinist, CEO

Troika Media Group, Inc.

1715 N. Gower St.

Los Angeles, CA 90028

(323) 965-1650

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

With copy to:

Elliot H. Lutzker

Davidoff Hutcher & Citron LLP

605 Third Ave, 34th Floor

New York, NY 10158

(212) 557-7200

Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an “emerging growth company.” See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Section Act. ☐

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Shares to be Registered (1)		Proposed Maximum Aggregate Offering Price Per Share (2)		Proposed Maximum Aggregate Offering Price (2)		Amount of Registration Fee (1)(2)
Common stock, $0.001 par value per share (3)		4,076,362	$	2.60	$	10,598,541	$	1,156.30

____________

(1)	The registration fee for securities to be offered by the Selling Shareholders is calculated solely for its purpose of calculating the registration fee pursuant to Rule 457(c).
(2)	Pursuant to Rule 457(c), the fee is based upon the average of the high and low prices of the Registrant’s Common Stock reported on the Nasdaq Capital Market on July 15, 2021.
(3)	Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), the shares of Common Stock registered hereby also include an indeterminate number of additional shares as may from time to time become issuable by reason of stock splits, distributions, recapitalizations or other similar transactions.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

Explanatory Note

This Amendment No. 1 to Form S-1 of Troika Media Group, Inc. is being filed solely to include the Interactive data files formatted in XBRL, which were not completed until the date of this filing.

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Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits

See the Exhibit Index on the page immediately following the signature page for a list of exhibits filed as part of this registration statement on Form S-1.

The following Exhibits are filed with this registration statement or incorporated by reference:

Exhibit No.	Description
2.1	Subsidiary Merger Agreement, dated as of March 27, 2015 by and among SignalPoint Holdings Corp., Roomlinx, SignalShare Infrastructure Inc. and RMLX Merger Corp. is incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-k filed on April 2, 2015.
2.2	Termination and Release Agreement, dated as of February 10, 2015 by and among the Registrant, SignalPoint Holdings Corp. and Roomlinx Merger Corp. is incorporated by reference to the Registrant’s Current Report on Form 8-K filed on February 13, 2015.
2.3	Stock Pledge and Security Agreement dated May 6, 2016 by and between Digital Media Acquisition Group Corp., SignalPoint Telecommunications Corp. and Signal Share Development Corp. to Brookville Special Purpose Fund LLC, Veritas High Yield Fund LLC and Allied International Fund, Inc. is incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 12, 2016.
2.4	Merger Agreement, dated as of June 12, 2017 by and among (i) Troika Design Group Inc. and each of its subsidiaries; (ii) Daniel Pappalardo; (iii) M2 nGage Group Inc.; and (iv) Troika Acquisition Corp. is incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on June 20, 2017.
2.5	Equity Purchase Agreement dated as of June 29, 2018 by and among Nicola Stephenson, James Stephenson, Troika Media Group Inc. and Troika Mission Holdings Inc. is incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 6, 2018.
2.6	Asset Purchase Agreement dated May 21, 2021, by and among Redeeem LLC, Kyle Hill, Redeem Acquisition Corp. and Troika Media Group Inc. is incorporated by reference to Exhibit 21 to Registrant’s Current Report on Form 8-K filed on May 25, 2021.
3.1	Amended and Restated Articles of Incorporation of the Registrant, including Class A Preferred Stock terms, is incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 22, 2010.
3.2	Amended and Restated By-Laws of the Registrant adopted on March 29, 2021. (3)
3.3	Certificate of Correction to Articles of Incorporation of Roomlinx dated March 26, 2015 is incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on April 2, 2015.
3.4	Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of Series B Convertible Preferred Stock is incorporated by reference to the Registrant’s Current Report on Form 8-K filed on February 8, 2016.
3.5	Amendment to Certificate of Designation of Series B Preferred Stock is incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on March 30, 2016.
3.6	Certificate of Amendment to Articles of Incorporation dated July 27, 2016 changing the Registrant’s name to M2 nGage Group Inc. is incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 28, 2016.

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3.7	Certificate of Designation of the Rights, Preferences, Privileges and Designations of Series C Convertible Preferred Stock dated June 14, 2017. (2)
3.8	Articles of Merger dated July 7, 2017 changing the Registrant’s name to M2 nGage Group Inc. is incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on September 18, 2017.
3.9	Certificate of Designation of the Rights, Preferences, Privileges and Designations of Series D Convertible Preferred Stock dated February 22, 2018. (2)
3.10	Certificate of Amendment to Certificate of Designation of Series D Preferred Stock dated June 20, 2018. (2)
3.11	Amendment to Certificate of Designation of Series D Preferred Stock dated April 23, 2018, is incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on May 24, 2018.
3.12	Certificate of Amendment to Articles of Incorporation dated April 24, 2018 is incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on May 24, 2018.
3.13	Certificate of Amendment to Articles of Incorporation filed on September 24, 2020. (1)
4.1	Form of Common Stock Investor Warrants issued in connection with Series B Preferred Stock Offering is incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed on February 8, 2016.
4.2	Form of Subscription Agreement for use by Non-U.S. Persons dated February 27, 2017 for Series C Preferred Stock. (2)
4.3	Form of Subscription Agreement for use by Non-U.S. Persons dated June 5, 2018 for Series D Preferred Stock. (2)
4.4	Common Stock Purchase Warrant dated February 15, 2017 of M2 nGage Group Inc. to SAB Management LLC. (2)
4.5	Form of Stock Option Agreement dated June 12, 2017 granted to each of Christopher Broderick, Michael Tenore and Daniel Pappalardo. (2)
4.6	2015 Employee, Director and Consultant Equity Incentive Plan. (2)
4.7	Warrant to purchase 1,111,111 shares of Common Stock issued by the Company to NFS, incorporated by reference to Exhibit 10.6 of the Registrant’s Report on Form 8-K filed on August 6, 2015.
4.8	Goodwill Purchase Agreement dated as of June 29, 2018 between Nicola Stephenson, Troika Media Group Inc. and Troika Mission Holdings Inc. is incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 6, 2018.
4.9	Form of Common Stock Purchase Warrant (included in Exhibit 10.11) (3)
5.1	Opinion of Davidoff Hutcher & Citron LLP
10.1	Amended and Restated Executive Employment Agreement dated as of February 15, 2017 by and between M2 nGage Group Inc. (the Registrant) and Christopher Broderick, as amended on June 1, 2017, June 12, 2017 and June 5, 2018.(2)
10.2	Amended and Restated Consulting Agreement dated February 15, 2017 by and between M2 nGage Group Inc. (the Registrant) and SAB Management LLC, as amended on August 8, 2017, April 16, 2018 and June 5, 2018.(2)

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10.3	Amended and Restated Executive Employment Agreement dated as of October 21, 2016 by and between M2 nGage Group Inc. (the Registrant) and Michael Tenore, as amended on June 6, 2018. (2)
10.4	Executive Employment Agreement dated as of June 9, 2017 by and between Troika Design Group Inc. and Daniel Pappalardo is incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 20, 2017
10.5	Executive Employment Agreement dated as of June 29, 2018 by and between Mission Media USA Inc., Troika Media Group Inc. and Nicola Stephenson is incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on July 6, 2018.
10.6	Reconfirmation of Foreclosure and Notice of Asset Transfer dated as of October 24, 2016 to Digital Media Acquisition Group Corp., M2 nGage Communications Inc., M2 nGage, Inc. from M2 nGage Telecommunications Corp. and M2 nGage Software Development and Design Corp. (2)
10.7	Settlement Agreement and Mutual General Release dated as of July 26, 2017 by and among the Registrant, Robert DePalo, RoseMarie DePalo and the Secured Lenders. (2)
10.8	Office Lease dated January 6, 2020 for 1715 N. Gower Street, Los Angeles, California 90028. (3)
10.9	Office Lease dated May 2, 2017 for 45 Main Street, Brooklyn, New York 11201. (2)
10.10	Separation Agreement dated as of February 28, 2021 by and among the Registrant, SAB Management, LLC and Andrew Bressman. (3)
10.11	Form of Warrant Agreement by and between the Company and American Stock Transfer & Trust Company, LLC (3)
10.12	Office Lease dated April 6, 2019, for 28/32 Shelton Street, London, WC2 UK (3)
10.13	Promissory Notes dated between February 9 and February 23, 2021 in the respective amounts of $78,100, $74,900, $602,200, $125,400 and $812,600 payable to Connect One Bank under the U.S. Small Business Administration Paycheck Protection Program. (3)
10.14	Employment Agreement dated May 21, 2021, by and between Kyle Hill and Redeeem Acquisition Corp. is incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 25, 2021.

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10.15	Escrow Agreement by and among Redeeem Acquisition Corp., Troika Media Group, Inc., the members of Redeeem LLC and their designees and Davidoff Hutcher & Citron LLC is incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 25, 2021.
10.16	Form of Lock-Up Agreement is incorporated by reference as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on May 25, 2021.
14.1	Corporate Code of Conduct. (1)
21.1	Subsidiaries of the Registrant. (3)
23.1	Consent of RBSM LLP.*
23.2	Consent of Davidoff Hutcher & Citron LLP (contained in Exhibit 5.1).
99.1	Mission-Media Holdings Limited Annual Report and Financial Statements for the period ended 31 December 2017. (2)
99.2	Mission-Media Limited Directors Report and Financial Statements for the period ended 31 December 2017. (2)
99.3	Mission-Media Holdings Limited Non-Statutory Report and Financial Statements for the period ended 31 December 2017. (2)
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101	Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements*

_____________

* Filed with this Report.

(1)	Incorporated by reference to the Registrant’s Draft Registration Statement No. 333-254889 filed on March 19, 2021.
(2)	Incorporated by reference to the Registrant’s Draft Registration Statement No. 333-254889 filed on August 1, 2019
(3)	Incorporated by reference to the Registrant’s Registration Statement No. 333-254889 filed on March 31, 2021, as amended on April 8, 2021

 

(b) Financial Statement Schedules

Financial Statement Schedules are omitted because the information is included in our financial statements or notes to those financial statements.

[SIGNATURE PAGE FOLLOWS]

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized on the 22^nd day of July 2021.

TROIKA MEDIA GROUP, INC.
By:	/s/ Robert B. Machinist
Name:	Robert B. Machinist
Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Robert B. Machinist
Robert B. Machinist	Chairman and Chief Executive Officer	July 22, 2021
	(Principal Executive Officer)
/s/ Christopher Broderick
Christopher Broderick	Chief Operating Officer/Interim CFO	July 22, 2021
	(Principal Financial and Accounting Officer)
*/s/ Jeff Kurtz
Jeff Kurtz	Director	July 22, 2021
*/s/ Daniel Pappalardo
Daniel Pappalardo	President of Troika Design Group and Director	July 22, 2021
Thomas Ochocki	Director	_____, 2021
Daniel Jankowski	Director	_____, 2021
*/s/ Martin Pompadur
Martin Pompadur	Director	July 22, 2021
*/s/ Christopher Broderick
Christopher Broderick	Attorney-In-Fact	July 22, 2021

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EX-23.1

EXHIBIT 23.1

 
871 Coronado Center Drive
Suite 110
Henderson, Nevada 89052

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Registration Statement on Form S-1 of Troika Media Group, Inc. our report dated November 2, 2020, with respect to the consolidated financial statements as of June 30, 2020 and 2019 and for each of the years in the two-year period ended June 30, 2020, appearing in this Registration Statement.

We also consent to the reference to our firm under the heading of “experts” in such Prospectus.

 

RBSM LLP

Henderson, NV

July 20, 2021

XML

Cover	9 Months Ended
	Mar. 31, 2021
Cover [Abstract]
Entity Registrant Name	Troika Media Group, Inc.
Entity Central Index Key	0001021096
Document Type	S-1/A
Amendment Flag	true
Amendment Description	This Amendment No. 1 to Form S-1 of Troika Media Group, Inc. is being filed solely to include the Interactive data files formatted in XBRL, which were not completed until the date of this filing.
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Filer Category	Non-accelerated Filer

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
Current assets:
Cash and cash equivalents	$ 1,426,000	$ 1,706,000	$ 1,589,000
Accounts receivable, net	3,248,000	841,000	3,684,000
Prepaid expenses	121,000	143,000	815,000
Other assets - short term portion	20,000	1,000	2,000
Total current assets	4,815,000	2,691,000	6,090,000
Other assets -long term portion	534,000	615,000	318,000
Property and equipment, net	273,000	344,000	782,000
Operating lease right-of-use assets	7,404,000	8,297,000	0
Intangible assets, net	2,572,000	4,191,000	10,060,000
Goodwill	17,362,000	17,362,000	19,347,000
Total assets	32,960,000	33,500,000	36,597,000
Current liabilities:
Accounts payable and accrued expenses	10,553,000	8,137,000	8,362,000
Convertible notes payable	535,000	1,435,000	35,000
Note payable - related party - short term portion	452,000	452,000	207,000
Contract liabilities	6,647,000	3,327,000	3,516,000
Operating lease liability - short term portion	2,922,000	2,255,000	0
Derivative liabilities	98,000	0	323,000
Stimulus loan program - short term portion	16,000	849,000	0
Total current liabilities	21,223,000	16,455,000	12,443,000
Long term liabilities:
Operating lease liability - long term portion	6,327,000	7,003,000	0
Deferred rent - long term portion		0	519,000
Note payable - related party - long term portion	2,198,000	1,975,000	2,251,000
Stimulus loan program - long term portion	553,000	855,000	0
Rental deposits	94,000	105,000	109,000
Liabilities of discontinued operations - long term portion	107,000	107,000	6,452,000
Total liabilities	30,502,000	26,500,000	21,774,000
Commitment and contingencies (Note 11 &12)		0	0
Stockholders' equity:
Common stock, ($0.001 par value: 300,000,000 shares authorized; 15,020,512 and 15,454,623 shares issued and outstanding as of March 31, 2021 and June 30, 2020, respectively)	15,000	16,000	15,000
Additional paid-in-capital	182,717,000	176,262,000	169,400,000
Stock payable	156,000	1,300,000	1,743,000
Accumulated deficit	(180,115,000)	(170,892,000)	(156,445,000)
Other comprehensive (gain)/loss	(376,000)	253,000	50,000
Total stockholders' equity (deficit)	2,458,000	7,000,000	14,823,000
Total liabilities and stockholders' equity (deficit)	32,960,000	33,500,000	36,597,000
Series A Preferred Stock [Member]
Stockholders' equity:
Preferred stock value	7,000	7,000	7,000
Series B Convertible Preferred Stock [Member]
Stockholders' equity:
Preferred stock value	25,000	25,000	25,000
Series C Convertible Preferred Stock [Member]
Stockholders' equity:
Preferred stock value	9,000	9,000	9,000
Series D Convertible Preferred Stock [Member]
Stockholders' equity:
Preferred stock value	$ 20,000	$ 20,000	$ 19,000

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
Stockholder's Equity
Preferred stock, shares par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	15,000,000	15,000,000	15,000,000
Common stock, shares par value	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000	600,000,000
Common stock, shares issued	15,020,512	15,454,623	15,211,290
Common stock, shares outstanding	15,020,512	15,464,623	15,211,290
Series B Convertible Preferred Stock [Member]
Stockholder's Equity
Preferred stock, shares par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	3,000,000	3,000,000	3,000,000
Preferred stock, shares issued	2,495,000	2,495,000	2,495,000
Preferred stock, shares outstanding	2,495,000	2,495,000	2,495,000
Series C Convertible Preferred Stock [Member]
Stockholder's Equity
Preferred stock, shares par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,200,000	1,200,000	1,200,000
Preferred stock, shares issued	911,149	911,149	911,149
Preferred stock, shares outstanding	911,149	911,149	911,149
Series D Convertible Preferred Stock [Member]
Stockholder's Equity
Preferred stock, shares par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,500,000	2,500,000	2,500,000
Preferred stock, shares issued	1,979,000	1,979,000	1,881,500
Preferred stock, shares outstanding	1,979,000	1,979,000	1,881,500
Series A Preferred Stock [Member]
Stockholder's Equity
Preferred stock, shares par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued	720,000	720,000	720,000
Preferred stock, shares outstanding	720,000	720,000	720,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
Project revenues, net	$ 3,854,000	$ 3,620,000	$ 12,437,000	$ 20,759,000	$ 24,613,000	$ 40,791,000
Cost of revenues	1,941,000	2,256,000	6,360,000	11,106,000	11,636,000	23,229,000
Gross profit	1,913,000	1,364,000	6,077,000	9,653,000	12,977,000	17,562,000
Operating expenses:
Selling, general and administrative expenses	6,813,000	6,089,000	14,864,000	19,483,000	24,034,000	27,949,000
Professional fees	136,000	98,000	1,274,000	527,000	1,028,000	1,872,000
Depreciation expense	34,000	90,000	95,000	281,000	344,000	480,000
Amortization expense of intangibles	540,000	1,003,000	1,619,000	3,010,000	4,002,000	4,013,000
Goodwill impairment expense	0	1,387,000	0	1,387,000	1,985,000	3,082,000
Intangibles impairment expense					1,867,000	0
Acquisition costs					0	154,000
Gain from release of contingent earn out					0	(7,571,000)
Total operating expenses	7,523,000	8,667,000	17,852,000	24,688,000	33,260,000	29,979,000
Loss from operations	(5,610,000)	(7,303,000)	(11,775,000)	(15,035,000)	(20,283,000)	(12,417,000)
Other income (expense):
Contribution revenue from stimulus funding	831,000	0	2,535,000	0
Amortization expense of note payable discount	0	(786,000)	(409,000)	(786,000)	(1,092,000)	0
Interest expense	11,000	(49,000)	(35,000)	(247,000)	(239,000)	(186,000)
Foreign exchange gain	(11,000)	(18,000)	48,000	9,000	(11,000)	(4,000)
Gain on early termination of operating lease	0	170,000	0	170,000	164,000	0
Other income	122,000	136,000	378,000	567,000	691,000	761,000
Other expenses	1,000	(3,000)	154,000	127,000	(18,000)	(659,000)
Total other income (expense)	954,000	(514,000)	2,575,000	(160,000)	(483,000)	(88,000)
Net loss from continuing operations before income tax	(4,656,000)	(7,817,000)	(9,200,000)	(15,195,000)	(20,766,000)	(12,505,000)
Provision for income tax	(23,000)	0	(23,000)	0	0	(64,000)
Net loss from continuing operations after income tax					(20,766,000)	(12,569,000)
Net income from discontinued operations					6,319,000	6,528,000
Net loss	(4,679,000)	(7,817,000)	(9,223,000)	(15,195,000)	(14,447,000)	(6,041,000)
Deemed dividend on preferred stock					0	(820,000)
Net loss attributable to common stockholders					(14,447,000)	(6,861,000)
Foreign currency translation adjustment	(130,000)	60,000	(629,000)	10,000	203,000	(46,000)
Comprehensive loss	$ (4,809,000)	$ (7,757,000)	$ (9,852,000)	$ (15,185,000)	$ (14,244,000)	$ (6,907,000)
Basic earnings and diluted (loss) per share
Continuing operations	$ (0.31)	$ (0.51)	$ (0.58)	$ (0.99)	$ (1.35)	$ (0.83)
Discontinued operations - basic					0.41	0.43
Net loss attributable to common stockholders	$ (0.31)	$ (0.51)	$ (0.58)	$ (0.99)	(0.94)	(0.45)
Diluted earnings per share
Weighted average basic and diluted shares	15,110,400	15,454,623	15,874,783	15,413,370
Discontinued operations					$ 0.16	$ 0.16
Weighted average basic shares					15,423,655	15,211,290
Weighted average diluted shares					38,736,615	42,018,163

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Condensed Consolidated Statement of Stockholders Equity (Deficit) (Unaudited) - USD ($)	Total	Series A, Preferred Stock	Series B, Preferred Stock	Series C, Preferred Stock	Series D, Preferred Stock	Common Stock	Additional Paid-in Capital	Stock Payable	Accumulated Deficit	Comprehensive Income (Loss)
Balance, shares at Jun. 30, 2018		720,000	2,495,000	884,899	616,500	15,211,290
Balance, amount at Jun. 30, 2018	$ 9,294,000	$ 7,000	$ 25,000	$ 9,000	$ 6,000	$ 15,000	$ 158,277,000	$ 443,000	$ (149,584,000)	$ 96,000
Stock payable for conversion of convertible note payable	1,300,000							1,300,000
Sale of preferred stock - series C, shares				26,250
Sale of preferred stock - series C, amount	180,000			$ 0			180,000
Sale of preferred stock - series D, shares					1,265,000
Sale of preferred stock - series D, amount	7,710,000				$ 13,000		7,697,000
Stock-based compensation on options	474,000						474,000
Stock-based compensation on warrants	1,895,000						1,895,000
Warrants related to legal settlement	33,000						33,000
Deemed dividend on preferred stock	0						820,000		(820,000)
Imputed interest on convertible note payable	24,000						24,000
Foreign currency translation loss	(46,000)									(46,000)
Net loss	(6,041,000)								(6,041,000)
Warrants related to financing of convertible note payable	0
Balance, shares at Jun. 30, 2019		720,000	2,495,000	911,149	1,881,500	15,211,290
Balance, amount at Jun. 30, 2019	14,823,000	$ 7,000	$ 25,000	$ 9,000	$ 19,000	$ 15,000	169,400,000	1,743,000	(156,445,000)	50,000
Sale of preferred stock - series D, shares					42,500
Sale of preferred stock - series D, amount	417,000				$ 0		417,000
Stock-based compensation on options	49,000						49,000
Stock-based compensation on warrants	2,646,000						2,646,000
Imputed interest on convertible note payable	9,000						9,000
Net loss	(4,573,000)								(4,573,000)
Retirement of common stock, shares						(416,667)
Retirement of common stock, amount	0					$ 0	0
Issuance of common stock related to stock payable, shares						660,000
Issuance of common stock related to stock payable, amount	0					$ 1,000	442,000	(443,000)
Foreign currency translation gain	(57,000)									(57,000)
Balance, shares at Sep. 30, 2019		720,000	2,495,000	911,149	1,924,000	15,454,623
Balance, amount at Sep. 30, 2019	13,314,000	$ 7,000	$ 25,000	$ 9,000	$ 19,000	$ 16,000	172,963,000	1,300,000	(161,018,000)	(7,000)
Balance, shares at Jun. 30, 2019		720,000	2,495,000	911,149	1,881,500	15,211,290
Balance, amount at Jun. 30, 2019	14,823,000	$ 7,000	$ 25,000	$ 9,000	$ 19,000	$ 15,000	169,400,000	1,743,000	(156,445,000)	50,000
Stock-based compensation on options	863,000
Stock-based compensation on warrants	3,420,000
Warrants related to legal settlement	33,000
Net loss	(15,195,000)
Beneficial conversion features on convertible promissory notes	1,093,000
Warrants granted for convertible promissory note	0
Shares to be issued for convertible promissory note	0
Balance, shares at Mar. 31, 2020		720,000	2,495,000	911,149	1,979,000	15,454,623
Balance, amount at Mar. 31, 2020	6,058,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 16,000	176,261,000	1,300,000	(171,640,000)	60,000
Balance, shares at Jun. 30, 2019		720,000	2,495,000	911,149	1,881,500	15,211,290
Balance, amount at Jun. 30, 2019	14,823,000	$ 7,000	$ 25,000	$ 9,000	$ 19,000	$ 15,000	169,400,000	1,743,000	(156,445,000)	50,000
Sale of preferred stock - series D, shares					97,500
Sale of preferred stock - series D, amount	976,000				$ 1,000		975,000
Stock-based compensation on options	671,000						671,000
Stock-based compensation on warrants	3,593,000						3,593,000
Warrants related to legal settlement	0
Imputed interest on convertible note payable	41,000						41,000
Net loss	(14,447,000)								(14,447,000)
Retirement of common stock, shares						(416,667)
Retirement of common stock, amount	0					$ 0	0
Issuance of common stock related to stock payable, shares						660,000
Issuance of common stock related to stock payable, amount	0					$ 1,000	442,000	(443,000)
Foreign currency translation gain	203,000									203,000
Discount on convertible note payable	1,093,000						1,093,000
Warrants related to financing of convertible note payable	47,000						47,000
Balance, shares at Jun. 30, 2020		720,000	2,495,000	911,149	1,979,000	15,454,623
Balance, amount at Jun. 30, 2020	7,000,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 16,000	176,262,000	1,300,000	(170,892,000)	253,000
Balance, shares at Sep. 30, 2019		720,000	2,495,000	911,149	1,924,000	15,454,623
Balance, amount at Sep. 30, 2019	13,314,000	$ 7,000	$ 25,000	$ 9,000	$ 19,000	$ 16,000	172,963,000	1,300,000	(161,018,000)	(7,000)
Sale of preferred stock - series D, shares					55,000
Sale of preferred stock - series D, amount	550,000				$ 1,000		549,000
Stock-based compensation on options	285,000						285,000
Stock-based compensation on warrants	462,000						462,000
Imputed interest on convertible note payable	4,000						4,000
Net loss	(2,804,000)								(2,804,000)
Foreign currency translation gain	7,000									7,000
Balance, shares at Dec. 31, 2019		720,000	2,495,000	911,149	1,979,000	15,454,623
Balance, amount at Dec. 31, 2019	11,818,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 16,000	174,263,000	1,300,000	(163,822,000)	0
Sale of preferred stock - series D, amount	9,000						9,000
Stock-based compensation on options	529,000						529,000
Stock-based compensation on warrants	312,000						312,000
Warrants related to legal settlement	33,000						33,000
Imputed interest on convertible note payable	22,000						22,000
Net loss	(7,817,000)								(7,818,000)
Foreign currency translation gain	60,000									60,000
Discount on convertible note payable	1,093,000						1,093,000
Balance, shares at Mar. 31, 2020		720,000	2,495,000	911,149	1,979,000	15,454,623
Balance, amount at Mar. 31, 2020	6,058,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 16,000	176,261,000	1,300,000	(171,640,000)	60,000
Balance, shares at Jun. 30, 2020		720,000	2,495,000	911,149	1,979,000	15,454,623
Balance, amount at Jun. 30, 2020	7,000,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 16,000	176,262,000	1,300,000	(170,892,000)	253,000
Stock-based compensation on options	166,000						166,000
Stock-based compensation on warrants	154,000						154,000
Imputed interest on convertible note payable	4,000						4,000
Foreign currency translation loss	(93,000)									(93,000)
Net loss	(3,921,000)								(3,921,000)
Issuance of common stock related to stock payable, amount	0					$ 2,000	1,298,000	(1,300,000)
Issuance of common stock related to convertible note payables, shares						499,222
Issuance of common stock related to convertible note payables, amount	1,400,000					$ 0	1,400,000	0
Issuance of common stock related to stock payables, shares						1,733,333
Balance, shares at Sep. 30, 2020		720,000	2,495,000	911,149	1,979,000	17,687,179
Balance, amount at Sep. 30, 2020	4,710,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 18,000	179,284,000	0	(174,813,000)	160,000
Balance, shares at Jun. 30, 2020		720,000	2,495,000	911,149	1,979,000	15,454,623
Balance, amount at Jun. 30, 2020	7,000,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 16,000	176,262,000	1,300,000	(170,892,000)	253,000
Stock-based compensation on options	700,000
Stock-based compensation on warrants	2,882,000
Warrants related to legal settlement	0
Net loss	(9,223,000)
Beneficial conversion features on convertible promissory notes	144,000
Warrants granted for convertible promissory note	12,000
Shares to be issued for convertible promissory note	156,000
Balance, shares at Mar. 31, 2021		720,000	2,495,000	911,149	1,979,000	15,020,512
Balance, amount at Mar. 31, 2021	2,458,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 15,000	182,717,000	156,000	(180,115,000)	(376,000)
Balance, shares at Sep. 30, 2020		720,000	2,495,000	911,149	1,979,000	17,687,179
Balance, amount at Sep. 30, 2020	4,710,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 18,000	179,284,000	0	(174,813,000)	160,000
Stock-based compensation on options	263,000						263,000
Stock-based compensation on warrants	301,000						301,000
Imputed interest on convertible note payable	3,000						3,000
Net loss	(623,000)								(623,000)
Foreign currency translation gain	(406,000)									(406,000)
Beneficial conversion features on convertible promissory notes	144,000						144,000
Warrants granted for convertible promissory note	12,000						12,000
Shares to be issued for convertible promissory note	156,000							156,000
Balance, shares at Dec. 31, 2020		720,000	2,495,000	911,149	1,979,000	17,687,179
Balance, amount at Dec. 31, 2020	4,560,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 18,000	180,007,000	156,000	(175,436,000)	(246,000)
Stock-based compensation on options	271,000						271,000
Stock-based compensation on warrants	2,427,000						2,427,000
Imputed interest on convertible note payable	9,000						9,000
Net loss	(4,679,000)								(4,679,000)
Retirement of common stock, shares						(2,666,667)
Retirement of common stock, amount	0					$ (3,000)	3,000
Foreign currency translation gain	(130,000)									(130,000)
Balance, shares at Mar. 31, 2021		720,000	2,495,000	911,149	1,979,000	15,020,512
Balance, amount at Mar. 31, 2021	$ 2,458,000	$ 7,000	$ 25,000	$ 9,000	$ 20,000	$ 15,000	$ 182,717,000	$ 156,000	$ (180,115,000)	$ (376,000)

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (9,223,000)	$ (15,195,000)	$ (14,447,000)	$ (6,041,000)
Net loss from continuing operations			(20,766,000)	(12,569,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	95,000	281,000	344,000	480,000
Amortization of intangibles	1,619,000	3,010,000	4,002,000	4,013,000
Amortization of discount on convertible note payables	409,000	786,000	1,092,000	0
Amortization of right-of-use assets	893,000	1,386,000	1,857,000	0
Impairment of goodwill	0	1,387,000	1,985,000	3,082,000
Intangibles impairment expense			1,867,000	0
Release of contingent earn out			0	(7,571,000)
Stock-based compensation on options	700,000	863,000	671,000	474,000
Stock-based compensation on warrants	2,882,000	3,420,000	3,593,000	1,895,000
Warrants related to legal settlement	0	33,000	0	33,000
Warrants related to financing of convertible note payable			47,000	0
Imputed interest for note payable	16,000	35,000	41,000	24,000
Gain on early termination of operating lease	0	(170,000)	(164,000)	0
Provision for bad debt			397,000	112,000
Recognition of contribution revenue from stimulus funding	(2,535,000)	0
(Recovery) and provision for bad debt	202,000	(133,000)
Change in operating assets and liabilities:
Accounts receivable	(2,205,000)	985,000	2,447,000	(1,608,000)
Prepaid expenses	21,000	195,000	672,000	379,000
Other assets	63,000	(48,000)	(296,000)	(320,000)
Accounts payable and accrued expenses	2,418,000	1,876,000	(225,000)	1,973,000
Deferred expenses	0	(660,000)	0	1,146,000
Due from related parties			0	835,000
Rental deposits	(11,000)	(6,000)	(4,000)	109,000
Operating lease liability	(10,000)	(1,732,000)	(1,382,000)	0
Deferred rent			0	(18,000)
Contract liabilities	2,462,000	565,000	(189,000)	685,000
Net cash used in operating activities	(2,608,000)	(2,856,000)	(4,011,000)	(6,846,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(24,000)	(89,000)	(98,000)	(86,000)
Net cash used in investing activities	(24,000)	(89,000)	(98,000)	(86,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of series C convertible preferred shares for cash			0	180,000
Issuance of series D convertible preferred shares for cash	0	976,000	976,000	7,710,000
Payments to related parties - Mission acquisition			0	(4,554,000)
Proceeds from Paycheck Protection Program loan			1,704,000	0
Proceeds from note payable of related party			0	2,023,000
Payments to note payable of related party			(31,000)	0
Proceeds from stimulus loan programs	2,258,000	0
Proceeds from convertible note payable	500,000	1,400,000	1,400,000	1,300,000
Payments to convertible note payable	0	(44,000)	0	(55,000)
Net cash provided by financing activities	2,758,000	2,332,000	4,049,000	6,604,000
CASH FLOWS FROM DISCONTINUED OPERATIONS
Net income from derecognition of liabilities from discontinued operations			6,319,000	6,528,000
Gain from derecognition of liabilities from discontinued operations			(6,319,000)	(6,528,000)
Change in accounts payable and accrued expenses	0	(27,000)	(26,000)	(133,000)
Net cash used in discontinued operations - operating activities	0	(27,000)	(26,000)	(133,000)
Net cash used in discontinued operations - financing activities			0	0
Net cash (used in) provided by discontinued operations	0	(27,000)	(26,000)	(133,000)
Effect of exchange rate on cash	(406,000)	10,000	203,000	(46,000)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(280,000)	(630,000)	117,000	(507,000)
CASH AND CASH EQUIVALENTS - beginning of period	1,706,000	1,589,000	1,589,000	2,096,000
CASH AND CASH EQUIVALENTS - end of period	1,426,000	959,000	1,706,000	1,589,000
Cash paid during the period for:
Income taxes	0	0	0	0
Interest expense	0	0	29,000	0
Noncash investing and financing activities:
Stock payable for conversion of convertible notes payables and accrued interest			0	1,300,000
Retirement of common stock	2,666,667	6,000	0	0
Beneficial conversion features on convertible promissory notes	144,000	1,093,000
Warrants granted for convertible promissory note	12,000	0
Shares to be issued for convertible promissory note	156,000	0
Record derivative liability on convertible notes	98,000	0
Conversion of convertible note payable	1,400,000	0
Issuance of common stock related to stock payable	1,300,000	443,000	443,000	0
Deemed dividend on preferred stock			0	820,000
Right-of-use assets acquired through adoption of ASC 842	0	13,092,000	8,348,000	0
Right-of-use assets acquired through operating leases	$ 0	$ 0	$ 2,398,000	$ 0

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PRESENTATION OF THE FINANCIAL STATEMENTS

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

PRESENTATION OF THE FINANCIAL STATEMENTS

NOTE 1- PRESENTATION OF THE FINANCIAL STATEMENTS

The terms “Troika,” “the Company,” “we,” “our” and “us” each refer to Troika Media Group, Inc. and its subsidiaries, unless the context indicates otherwise. The accompanying unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP, for interim financial information and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures have been condensed or omitted.

In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. These unaudited condensed consolidated financial statements should be read in conjunction with our annual report for the year ended June 30, 2020.

RISKS & UNCERTAINTIES

Liquidity

The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows until fiscal year 2022. For the nine months ended March 31, 2021, the Company had a net loss of $9,223,000 which increased the accumulated deficit to $180.1 million at March 31, 2021 from $170.9 million at June 30, 2020. At March 31, 2021, the Company had approximately $1.4 million in cash and cash equivalents and a total of $4.8 million in current assets in relation to $21.2 million in current liabilities. While the Company continues to find efficiencies with its acquisitions of Troika Design Group, Inc. and Mission Group, the departure of Mission’s President and Founder in fiscal year 2019 together with the coronavirus (COVID-19) pandemic in fiscal years 2020 and 2021 impacted revenue more than anticipated.

With the acquisition of Mission Group, the Company anticipated increasing Troika’s footprint in a major media markets, such as NY and London. The Company also continues to expand its consulting services and breadth of product offering with existing Mission and Troika clients and increase business development in NY and London as a result of the Mission acquisition. Additionally, the Company intends to add to Mission business development due to Troika’s existing clientele.

During the fiscal year ended June 30, 2020, the Company entered into an agreement with a financial advisory firm to analyze potential financing transactions including preparing the Company for an initial public offering (IPO). In April 2021, the Company’s Form S-1 registration statement was declared effective by the U.S. Securities and Exchange Commission. The Company received net proceeds of $21.9 million ’and the Company’s securities were listed on the Nasdaq Capital Market. Management believes the proceeds from the IPO will be more than sufficient to meet the Company’s cash requirements until the Company generates positive cash flow.

Impact of COVID-19 Pandemic

In March 2020, the World Health Organization categorized the coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and the resulting public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and those of our clients. Businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the clients we service. We continue to believe our focus on our strategic strengths, including talent, our differentiated market strategy and the relevance of our services, including the longevity of our relationships, will continue to assist our Company as we navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic have negatively impacted our results of operations, cash flows and financial position; however, the continued extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19.

              We took steps to protect the safety of our employees, with a large majority of our worldwide workforce working from home, while developing creative ideas to protect the health and well-being of our communities and setting up our people to help them do their best work for our clients while working remotely. With respect to managing costs, we have took multiple initiatives to align our expenses with changes in revenue. The steps taken across our agencies and corporate group include deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary deferment for our senior corporate management team. In addition, we remain committed to and have intensified our efforts around cash flow discipline, including the identification of significant capital expenditures that can be deferred, and working capital management. We began to see the effects of COVID-19 on client spending, notably in the UK and US markets with our Mission subsidiaries throughout the second quarter of calendar 2020 with much of the work force of the UK subsidiary on furlough, and with our Troika Design subsidiary furloughed as March 2020 progressed. Due to mandatory stay at home orders and social distancing, our experiential business has been particularly impacted by COVID-19. Promotional and experiential events with the Company’s assistance are particularly susceptible to external factors were delayed by many of the Company’s Mission clients due to the effects of COVID-19. The Company had temporarily furloughed employees to reflect current reduced demands associated with those client sets. However, as of mid-February 2021, we started to see business dramatically improve and expect greater improvement in our results in our next fiscal quarters. As cities have commenced openings with the improvement of vaccines distribution and infection rates declining, our client activities have doubled and there is a real optimism that the economic conditions are improving. Sports, Entertainment, Pharma clients are contracting our services across all entities at rates similar to 2019.

We took steps to strengthen our financial position during this period of heightened uncertainty. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide relief as a result of the COVID-19 outbreak. The CARES Act, among other things, includes 1) provisions relating to compensation, benefits and payroll tax relief, 2) the availability of net operating loss carrybacks for periods beginning in 2018 and before 2021 and alternative minimum tax credit refunds, and 3) modifications to the net interest deduction limitations. The Company continues to examine the impacts the CARES Act may have on its business. The governments in which our International subsidiaries are located are offering similar business relief programs and the Company is examining the impacts of these programs on its operations as well.

In the current environment, a major priority for us is preserving liquidity. Our primary liquidity sources are operating cash flow, cash and cash equivalents and short-term investments. Although we expect to experience a decrease in our cash flow from operations as a result of the impact of COVID-19, we have obtained relief under the CARES Act in the form of a Small Business Administration backed loans. In aggregate we received $1.7 million in SBA stimulus “Payroll Protection Program” funding in April 2020 of which the majority of these funds were used for payroll. As per the US Government rules, the funds used for payroll, healthcare benefits, and other applicable operating expenses can be forgiven and the Company reported them as such in December 2020 considering the Company believes we have substantially met these conditions. On August 14, 2020, the Company received an additional $500,000 in loans with 30 year terms under the SBA’s “Economic Injury Disaster Loan” program which the Company intends to use to address any cash shortfalls that may result from the current pandemic. In February 2021, the Company obtained additional relief under the CARES Act in the form of a Small Business Administration backed loans and received an additional $1.7 million in SBA stimulus “Payroll Protection Program” funds which will be used for payroll, healthcare benefits, and other applicable operating expenses.

In the United Kingdom, as of April 1, 2020, Mission furloughed 27 employees, saving £78,000 in April payroll, being made up of £55,000 of furlough monies from the government and £16,000 in associated payroll savings and applied for a 3-month rent holiday. In May 1, 2020, Mission put on furlough an additional 5 employees bringing the total to 32, alongside a 10% pay cut for all employees not furloughed, saving £111,000 in May payroll, being made up of £62,000 of furlough monies from the government, £33,000 of associated payroll savings and £16,000 in savings related to the pay cut. On April 1, 2020, Troika Design Group actioned a 15% salary reduction across the majority of the Los Angeles staff and furloughed one office manager for a total savings of $112,000 per month. Finally, certain members of the Company’s executive team deferred compensation temporarily. In August 2020, the Company received £50,000 in loans related to the COVID pandemic with an interest rate of 2.5% to be paid over five years beginning one year after receipt. The Company used these proceeds to address any cash shortfalls that resulted from the pandemic.

The extent to which the COVID-19 outbreak continues to impact the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact. While the Company’s revenue has declined by $8.3 million from $20.8 million to $12.4 million in the nine months ending March 31, 2021 and 2020 respectively, the Company is still quantifying how much of this decline in revenue was caused by the pandemic as well as the impact from the departure of Mission’s founder.

PRINCIPLES OF CONSOLIDATION

The accompanying unaudited condensed financial statements include the accounts of TMG, and its wholly-owned subsidiaries, Troika Design Group, Inc. (California), Troika Services Inc. (New York), Troika Analytics Inc. (New York), Troika Productions, LLC (California), Troika-Mission Holdings, Inc. (New York), Mission Culture LLC (Delaware), Mission-Media Holdings Limited (England and Wales), and Mission Media USA, Inc. (New York). All significant intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting periods.

Significant estimates and assumptions made by management include, among others, the assessment of the collectability of accounts receivable and the determination of the allowance for doubtful accounts, the valuation and useful life of capitalized equipment costs and long-lived assets, valuation of warrants and options, the determination of the useful lives and any potential impairment of long-lived assets such as intangible assets, the valuation of goodwill, stock-based compensation, and deferred tax assets. Actual results could differ from those estimates.

FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS

The Company has estimated the fair value of its financial instruments using the available market information and valuation methodologies considered to be appropriate and has determined that the book value of the Company’s accounts receivable, prepaid expenses, accounts payable, and accrued expenses, as of March 31, 2021 and 2020, respectively, approximate fair value based on their short-term nature.

FAIR VALUE MEASUREMENT

Fair value is defined 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 as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as March 31, 2021 and 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts payable, accrued liabilities, and convertible notes payable. Fair values for these items were assumed to approximate carrying values because of their short-term nature or they are payable on demand.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the undiscounted value of expected future operating cash flows is used to determine whether the asset is recoverable and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or discounted future operating cash flows.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalent account balances with financial institutions in the United States and United Kingdom which at times exceed federally insured limits for accounts in the United States. Considering deposits with these institutions can be redeemed on demand, the Company believes there is minimal risk. As of March 31, 2021 and 2020, the Company had $365,000 and $401,000 in cash that was uninsured, respectively.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of March 31, 2021 and 2020, the Company had no cash equivalents.

ACCOUNTS RECEIVABLE

Our accounts receivable are amounts due from our clients. The Company accounts for unbilled accounts receivable using the percentage-of-completion accounting method for revenue recognized and the customer has not been invoiced due to the terms of the contract or the timing of the account invoicing cycle.

For those clients to whom we extend credit, we perform periodic evaluations of accounts receivable and maintain allowances for potential credit losses as deemed necessary.

The Company periodically reviews the outstanding accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. When a customer’s account is deemed to be uncollectible the outstanding balance is charged to the allowance for doubtful accounts. As of March 31, 2021 and 2020, the Company had $579,000 and $518,000 in allowance for doubtful accounts, respectively.

GOODWILL AND INTANGIBLE ASSETS

As a result of acquisitions, the Company recorded goodwill and identifiable intangible assets as part of its allocation of the purchase consideration.

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at June 30 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value then an impairment loss is recognized equal to that excess. A goodwill impairment charge of $598,000 was recorded as a result of the Company’s annual impairment assessment on June 30, 2020. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired.

We test our goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is June 30. Internal evaluations on both March 31, 2021 and 2020 determined that impairments were not necessary and this will be reevaluated June 30, 2021.

None of the goodwill is deductible for income tax purposes.

Intangibles

Intangible assets with finite useful lives consist of tradenames, non-compete agreements, acquired workforce and customer relationships and are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. It was determined by the Company that the COVID-19 pandemic was a triggering event and after an internal evaluation it was concluded that an impairment for intangibles was required on March 31, 2020 for $1,387,000. An internal evaluation was also carried out on March 31, 2021 and it was determined that an impairment was not necessary.

BENEFICIAL CONVERSION FEATURE

The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20, Debt with Conversion and Other Options, Emerging Issues Task Force (“EITF”) 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF 00-27, Application of Issue No 98-5 To Certain Convertible Instruments. The Beneficial Conversion Feature (“BCF”) of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

The BCF of a convertible note is measured by allocating a portion of the note’s proceeds to the warrants, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid-in-capital. The value of the proceeds received from a convertible note is then allocated between the conversion features and warrants on an allocated fair value basis. The allocated fair value is recorded in the financial statements as a debt discount (premium) from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense using interest method.

STOCK-BASED COMPENSATION

The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

For non-employee stock-based compensation, the Company has adopted ASC 2018-07, Improvements to Nonemployee Share-Based Payment Accounting which expands on the scope of ASC 718 to include share-based payment transactions for acquiring services from non-employees and requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock.

FOREIGN CURRENCY TRANSLATION

The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company is U.S. dollars for all entities other than Mission Media Limited whose operations are based in the United Kingdom and their functional currency is British Pound Sterling (GBP). Transactions in currencies other than the functional currencies are recorded using the appropriate exchange rate at the time of the transaction. All assets and liabilities are translated into U.S. Dollars at balance sheet date, stockholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) income. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.

The relevant translation rates are as follows: for the quarter ended March 31, 2021 closing rate at 1.378900 US$: GBP, average rate at 1.342278 US$: GBP, for the quarter ended March 31, 2020 closing rate at 1.241200 US$: GBP, average rate at 1.268544 US$.

COMPREHENSIVE LOSS

Comprehensive loss is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. For the Company, comprehensive loss for the three and nine months ended March 31, 2021 and 2020 included net loss and unrealized losses from foreign currency translation adjustments.

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table provides the numerators and denominators in the basic and diluted earnings per share computations for the three months ended March 31. The figures represent the converted common stock equivalent.

	Three Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(4,679,000	)	$	(7,817,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		17,687,179			15,454,623
Weighted average common stock retired		(2,576,779	)		-
Weighted average common shares issued during the period		-			-
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,110,400			15,454,623
Diluted EPS:
Common shares outstanding, beginning of period		17,687,179			15,454,623
Weighted average common stock retired		(2,576,779	)		-
Weighted average common shares issued during the period		-			-
Denominator for basic earnings per common shares		-			-
Preferred Stock Series A, beginning of period		720,000			720,000
Preferred Stock Series B, beginning of period		2,495,000			2,495,000
Preferred Stock Series C, beginning of period		911,149			911,149
Preferred Stock Series D, beginning of period		1,979,000			1,979,000
Stock payable, beginning of period		156,000			1,300,000
Weighted average diluted effect of stock options		2,771,081			2,342,660
Weighted average diluted effect of warrants		7,622,411			6,110,534
Lock-Up Agreements - common stock equivalents		-			(5,711,111	)
Weighted average common shares		31,765,041			25,601,854

The following table provides the numerators and denominators in the basic and diluted earnings per share computations for the nine months ended March 31. The figures represent the converted common stock equivalent.

	Nine Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(9,223,000	)	$	(15,195,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		15,454,623			15,211,290
Weighted average common stock retired		(836,983	)		(296,533	)
Weighted average common shares issued during the period		1,257,143			498,613
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,874,783			15,413,370
Diluted EPS:
Common shares outstanding, beginning of period		15,454,623			15,211,290
Weighted average common stock retired		(836,983	)		(296,533	)
Weighted average common shares issued during the period		1,257,143			498,613
Denominator for basic earnings per common shares		-			-
Preferred Stock Series A, beginning of period		720,000			720,000
Preferred Stock Series B, beginning of period		2,495,000			2,495,000
Preferred Stock Series C, beginning of period		911,149			911,149
Preferred Stock Series D, beginning of period		1,979,000			1,881,500
Stock payable, beginning of period		1,300,000			1,743,000
Weighted average preferred stock series D purchased during the period		-			260,000
Weighted average stock payable issued during the period		-			-
Weighted average diluted effect of stock options		2,686,722			2,127,915
Weighted average diluted effect of warrants		7,756,204			6,443,472
Lock-Up Agreements - common stock equivalents		-			(5,711,111	)
Weighted average common shares		33,722,857			26,284,295

CORRECTION OF AN IMMATERIAL MISSTATEMENT

During the nine months ending March 31, 2021 the Company identified certain liabilities recorded as of June 30, 2020 relating to “Payroll Protection Program” stimulus funding totaling $1,704,000 that were to be treated as a government grant rather than debt. In accordance with IAS-20, Accounting for Government Grants and Disclosure of Government Assistance, the proceeds from government grants are to be recognized as a deferred income liability and reported as income as the related costs are expensed. On June 30, 2020, the Company recorded these funds as debt and should have recorded the balance of $1,704,000 as a deferred income liability. The Company believes this is an immaterial misstatement as the total liabilities would have been unchanged.

RECLASSIFICATION OF PRIOR YEAR PRESENTATION

Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported consolidated balance sheets and statement of operations and comprehensive loss.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In February 2016 the FASB issued amended guidance in the form of ASU No. 2016-02, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting for all leases with terms longer than twelve months. Lessees initially recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The right-of-use asset is measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs. Leases will be classified as either finance (formerly “capital leases”) or operating, with classification affecting the pattern of expense recognition in the income statement. The standard provides for a modified retrospective transition approach for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain optional practical expedients. In July 2018, the FASB issued ASU 2018-11, “Leases: Targeted Improvements”, allowing for an alternative transition method (the effective date approach). It allows an entity to initially apply the new lease guidance at the adoption date (rather than at the beginning of the earliest period presented). The Company adopted the new guidance on July 1, 2019 using the optional transitional method and elected to use the package of three practical expedients which allows the Company not to reassess whether contracts are or contain leases, lease classification and whether initial direct costs qualify for capitalization. Upon adoption of the standard, the Company has recognized an $8.9 million right-of-use asset and offsetting lease liability on the balance sheet which resulted in no impact on accumulated deficit. The Company also removed deferred rent of approximately $842,000 when adopting the new guidance.

In July 2017, the FASB issued amended guidance in the form of ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In February 2018 the FASB issued amended guidance in the form of ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)”, which amends the previous guidance to allow for certain tax effects “stranded” in accumulated other comprehensive income, which are impacted by the Tax Cuts and Jobs Act (the “Tax Reform Act”), to be reclassified from accumulated other comprehensive income into retained earnings. This amendment pertains only to those items impacted by the new tax law and will not apply to any future tax effects stranded in accumulated other comprehensive income. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In June 2018, the FASB issued amended guidance in the form of ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In October 2018, the FASB issued amended guidance in the form of ASU No. 2018-17, “Targeted Improvements to Related Party Guidance for Variable Interest Entities.” This ASU amends the guidance for determining whether a decision-making fee is a variable interest. ASU No. 2018-17 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company has adopted this standard effective July 1, 2019 and has determined that there were no such instances resulting in no material impact to the financials.

Accounting Pronouncements Not Yet Effective

In August 2020, FASB issued ASU 2020-06, ”Debt—Debt with Conversion and Other and Derivatives and Hedging—Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the accounting for convertible instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. These changes will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was bifurcated according to previously existing rules. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The new guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 however it is not believed that it will result in a material to the financials.

HISTORY AND NATURE OF BUSINESS

Troika Media Group, Inc. (formerly M2 nGage Group, Inc. and Roomlinx, Inc.) (the “Company”, “TMG”, “Roomlinx” or “M2 Group”) was formed in 2003 under the name RL Acquisition, Inc. pursuant to the laws of the State of Nevada.

The Company operates as a brand consulting and marketing agency specializing in the entertainment and sports media category. Our clients are, in the entertainment, sports, media, gaming and consumer brands, seeking new ways to connect with consumers, audiences and fans through evolving media and technology.

During the year ended December 31, 2013, Signal Point Holdings Corp. (“SPHC”), a subsidiary of the Company, closed down the operations of its Signal Point Corp. (“SPC”) subsidiary. This decision was made as a result of a continuing decline in revenues, increasing costs and Federal and state regulatory environment that continued to pressure margins in the SPC businesses. As a result of the decision to shut down SPC, all applicable employees were terminated, as were leases for facilities and office.

On March 27, 2015, the Company entered into and completed (the “Closing”) a Subsidiary Merger Agreement (the “SMA”) by and among the Company, Signal Point Holdings Corp. (“SPHC”), SignalShare Infrastructure, Inc. (“SSI”) and RMLX Merger Corp. Upon the terms and conditions of the SMA, the Company’s wholly-owned subsidiary RMLX Merger Corp., a Delaware corporation, was merged with and into SPHC, with SPHC and its operating subsidiaries surviving as a wholly-owned subsidiary of the Company (the “Subsidiary Merger”). The Company’s operations, of Roomlinx, Inc., existing at the time of the SMA were transferred into a newly-formed, wholly-owned subsidiary named SignalShare Infrastructure Inc. As a result of the SMA, the former stockholders of SPHC, a privately-owned Delaware corporation, received an aggregate of approximately 85% of the fully diluted common stock of the Company.

On May 11, 2016, SSI, completed the foreclosure sale of substantially all of the assets of SSI (other than certain excluded agreements) pursuant to Article 9 of the Uniform Commercial Code. SSI, which held the operations of the Company prior to the SMA, terminated all of its employees and ceased operations.

On July 5, 2016, SignalShare, LLC filed for bankruptcy voluntarily pursuant to Chapter 7 of the Bankruptcy Code. The case was filed in the U.S. Bankruptcy Court, District of New Jersey and is captioned case no. 16-23003.

On July 28, 2016, The Company’s name was changed to M2 nGage Group, Inc.

On July 14, 2017, Troika Media Group, Inc. (“TMG”) was created as a Nevada corporation. TMG began operations on June 14, 2017 by acquiring all the assets and liabilities of Troika Design Group, Inc (“TDG”). TMG operates from its main facilities and offices located in Los Angeles, California and Englewood Cliffs, New Jersey. Pursuant to the terms of a Merger Agreement dated June 12, 2017, on June 14, 2017, TMG, a wholly-owned subsidiary of M2nGage Group, Inc. was merged with and into Troika Acquisition Corp. with TMG as the surviving entity and a wholly-owned subsidiary of the acquirer. The total purchase price was $5.0 million in cash plus 2,046,667 shares of common stock of the acquirer.

On June 29, 2018, the Company entered into an agreement to acquire all of the issued and outstanding membership interest of Mission Culture LLC and all of the outstanding ordinary shares of MissionMedia Holdings Limited. The Company formed a wholly owned subsidiary TroikaMission Holdings, Inc, as the acquisition company.

LIQUIDITY

The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows until fiscal year 2022. For the year ended June 30, 2020, the Company had a net loss of $14.4 million, which increased the accumulated deficit to $170.9 million at June 30, 2020 from $156.4 million at June 30, 2019. At June 30, 2020, the Company had $1.7 million in cash and cash equivalents and a total of $2.7 million in current assets in relation to $16.4 million in current liabilities. While the Company continues to find efficiencies with its acquisitions of Troika Design Group, Inc. and Mission Group, the recent COVID-19 pandemic and the departure of Mission’s President and Founder in fiscal year 2019 impacted revenue more than anticipated. With recent restructuring, Management however now believes that the Mission Group is now stabilized and will soon generate positive cash flow.

With the acquisition of Mission Group, the Company anticipates increasing Troika’s footprint in a major media markets, such as NY and London. The Company also continues to expand its consulting services and breadth of product offering with existing Mission and Troika clients and increase business development in NY and London as a result of the Mission acquisition. Additionally, the Company intends to add to Mission business development due to Troika’s existing clientele.

During the fiscal year ended June 30, 2020, the Company entered into an agreement with a financial advisory firm to analyze potential financing transactions including preparing the Company for an initial public offering (IPO). The Company anticipates this firm serving as its underwriter during the IPO process and expects to file a Form S-1 registration statement with the U.S. Securities and Exchange Commission shortly. Management is confident the proceeds from the IPO will be more than sufficient to meet the Company’s cash requirements until the Company generates positive cash flow in fiscal year 2022.

Subsequent to year-end June 30, 2020, the Company has received an additional $500,000 in funding relating to the Paycheck Protection Program and has historically been successful raising funds through private placements when necessary. In addition, the Company has been successful at raising funding through debt financing, has entered into three separate unsecured loan facility agreements in fiscal year 2020 with friendly lenders totaling $1.4 million and Management believes they can raise additional capital through similar means if necessary.

If the Company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and require significant debt service payments, which diverts resources from other activities. If the Company is unable to obtain additional financing, it may be required to significantly scale back its business and operations. The Company’s ability to raise additional capital will also be impacted by the outbreak of COVID-19.

Based on this acquisition, company-wide consolidation, and management’s plans, the Company believes that the current cash on hand and anticipated cash from operations is sufficient to conduct planned operations for one year from the issuance of the consolidated financial statements.

Impact of COVID-19

In March 2020, the World Health Organization categorized the coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and the resulting public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and those of our clients. Businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the clients we service. We continue to believe our focus on our strategic strengths, including talent, our differentiated market strategy and the relevance of our services, including the longevity of our relationships, will continue to assist our Company as we navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic will negatively impact our results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19.

We have taken steps to protect the safety of our employees, with a large majority of our worldwide workforce now working from home, while developing creative ideas to protect the health and well-being of our communities and setting up our people to help them do their best work for our clients while working remotely. With respect to managing costs, we have multiple initiatives underway to align our expenses with changes in revenue. The steps being taken across our agencies and corporate group include deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary deferment for our senior corporate management team. In addition, we remain committed to and have intensified our efforts around cash flow discipline, including the identification of significant capital expenditures that can be deferred, and working capital management. We began to see the effects of COVID-19 on client spending, notably in the UK and US markets with our Mission subsidiaries throughout the second quarter of calendar 2020 with much of the work force of the UK subsidiary on furlough, and with our Troika Design subsidiary furloughed as March progressed. Due to mandatory stay at home orders and social distancing, our experiential business has been particularly impacted by COVID-19. Promotional and experiential events with the Company’s assistance are particularly susceptible to external factors and are being delayed by many of the Company’s Mission clients due to the effects of COVID-19. The Company is in the process of temporarily furloughing employees to reflect current reduced demands associated with those client sets. We expect a greater impact on our second calendar quarter results as clients respond to the current economic conditions by reducing their marketing budgets, which will affect the demand for our services.

We have also taken steps to strengthen our financial position during this period of heightened uncertainty. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide relief as a result of the COVID-19 outbreak. The CARES Act, among other things, includes 1) provisions relating to compensation, benefits and payroll tax relief, 2) the availability of net operating loss carrybacks for periods beginning in 2018 and before 2021 and alternative minimum tax credit refunds, and 3) modifications to the net interest deduction limitations. The Company continues to examine the impacts the CARES Act may have on its business. The governments in which our International subsidiaries are located are offering similar business relief programs and the Company is examining the impacts of these programs on its operations as well.

In the current environment, a major priority for us is preserving liquidity. Our primary liquidity sources are operating cash flow, cash and cash equivalents and short-term investments. Although we expect to experience a decrease in our cash flow from operations as a result of the impact of COVID-19, we have obtained relief under the CARES Act in the form of a Small Business Administration backed loan. In aggregate we received $1.7 million in SBA stimulus “Payroll Protection Program” loans as of April 27, 2020. Of which the majority of these loans were used for payroll. As per the US Government rules these amounts used for payroll, healthcare benefits and some of the loan may be forgiven. We believe these steps will enhance our financial resources as we navigate the period ahead. On August 14, 2020, the Company received an additional $500,000 in loans with 30 year terms under the SBA’s “Economic Injury Disaster Loan” program which the Company which the Company used to address any cash shortfalls that may result from the current pandemic. The Company expects to obtain another $1,700,000 in Payroll Protection Program loans as part of the second stimulus payments in January or February 2021.

In the United Kingdom, as of April 1, 2020, Mission furloughed 27 employees, saving £78,000 in April payroll, being made up of £55,000 of furlough monies from the government and £16,000 in associated payroll savings and applied for a 3-month rent holiday. In May 1, 2020, Mission put on furlough an additional 5 employees bring the total to 32, alongside a 10% pay cut for all employees not furloughed, saving £111,000 in May payroll, being made up of £62,000 of furlough monies from the government, £33,000 of associated payroll savings and £16,000 in savings related to the pay cut. On April 1, 2020, Troika Design Group actioned a 25% salary reduction across the entire Los Angeles staff and furloughed one office manager for a total savings of $112,000 per month. Finally, certain members of the Company’s executive team have deferred compensation temporarily.

The extent to which the COVID-19 outbreak continues to impact the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact. While the Company’s revenue has declined by $16.2M from $40.8M to $24.6M in the fiscal years ending June 30, 2019 and 2020 respectively, the Company is still quantifying how much of this decline in revenue was caused by the pandemic as well as the impact from the departure of Mission’s founder.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of TMG, and its wholly-owned subsidiaries, Troika Design Group, Inc. (California), Troika Services Inc. (New York), Troika Analytics Inc. (New York), Troika Productions, LLC (California), Troika-Mission Holdings, Inc. (New York), Mission Culture LLC (Delaware), Mission-Media Holdings Limited (England and Wales), and Mission Media USA, Inc. (New York). All significant intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting periods.

Significant estimates and assumptions made by management include, among others, the assessment of the collectability of accounts receivable and the determination of the allowance for doubtful accounts, the valuation and useful life of capitalized equipment costs and long-lived assets, valuation of warrants and options, the determination of the useful lives and any potential impairment of long-lived assets such as intangible assets, the valuation of goodwill, stock-based compensation, and deferred tax assets. Actual results could differ from those estimates.

FAIR VALUE MEASUREMENT

Fair value is defined 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 as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as June 30, 2020 and 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued liabilities, and convertible notes payable. Fair values for these items were assumed to approximate carrying values because of their short term nature or they are payable on demand.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the undiscounted value of expected future operating cash flows is used to determine whether the asset is recoverable, and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or discounted future operating cash flows.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalent account balances with financial institutions in the United States and United Kingdom which at times exceed federally insured limits for accounts in the United States. Considering deposits with these institutions can be redeemed on demand, the Company believes there is minimal risk. As of June 30, 2020 and 2019, the Company had $822,000 and $1,241,000 in cash that was uninsured, respectively.

For the fiscal years ending June 30, 2020 and 2019, (6) customers accounted for 45.1% and 44.9% of our net revenues, respectively. As of June 30, 2020, three customers made up 35.6% of the net receivable balance however it was collected subsequent to year-end. As of June 30, 2019, three customers made up 37.6% of the net receivable balance. The Company believes there is minimal risk however it will continue to monitor.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of June 30, 2020 and 2019, the Company had no cash equivalents.

ACCOUNTS RECEIVABLE

Our accounts receivable are amounts due from our clients. The Company accounts for unbilled accounts receivable using the percentage-of-completion accounting method for revenue recognized and the customer has not been invoiced due to the terms of the contract or the timing of the account invoicing cycle.

For those clients to whom we extend credit, we perform periodic evaluations of accounts receivable and maintain allowances for potential credit losses as deemed necessary.

The Company periodically reviews the outstanding accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. When a customer’s account is deemed to be uncollectible the outstanding balance is charged to the allowance for doubtful accounts. As of June 30, 2020 and 2019, the Company had $781,000 and $385,000, in allowance for doubtful accounts, respectively.

PROPERTY AND EQUIPMENT, NET

Property and equipment are stated at cost less accumulated depreciation and amortization. Property and equipment consist of furniture and computer equipment. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, generally ranging from three to seven years. Maintenance and repairs are charged to expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is reflected in the statements of income in the period realized.

GOODWILL AND INTANGIBLE ASSETS

As a result of acquisitions, the Company recorded goodwill and identifiable intangible assets as part of its allocation of the purchase consideration.

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at June 30 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value, then an impairment loss is recognized equal to that excess. A goodwill impairment charge of $1,985,000 and $3,082,000 was recorded as a result of the Company’s annual impairment assessment in fiscal year 2020 and 2019 respectively. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired.

We test our goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is June 30.

None of the goodwill is deductible for income tax purposes.

Intangibles

Intangible assets with finite useful lives consist of tradenames, non-compete agreements, acquired workforce and customer relationships and are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. There was an impairment of intangibles recorded of $1,867,000 and $0 for the year ended June 30, 2020 and 2019, respectively.

REVENUE RECOGNITION

In accordance with the FASB issued amended guidance in the form of ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASC 606”), the Company has modified its revenue recognition policy beginning in fiscal year 2019 using modified retrospective (cumulative effect) transition method. Under this transition method, results for reporting periods beginning July 1, 2018 or later are presented under ASC 606, while prior period results continue to be reported in accordance with previous guidance. The cumulative effect of the initial application of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings. The timing of revenue recognition for our various revenue streams was not materially impacted by the adoption of this standard. Overall, the adoption of ASC 606 did not have a material impact on the Company’s consolidated balance sheet, statement of operations and comprehensive loss and statement of cash flows for the year ended June 30, 2019. ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

The Company recognizes primarily four revenue streams and they are retainer fees, project fees, reimbursement income, and fee income.

Retainer fees are non-refundable fixed amounts being received from a client often on a recurring basis and the performance obligation is the staff being available to provide consultation services. Consulting engagements do not incur a significant amount of direct costs however any costs are recognized as incurred. Consulting fees are recognized evenly throughout the term of the agreement.

Project fees are associated with the delivery of services and/or goods to a client and the revenue includes both the anticipated costs to deliver the product as well as the Company’s margin. As per ASC 606-10-25-31, the Company recognizes project fees over time by measuring the progress toward complete satisfaction of a performance obligation by measuring its performance in transferring control of the services contractually delivered to a client by applying the input method. Revenue is recognized based on the extent of inputs expended toward satisfying a performance obligation and it was determined that the best judge of inputs is the costs consumed by a project in relation to its total anticipated costs. As part of the close process the Company compiles a preliminary percentage of completion (POC) for each project which is the ratio of incurred costs to date in relation to the anticipated costs from the production team’s approved budgets. The POC ratio is then applied to the contracted revenue and the pro-rated revenue is then recognized accordingly.

Reimbursement income represents compensation relating to the out-of-pocket costs associated with a staging of a live event. As per 606-10-25-31, the Company recognizes reimbursement income over time by measuring the progress toward complete satisfaction of a performance obligation by measuring its performance in transferring control of the services contractually delivered to a client by applying the input method. The revenue is recognized based on the extent of inputs expended toward satisfying a performance obligation and it was determined that the best judge of input is the costs incurred to date in relation to the anticipated costs. As a result, unless an overage or saving is identified, the reimbursement income equates to the reimbursement costs incurred. Given that the Company contracts directly with the majority of the vendors and is liable for any overages, the Company is deemed a principal in this revenue transaction as they have control over the asset and transfer the asset themselves. As a result, this transaction is recorded gross rather than net.

Fee income represents the Company’s margin on the staging of a live event, is negotiated with the client prior and fixed. Based on ASC 606, the Company’s progress in satisfying the performance obligation in a contract is difficult to determine so as a result the fee income is only recognized at the conclusion of a project. Only upon confirmation the Company has performed all its contractual obligations as per the contract does the Company record fee income.

Contract Assets

The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s consolidated balance sheet are from contracts with customers.

Contract Costs

Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of June 30, 2020 and 2019.

Contract Liabilities - Deferred Revenue

The Company’s contract liabilities consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized.

ADVERTISING

The Company generally expenses marketing and advertising costs as incurred. During the years ended June 30, 2020 and 2019, the Company incurred $12,000 and $52,000, respectively, on marketing, trade shows and advertising.

The Company received rebates on advertising from co-operative advertising agreements with several vendors and suppliers. These rebates have been recorded as a reduction to the related advertising and marketing expense.

BENEFICIAL CONVERSION FEATURE

The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20, Debt with Conversion and Other Options, Emerging Issues Task Force (“EITF”) 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF 00-27, Application of Issue No 98-5 To Certain Convertible Instruments. The Beneficial Conversion Feature (“BCF”) of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

The BCF of a convertible note is measured by allocating a portion of the note’s proceeds to the warrants, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid-in-capital. The value of the proceeds received from a convertible note is then allocated between the conversion features and warrants on an allocated fair value basis. The allocated fair value is recorded in the financial statements as a debt discount (premium) from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense using interest method.

STOCK-BASED COMPENSATION

The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

For non-employee stock-based compensation, the Company has adopted ASC 2018-07, Improvements to Nonemployee Share-Based Payment Accounting which expands on the scope of ASC 718 to include share-based payment transactions for acquiring services from non-employees and requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or the fair value of the services at the grant date, whichever is more readily determinable in accordance with ASC Topic 718.

FOREIGN CURRENCY TRANSLATION

The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company is U.S. dollars for all entities other than Mission Media Limited whose operations are based in the United Kingdom and their functional currency is British Pound Sterling (GBP). Transactions in currencies other than the functional currencies are recorded using the appropriate exchange rate at the time of the transaction. All assets and liabilities are translated into U.S. Dollars at balance sheet date, stockholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) income. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.

The relevant translation rates are as follows: for the year ended June 30, 2020 closing rate at 1.238900 US$: GBP, yearly average rate at 1.262367 US$: GBP, for the year ended June 30, 2019 closing rate at 1.268980 US$: GBP, yearly average rate at 1.294241 US$: GBP.

INCOME TAXES

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax 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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse.

The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company has net operating losses for both their US and UK entities however a full valuation allowance was recorded due to uncertainties in realizing the deferred tax asset (Note 14 – Income Taxes).

COMPREHENSIVE LOSS

Comprehensive loss is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. For the Company, comprehensive loss for the years ending June 30, 2020 and 2019 included net loss and unrealized gains from foreign currency translation adjustments.

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table provides the numerators and denominators in the basic and diluted earnings per share computations for the years ended June 30. The figures represent the converted common stock equivalent.

	Year Ended June 30,
	2020			2019
Numerator:
Net loss attributable to common stockholders	$	(14,447,000	)	$	(6,861,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		15,211,290			15,211,290
Weighted average common shares issued during the period		212,365			-
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,423,655			15,211,290
Diluted EPS:
Common shares outstanding, beginning of period		15,211,290			15,211,290
Weighted average common shares issued during the period		212,365			-
Preferred Stock Series A, beginning of period		48,000			48,000
Preferred Stock Series B, beginning of period		594,048			594,048
Preferred Stock Series C, beginning of period		12,148,653			11,798,653
Preferred Stock Series D, beginning of period		5,017,333			1,644,000
Stock payable, beginning of period		2,324,000			590,667
Reduction of stock payable due to issuance		(660,000	)		-
Weighted average preferred stock series C purchased during the period		-			271,960
Weighted average preferred stock series D purchased during the period		197,078			2,703,616
Weighted average stock payable issued during the period		-			940,273
Weighted average diluted effect of stock options		2,453,486			2,492,996
Weighted average diluted effect of warrants		6,901,474			5,722,661
Lock-Up Agreements - common stock equivalents		(5,711,111	)		-
Denominator for diluted earnings per common shares		-			-
Weighted average common shares		38,736,615			42,018,163

RECLASSIFICATION OF PRIOR YEAR PRESENTATION

Certain prior year’s amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported consolidated balance sheets and statement of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In February 2016 the FASB issued amended guidance in the form of ASU No. 2016-02, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting for all leases with terms longer than twelve months. Lessees initially recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The right-of-use asset is measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs. Leases will be classified as either finance (formerly “capital leases”) or operating, with classification affecting the pattern of expense recognition in the income statement. The standard provides for a modified retrospective transition approach for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain optional practical expedients. In July 2018, the FASB issued ASU 2018-11, “Leases: Targeted Improvements”, allowing for an alternative transition method (the effective date approach). It allows an entity to initially apply the new lease guidance at the adoption date (rather than at the beginning of the earliest period presented). The Company adopted the new guidance on July 1, 2019 using the optional transitional method and elected to use the package of three practical expedients which allows the Company not to reassess whether contracts are or contain leases, lease classification and whether initial direct costs qualify for capitalization. Upon adoption of the standard, the Company has recognized a $8.3 million right-of-use asset and offsetting lease liability on the balance sheet which resulted in no impact on accumulated deficit. The Company also removed deferred rent of approximately $842,000 when adopting the new guidance.

In July 2017, the FASB issued amended guidance in the form of ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception”. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In February 2018 the FASB issued amended guidance in the form of ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)”, which amends the previous guidance to allow for certain tax effects “stranded” in accumulated other comprehensive income, which are impacted by the Tax Cuts and Jobs Act (the “Tax Reform Act”), to be reclassified from accumulated other comprehensive income into retained earnings. This amendment pertains only to those items impacted by the new tax law and will not apply to any future tax effects stranded in accumulated other comprehensive income. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In June 2018, the FASB issued amended guidance in the form of ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In October 2018, the FASB issued amended guidance in the form of ASU No. 2018-17, “Targeted Improvements to Related Party Guidance for Variable Interest Entities.” This ASU amends the guidance for determining whether a decision-making fee is a variable interest. ASU No. 2018-17 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued amended guidance in the form of ASU No. 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on July 1, 2020 with early adoption permitted. The Company is in the initial stage of evaluating the impact of this new standard on its trade and other receivables.

In December 2019, the FASB issued amended guidance in the form of ASU No. 2019-12, ”Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is in the initial stage of evaluating the impact of this new standard however it does not believe the guidance will have a material impact on our financial statements.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

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PROPERTY AND EQUIPMENT

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

PROPERTY AND EQUIPMENT

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of March 31, 2021 and June 30, 2020:

	March 31, 2021			June 30, 2020
Computer equipment	$	650,000		$	620,000
Website design		6,000			6,000
Office machine & equipment		97,000			89,000
Furniture & fixtures		437,000			429,000
Leasehold improvements		191,000			173,000
Tenant incentives		145,000			145,000
		1,526,000			1,462,000
Accumulated depreciation		(1,253,000	)		(1,118,000	)
Net book value	$	273,000		$	344,000

During the three months ended March 31, 2021 and 2020, depreciation expense was $34,000 and $90,000, respectively. During the nine months ended March 31, 2021 and 2020, depreciation expense was $95,000 and $281,000, respectively.

Property and equipment consist of the following as of June 30:

	2020			2019
Computer equipment	$	620,000		$	566,000
Website design		6,000			6,000
Office machine & equipment		89,000			88,000
Furniture & fixtures		429,000			427,000
Leasehold improvements		173,000			997,000
Tenant incentives		145,000			136,000
		1,462,000			2,220,000
Accumulated depreciation		(1,118,000	)		(1,438,000	)
Net book value	$	344,000		$	782,000

During the years ended June 30, 2020 and 2019, depreciation expense was $344,000 and $480,000, respectively.

In January 2020, the Company terminated the lease agreement for Troika Design’s office at 101 South La Brea in Los Angeles and relocated to a new office space at 1715 N. Gower Street in Los Angeles, CA. As a result of a move, $192,000 in leasehold improvements in net book value associated with the La Brea office space was taken as a loss in the fiscal year ending June 30, 2020. Due to the effective for early termination of operating lease a gain of $356,000 representing the difference between the right of use asset and the lease liability (Note 10 – Leases) resulting in a net gain of $164,000.

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ACQUISITIONS

12 Months Ended

Jun. 30, 2020

ACQUISITIONS

NOTE 2. ACQUISITIONS

MISSION GROUP

On June 29, 2018 (“Closing Date”), the Company executed an equity purchase and goodwill purchase agreement for the acquisition of all the issued and outstanding limited liability membership interests of both Mission Culture LLC, a Delaware limited liability company and Mission-Media Holdings Limited, a private limited company incorporated under the laws of England and Wales (collectively “Mission”). The purchase price consisted of an aggregate cash payment of $25,000,000 and 3,333,334 shares of the Company’s common stock (valued by the Company at $10 million). Mission was founded in 2003 with offices in London and New York. Mission specializes in physical and digital experiences, brand fundamentals, voice and personality, marketing strategy, public relations and crisis management. On the Closing Date, Mission became our wholly owned subsidiary. The Company is accounting for the transaction under the purchase method of accounting in accordance with the provisions of ASC Topic 805 Business Combinations (ASC 805).

PURCHASE PRICE

The cash consideration component consisted of an $11,000,000 payment on the Closing Date, up to $4,000,000 payable subject to contingencies and up to $10,000,000 earn-out consideration.

If Mission’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the twelve months ending December 31, 2018 was equal to or greater than $2,500,000, then the Company was required to make the payment of $4,000,000. In the event the EBITDA for twelve months ending December 31, 2018 was less than $2,500,000, then the Company’s required payment would have been calculated as the product obtained by multiplying (a) $4,000,000, by (b) a fraction, the numerator of which is EBITDA for the twelve months ending December 31, 2018 and the denominator of which is $2,500,000.

In January 2019, the founders of Mission Group were terminated with cause and as a result are no longer eligible to the earn out consideration. Prior to their departure the Company may have had to make certain payments (“Earn-out Payments”) based on the achieved level of EBITDA for Mission for each of the years ending December 31, 2019, 2020, 2021, 2022 and 2023 (“Earn-out Periods”). The aggregate contingent Earn-out Payments were not to exceed $10,000,000. An Earn-out Payment for each Earn-out Period was required if and only if Mission achieves the EBITDA thresholds of $3,000,000 for the year ended December 31, 2019, $3,500,000 for the year ending December 31, 2020 and $4,000,000 for the remaining Earn-out Periods and neither of the Stephensons were terminated for cause. The Earn-out Payments for each Earn-out Period would have been calculated by multiplying the Earn-out Period’s EBITDA by 50%.

Assessed at the date of the acquisition and reported in the financials for the year ending June 30, 2018, the Earn-out consideration recorded was $7,571,000. In the fiscal year ending June 30, 2019, this balance was reversed and is reported as other income in the income statement. For further information, please see the Litigation section of Note 16 -Subsequent Events.

The Company has estimated the fair value at the consideration due; subject to the contingent payments, as follows:

Cash paid at Closing	$	11,000,000
Fair value of common stock issued at Closing		12,500,000
Estimated value of earn out payments		3,377,000
Estimated value of earn-out consideration		4,194,000
Total purchase price	$	31,071,000

The fair value of the 3,333,334 shares was estimated to be approximately $12,500,000 based on the fair value of the Company’s common stock on the Closing Date of $3.75.

The Closing date fair value of the contingent cash consideration was estimated to be approximately $3,377,000 based on using an income approach, more specifically a Monte Carlo simulation was performed. The Closing date fair value of the earn-out consideration was estimated to be approximately $4,194,000 based on using an income approach, more specifically a Monte Carlo simulation was performed.

PURCHASE PRICE ALLOCATION

The Company negotiated the purchase price based on the expected cash flows to be derived from their operations after integration into the Company’s existing distribution, production and service networks. The acquisition purchase price is allocated based on the fair values of the assets acquired and liabilities assumed, which are based on management estimates and third-party appraisals. The following table summarizes the allocation of the purchase price of the assets acquired and liabilities assumed related to the acquisition:

Current assets		$	5,800,000
Furniture and equipment			362,000
Director loan			835,000
Intangible assets:
Customer relationships	7,100,000
Non-compete agreements	2,200,000
Workforce acquired	1,900,000		11,200,000
Goodwill			19,531,000
Current liabilities			(6,557,000	)
Foreign currency translation adjustment			(100,000	)
Consideration		$	31,071,000

INTANGIBLE ASSETS

Intangible assets consist of customer relationships, non-compete agreements and workforce acquired. The estimated lives of each component are as follows:

Intangible Asset	Life in Years
Customer relationships		3
Non-compete agreements		5
Workforce acquired		3

The estimated fair values of the identifiable intangible assets, which include customer relationships, non-compete agreements, and workforce were primarily determined using either the relief-from-royalty or excess earnings methods. The rates utilized to discount net cash flows to their present values was 17% and was determined after consideration of the overall enterprise rate of return and the relative risk and importance of the assets to the generation of future cash flows. The estimated fair values of the studio relationships and content library were determined under the cost method.

Customer relationships, non-compete agreements and workforce will be amortized on a straight-line basis over their estimated useful lives.

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INTANGIBLE ASSETS

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

INTANGIBLE ASSETS

NOTE 3 - INTANGIBLE ASSETS

Intangible assets consisted of the following as of March 31, 2021 and June 30, 2020:

	March 31, 2021			June 30, 2020
Customer relationship	$	4,960,000		$	8,510,000
Non-core customer relationships		760,000			760,000
Non-compete agreements		1,430,000			2,200,000
Tradename		410,000			410,000
Workforce acquired		2,125,000			2,790,000
		9,685,000			14,670,000
Less: impairment expense		-			(1,867,000	)
Less: accumulated amortization		(7,113,000	)		(8,612,000	)
Net book value	$	2,572,000		$	4,191,000

Purchased intangible assets with finite useful lives are amortized over their respective estimated useful lives (using an accelerated method for customer relationships and trade names) to their estimated residual values, if any. The Company’s finite-lived intangible assets consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over periods ranging from two to nine years. Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the rate of amortization is accelerated and the remaining carrying value is amortized over the new shorter useful life. For the three and nine months ended March 31, 2021, the Company had no impairments. During the fiscal year ending June 30, 2020, the Company recorded $1,867,000 in impairment expense related to intangibles.

During the three months ended March 31, 2021 and 2020, amortization expense was $540,000 and $1,003,000, respectively. During the nine months ended March 31, 2021 and 2020, amortization expense was $1,619,000 and $3,010,000, respectively.

Intangible assets consisted of the following as of June 30:

	2020			2019
Customer relationship	$	8,510,000		$	8,510,000
Non-core customer relationships		760,000			760,000
Non-compete agreements		2,200,000			2,200,000
Tradename		410,000			410,000
Workforce acquired		2,790,000			2,790,000
		14,670,000			14,670,000
Less: impairment expense		(1,867,000	)		-
Less: accumulated amortization		(8,612,000	)		(4,610,000	)
Net book value	$	4,191,000		$	10,060,000

Purchased intangible assets with finite useful lives are amortized over their respective estimated useful lives (using an accelerated method for customer relationships and trade names) to their estimated residual values, if any. The Company’s finite-lived intangible assets consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over periods ranging from two to nine years. Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the rate of amortization is accelerated and the remaining carrying value is amortized over the new shorter useful life. For the fiscal years ending June 30, 2020 and 2019, the Company recorded $1,867,000 and $0 in impairment expense related to intangibles respectively.

During the years ended June 30, 2020 and 2019 amortization expense was $4,002,000 and $4,013,000, respectively.

Future amortization expense is as follow for the years ending June 30,
2021		2,158,000
2022		563,000
2023		563,000
2024		277,000
2025		273,000
Thereafter		357,000
	$	4,191,000

A goodwill impairment charge of $1,985,000 and $3,082,000 was recorded as a result of the Company’s annual impairment assessment in fiscal year 2020 and 2019 respectively. The impairment of $1,985,000 in the fiscal year ending June 30, 2020 relates to both the Mission US and Mission UK entities and is the result of lower than anticipated revenue due to the departure of Nicola Stephenson in January 2019. This impairment was lessened as a result of measures taken by the Company including additional investments in new business development and reduction in operating costs. Goodwill will be reassessed during our next annual measurement date of June 30, 2021. Notwithstanding the foregoing, the Company has asserted economic damages and loss of goodwill in the Stephensons litigation greatly in excess of the amount allowed by GAAP as detailed and calculated by the Company's damages expert retained in the litigation (Note 12 – Legal Contingencies).

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ACCOUNTS PAYABLE ACCRUED EXPENSES

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

ACCOUNTS PAYABLE ACCRUED EXPENSES

NOTE 4 - ACCOUNTS PAYABLE & ACCRUED EXPENSES

As of March 31, 2021 and June 30, 2020, the Company recorded $10,525,000 and $8,137,000 in accounts payable and accrued expenses respectively. Both accounts payable and accrued expenses are treated as current liabilities however the difference is that a formal invoice has been received and entered to record an accounts payable transaction.

	March 31, 2021		June 30, 2020
Accounts payable	$	2,774,000	$	3,578,000
Accrued expenses		6,116,000		3,750,000
Accrued payroll		822,000		482,000
Accrued taxes		841,000		327,000
	$	10,553,000	$	8,137,000

As of June 30, 2020 and 2019, the Company recorded $8,137,000 and $8,362,000 in accounts payable and accrued expenses respectively. Both accounts payable and accrued expenses are treated as current liabilities however the difference is that a formal invoice has been received and entered to record an accounts payable.

	As of June 30,
	2020		2019
Accounts payable	$	3,578,000	$	4,461,000
Accrued expenses		3,750,000		3,291,000
Accrued payroll		482,000		370,000
Accrued taxes		327,000		240,000
	$	8,137,000	$	8,362,000

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CONVERTIBLE NOTES PAYABLE

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

CONVERTIBLE NOTES PAYABLE

NOTE 5 - CONVERTIBLE NOTES PAYABLE

During the fiscal year ending June 30, 2020, the Company issued a convertible promissory note of $200,000 to a lender with an interest rate of 10.0%, a loan fee of $10,000, and the balance was convertible into shares of the Company’s common stock at a rate of $3.75 per share. The balance was recorded as a current liability as payment was due on the earlier of February 28, 2020 or listing to a US national securities exchange which was anticipated within the next twelve months. In consideration for the loan, the lender received warrants for 13,333 shares of common stock at an exercise price of $3.75 per share vesting over three years. In July 7, 2020, the note holder elected to convert the entire balance.

During the fiscal year ending June 30, 2020, the Company issued a convertible promissory note of $200,000 to a lender with an interest rate of 10.0%, a loan fee of $10,000, and the balance was convertible into shares of the Company’s common stock at a rate of $3.75 per share. The balance was recorded as a current liability as payment was due on the earlier of March 7, 2020 or listing on a US national securities exchange which was anticipated within the next twelve months. In consideration for the loan, the lender received warrants for 66,667 shares of common stock at an exercise price of $3.75 per share vesting over five years. In July 7, 2020, the note holder elected to convert the entire balance.

During the fiscal year ending June 30, 2020, the Company issued a convertible promissory note of $1,000,000 to a lender with an interest rate of 10.0%, a loan fee of $120,000, and the balance was convertible into shares of the Company’s common stock at a rate of $1.50 per share. The balance was recorded as a current liability as payment was due on the earlier of April 15, 2020 or listing on a US national securities exchange which was anticipated within the next twelve months. In consideration for the loan, the lender received securities warrants for 13,334 shares of common stock at an exercise price of $0.75 per share vesting over three years and warrants for 66,667 shares of common stock at an exercise price of $1.50 per share vesting over three years. The note also includes a loan conversion option which entitled the lender upon conversion to additional warrants for 26,667 shares of common stock at an exercise price of $0.75 per share. In July 2020, the note holder elected to convert the entire balance. The additional warrants for 26,667 shares of common stock at an exercise price of $0.75 per share due upon conversion shall vest over three years and have been recorded though have not been issued.

In August 2020, the Company issued a convertible promissory note of $100,000 to a lender with an interest rate of 10.0%. If the loan was not paid by its maturity date which was the earlier of November 30, 2020 or five business days after the Company is listed on a national securities exchange, the principal due shall incur prospective interest of 20%. Upon mutual agreement, the balance including accrued interest is convertible into shares of the Company’s common stock at its then current market price less a 25% discount. A discount was recorded of $49,000 due to the conversion price being less than the market value and $21,000 of the discount was amortized during the three and nine months ended March 31, 2021. The balance was recorded as a current liability and interest expense of $2,000 was recorded for the three months ended March 31, 2021. The Company determined that the note’s conversion feature should be valued separately and bifurcated from the host instrument and accounted for as a separate derivative lability. The fair market value of the embedded conversion feature was determined to be $49,000 using the Black-Scholes model as of March 31, 2021 and a derivative liability was recorded as a short-term liability. The assumptions used in the Black-Scholes valuation include a volatility of 66.48%, risk-free rate of 0.10% and term of one year.

In September 2020, the Company issued a convertible promissory note of $50,000 to a lender with an interest rate of 10.0%. If the loan is not paid by its maturity date which was the earlier of November 30, 2020 or five business days after the Company is listed on a national securities exchange, the principal due shall incur prospective interest of 20%. Upon mutual agreement, the balance including accrued interest is convertible into shares of the Company’s common stock at its then current offering price less a 25% discount. A discount was recorded of $24,000 due to the conversion price being less than the market value and $12,000 of that discount was amortized during the three months ended March 31, 2021. The balance was recorded as a current liability and interest expense of $1,000 was recorded for the three months ended March 31, 2021. The Company determined that the note’s conversion feature should be valued separately and bifurcated from the host instrument and accounted for as a separate derivative lability. The fair market value of the embedded conversion feature was determined to be $25,000 using the Black-Scholes model as of March 31, 2021 and a derivative liability was recorded as a short-term liability. The assumptions used in the Black-Scholes valuation include a volatility of 66.48%, risk-free rate of 0.10% and term of one year.

In October 2020 and December 2020, the Company received gross proceeds of $247,500 and $52,500, respectively, for a total of $300,000 representing a convertible note payable issued to an existing investor. Terms include a maturity date of December 7, 2020, interest rate of 10% if the loan was not paid in full by the maturity date, and the outstanding balance can be converted to common stock at a conversion price of $3.00 per share of common stock if mutually agreed. In consideration for the loan, 26,667 warrants were issued at an exercise price of $1.95 per share vesting over three years and the issuance of 106,667 shares of restricted shares of common stock. A total discount of $300,000 was recorded due to the conversion price being less than the market value, which resulting a discount of $117,000, the discount value of $26,000 attributed to the 26,667 warrants, and the discount value of $156,000 attributed to the restricted shares of common stock. $300,000 of that discount was amortized during the nine months ended March 31, 2021. The balance was recorded as a current liability and interest expense of $7,000 was recorded for the three months ended March 31, 2021. In January 2021, it was mutually agreed to extend the maturity date to October 6, 2021.

In October 2020, the Company received gross proceeds of $50,000 representing a convertible note payable issued to an existing investor. Terms include an interest rate of 10% and a maturity date the earlier of January 1, 2021 or five business days after the Company is listed on a US national securities exchange. Upon mutual agreement, the outstanding balance can be converted to common stock at a conversion price 25% less the current offering price. In consideration for the loan, 6,667 warrants were issued at an exercise price of $2.25 per share vesting over three years. A total discount of $37,000 was recorded due to the conversion price being less than the market value, which resulted in a discount of $25,000 and the discount value of $12,000 attributed to the 6,667 warrants. $37,000 of that discount was amortized during the nine months ended March 31, 2021. The Company determined that the note’s conversion feature should be valued separately and bifurcated from the host instrument and accounted for as a separate derivative lability. The fair market value of the embedded conversion feature was determined to be $25,000 using the Black-Scholes model as of March 31, 2021, a derivative liability was recorded as a short-term liability, and interest expense of $1,000 was recorded for the three months ended March 31, 2021. The assumptions used in the Black-Scholes valuation include a volatility of 66.48%, risk-free rate of 0.10% and a term of one.

As of March 31, 2021 and June 30, 2020, there was a total $535,000 and $1,435,000 in notes payable outstanding. The Company recorded $12,000 and $54,000 in interest expense relating to convertible note payables during the three and nine months ended March 31, 2021, respectively. The Company recorded $7,000 and $7,000 in interest expense relating to convertible note payables during the three and nine months ended March 31, 2020, respectively. The Company recorded $409,000 and $0 in amortization expense relating to the note payable discount during the nine months ended March 31, 2021 and 2020, respectively.

During the year ending June 30, 2020, the Company issued a convertible promissory note of $200,000 to a borrower with an interest rate of 10.0%, a loan fee of $10,000, and the balance was convertible into shares of the Company’s common stock at a rate of $3.75 per share. The balance was recorded as a current liability as payment was due on the earlier of February 28, 2020 or listing to a US national exchange which is anticipated within the next twelve months. In consideration for the loan, the borrower received warrants for 13,333 shares of common stock at an exercise price of $3.75 per share vesting over three years. Using the Black-Scholes model, the warrants were valued at $25,000 and were recorded as interest expense. Interest expense of $9,000 representing the contractual interest rate was accrued on June 30, 2020. As noted in Note 16 – Subsequent Events, the note holder elected to convert in July 2020.

The convertible note payable contains a beneficial conversation feature because the convertible portion or feature of the convertible note payable provides a rate of conversion that is below market value and therefore is “in-the-money” when issued. The Company has recorded the beneficial conversation feature to the issuance of the convertible note payable when issued and also recorded the estimated fair value of the detachable Warrant issued with the convertible note payable.

The beneficial conversation feature of the convertible note payable was measured by allocating a portion of the convertible note payable’s proceeds to the detachable Warrant (utilizing Black-Scholes methodology), and as a reduction of the carrying amount of the convertible note payable equal to the intrinsic value of the conversion feature, both of which were credited to additional paid-in-capital as of the issuance date. The value of the proceeds received from the convertible note payable was then allocated between the conversion features and Warrant on an allocated fair value basis. The allocated value of the beneficial conversation feature and Warrant exceeded the proceeds received from issuance of the convertible note payable which was recorded as a discount from the face amount of the convertible note payable. The discount is amortized over the term of the convertible note payable under the interest method and is charged to interest expense.

Following is an analysis of the aforementioned convertible note payable as of the fiscal year ending June 30, 2020:

Amount allocated to detachable warrants	$	25,000
Amount allocated to beneficial conversion feature		19,000
Amount allocated to convertible note		156,000
Par value of convertible note payable		200,000
Unamortization of debt discount		-
Balance of convertible note payable	$	200,000

During the year ending June 30, 2020, the Company issued a convertible promissory note of $200,000 to a borrower with an interest rate of 10.0%, a loan fee of $10,000, and the balance was convertible into shares of the Company’s common stock at a rate of $3.75 per share. The balance was recorded as a current liability as payment was due on the earlier of March 7, 2020 or listing to a US national exchange which is anticipated within the next twelve months. In consideration for the loan, the borrower received warrants for 66,667 shares of common stock at an exercise price of $3.75 per share vesting over five years. Interest expense of $8,000 representing the contractual interest rate was accrued on June 30, 2020. Using the Black-Scholes model, the warrants were valued at $22,000 and were recorded as interest expense. As noted in Note 16 – Subsequent Events, the note holder elected to convert in July 2020.

Following is an analysis of the aforementioned convertible note payable as of the fiscal year ending June 30, 2020:

Amount allocated to detachable warrants	$	22,000
Amount allocated to beneficial conversion feature		26,000
Amount allocated to convertible note		152,000
Par value of convertible note payable		200,000
Unamortization of debt discount		-
Balance of convertible note payable	$	200,000

During the year ending June 30, 2020, the Company issued a convertible promissory note of $1,000,000 to a borrower with an interest rate of 10.0%, a loan fee of $120,000, and the balance was convertible into shares of the Company’s common stock at a rate of $3.00 per share. The balance was recorded as a current liability as payment was due on the earlier of April 15, 2020 or listing to a US national exchange which is anticipated within the next twelve months. In consideration for the loan, the borrower received warrants for 200,000 shares of common stock at an exercise price of $0.75 per share vesting over three years and warrants for 66,667 shares of common stock at an exercise price of $3.00 per share vesting over three years. The note also includes a loan conversion option which entitles the lender upon conversion to additional warrants for 333,334 shares of common stock at an exercise price of $0.75 per share. In April 2020, it was mutually agreed to extend the maturity date to July 15, 2020 and in consideration the lender would receive upon conversion additional warrants of 66,666 shares of common stock (representing a total of 400,000 shares of common stock) at an exercise price of $0.75 per share. Interest expense of $34,000 was accrued as of June 30, 2020. As noted in Note 16 – Subsequent Events, the note holder and Company agreed to a conversion in July 2020.

Following is an analysis of the aforementioned convertible note payable as of the fiscal year ending June 30, 2020:

Amount allocated to detachable warrants	$	437,000
Amount allocated to beneficial conversion feature		563,000
Amount allocated to convertible note		-
Par value of convertible note payable		1,000,000
Unamortization of discount		-
Balance of convertible note payable	$	1,000,000

During year ended June 30, 2020 and 2019, the Company paid $0 and $55,000 towards the principal of the Promissory Notes, respectively.

As of June 30, 2020 and 2019, there was a total of $1,435,000 and $35,000 in notes payable outstanding. The Company recorded interest expense on convertible notes payable of $51,000 and $2,000 during the years ended June 30, 2020 and 2019, respectively. The Company recorded $1,000 and $2,000 in imputed interest during the years ended June 30, 2020 and 2019, respectively.

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NOTE PAYABLE RELATED PARTY

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

NOTE PAYABLE RELATED PARTY

NOTE 6 - NOTE PAYABLE RELATED PARTY

As of March 31, 2021 and 2020, the Company owed the founder and CEO of Troika Design Group, Inc., Dan Pappalardo, approximately $200,000 and the estate of his mother Sally Pappalardo $235,000. Repayment of the loans were contractually due to begin on July 1, 2019 and accrue interest at 10.0% per annum. Interest expense of $10,000 and $10,000 were recorded for these notes for the three months ending March 31, 2021 and 2020, respectively. Interest expense of $30,000 and $30,000 were recorded for these notes for the nine months ended March 31, 2021 and 2020, respectively.

During the year ended June 30, 2020, the Company issued a convertible promissory note of $1,300,000 to a related party with an interest rate of 5.0% and convertible into shares of the Company’s common stock at a rate of $0.75 per share. The holder elected to convert the debt into shares of the Company’s common stock in July 2019 at a rate of $0.75 per share for 1,733,334 shares. This balance was recorded as stock payable on June 30, 2020 as the shares were not issued until July 2020.

On January 27, 2019, Daniel Jankowski and Tom Ochocki (collectively as the “Lenders”) entered into a facility agreement with Mission Media Limited (“MML”) in order to provide certain funds allowing MML to exit administration in the United Kingdom. Mr. Ochocki, as primary lender, provided MML £1,594,211 ($2,198,000) which was received in January 2019. The same agreement allows the Company to draw upon Mr. Jankowski in upwards of £992,895 ($1,369,000) however the funds were not needed. Mr. Ochocki was a member of the Board of the Company and subsequent to the loan, Mr. Jankowski was appointed to the Board. Both Lenders were appointed to the Board of Mission Media Holdings Limited. The loan has a repayment date of January 2022 and an interest rate of 0%. Imputed interest for $22,000 and $35,000 were recorded for this facility agreement for the nine months ending March 31, 2021 and 2020, respectively. The Company paid the balance due of the note in April 2021.

Below is a breakout showing the short term and long-term potions of notes payable related party as of March 31, 2021 and June 30, 2020:

	March 31, 2021		June 30, 2020
Short term portion
Dan Pappalardo	$	217,000	$	217,000
Estate of Sally Pappalardo		235,000		235,000
		452,000		452,000
Long term portion
Tom Ochocki		2,198,000		1,975,000
	$	2,198,000	$	1,975,000

As of June 30, 2020 and 2019, the Company owed the founder and CEO of Troika Design Group, Inc. Dan Pappalardo approximately $217,000 and the estate of his mother Sally Pappalardo $235,000. The loans are due and payable on demand and accrue interest at 10.0% per annum.

During the year ended June 30, 2019, the Company issued a convertible promissory note of $1,300,000 to a related party with an interest rate of 5.0% and convertible into shares of the Company’s common stock at a rate of $0.75 per share. The holder elected to convert the promissory note in June 2019 resulting in $29,000 in accrued interest expense which was paid subsequent in the fiscal year ending June 30, 2020.

On January 27, 2019, Daniel Jankowski and Thomas Ochocki (collectively the “Lenders”) entered into a facility agreement with Mission Media Limited (“MML”) in order to provide certain funds allowing MML to exit administration in the United Kingdom. Mr. Ochocki, as primary lender, provided MML £1,594,211 ($2,023,022) which was received in January 2019. The same agreement allows the Company to draw upon Mr. Jankowski in upwards of £992,895 ($1,259,964) however the funds were not needed. Mr. Ochocki was a member of the Board of the Company and subsequent to the loan, Mr. Jankowski was appointed to the Board. Both Lenders were appointed to the Board of Mission Media Holdings Limited. The loan has a repayment date of January 2022 and an interest rate of 0%. Imputed interest of $40,000 and $22,000 were recorded for this facility agreement in the fiscal years ending June 30, 2020 and 2019, respectively.

Total interest expense on note payable related party was $42,000 and $117,000 during the years ended June 30, 2020 and 2019.

Below is a breakout showing the short term and long-term potions of note payable related party as of June 30:

	As of June 30,
	2020		2019
Short term portion
Dan Pappalardo	$	217,000	$	95,000
Estate of Sally Pappalardo		235,000		112,000
	$	452,000	$	207,000
Long term portion
Dan Pappalardo	$	-	$	105,000
Estate of Sally Pappalardo		-		123,000
Thomas Ochocki		1,975,000		2,023,000
	$	1,975,000	$	2,251,000

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CONTRACT LIABILITIES

12 Months Ended

Jun. 30, 2020

CONTRACT LIABILITIES

NOTE 8. CONTRACT LIABILITIES

Contract liabilities are billings at the end of the period that relate to goods or services that have not been delivered and thus were deferred to be recognized in subsequent periods. As per the new accounting standard “Revenue from Contracts with Customers” (“ASC 606”) which was implemented in fiscal year 2019, the Company accounts for revenue based on the input-method of this standard and recognizes the pro-rated revenue based on the ratio of costs incurred to total anticipated costs. If the Company does not have sufficient proof that the goods or services are transferred to customers, the Company defers the revenue until the date of the event and upon receipt of customer acceptance that all the performance obligations in the contract have been satisfied.

A summary of the contract liabilities recognized in the fiscal year ending June 30, 2020 are presented below:

Contract liabilities at June 30, 2019	$	3,516,000
Contract liabilities recorded June 30, 2019 and recognized fiscal year 2020		(3,516,000	)
Contract liabilities acquired in fiscal year ending June 30, 2020		3,327,000
Contract liabilities at June 30, 2020	$	3,327,000

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DEFERRED RENT

12 Months Ended

Jun. 30, 2020

DEFERRED RENT

NOTE 9 - DEFERRED RENT

Prior to the adoption of ASU No. 2016-02, the Company recorded rent on a straight-line basis in the fiscal year ending June 30, 2019. Differences between monthly rent expenses and rent payments were recorded as deferred rent. Deferred rent was recorded in either an asset account when the cumulative difference between rent expenses and rent payments as of a balance sheet date is negative or a liability account when the cumulative difference was positive. Due to our escalating rents, the Company recorded a deferred rent liability for the fiscal year ending June 30, 2019.

The breakout of deferred rent between short term and long-term portions for each location for as of June 30, 2019 is the following:

		Deferred Rent
Entity	Location	Short Term		Long Term
Troika Design	Los Angeles, CA	$	289,000	$	293,000
Mission US	Brooklyn, NY		34,000		226,000
		$	323,000	$	519,000

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LEASE LIABILITIES

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

LEASE LIABILITIES

NOTE 7 - LEASE LIABILITIES

The Company leases office space and as a result of our adoption of ASC 842, the operating leases are reflected on our balance sheet within operating lease right-of-use (ROU) assets and the related current and non-current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from lease agreement. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred.

When the new accounting standard was adopted on July 1, 2019, the Company had current and long-term operating lease liabilities of $2,275,000 and $6,916,000, respectively, and right of use of assets of $8,348,000. As of June 30, 2020, the Company had current and long-term operating lease liabilities of $2,255,000 and $7,003,000, respectively, and right of use of assets of $8,297,000. As of March 31, 2021, the Company had current and long-term operating lease liabilities of $2,922,000 and $6,327,000, respectively, and right of use of assets of $7,404,000.

Future minimum lease payments on a discounted and undiscounted basis under these leases are as follows:

	Troika Gower			Troika LaBrea			Corporate Englewood			Mission US Brooklyn			Mission US Manhattan			Mission UK London			Undiscounted Cash Flows
Discount rate		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%
2021		310,000			838,000			14,000			602,000			93,000			166,000			2,023,000
2022		536,000			-			55,000			460,000			-			677,000			1,728,000
2023		558,000			-			19,000			497,000			-			677,000			1,751,000
2024		580,000			-			-			509,000			-			677,000			1,766,000
2025		346,000			-			-			522,000			-			677,000			1,545,000
2026		-			-			-			535,000			-			564,000			1,099,000
2027		-			-			-			455,000			-			-			455,000
Total undiscounted minimum future payments		2,330,000			838,000			88,000			3,580,000			93,000			3,438,000			10,367,000
Imputed interest		(185,000	)		-			(4,000	)		(392,000	)		(93,000	)		(444,000	)		(1,118,000	)
Total operating lease liabilities	$	2,145,000		$	838,000		$	84,000		$	3,188,000		$	-		$	2,994,000		$	9,249,000
Short-term lease liabilities	$	610,000		$	838,000		$	52,000		$	899,000		$	-		$	523,000		$	2,922,000
Long-term lease liabilities	$	1,535,000		$	-		$	32,000		$	2,289,000		$	-		$	2,471,000		$	6,327,000

Other information related to our operating leases is as follows:

	March 31, 2021
Weighted average remaining lease term in years	3.4 years
Weighted average discount rate		10.8	%

LEASE AGREEMENTS

On February 8, 2013, our Troika Design Group, Inc. subsidiary entered into a lease agreement for office space in Los Angeles, CA. The lease commenced upon move in, December 15, 2013. As part of the lease agreement, Troika received a rent abatement in months two through six of the lease and partial rent abatement in months seven through nine. The lease also provides for an escalation clause where the Company will be subject to an annual rent increase of 3%, year over year. Initially the lease expired on May 31, 2021, however the Company surrendered the premises in January 2020.

On February 1, 2018, Troika Media Group entered into a five-year lease agreement for office space in Englewood Cliffs, NJ. The beginning lease expense was $4,120 per month escalating annually at 3.5%. The lease expires on January 31, 2023.

On January 9, 2014, Mission USA entered into a seven year and five-month lease agreement for office space in New York, NY. The beginning lease expense was $19,230 per month escalating annually at 2.5%. As part of the lease agreement, Mission USA received a rent abatement in months one through five of the lease. The lease expired on May 8, 2021.

On May 2, 2017, Mission USA entered into a ten-year lease agreement for office space in Brooklyn, NY. The beginning lease expense was $34,278 per month escalating annually at 2.5%. As part of the lease agreement, Mission USA received a rent abatement in months one through four of the lease. The lease expires on May 1, 2027.

On April 6, 2016, Mission UK entered into a ten-year lease agreement for office space in London, UK. The beginning lease expense was £17,365 ($22,432) per month for the first twelve months and then escalated to £40,916 ($52,855) per month for the remainder of the lease which expires April 5, 2026. As part of the lease agreement, Mission UK received a rent abatement in months sixty-one through sixty-six of the lease. On September 8, 2020, Mission UK entered into an amendment to the current lease providing a discount for the period between March 25, 2020 and September 28, 2020 in acceptance of an increase in the monthly payments from £40,916 to £46,766 for the months of October 2020 through April 2021. In April 2021, Mission UK terminated the original lease agreement and has agreed with the landlord to occupy the first floor of the building through June 2021 at £8,858 per month. In April 2021, Mission UK entered into a three-year lease agreement for office space in London, UK ending in April 2024. The lease expense is £39,173 ($54,016) per month throughout the life of the lease.

On February 1, 2020, Troika Production Group entered into a five-year lease agreement for office space in Los Angeles, CA. The beginning lease expense is $42,265 and the lease provides for an escalation clause where the Company will be subject to an annual rent increase of 3.5%, year over year. The lease expires on January 31, 2025.

The Company accounts for leases based on the new accounting standard ASC 842 and recorded $537,000 and $773,000 in rent expense for the three months ended March 31, 2021 and 2020, respectively. The Company recorded $1,283,000 and $1,439,000 in rent expense for the nine months ended March 31, 2021 and 2020, respectively.

SUBLEASE AGREEMENTS

On January 19, 2018, Mission Media USA, Inc. entered into a four-year sublease agreement pertaining to the aforementioned office space in New York, NY. The sublease commenced on March 1, 2018 and lease income was $22,496 per month escalating annually at 3.0%.

On April 6, 2019, Mission-Media Limited entered into a sublease agreement pertaining to a floor within the aforementioned office space in London, UK. The sublease commenced in April 2019 and the lease income is £3,000 per month and could be terminated by either party with 30 days written notice.

On April 19, 2018, Mission-Media Limited entered into a sublease agreement pertaining to a floor within the aforementioned office space in London, UK. The sublease commenced in April 2018 and terminated in March 2021. The lease income was £5,163 per month.

The Company leases office space and as a result of adoption of ASC 842 in fiscal year ending June 30, 2020, the operating leases are reflected on balance sheet within operating lease right-of-use (ROU) assets and the related current and non-current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from lease agreement. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred.

The ROU asset and related lease liabilities recorded under ASC 842 are calculated based on the present value of the lease payments using (1) the rate implicit in the lease or (2) the lessee’s IBR, defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a comparable economic environment. Because our leases do not provide an implicit rate and the Company does not have prior borrowings over similar terms, the Company applied an IBR of 5.5% which is current loan rate of a SBA 7(a) loan.

When the new accounting standard was adopted on July 1, 2019, the Company had current and long-term operating lease liabilities of $2,275,000 and $6,916,000, respectively, and right of use of assets of $8,348,000. As of June 30, 2020, the Company had current and long-term operating lease liabilities of $2,255,000 and $7,003,000, respectively, and right of use of assets of $8,297,000. For the fiscal year ending June 30, 2020, the Company paid $1,382,000 in cash payments relating to its lease commitments.

Following are the future minimum lease payments on a discounted and undiscounted basis under these leases for each year and in total as of June 30, 2020:

	Troika Gower			Troika LaBrea			Corporate Englewood			Mission US Brooklyn			Mission US Manhattan			Mission UK London			Undiscounted Cash Flows
Discount rate		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%
2021	$	605,000		$	733,000		$	54,000		$	557,000		$	251,000			484,000		$	2,684,000
2022		536,000			-			55,000			460,000			-			608,000			1,659,000
2023		558,000			-			19,000			497,000			-			608,000			1,682,000
2024		580,000			-			-			509,000			-			608,000			1,697,000
2025		346,000			-			-			522,000			-			608,000			1,476,000
2026		-			-			-			535,000			-			507,000			1,042,000
2027		-			-			-			455,000			-			-			455,000
Total undiscounted minimum future payments		2,625,000			733,000			128,000			3,535,000			251,000			3,423,000			10,695,000
Imputed interest		(307,000	)		-			(9,000	)		(597,000	)		(7,000	)		(517,000	)		(1,437,000	)
Total operating lease liabilities	$	2,318,000		$	733,000		$	119,000		$	2,938,000		$	244,000		$	2,906,000		$	9,258,000
Short-term lease liabilities	$	492,000		$	733,000		$	48,000		$	409,000		$	244,000		$	329,000		$	2,255,000
Long-term lease liabilities	$	1,826,000		$	-		$	71,000		$	2,529,000		$	-		$	2,577,000		$	7,003,000

Other information related to our operating leases is as follows:

	Year Ended June 30, 2020
Weighted average remaining lease term in years	3.9 years
Weighted average discount rate		13.4	%

LEASE AGREEMENTS

On February 8, 2013, our Troika Design Group, Inc. subsidiary entered into a lease agreement for office space in Los Angeles, CA. The lease commenced upon move in, December 15, 2013. As part of the lease agreement, Troika received a rent abatement in months two through six of the lease and partial rent abatement in months seven through nine. The lease also provides for an escalation clause where the Company will be subject to an annual rent increase of 3%, year over year. Initially the lease expired on May 31, 2021, however the Company surrendered the premises in January 2020. The Company recorded a gain from the termination of this lease of $356,000 representing the difference between the right of use asset of $1,030,000 and the lease liability of $1,386,000 at the date of termination. This was offset by a loss of $192,000 representing the release of net book value of leasehold improvements (Note 3 – Property and Equipment) resulting in a net gain of $164,000.

On February 1, 2018, Troika Media Group entered into a five-year lease agreement for office space in Englewood Cliffs, NJ. The beginning lease expense was $45,275 per month escalating annually at 3.5%. The lease expires on January 31, 2023.

On January 9, 2014, Mission USA entered into a seven year and five-month lease agreement for office space in New York, NY. The beginning lease expense was $19,230 per month escalating annually at 2.5%. As part of the lease agreement, Mission USA received a rent abatement in months one through five of the lease. The lease expires on May 8, 2021.

On May 2, 2017, Mission USA entered into a ten-year lease agreement for office space in Brooklyn, NY. The beginning lease expense was $34,278 per month escalating annually at 2.5%. As part of the lease agreement, Mission USA received a rent abatement in months one through four of the lease. The lease expires on May 1, 2027.

On April 6, 2016, Mission UK entered into a ten-year lease agreement for office space in London, UK. The beginning lease expense was £22,837 ($29,557) per month for the first twelve months and then escalated to £53,807 ($69,639) per month for the remainder of the lease which expires April 5, 2026. As part of the lease agreement, Mission UK received a rent abatement in months sixty-one through sixty-six of the lease.

On February 1, 2020, Troika Production Group entered into a five-year lease agreement for office space in Los Angeles, CA. The beginning lease expense is $42,265 and the lease provides for an escalation clause where the Company will be subject to an annual rent increase of 3.5%, year over year. The lease expires on January 31, 2025.

The Company accounts for leases based on the new accounting standard ASC 842 and recorded $1,983,000 and $1,945,000 of rent expense for the years ended June 30, 2020 and 2019, respectively.

SUBLEASE AGREEMENTS

On January 19, 2018, Mission Media USA, Inc. entered into a four-year sublease agreement pertaining to the aforementioned office space in New York, NY. Commenced on March 1, 2018, the lease income was $22,496 per month and escalated annually at 3.0%.

On April 6, 2019, Mission-Media Limited entered into a sublease agreement pertaining to a floor within the aforementioned office space in London, UK. Commenced in April 2019, the lease income is £3,000 per month and could be terminated by either party with 30 days written notice.

On April 19, 2018, Mission-Media Limited entered into a sublease agreement pertaining to a floor within the aforementioned office space in London, UK. Commenced in April 2018 and terminating March 2021, the lease income is £5,163 per month.

A summary of the rental income recognized by each entity is presented in the table below for the fiscal years ending June 30:

	2020		2019
Troika Design	$	186,000	$	298,000
Mission US		292,000		378,000
Mission UK		213,000		85,000
	$	691,000	$	761,000

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LIABILITIES OF DISCONTINUED OPERATIONS

12 Months Ended

Jun. 30, 2020

LIABILITIES OF DISCONTINUED OPERATIONS

NOTE 11 - LIABILITIES OF DISCONTINUED OPERATIONS

In the fiscal year ending June 30, 2019, the Company extinguished $6,528,000 of liabilities from discontinued operations as a result of an inter-creditor agreement and settlement agreement with the bankruptcy trustee in December 2018 in relation to amounts owed by SignalShare, LLC.

In the fiscal year ending June 30, 2020, the Company identified $6,319,000 of liabilities from discontinued operations in relation to amounts owed by SignalPoint Corporation, LLC, a previously wholly owned subsidiary of the Company and the Company’s predecessor Roomlinx, Inc. Based upon an opinion provided by the Company’s legal counsel, the statute of limitations has expired in connection with collection of the $6,319,000 of previously incurred debts by SignalPoint Corporation, LLC and Roomlinx, Inc. and concludes the debts have been extinguished pursuant to operation of law. Accordingly, the Company has concluded the $6,319,000 has been legally released pursuant to ASC 405 - Liabilities, and has been accounted for as extinguishment of debt and recognized this as income from discontinued operations.

Liabilities of discontinued operations consisted of the follow as of June 30:

	2020		2019
SPC – Accounts payable and other accrued liabilities	$	-	$	3,138,000
Roomlinx – Account payable and other accrued liabilities		107,000		3,314,000
	$	107,000	$	6,452,000

For the fiscal years ending June 30, 2020 and 2019, the Company recorded the balance of liabilities from discontinued operations as long-term because the Company does not anticipate making payments towards these liabilities in the next 12 months.

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LEGAL CONTINGENCIES

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

LEGAL CONTINGENCIES

NOTE 8 - LEGAL CONTINGENCIES

We may become a party to litigation in the normal course of business. In the opinion of management, there are no legal matters involving us that would have a material adverse effect upon our financial condition, results of operations or cash flows.

Stephenson Disputes. A dispute arose between Nicola and James Stephenson, co-founders of Mission, and the Company. The Board of Directors deemed it necessary to terminate the Stephensons’ employment on January 4, 2019. The Company filed suit on January 7, 2019 in the Federal District Court for the Southern District of New York against the Stephensons (Troika Media Group et.al. vs. Nicola Stephenson, James Stephenson and AllMac LLC, 14-CV-00145-ER) associated with the activities of the Stephensons’ and alleging breach of the Mission Acquisition documents.

On February 13, 2019, the Court granted the Company a preliminary injunction barring the Stephensons from, among other things: entering the physical or virtual premises of the Company; communicating with Company employees; accessing the Company’s and its affiliates’ property or funds, and holding themselves out as being associated with the Company.

In March 2019, the parties agreed to submit their disputes to arbitration before JAMS. On January 4, 2021, the Arbitrator issued a Partial Final Award (made final on March 8, 2021) in favor of the Company. The Arbitrator found that the Stephensons were terminated properly for cause, had violated their fiduciary duties to the Company and that there was no fraud on the part of the Company or its management and awarded the Company approximately $900,000 in net damages after the Stephensons were reimbursed for previously incurred business expenses. The Arbitrator also provided limited relief to the Stephensons from their expiring non-compete agreement.

On October 30, 2019, the Court issued an order disqualifying the Stephensons’ law firm from serving as counsel in this matter due to the fact that, among other findings, Stephensons’ counsel simultaneously impermissibly represented the Stephensons in an adversarial manner while it still represented the Company.

Studio Fathom Dispute. On January 28, 2021, the Company received a demand from Studio Fathom associated with amounts purportedly due for services provided to Mission Culture, LLC. Studio Fathom claims Mission owes approximately $197,000 for services related to a project that the vendor worked on. The Company is reviewing the claims as it is aware that certain disputes may exist related to the purported amount due. At this time the Company cannot comment on the legitimacy of the demand.

Other than the foregoing, no material legal proceedings to which the Company (or any officer or director of the Company, or any affiliate, to management’s knowledge) is party to or to which the property of the Company is subject is pending, and no such material proceeding is known by management of the Company to be contemplated.

We may become a party to litigation in the normal course of business. In the opinion of management, there are no legal matters involving us that would have a material adverse effect upon our financial condition, results of operations or cash flows.

Stephenson Disputes. A dispute arose between Nicola and James Stephenson, co-founders of Mission, and the Company. The Board of Directors deemed it necessary to terminate the Stephensons’ employment on January 4, 2019. The Company filed suit on January 7, 2019 in the Federal District Court for the Southern District of New York against the Stephensons [Troika Media Group et.al. vs. Nicola Stephenson, James Stephenson and AllMac LLC, 14-CV-00145-ER] associated with the activities of the Stephensons’ and alleging breach of the Mission Acquisition Transaction Documents.

On February 13, 2019, the Court granted the Company a preliminary injunction barring the Stephensons from, among other things: entering the physical or virtual premises of the Company; communicating with Company employees; accessing the Company’s and its affiliates’ property or funds, and holding themselves out as being associated with the Company.

In March 2019, the parties agreed to submit their disputes to arbitration before JAMS. On January 4, 2021, the Arbitrator issued a Partial Final Award in favor of the Company. The Arbitrator found that the Stephensons were terminated properly for cause and that there was no fraud on the part of the Company or its management and awarded the Company approximately $900,000 in net damages after the Stephensons were reimbursed for previously incurred business expenses. The Arbitrator also provided limited relief to the Stephensons from their expiring non-compete agreement.

On October 30, 2019, the Court issued an order disqualifying the Stephensons’ law firm from serving as counsel in this matter due to the fact that, among other findings, Stephenson counsel simultaneously impermissibly represented the Stephensons in an adversarial manner while it still represented the Company.

Other than the foregoing, no material legal proceedings to which the Company (or any officer or director of the Company, or any affiliate, to management’s knowledge) is party to or to which the property of the Company is subject is pending, and no such material proceeding is known by management of the Company to be contemplated.

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STOCKHOLDERS EQUITY

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

STOCKHOLDERS EQUITY

NOTE 9 - STOCKHOLDERS' EQUITY

REVERSE STOCK SPLIT

In June 2020, our Board of Directors and stockholders holding a majority of the outstanding shares of our common stock approved a resolution authorizing our Board of Directors to effect a reverse stock split of our common stock at a certain exchange ratios from 1:10 to 1:15 with our Board of Directors retaining the discretion as to whether to implement the reverse stock split and which exchange ratio to implement. In September 2020, the Company amended its articles of incorporation and enacted a reverse stock split of 1 share for each 15 shares and the accompanying financials reflect the reverse stock split retroactively.

The reverse stock split resulted in a decrease in authorized shares of all classes of stock from 615,000,000 to 315,000,000 shares consisting of 300,000,000 shares of common stock at a par value of $0.001 and 15,000,000 shares of preferred stock at a par value of $0.01 per share. Prior to the reverse stock split, the Company had 600,000,000 shares of common stock at a par value of $0.001, 15,000,000 shares of preferred stock at a par value of $0.20 per share.

COMMON STOCK

As of March 31, 2021 and June 30, 2020, the Company has 15,020,512 and 15,454,623 shares of common stock issued and outstanding.

In July 2020, the holder of a convertible promissory note for $1,000,000 informed the Company that they had elected to convert the balance due to common shares at the agreed upon conversion price of $1.50 per share and 387,222 shares were issued representing the outstanding principal and accrued interest.

In July 2020, the holder of a convertible promissory note for $200,000 informed the Company that they had elected to convert the balance due to common shares at the agreed upon conversion price of $3.75 per share and 56,000 shares were issued representing the outstanding principal and loan fee.

In July 2020, the holder of a convertible promissory note for $200,000 informed the Company that they had elected to convert the balance due to common shares at the agreed upon conversion price of $3.75 per share and 56,000 shares were issued representing the outstanding principal and loan fee.

In January 2021, the Company reported the return of the two million six hundred sixty thousand six hundred and sixty-seven (2,666,667) shares of the Company’s stock granted to the Stephensons regarding the aforementioned legal dispute. Upon their termination for Cause, the restricted shares held in escrow were forfeited back to the Company.

PREFERRED STOCK

The Company has designated 15,000,000 shares as preferred stock, par value $1.50 series A, B, C and D, of which 5,000,000 shares have been designated as Series A preferred stock; 3,000,000 shares have been designated as Series B convertible preferred stock; 1,200,000 shares have been designated as Series C convertible preferred stock; and 2,500,000 shares have been designated as Series D convertible preferred stock.

As of March 31, 2021, 720,000 shares of Series A Preferred Stock were issued and outstanding; 2,495,000 shares of Series B Preferred Stock were issued and outstanding; 911,149 shares of Series C Preferred Stock were issued and outstanding; and 1,979,000 shares of Series D Preferred Stock were issued and outstanding.

As of June 30, 2020, 720,000 shares of Series A Preferred Stock were issued and outstanding; 2,495,000 shares of Series B Preferred Stock were issued and outstanding; 911,149 shares of Series C Preferred Stock were issued and outstanding; and 1,979,000 shares of Series D Preferred Stock were issued and outstanding.

WARRANTS

During the three months ended March 31, 2021, the Company issued warrants to a certain aforementioned investor to purchase 26,667 shares of the Company’s common stock at $1.95 vested over three years in consideration for convertible note payables. Valued at $66,000, a total of $0 was expensed in the three months ending March 31, 2021.

During the three months ended March 31, 2021, the Company issued warrants to certain directors and consultants to purchase 566,667 shares of the Company’s common stock between $0.75 and $3.75 per share which vested over three years and were valued at $1,682,000. The Company recorded compensation of $1,558,000 for the vested portion during the three months ended March 31, 2021.

During the three months ended March 31, 2020, the Company issued warrants to certain aforementioned investors to purchase 438,333 shares of the Company’s common stock between $0.75 and $3.75 vested over three years in consideration for new issued convertible note payables and extensions of previously issued notes. Valued at $1,075,000, a total of $748,000 was expensed in the three months ending March 31, 2020.

During the three months ended March 31, 2020, the Company issued warrants to certain directors and consultants to purchase 327,333 shares of the Company’s common stock between $0.75 and $3.75 per share which vested between three and four years and were valued at $858,000. The Company recorded compensation of $0 for the vested portion during the three months ended March 31, 2020.

As of March 31, 2021 and 2020, respectively, the Company issued 8,551,000 warrants valued at $16,050,000 and 7,187,518 warrants valued at $11,934,000 using the Black-Scholes model.

The Company uses the Black-Scholes Model to determine the fair value of warrants granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected stock price volatility assumptions are based on the historical volatility of the Company’s common stock over periods that are similar to the expected terms of grants and other relevant factors. The Company derives the expected term based on an average of the contract term and the vesting period taking into consideration the vesting schedules and future employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. The Company has never paid any cash dividends on its common stock and the Company has no intention to pay a dividend at this time; therefore, the Company assumes that no dividends will be paid over the expected terms of warrants awards.

The Company determines the assumptions used in the valuation of warrants awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for warrants granted throughout the year.

The Company has utilized the following assumptions in its Black-Scholes warrant valuation model to calculate the estimated grant date fair value of the warrants during the nine months ended March 31, 2021 and 2020:

		2021			2020
Volatility - range		63.5% - 66.5	%		56.4% – 74.1	%
Risk-free rate		0.2% - 0.5	%		0.3% - 1.8	%
Contractual term		4.0 - 5.0 years			4.0 - 5.0 years
Exercise price	$	0.75 - $3.75		$	0.75 - $3.75

A summary of the warrants granted, exercised, forfeited and expired for the nine months ending March 31, 2021 are presented in the table below:

	Number of Warrant Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Warrant Shares			Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2020		7,858,741		$	1.52	$	1.92	$	9,234,295			3.0
Granted		1,256,667			0.93		3.04		3,845,945			4.7
Exercised		-			-		-		-			-
Forfeited		-			-		-		-			-
Expired		(564,556	)		3.16		3.13		(733,295	)		-
Outstanding March 31, 2021		8,550,852			1.12		1.88		12,039,000			2.5
Vested and exercisable March 31, 2021		7,598,630			1.10		1.73		9,644,333			2.4
Non-vested March 31, 2021		952,223		$	1.24	$	3.02	$	2,394,667			3.4

The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable warrants under the Company’s warrant plans as of March 31, 2021.

		Outstanding Warrant Shares			Exercisable Warrant Shares
Exercise price range		Number of Warrant Shares		Weighted average remaining contractual life	Number of Warrant Shares		Weighted average remaining contractual life
$	0.75		7,440,667	2.5 years		6,658,444	2.3 years
$	1.50		400,000	3.2 years		400,000	3.2 years
$	1.50		26,667	0.0 years		-	0.0 years
$	3.00		66,667	3.9 years		66,667	3.9 years
$	3.75		435,000	3.2 years		291,667	3.7 years
$	6.00		163,333	0.2 years		163,333	0.2 years
$	27.00		18,518	0.4 years		18,518	0.4 years
			8,550,852	2.5 years		7,598,630	2.4 years

A summary of the warrants granted, exercised, forfeited and expired for the nine months ending March 31, 2020 are presented in the table below:

	Number of Warrant Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Warrant Shares			Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2019		6,275,593		$	1.65	$	1.65	$	5,509,850			3.8
Granted		1,667,815			1.50		2.85		3,845,945			3.0
Exercised		-			-		-		-			-
Forfeited		-			-		-		-			-
Cancelled		(164,815	)		-		-		(44,445	)		-
Outstanding March 31, 2020		7,778,593			1.50		1.95		9,311,350			3.1
Vested and exercisable March 31, 2020		7,303,741			1.65		1.95		7,814,295			3.1
Non vested March 31, 2020		474,852		$	1.65	$	2.55	$	1,497,055			2.3

The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable warrants under the Company’s warrant plans as of March 31, 2020.

		Outstanding Warrant Shares			Exercisable Warrant Shares
Exercise price range		Number of Warrant Shares		Weighted average remaining contractual life	Number of Warrant Shares		Weighted average remaining contractual life
$	0.75		6,546,333	3.3 years		6,404,259	3.2 years
$	1.50		416,667	2.5 years		133,333	4.0 years
$	1.50		66,667	4.9 years		-		-
$	2.25		261,667	2.1 years		262,222	1.4 years
$	3.00		381,333	1.0 years		381,333	1.0 years
$	3.75		105,926	0.3 years		122,593	0.3 years
			7,778,593	3.1 years		7,303,741	3.1 years

2017 EQUITY INCENTIVE PLAN

On June 13, 2017, the Board adopted and approved an amendment to the Troika Media Group, Inc. 2015 Employee, Director and Consultant Equity Incentive Plan (the “Equity Plan”), to change the name from M2 nGage Group, Inc. to Troika Media Group, Inc., in order to attract, motivate, retain, and reward high-quality executives and other employees, officers, directors, consultants, and other persons who provide services to the Company by enabling such persons to acquire an equity interest in the Company. Under the Plan, the Board (or the compensation committee of the Board, if one is established) may award stock options, either stock grant of shares of the Company’s common stock, incentive stock option under IRS section 422 (“ISO’s”) or a non-qualified stock option (“Non-ISO’s”) (collectively “Options”). The Plan allocates 3,333,334 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the Plan.

ISO’s Awards

During the three months ended March 31, 2021, the Company did not issue additional options. During the three months ended March 31, 2020 the Company issued options to certain employees to purchase 308,333 shares of the Company’s common stock between $0.75 and $3.75 per share which vested during various terms and were valued at $582,000. The Company recorded compensation of $271,000 and $314,000 for the three months ended March 31, 2021 and 2020, respectively, relating to the vested portion of options that were issued in previous periods. The total compensation of the unvested options to be recognized in future periods is $812,000 and the weighted average remaining is 1.5 years.

The Company uses the Black-Scholes Model to determine the fair value of Options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected stock price volatility assumptions are based on the historical volatility of the Company’s common stock over periods that are similar to the expected terms of grants and other relevant factors. The Company derives the expected term based on an average of the contract term and the vesting period taking into consideration the vesting schedules and future employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. The Company has never paid any cash dividends on its common stock and the Company has no intention to pay a dividend at this time; therefore, the Company assumes that no dividends will be paid over the expected terms of option awards.

The Company determines the assumptions used in the valuation of Option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year.

The Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated grant date fair value of the options during the nine months ended March 31, 2021 and 2020.

	2021				2020
Volatility - range		64.8	%		57.5% – 64.8	%
Risk-free rate		0.3	%		0.9% - 1.7	%
Contractual term	3.0 years				3.0 years
Exercise price	$	3.75		$	0.75 - $3.75

A summary of the options granted, exercised, forfeited and expired for the nine months ending March 31, 2021 are presented in the table below:

	Number of Option Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Option Shares			Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2020		3,377,222		$	1.10	$	1.06	$	2,030,000			0.7
Granted		76,667			3.75		-		-			2.8
Exercised		-			-		-		-			-
Forfeited		-			-		-		-			-
Expired		(143,333	)		-		-		(200,000	)		-
Outstanding March 31, 2021		3,310,556			1.10		1.01		1,830,000			0.5
Vested and exercisable March 31, 2021		2,883,458			0.89		0.93		1,469,818			0.3
Non-vested March 31, 2021		427,098		$	2.59	$	1.90	$	360,182			1.5

The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable options under the Company’s warrant plans as of March 31, 2021.

		Outstanding Option Shares			Exercisable Option Shares
Exercise price range		Number of Option Shares		Weighted average remaining contractual life	Number of Option Shares		Weighted average remaining contractual life
$	0.75		2,768,889	0.3 years		2,628,458	0.2 years
$	1.50		200,000	0.5 years		166,667	0.5 years
$	3.75		341,667	2.0 years		88,333	1.9 years
			3,310,556	0.5 years		2,883,458	0.3 years

A summary of the options granted, exercised, forfeited and expired for the nine months ending March 31, 2020 are presented in the table below:

	Number of Option Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Option Shares		Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2019		3,512,500		$	0.90	$	0.90	$	1,908,750		1.1
Granted		511,667			2.70		2.10		550,000		-
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Expired		(139,167	)		-		-		243,750		-
Outstanding March 31, 2020		3,885,000			1.05		1.05		2,152,500		0.8
Vested and exercisable March 31, 2020		2,522,731			0.75		0.90		1,155,000		0.5
Non-vested March 31, 2020		1,362,269		$	1.50	$	1.35	$	997,500		1.5

The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable options under the Company’s warrant plans as of March 31, 2020.

		Outstanding Option Shares			Exercisable Option Shares
Exercise price range		Number of Option Shares		Weighted average remaining contractual life	Number of Option Shares		Weighted average remaining contractual life
$	0.75		3,326,667	0.6 years		2,334,398	0.4 years
$	1.50		200,000	1.5 years		177,778	1.1 years
$	3.00		16,667	1.8 years		7,222	2.0 years
$	3.75		341,667	3.0 years		3,333	0.9 years
			3,885,000	0.8 years		2,522,731	0.5 years

REVERSE STOCK SPLIT

In June 2020, our Board of Directors and stockholders holding a majority of the outstanding shares of our common stock approved a resolution authorizing our Board of Directors to effect a reverse stock split of our common stock at a certain exchange ratios from 1:10 to 1:15 with our Board of Directors retaining the discretion as to whether to implement the reverse stock split and which exchange ratio to implement. In September 2020, the Company amended its articles of incorporation and enacted a reverse stock split of 1 share for each 15 shares and the accompanying financials reflect the reverse stock split retroactively.

The reverse stock split resulted in a decrease in authorized shares of all classes of stock from 615,000,000 to 315,000,000 shares consisting of 300,000,000 shares of common stock at a par value of $0.001 and 15,000,000 shares of preferred stock at a par value of $0.01 per share. Prior to the reverse stock split, the Company had 600,000,000 shares of common stock at a par value of $0.001, and 15,000,000 shares of preferred stock at a par value of $0.20 per share.

COMMON STOCK

As of June 30, 2020 and 2019, the Company has 15,464,623 and 15,211,290 shares of common stock issued and outstanding.

In the fiscal year ending June 30, 2020, the Company issued 660,000 in common stock in relation to $443,000 in previously recorded stock payables relating to converted note payables.

In the fiscal year ending June 30, 2020, the Company cancelled 416,667 in common stock in relation to a previous agreement with Cenfin, LLC. The stocks were issued in accordance with a settlement agreement and upon completion of the settlement, the shares were returned to the Company.

PREFERRED STOCK

The Company has designated 15,000,000 shares as preferred stock, par value $0.01 series A, B, C and D, of which 5,000,000 shares have been designated as Series A preferred stock; 3,000,000 shares have been designated as Series B convertible preferred stock; 1,200,000 shares have been designated as Series C convertible preferred stock; and 2,500,000 shares have been designated as Series D convertible preferred stock.

As of June 30, 2020, 720,000 shares of Series A Preferred Stock were issued and outstanding; 2,495,000 shares of Series B Preferred Stock were issued and outstanding; 911,149 shares of Series C Preferred Stock were issued and outstanding; and 1,979,000 shares of Series D Preferred Stock were issued and outstanding.

As of June 30, 2019, 720,000 shares of Series A Preferred Stock were issued and outstanding; 2,495,000 shares of Series B Preferred Stock were issued and outstanding; 911,149 shares of Series C Preferred Stock were issued and outstanding; and 1,881,500 shares of Series D Preferred Stock were issued and outstanding.

The Company has completed the following private placements for the sale of preferred stock:

Pursuant to an amendment to the Company’s certificate of designation of series C convertible preferred stock (“Series C Preferred”) filed with the secretary of state of Nevada on April 11, 2017, the Company offered for sale up to $8,000,000 face value of Series C Preferred on a best efforts basis, with a $2,000,000 overallotment, (the “Series C Offering”) at $10.00 per Series C Preferred. The Series C Preferred is convertible at any time at $0.75 per share which was the market price when the Series C Offering commenced on November 18, 2016 into an aggregate of 12,148,654 shares of Common Stock. The Company sold 26,250 shares of Series C preferred for $200,000 exclusive of offering costs during the fiscal year ended June 30, 2019. Each share of Series C Preferred Stock is convertible into 14 shares of common stock.

Pursuant to an amendment to the Company’s certificate of designation of series D convertible preferred stock (“Series D Preferred”) filed with the secretary of State of Nevada last filed on June 20, 2018, the Company offered for sale up to $20,000,000 face value of Series D Preferred on a best efforts basis, with a $5,000,000 over-subscription option, (the “Series D Offering”) at $10.00 per share of Series D Preferred. The Series D Preferred is convertible at any time at $3.75 per share which was the market price when the Series D Offering commenced on February 22, 2018. The Company sold 1,265,000 shares of Series D Preferred for $7,710,000 net of offering costs during the period ended June 30, 2019 and 97,500 shares of Series D Preferred for $976,000 net of offering costs during the fiscal year ended June 30, 2020. Each share of Series D Preferred Stock is convertible into 3 shares of common stock.

WARRANTS

During the fiscal year ended June 30, 2019, the Company issued warrants to consultants for services to purchase 96,667 shares of the Company’s common stock for $3.75 per share, which were valued at $217,000. The Company recorded compensation of $13,000 and $179,000 during the fiscal year ended June 30, 2020 and 2019 respectively relating to these issuances.

During the fiscal year ended June 30, 2019, the Company issued warrants to a consultant for services to purchase 266,667 shares of the Company’s common stock for $1.50 per share, which were valued at $774,000. The Company recorded compensation of $387,000 and $0 during the fiscal year ended June 30, 2020 and 2019 respectively relating to these issuances.

During the period ended June 30, 2019, the Company issued warrants to consultants for services to purchase 124,000 shares of the Company’s common stock for $0.75 per share, which were valued at $335,000. The Company recorded compensation of $0 and $335,000 during the year ended June 30, 2020 and 2019 respectively related to these issuances.

During the fiscal year ended June 30, 2019, the Company issued warrants to subscribers to the Convertible Note Payables to purchase 353,333 shares of the Company’s common stock for $0.75 per share, which were valued at $1,142,000. The Company recorded compensation of $0 and $1,142,000 during the fiscal year ended June 30, 2020 and 2019 respectively relating to these issuances.

During the fiscal year ended June 30, 2019, the Company issued warrants relating to a legal settlement to purchase 10,000 shares of the Company’s common stock for $0.75 per which were valued at $33,000. The Company recorded warrants expense of $0 and $33,000 during the fiscal year ended June 30, 2020 and 2019 respectively relating to these issuances.

During the fiscal year ended June 30, 2020, the Company issued warrants to certain directors and consultants to purchase 1,021,482 shares of the Company’s common stock between $0.75 and $3.75 per share which vested during various terms and were valued at $3,076,000. The Company recorded compensation of $2,650,000 for the vested portion during the fiscal year ended June 30, 2020.

During the period ended June 30, 2020, the Company issued warrants to the subscribers to the Convertible Promissory Notes to purchase 333,333 shares of the Company’s common stock for $0.75 per share as additional consideration for an extension, which were valued at $209,000. The Company recorded warrants expense of $209,000 during the year ended June 30, 2020 related to these issuances.

During the fiscal year ended June 30, 2020, the Company issued warrants to current investors to purchase 231,667 shares of the Company’s common stock for $3.75 per share as additional consideration, which were valued at $539,000. The Company recorded warrants expense of $353,000 during the year ended June 30, 2020 related to these issuances.

During the fiscal year ended June 30, 2020, the Company issued warrants to current note holders to purchase 26,666 shares of the Company’s common stock for $3.75 per share as interest expenses, which were valued at $47,000. The Company recorded interest expense of $47,000 during the year ended June 30, 2020 related to these issuances.

The Company uses the Black-Scholes Model to determine the fair value of warrants granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected stock price volatility assumptions are based on the historical volatility of the Company’s common stock over periods that are similar to the expected terms of grants and other relevant factors. The Company derives the expected term based on an average of the contract term and the vesting period taking into consideration the vesting schedules and future employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. The Company has never paid any cash dividends on its common stock and the Company has no intention to pay a dividend at this time; therefore, the Company assumes that no dividends will be paid over the expected terms of warrants awards.

The Company determines the assumptions used in the valuation of warrants awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for warrants granted throughout the year.

The Company has utilized the following assumptions in its Black-Scholes warrant valuation model to calculate the estimated grant date fair value of the warrants during the years ended June 30, 2020 and 2019:

	2020		2019
Volatility - range	56.4% - 74.1	%	69.9% - 73.3	%
Risk-free rate	0.3% - 1.8	%	1.3% - 2.9	%
Contractual term	4.0 - 5.0 years		4.0 - 5.0 years
Exercise price	$0.75 - $3.75		$0.75 - $3.75

A summary of the warrants granted, exercised, forfeited and expired are presented in the table below:

	Number of Warrant Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Warrant Shares		Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2018		5,458,259		$	2.10	$	1.05	$	1,476,850		5.5
Granted		850,667			1.33		2.96		1,990,000		4.4
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Expired		(33,333	)		4.50		3.90		20,000		-
Outstanding June 30, 2019		6,275,593			1.66		1.73		5,509,850		3.8
Granted		1,613,148			1.44		2.87		3,724,445		4.0
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Expired		(30,000	)		27.00		13.20		-		-
Outstanding June 30, 2020		7,858,741			1.52		1.92		9,234,295		3.0
Vested and exercisable June 30, 2020		7,143,370			1.49		1.85		7,919,850		3.1
Non-vested June 30, 2020		715,370		$	7.73	$	2.57	$	1,314,445		2.9

The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable warrants under the Company’s warrant plans as of June 30, 2020.

		Outstanding Warrant Shares			Exercisable Warrant Shares
Exercise price range		Number of Warrant Shares		Weighted average remaining contractual life	Number of Warrant Shares		Weighted average remaining contractual life
$	0.75		6,533,148	3.2 years		6,289,444	3.2 years
$	1.50		400,000	2.5 years		133,333	3.7 years
$	3.00		66,667	4.0 years		-
$	3.75		385,000	4.4 years		246,667	4.5 years
$	6.00		381,333	0.7 years		381,333	0.7 years
$	27.00		92,593	0.1 years		92,593	0.1 years
			7,858,741	3.0 years		7,143,370	3.1 years

2017 EQUITY INCENTIVE PLAN

On June 13, 2017, the Board adopted and approved an amendment to the Troika Media Group, Inc. 2015 Employee, Director and Consultant Equity Incentive Plan (the “Equity Plan”), to change the name from M2 nGage Group, Inc. to Troika Media Group, Inc., in order to attract, motivate, retain, and reward high-quality executives and other employees, officers, directors, consultants, and other persons who provide services to the Company by enabling such persons to acquire an equity interest in the Company. Under the Plan, the Board (or the compensation committee of the Board, if one is established) may award stock options, either stock grant of shares of the Company’s common stock, incentive stock option under IRS section 422 (“ISO’s”) or a non-qualified stock option (“Non-ISO’s”) (collectively “Options”). The Plan allocates 3,333,334 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the Plan. As of June 30, 2020, the Company has granted, under the Plan, awards in the form ISO’s.

ISO’s Awards

In the fiscal year ending June 30, 2019, the Company issued to employees and directors of the Company options to purchase, in the aggregate, 820,833 shares of the Company’s common stock between $0.75 and $3.75 per share which were valued at $2,360,000. The Company recorded options expense of $333,000 and $607,000 during the fiscal years ending June 30, 2019 and 2020 related to these issuances, respectively.

In the fiscal year ending June 30, 2020, the Company issued to employees and directors of the Company options to purchase, in the aggregate, 568,333 shares of the Company’s common stock between $0.75 and $3.75 per share which were valued at $1,300,000. The Company recorded options expense of $135,000 during the fiscal year ended June 30, 2020 related to these issuances. During the fiscal year ended June 30, 2020, there was a reversal of $71,000 in options expense relating to issuances granted in prior years which were forfeited.

The Company uses the Black-Scholes Model to determine the fair value of Options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected stock price volatility assumptions are based on the historical volatility of the Company’s common stock over periods that are similar to the expected terms of grants and other relevant factors. The Company derives the expected term based on an average of the contract term and the vesting period taking into consideration the vesting schedules and future employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. The Company has never paid any cash dividends on its common stock and the Company has no intention to pay a dividend at this time; therefore, the Company assumes that no dividends will be paid over the expected terms of option awards.

The Company determines the assumptions used in the valuation of Option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year.

The Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated grant date fair value of the options during the years ended June 30, 2020 and 2019:

	2020		2019
Volatility - range	56.4% - 69.0	%	34.6% - 74.1	%
Risk-free rate	0.9 - 1.7	%	1.8 - 2.8	%
Contractual term	3.0 years		2.5 - 5.0 years
Exercise price	$0.75 - $3.75		$0.75 - $3.75

A summary of the Options granted to employees under the Plan as of June 30, 2020 are presented in the table below:

	Number of Option Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Option Shares		Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2018		2,761,667		$	0.75	$	0.39	$	-		5.2
Granted		820,833			1.17		2.88		2,078,750		-
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Cancelled		(70,000	)		3.15		2.59		170,000		-
Outstanding June 30, 2019		3,512,500			0.90		0.75		1,908,750		1.1
Granted		568,333			2.48		1.98		720,000		-
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Cancelled		(703,611	)		0.97		1.16		598,750		-
Outstanding June 30, 2020		3,377,222			1.10		1.06		2,030,000		0.7
Vested and exercisable June 30, 2020		2,489,986			0.79		0.78		974,401		0.3
Non vested June 30, 2020		887,237		$	1.91		1.85	$	1,055,599		1.7

The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable options under the Company’s option plans as of June 30, 2020.

		Outstanding Options Shares			Exercisable Option Shares
Exercise price range		Number of Option Shares		Weighted average remaining contractual life	Number of Option Shares		Weighted average remaining contractual life
$	0.75		2,835,556	0.4 years		2,352,208	0.3 years
$	1.50		200,000	1.3 years		133,333	1.1 years
$	3.75		341,666	2.7 years		4,445	1.8 years
			3,377,222	0.7 years		2,489,986	0.3 years

During the years ended June 30, 2020 and 2019, the Company has recorded approximately $671,000 and $474,000 as compensation expense related to vested options issued, net of forfeitures. As of June 30, 2020, total unrecognized share-based compensation related to unvested options was approximately $1,753,000.

LOCK-UP AGREEMENTS

In June 2020, the Company entered into lock-up agreements with some of its officers restricting them from exercising their vested warrants and options. Representing the common stock equivalent of 3,966,667 shares, the agreements restricted 2,333,334 warrants and 1,633,334 options from being converted until the Company’s Articles of Incorporation are amended upon stockholder and Board of Directors approval.

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INCOME TAXES

12 Months Ended

Jun. 30, 2020

INCOME TAXES

NOTE 14 - INCOME TAXES

Troika Media Group Inc. and domestic subsidiaries file on a consolidated U.S. federal tax basis and state tax returns on a consolidated, combined or separate basis depending on the applicable laws for the years ending June 30, 2020 and June 30, 2019. Mission Media Holdings, LTD and Mission Media, LTD are foreign subsidiaries of the Company which file tax returns in the United Kingdom.

Information on Federal and where applicable state statutory tax rates and also by country are as follows, but may not be all inclusive, so are estimated:

UNITED STATES

Troika Media Group Inc. the parent company of Troika Design Group Inc., Digital Media Acquisition Corporation, SignalPoint Corporation, Signal Point Holdings Corporation, Troika Services, Inc., Troika Analytics, Inc., Troika-Mission Holdings, Inc., and Mission Media USA, Inc. are subject to the U.S. federal tax rate of 21% and approximately up to 9% state tax for the years ending June 30, 2020 and 2019.

United Kingdom

We have two operating subsidiaries in the UK, Mission Media Holdings, LTD and Mission Media, LTD, which are subject to a tax rate of 19% for the years ending June 30, 2020 and June 30, 2019.

The below table summarizes the net loss by geographic area for the fiscal years ending June 30:

	June 30, 2020			June 30, 2019
United States	$	(11,295,000	)	$	(5,393,000	)
Foreign		(3,153,000	)		(1,405,000	)
Loss before income taxes	$	(14,448,000	)	$	(6,798,000	)

Income tax (benefit) expense from continuing operations on an estimated GAAP basis for the year ending June 30, 2020 consisted of the following:

	Current		Deferred			Total
Federal	$	-	$	(4,595,000	)	$	(4,595,000	)
State		-		(991,000	)		(991,000	)
Foreign		-		(533,000	)		(533,000	)
Subtotal		-		(6,119,000	)		(6,119,000	)
Valuation allowance		-		6,119,000			6,119,000
Total	$	-	$	-		$	-

Income tax (benefit) expense from continuing operations on an estimated GAAP basis for the year ending June 30, 2019 consisted of the following:

	Current		Deferred			Total
Federal	$	-	$	(1,776,000	)	$	(1,776,000	)
State		-		(364,000	)		(364,000	)
Foreign		-		(294,000	)		(294,000	)
Subtotal		-		(2,434,000	)		(2,434,000	)
Valuation allowance		-		2,434,000			2,434,000
Total	$	-	$	-		$	-

A reconciliation of the estimated federal statutory income tax rate to the Company’s effective income tax rate is as follows:

	June 30, 2020			June 30, 2019
Taxes calculated at federal rate		21.0	%		21.0	%
Foreign taxes		(2.9	)%	-		%
Debt settlement		9.2	%		20.2	%
Stock compensation		(1.0	)%		(7.4	)%
Change in valuation allowance		(21.2	)%		(21.4	)%
State taxes net of federal benefit		(0.1	)%		(2.3	)%
Revaluation of deferred	-		%	-		%
Acquisition - domestic	-		%	-		%
Acquisition - foreign	-		%	-		%
Goodwill impairment		(2.9	)%		(9.5	)%
Other adjustments		(2.3	)%		0.9	%
Provision for income taxes		(0.1	)%		1.4	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at June 30, 2020 and 2019 are presented below:

	June 30, 2020			June 30, 2019
Deferred Tax Assets
Net operating loss carryforwards	$	5,649,000		$	3,506,000
Accounts receivable reserve		201,000			110,000
Contribution carryover		995,000			6,000
Section 163 (j) limitation		123,000			51,000
Stock based compensation		1,053,000			-
Accrued interest		127,000			184,000
Contract liabilities		-			1,259,000
Deferred rent		29,000			281,000
Net right-of-use assets		24,000			-
Other accruals		-			-
Total Deferred Tax Assets		8,201,000			5,397,000
Deferred Tax Liabilities
Fixed Assets		(101,000	)		(10,000	)
Intangibles		(1,775,000	)		(2,952,000	)
Deferred Revenue		(205,000	)		-
Total Deferred Tax Liabilities		(2,081,000	)		(2,962,000	)
Net Deferred Tax Assets		6,120,000			2,435,000
Valuation Allowance		(6,120,000	)		(2,435,000	)
Net deferred tax / (liabilities)	$	-		$	-

The Company is in the process of reviewing its current deferred tax balances and the above amounts for the periods June 30, 2020 and 2019 are estimated but may not be all inclusive.

Deferred tax assets and liabilities are computed by applying the estimated enacted federal, foreign and state income tax rates to the gross amounts of future taxable amounts and future deductible amounts and other tax attributes, such as net operating loss carryforwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse.

During the year ending June 30, 2020, the estimated valuation allowance increased by $3,685,000 to $6,120,000 as compared to $2,435,000 as of June 30, 2019. The increase in valuation allowance is primarily related to an increase in net operating losses as well as stock-based compensation. The total valuation allowance results from the Company’s position that it is more likely than not able to realize their net deferred tax assets.

At June 30, 2017 and prior to this date, the Company had estimated federal and state net operating loss carry forwards. For the periods prior to the year ending June 30, 2017 the Company is unable to accurately verify or compute the applicable federal and state net operating losses. The Company’s tax year end was on a calendar year end December 31. Such losses may not be utilizable or possibly eliminated under IRC Section 382/383, change of ownership rules. Management is in the process of reviewing IRC Section 382/383 at the time of this filing for the period indicated. The federal net operating loss for the period June 30, 2019 is estimated to be $4,213,000 and for state $4,225,000. The federal net operating loss for the period June 30, 2020 is estimated to be $8,344,000 and for state $9,198,000. These carryforwards may be subject to an annual limitation under I.R.C. §§ 382 and 383 and similar state provisions, if the Company experienced one or more ownership changes which would limit the amount of the NOL and tax credit carryforwards that can be utilized to offset future taxable income. In general, an ownership change, as defined by I.R.C. §§ 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. The Company has not completed an I.R.C. § 382/383 analysis. If a change in ownership were to have occurred, NOL and tax credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.

On June 12, 2017, the company entered into a merger agreement with Troika Design Group, Inc. and Subsidiaries (“Design”) and Daniel Pappalardo, the sole stockholder of Design. In conjunction with this merger, we believe that the Company experienced an “ownership change” within the meaning of Sections 382 and 383 of the Code. An ownership change is generally defined as a more than 50 percentage point increase in equity ownership by “5 percent stockholders” (as that term is defined for purposes of Sections 382 and 383 of the Code) in any three-year period or since the last ownership change if such prior ownership change occurred within the prior three-year period. As a result of the ownership change on June 12, 2017, the limitations on the use of pre-change losses and other carry forward tax attributes in Sections 382 and 383 of the Code apply and the Company may not be able to utilize any portion of their NOL carry forwards from the years prior to June 12, 2017 and the portion of the NOL for June 30, 2017 allocable to the portion of the year prior to June 12, 2017. NOLs from subsequent years should not be affected by the ownership change on June 12, 2017.

There is a new tax on global intangible low-taxed income (GILTI) of subsidiaries of US parents. This new tax law is based on the excess of foreign income over a specified return (deemed return on tangible assets of foreign corporation). This will result in a US tax on foreign earnings where: (i) there is not a large aggregate foreign fixed asset base; and (ii) foreign earnings are taxed at a low rate. For ASC 740 (Accounting for Income Tax), it is acceptable to recognize the GILTI in the year in which it is included on the tax return on the basis that it is triggered by the existence, on an aggregate basis, of “excess” low-taxed foreign income in that year. For IFRS tax accounting and GAAP, it is acceptable to recognize the charge for GILTI in the year in which it is included on the tax return on the basis that it is triggered by the existence, on an aggregate basis, of “excess” low-taxed foreign income in that year. Since the Mission foreign subsidiaries for the year ending June 30, 2020 recorded an operating loss $3,153,000 there is no current GILTI tax recorded as a period cost. The Company is in the process of reviewing GILTI, as it is computed on a cumulative basis, as it relates to United States Repatriation Tax, as well as GILTI.

As of December 31, 2017, the Company had an estimated net operating loss (NOL) carryforward of approximately $20,128,000. The NOL carryforward estimated to begins to expire in 2024. Under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”), a corporation that undergoes an “ownership change” is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income. Within the meaning of IRC Section 382, an “ownership change” occurs when the aggregate stock ownership of certain stockholders (generally 5% stockholders, applying certain look-through rules and aggregation rules which combine unrelated stockholders that do not individually own 5% or more of the corporation’s stock into one or more “public groups” that may be treated as 5-percent stockholder) increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years). In general, the annual use limitation equals the aggregate value of common stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. The Company has not completed a study as to whether there is a 382 limitation on its NOLs that will limit the use of its NOLs in the future. The Company has recorded a valuation allowance on the entire NOL as it believes that it is more likely than not that the deferred tax asset associated with the NOLs will not be realized regardless of whether an “ownership change” has occurred.

Effects of the Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was enacted. Accounting Standard Codification (ASC) 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment regardless of the effective date of those tax law changes. Certain provisions of the Tax Act are effective September 27, 2017, others are effective or identified as of December 31, 2017 and others are effective after January 1, 2018.

Given the timing of enactment of the Tax Act and the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period should not extend beyond one year from the Tax Act enactment date and is deemed to have ended when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but the registrant is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740, Accounting for Income Taxes, on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. More specifically, SAB 118 summarizes a three-step process to be applied at each reporting period to account for and disclose the tax effects of the Tax Act. The steps are (1) to record the effects of the change in tax law for which accounting is complete; (2) to record provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but for which a reasonable estimate has been determined; and (3) where a reasonable estimate cannot yet be made, to continue to apply ASC 740, Accounting for Income Taxes, based on the tax law in effect prior to enactment of the Tax Act.

Amounts recorded where accounting is complete for the year commencing January 1, 2018 primarily relate to the reduction in the U.S. corporate income tax rate to 21 percent. The Company revalued its estimated ending gross deferred tax items, previously recorded at 35 percent, using the enacted 21 percent corporate tax rate. This change resulted in no net tax expense/benefit but did cause a reduction to our U.S. federal estimated deferred tax asset fully offset by a reduction of our valuation allowance.

Effects of tax law changes where a reasonable estimate of the accounting effects have not yet been made include the one-time mandatory repatriation transition tax on the net accumulated earnings and profits of a U.S. taxpayer’s foreign subsidiaries earned post 1986. The Company has performed a preliminary earnings and profits analysis with consideration given to foreign loss carryforwards acquired as a result of the Company’s acquisitions and determined on a provisional basis that there should be no income tax effect in the current or any future period. The Company will continue to identify and evaluate data to more thoroughly identify the tax impact and record adjustments, if any, within the measurement period.

The Company is delinquent concerning the filing of Federal, State & local Tax returns, since approximately 2014 and therefore all tax returns remain open to audit for all income tax returns not filed. No assurance concerning IRC 382,383,108, etc. and such outcome, since Federal, State/Local and Foreign income tax returns remain delinquent to the date of this filing.

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

DISAGGREGATION OF REVENUE LONG-LIVED ASSETS

NOTE 10 - DISAGGREGATION OF REVENUE & LONG-LIVED ASSETS

The following table presents the disaggregation of gross revenue between revenue types:

	Three Months Ended March 31,					Nine months Ended March 31,
	2021		2020			2021		2020
Project fees	$	1,627,000	$	697,000			5,268,000	$	5,091,000
Retainer fees		560,000		631,000			1,648,000		2,913,000
Fee income		676,000		1,003,000			2,435,000		4,602,000
Reimbursement income		991,000		1,290,000			3,086,000		8,149,000
Other revenue		-		(1,000	)		-		4,000
	$	3,854,000	$	3,620,000			12,437,000	$	20,759,000

The following table presents the disaggregation of gross revenue between the United States and the United Kingdom:

	Three Months Ended March 31				Nine Months Ended March 31
	2021		2020		2021		2020
Gross Revenue:
United States	$	2,309,000	$	2,239,000	$	7,940,000	$	12,927,000
United Kingdom		1,545,000		1,381,000		4,497,000		7,832,000
Total gross revenue	$	3,854,000	$	3,620,000	$	12,437,000	$	20,759,000

The following table presents the disaggregation of gross profit between the United States and the United Kingdom:

	Three Months Ended March 31				Nine Months Ended March 31
	2021		2020		2021		2020
Gross Profit:
United States	$	1,078,000	$	439,000	$	3,770,000	$	5,509,000
United Kingdom		835,000		925,000		2,307,000		4,144,000
Total gross profit	$	1,913,000	$	1,364,000	$	6,077,000	$	9,653,000

The following table presents the disaggregation of net income (loss) between the United States and the United Kingdom:

	Three Months Ended March 31						Nine Months Ended March 31
	2021			2020			2021			2020
Net Gain or Loss:
United States	$	(4,188,000	)	$	(8,129,000	)	$	(8,147,000	)	$	(14,874,000	)
United Kingdom		(491,000	)		312,000			(1,076,000	)		(321,000	)
Total net gain/(loss)	$	(4,679,000	)	$	(7,817,000	)	$	(9,223,000	)	$	(15,195,000	)

The following table presents the disaggregation of fixed assets between the United States and the United Kingdom as of March 31, 2021:

	United States			United Kingdom			Total
Computer equipment	$	457,000		$	193,000		$	650,000
Website design		6,000			-			6,000
Office machine & equipment		52,000			45,000			97,000
Furniture & fixtures		351,000			86,000			437,000
Leasehold improvements		62,000			129,000			191,000
Tenant incentives		145,000			-			145,000
		1,073,000			453,000			1,526,000
Accumulated depreciation		(844,000	)		(409,000	)		(1,253,000	)
Net book value	$	229,000		$	44,000		$	273,000

The following table presents the disaggregation of fixed assets between the United States and the United Kingdom as of June 30, 2020:

	United States			United Kingdom			Total
Computer equipment	$	460,000		$	160,000		$	620,000
Website design		6,000			-			6,000
Office machine & equipment		53,000			36,000			89,000
Furniture & fixtures		350,000			79,000			429,000
Leasehold improvements		54,000			119,000			173,000
Tenant incentives		145,000			-			45,000
		1,068,000			394,000			1,462,000
Accumulated depreciation		(770,000	)		(348,000	)		(1,118,000	)
Net book value	$	298,000		$	46,000		$	344,000

The following table presents the disaggregation of intangible assets and goodwill between the United States and the United Kingdom as of March 31, 2021.

Intangibles	United States			United Kingdom		Total
Customer relationship	$	4,960,000		$	-	$	4,960,000
Non-core customer relationships		760,000			-		760,000
Non-compete agreements		1,430,000			-		1,430,000
Tradename		410,000			-		410,000
Workforce acquired		2,125,000			-		2,125,000
		9,685,000			-		9,685,000
Less: accumulated amortization		(7,113,000	)		-		(7,113,000	)
Net book value	$	2,572,000		$	-	$	2,572,000
Goodwill	$	9,831,000		$	7,531,000	$	17,362,000

The following table presents the disaggregation of intangible assets and goodwill between the United States and the United Kingdom as of June 30, 2020.

Intangibles	United States			United Kingdom			Total
Customer relationship	$	4,960,000		$	3,550,000		$	8,510,000
Non-core customer relationships		760,000			-			760,000
Non-compete agreements		1,430,000			770,000			2,200,000
Tradename		410,000			-			410,000
Workforce acquired		2,125,000			665,000			2,790,000
		9,685,000			4,985,000			14,670,000
Less: impairment		-			(1,867,000	)		(1,867,000	)
Less: accumulated amortization		(5,494,000	)		(3,118,000	)		(8,612,000	)
Net book value	$	4,191,000		$	-		$	4,191,000
Goodwill	$	9,831,000		$	7,531,000		$	17,362,000

The following table presents the disaggregation of gross revenue between revenue types:

	Years Ended June 30,
	2020		2020
Project fees	$	6,816,000	$	8,621,000
Retainer fees		3,194,000		3,632,000
Fee income		5,420,000		10,528,000
Reimbursement income		9,177,000		17,644,000
Other revenue		6,000		366,000
	$	24,613,000	$	40,791,000

The following table presents the disaggregation of gross revenue between the United States and the United Kingdom for the years presented:

	Years Ended June 30,
	2020		2019
Gross revenue:
United States	$	15,954,000	$	25,096,000
United Kingdom		8,659,000		15,695,000
Total gross revenue	$	24,613,000	$	40,791,000

The following table presents the disaggregation of gross profit between the United States and the United Kingdom for the years presented:

	Years Ended June 30,
	2020		2019
Gross profit:
United States	$	8,084,000	$	11,026,000
United Kingdom		4,893,000		6,536,000
Total gross profit	$	12,977,000	$	17,562,000

The following table presents the disaggregation of net loss between the United States and the United Kingdom for the years presented:

	Years Ended June 30,
	2020			2019
Net loss:
United States	$	(11,294,000	)	$	(4,624,000	)
United Kingdom		(3,153,000	)		(1,417,000	)
Total net loss	$	(14,447,000	)	$	(6,041,000	)

The following table presents the disaggregation of fixed assets between the United States and the United Kingdom as of June 30, 2020:

	United States			United Kingdom			Total
Computer equipment	$	460,000		$	160,000		$	620,000
Website design		6,000			-			6,000
Office machine & equipment		53,000			36,000			89,000
Furniture & fixtures		350,000			79,000			429,000
Leasehold improvements		54,000			119,000			173,000
Tenant incentives		145,000			-			145,000
		1,068,000			394,000			1,462,000
Accumulated depreciation		(770,000	)		(348,000	)		(1,118,000	)
Net book value	$	298,000		$	46,000		$	344,000

The following table presents the disaggregation of fixed assets between the United States and the United Kingdom as of June 30, 2019:

	United States			United Kingdom			Total
Computer equipment	$	401,000			165,000		$	566,000
Website design		6,000			-			6,000
Office machine & equipment		51,000			37,000			88,000
Furniture & fixtures		350,000			77,000			427,000
Leasehold improvements		881,000			116,000			997,000
Tenant incentives		136,000			-			136,000
		1,825,000			394,000			2,220,000
Accumulated depreciation		(1,116,000	)		(321,000	)		(1,438,000	)
Net book value	$	709,000		$	73,000		$	782,000

The following table presents the disaggregation of intangible assets and goodwill between the United States and the United Kingdom as of June 30, 2020.

Intangibles	United States			United Kingdom			Total
Customer relationship	$	4,960,000		$	3,550,000		$	8,510,000
Non-core customer relationships		760,000			-			760,000
Non-compete agreements		1,430,000			770,000			2,200,000
Tradename		410,000			-			410,000
Workforce acquired		2,125,000			665,000			2,790,000
		9,685,000			4,985,000			14,670,000
Less: impairment		-			(1,867,000	)		(1,867,000	)
Less: accumulated amortization		(5,494,000	)		(3,118,000	)		(8,612,000	)
Net book value	$	4,191,000		$	-		$	4,191,000
Goodwill	$	9,831,000		$	7,531,000		$	17,362,000

The following table presents the disaggregation of intangible assets and goodwill between the United States and the United Kingdom as of June 30, 2019.

Intangibles	United States			United Kingdom			Total
Customer relationship	$	4,960,000		$	3,550,000		$	8,510,000
Non-core customer relationships		760,000			-			760,000
Non-compete agreements		1,430,000			770,000			2,200,000
Tradename		410,000			-			410,000
Workforce acquired		2,125,000			665,000			2,790,000
		9,685,000			4,985,000			14,670,000
Less: accumulated amortization		(3,051,000	)		(1,559,000	)		(4,610,000	)
Net book value	$	6,634,000		$	3,426,000		$	10,060,000
Goodwill	$	11,816,000		$	7,531,000		$	19,347,000

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SUBSEQUENT EVENTS

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

SUBSEQUENT EVENTS

NOTE 11 - SUBSEQUENT EVENTS

INITIAL PUBLIC OFFERING AND NASDAQ LISTING

On April 22, 2021, the Company completed an underwritten public offering of 5,783,133 shares of common stock and warrants at a public offering price of $4.15 per share and accompanying warrant for aggregate gross proceeds of $24,000,000. After deducting underwriting commissions and other offering expenses, the Company received approximately $21,700,000 in net proceeds. The Company has granted the underwriters a 45 day option to purchase up to 867,469 additional shares and warrants at the public offering price of $4.15 less discounts and commissions. The Company has listed its common stock and warrants on the Nasdaq Capital Market under the symbols “TRKA” and “TRKAW”, respectively, and trading began on April 20, 2021.

PREFERRED STOCK CONVERSION

On May 10, 2021, the Company converted all Preferred Stock Series B, C, and D into Common Stock following its uplisting to the Nasdaq Capital Market. At the time of the conversion the Company had 2,495,000 shares of Series B Convertible Preferred Stock that were convertible into 594,051 shares of common stock at a price of $4.20 per share; 911,149 shares of Series C Convertible Preferred Stock convertible into 12,148,654 shares of Common Stock at $0.75 per share; and 1,979,000 shares of Series D Convertible Preferred Stock convertible into 5,277,335 shares of Common Stock at $3.75 per share for a total of 18,020,040 shares of Common Stock.

REDEEEM, LLC ACQUISITION & EXECUTIVE COMPENSATION

On May 21, 2021, the Company acquired substantially all the assets and approximately $165,000 of specific liabilities of Redeeem LLC a fintech platform that empowers businesses to digitize any asset to build their own blockchain-based payment solution for a total purchase price of $12.1 million. The acquisition price consisted of $1.21 million in cash and $10.89 million in common stock vested over three years.

On May 21, 2021, the Company entered into an employment agreement with Kyle Hill to continue serving as President and reporting directly to the CEO of the Company. The executive will be compensated at $300,000 in base salary per year and the contract is three years with automatic renewal annually unless either party has given written notice.

SEPARATION AGREEMENT WITH SAB MANAGEMENT, LLC

In order to facilitate the Company’s listing on a national securities exchange, the Company had entered into a Separation Agreement dated as of February 28, 2021 with SAB Management, LLC (“SAB”) and Andrew Bressman (“Bressman”). Under the terms of the Separation Agreement, Mr. Bressman’s consultancy with the Company under a Consultant Agreement dated as of June 1, 2017 terminated, without cause, effective immediately prior to the listing of the Company’s securities on a National Securities Exchange. The Consultant Agreement provided for Mr. Bressman to be Managing Director and Assistant to the CEO and Chairman of the Board until March 31, 2024.

Upon the completion of the offering, the Company paid Mr. Bressman (i) accrued and unpaid consulting fees, expenses and interest in the amount of $378,836.85, and (ii) one-half of the consulting fees owed under the Consultant Agreement in the amount of $1,291,833.33. The balance of Consultant’s fees under the Consultant Agreement in the amount of $1,291,833.33 shall be paid on a regular bi-weekly schedule through March 21, 2023. Provided the terms of the Bonus Provision in the Consultant Agreement are satisfied prior to the effective date of the Agreement, or will be reasonably fulfilled after such date, the Consultant shall be paid such bonus. On March 31, 2021, the Company accrued Mr. Bressman’s unpaid consulting fees, expenses and interest however the subsequent consulting fees were not accrued as the separation agreement was contingent upon the Company’s listing on a National Securities Exchange which did not occur until April 2021.

EXECUTIVE COMPENSATION

The Company entered into a First Amendment to the Executive Employment Agreement of Robert Machinist, Chief Executive Officer dated April 30, 2021, effective as of April 1, 2021. Under the first amendment Mr. Machinist’s base salary was increased from $210,000 to $300,000. Mr. Machinist also received a $100,000 cash bonus as a result of the Company’s IPO.

SETTLEMENT OF NOTE PAYABLE RELATED PARTY

In April 2021, the Company paid $300,000 to the estate of Sally Pappalardo representing the outstanding principal and accrued interest. The holder provided the Company a signed release acknowledging all obligations under the note had been paid in full.

SETTLEMENT OF NOTE PAYABLE

In May 2021, the Company paid $119,000 to a holder of a $100,000 convertible promissory note with an interest rate of 10.0% from August 2020. The holder provided the Company a signed release acknowledging all obligations under the note had been paid in full and the payment consisted of $100,000 in principal and $19,000 in accrued interest.

EXERCISE OF WARRANTS BY FORMER DIRECTOR

In May 13, 2021, a former director Jeffrey Schwartz exercised 166,667 in warrants at a closing price of $2.81 and an exercise price of $0.75 resulting in the issuance of 122,183 shares of common stock.

REVERSE STOCK SPLIT

In June 2020, our Board of Directors and stockholders holding a majority of the outstanding shares of our common stock approved a resolution authorizing our Board of Directors to effect a reverse stock split of our common stock at a certain exchange ratios from 1:10 to 1:15 with our Board of Directors retaining the discretion as to whether to implement the reverse stock split and which exchange ratio to implement. In September 2020, the Company amended its articles of incorporation and enacted a reverse stock split of 1 share for each 15 shares and the accompanying financials reflect the reverse stock split retroactively.

CONVERTIBLE NOTE PAYABLES

In August 2020, the Company received gross proceeds of $100,000 representing a convertible note payable issued to an existing investor. Terms include a maturity date of November 30, 2020, interest rate of 10% if the loan is not paid in full by the maturity date, and the outstanding balance can be converted to common stock at a 25% discount of its current market value if mutually agreed.

In August 2020, the Company received gross proceeds of $50,000 representing a convertible note payable issued to an existing investor. Terms include a maturity date of November 30, 2020, interest rate of 10% if the loan is not paid in full by the maturity date, and the outstanding balance can be converted to common stock at a 25% discount of its current market value if mutually agreed

In October 2020, the Company received gross proceeds of $247,500 representing a convertible note payable issued to an existing investor. Terms include a maturity date of December 7, 2020, interest rate of 10% if the loan is not paid in full by the maturity date, and the outstanding balance can be converted to common stock at a conversion price of $3.00 per share of common stock if mutually agreed. In consideration for the loan, 26,667 warrants were issued at an exercise price of $1.95 per share vesting over three years and the issuance of 106,667 shares of restricted shares of common stock.

CONVERSION OF CONVERTIBLE NOTE PAYABLE

In July 2020, the holder of a convertible promissory note of $1,000,000 elected to convert the debt into shares of the Company’s common stock at a rate of $3.00 per share for 333,333 shares. The holder also elected to convert a loan fee of $120,000 at a rate of $3.00 per share for an additional 40,000 shares of common stock and 13,889 shares of common stock representing interest.

In July 2020, the holder of a convertible promissory note of $200,000 elected to convert the debt into shares of the Company’s common stock at a rate of $3.75 per share for 53,334 shares. The holder also elected to convert a loan fee of $10,000 at a rate of $3.75 per share for an additional 2,667 shares of common stock.

In July 2020, the holder of a convertible promissory note of $200,000 elected to convert the debt into shares of the Company’s common stock at a rate of $3.75 per share for 53,334 shares. The holder also elected to convert a loan fee of $10,000 at a rate of $3.75 per share for an additional 2,667 shares of common stock.

CONVERSION OF NOTE PAYABLE RELATED PARTY

In July 2020, the holder of a related party convertible promissory note of $1,300,000 elected to convert the debt into shares of the Company’s common stock at a rate of $0.75 per share for 1,733,334 shares.

LOCK-UP AGREEMENTS

In July 2020, the Company entered into additional lock-up agreements with some of its officers restricting them from exercising their vested warrants. Representing the common stock equivalent of 1,744,467 shares, the agreements restricted 1,744,467 warrants from being converted until the Company’s Articles of Incorporation are amended upon stockholder and Board of Directors approval. These additional lock-up agreements restricted a total of 5,711,134 in common stock equivalents from being converted.

COVID-19 STIMULUS FUNDING

As a result of the impact of COVID-19, the Company has obtained additional relief under the CARES Act in the form of a Small Business Administration (“SBA”) backed loan. The Company received a $500,000 SBA stimulus “Payroll Protection Program” loan in September 2020 of which the majority will be used for payroll. The initial payment terms include a 3.75% interest rate, maturity of thirty years, and the first payment is due in March 2021. The Company expects to obtain another $1,700,000 in Payroll Protection Program loans as part of the second round of stimulus payments in January or February 2021.

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PRESENTATION OF THE FINANCIAL STATEMENTS (Policies)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

PRESENTATION OF THE FINANCIAL STATEMENTS (Policies)

LIQUIDITY

The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows until fiscal year 2022. For the year ended June 30, 2020, the Company had a net loss of $14.4 million, which increased the accumulated deficit to $170.9 million at June 30, 2020 from $156.4 million at June 30, 2019. At June 30, 2020, the Company had $1.7 million in cash and cash equivalents and a total of $2.7 million in current assets in relation to $16.4 million in current liabilities. While the Company continues to find efficiencies with its acquisitions of Troika Design Group, Inc. and Mission Group, the recent COVID-19 pandemic and the departure of Mission’s President and Founder in fiscal year 2019 impacted revenue more than anticipated. With recent restructuring, Management however now believes that the Mission Group is now stabilized and will soon generate positive cash flow.

With the acquisition of Mission Group, the Company anticipates increasing Troika’s footprint in a major media markets, such as NY and London. The Company also continues to expand its consulting services and breadth of product offering with existing Mission and Troika clients and increase business development in NY and London as a result of the Mission acquisition. Additionally, the Company intends to add to Mission business development due to Troika’s existing clientele.

During the fiscal year ended June 30, 2020, the Company entered into an agreement with a financial advisory firm to analyze potential financing transactions including preparing the Company for an initial public offering (IPO). The Company anticipates this firm serving as its underwriter during the IPO process and expects to file a Form S-1 registration statement with the U.S. Securities and Exchange Commission shortly. Management is confident the proceeds from the IPO will be more than sufficient to meet the Company’s cash requirements until the Company generates positive cash flow in fiscal year 2022.

Subsequent to year-end June 30, 2020, the Company has received an additional $500,000 in funding relating to the Paycheck Protection Program and has historically been successful raising funds through private placements when necessary. In addition, the Company has been successful at raising funding through debt financing, has entered into three separate unsecured loan facility agreements in fiscal year 2020 with friendly lenders totaling $1.4 million and Management believes they can raise additional capital through similar means if necessary.

If the Company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and require significant debt service payments, which diverts resources from other activities. If the Company is unable to obtain additional financing, it may be required to significantly scale back its business and operations. The Company’s ability to raise additional capital will also be impacted by the outbreak of COVID-19.

Based on this acquisition, company-wide consolidation, and management’s plans, the Company believes that the current cash on hand and anticipated cash from operations is sufficient to conduct planned operations for one year from the issuance of the consolidated financial statements.

Impact of COVID-19

In March 2020, the World Health Organization categorized the coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and the resulting public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and those of our clients. Businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the clients we service. We continue to believe our focus on our strategic strengths, including talent, our differentiated market strategy and the relevance of our services, including the longevity of our relationships, will continue to assist our Company as we navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic will negatively impact our results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19.

We have taken steps to protect the safety of our employees, with a large majority of our worldwide workforce now working from home, while developing creative ideas to protect the health and well-being of our communities and setting up our people to help them do their best work for our clients while working remotely. With respect to managing costs, we have multiple initiatives underway to align our expenses with changes in revenue. The steps being taken across our agencies and corporate group include deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary deferment for our senior corporate management team. In addition, we remain committed to and have intensified our efforts around cash flow discipline, including the identification of significant capital expenditures that can be deferred, and working capital management. We began to see the effects of COVID-19 on client spending, notably in the UK and US markets with our Mission subsidiaries throughout the second quarter of calendar 2020 with much of the work force of the UK subsidiary on furlough, and with our Troika Design subsidiary furloughed as March progressed. Due to mandatory stay at home orders and social distancing, our experiential business has been particularly impacted by COVID-19. Promotional and experiential events with the Company’s assistance are particularly susceptible to external factors and are being delayed by many of the Company’s Mission clients due to the effects of COVID-19. The Company is in the process of temporarily furloughing employees to reflect current reduced demands associated with those client sets. We expect a greater impact on our second calendar quarter results as clients respond to the current economic conditions by reducing their marketing budgets, which will affect the demand for our services.

We have also taken steps to strengthen our financial position during this period of heightened uncertainty. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide relief as a result of the COVID-19 outbreak. The CARES Act, among other things, includes 1) provisions relating to compensation, benefits and payroll tax relief, 2) the availability of net operating loss carrybacks for periods beginning in 2018 and before 2021 and alternative minimum tax credit refunds, and 3) modifications to the net interest deduction limitations. The Company continues to examine the impacts the CARES Act may have on its business. The governments in which our International subsidiaries are located are offering similar business relief programs and the Company is examining the impacts of these programs on its operations as well.

In the current environment, a major priority for us is preserving liquidity. Our primary liquidity sources are operating cash flow, cash and cash equivalents and short-term investments. Although we expect to experience a decrease in our cash flow from operations as a result of the impact of COVID-19, we have obtained relief under the CARES Act in the form of a Small Business Administration backed loan. In aggregate we received $1.7 million in SBA stimulus “Payroll Protection Program” loans as of April 27, 2020. Of which the majority of these loans were used for payroll. As per the US Government rules these amounts used for payroll, healthcare benefits and some of the loan may be forgiven. We believe these steps will enhance our financial resources as we navigate the period ahead. On August 14, 2020, the Company received an additional $500,000 in loans with 30 year terms under the SBA’s “Economic Injury Disaster Loan” program which the Company which the Company used to address any cash shortfalls that may result from the current pandemic. The Company expects to obtain another $1,700,000 in Payroll Protection Program loans as part of the second stimulus payments in January or February 2021.

In the United Kingdom, as of April 1, 2020, Mission furloughed 27 employees, saving £78,000 in April payroll, being made up of £55,000 of furlough monies from the government and £16,000 in associated payroll savings and applied for a 3-month rent holiday. In May 1, 2020, Mission put on furlough an additional 5 employees bring the total to 32, alongside a 10% pay cut for all employees not furloughed, saving £111,000 in May payroll, being made up of £62,000 of furlough monies from the government, £33,000 of associated payroll savings and £16,000 in savings related to the pay cut. On April 1, 2020, Troika Design Group actioned a 25% salary reduction across the entire Los Angeles staff and furloughed one office manager for a total savings of $112,000 per month. Finally, certain members of the Company’s executive team have deferred compensation temporarily.

The extent to which the COVID-19 outbreak continues to impact the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact. While the Company’s revenue has declined by $16.2M from $40.8M to $24.6M in the fiscal years ending June 30, 2019 and 2020 respectively, the Company is still quantifying how much of this decline in revenue was caused by the pandemic as well as the impact from the departure of Mission’s founder.

RISKS & UNCERTAINTIES

Liquidity

The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows until fiscal year 2022. For the nine months ended March 31, 2021, the Company had a net loss of $9,223,000 which increased the accumulated deficit to $180.1 million at March 31, 2021 from $170.9 million at June 30, 2020. At March 31, 2021, the Company had approximately $1.4 million in cash and cash equivalents and a total of $4.8 million in current assets in relation to $21.2 million in current liabilities. While the Company continues to find efficiencies with its acquisitions of Troika Design Group, Inc. and Mission Group, the departure of Mission’s President and Founder in fiscal year 2019 together with the coronavirus (COVID-19) pandemic in fiscal years 2020 and 2021 impacted revenue more than anticipated.

With the acquisition of Mission Group, the Company anticipated increasing Troika’s footprint in a major media markets, such as NY and London. The Company also continues to expand its consulting services and breadth of product offering with existing Mission and Troika clients and increase business development in NY and London as a result of the Mission acquisition. Additionally, the Company intends to add to Mission business development due to Troika’s existing clientele.

During the fiscal year ended June 30, 2020, the Company entered into an agreement with a financial advisory firm to analyze potential financing transactions including preparing the Company for an initial public offering (IPO). In April 2021, the Company’s Form S-1 registration statement was declared effective by the U.S. Securities and Exchange Commission. The Company received net proceeds of $21.9 million ’and the Company’s securities were listed on the Nasdaq Capital Market. Management believes the proceeds from the IPO will be more than sufficient to meet the Company’s cash requirements until the Company generates positive cash flow.

Impact of COVID-19 Pandemic

In March 2020, the World Health Organization categorized the coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and the resulting public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and those of our clients. Businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the clients we service. We continue to believe our focus on our strategic strengths, including talent, our differentiated market strategy and the relevance of our services, including the longevity of our relationships, will continue to assist our Company as we navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic have negatively impacted our results of operations, cash flows and financial position; however, the continued extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19.

We took steps to protect the safety of our employees, with a large majority of our worldwide workforce working from home, while developing creative ideas to protect the health and well-being of our communities and setting up our people to help them do their best work for our clients while working remotely. With respect to managing costs, we have took multiple initiatives to align our expenses with changes in revenue. The steps taken across our agencies and corporate group include deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary deferment for our senior corporate management team. In addition, we remain committed to and have intensified our efforts around cash flow discipline, including the identification of significant capital expenditures that can be deferred, and working capital management. We began to see the effects of COVID-19 on client spending, notably in the UK and US markets with our Mission subsidiaries throughout the second quarter of calendar 2020 with much of the work force of the UK subsidiary on furlough, and with our Troika Design subsidiary furloughed as March 2020 progressed. Due to mandatory stay at home orders and social distancing, our experiential business has been particularly impacted by COVID-19. Promotional and experiential events with the Company’s assistance are particularly susceptible to external factors were delayed by many of the Company’s Mission clients due to the effects of COVID-19. The Company had temporarily furloughed employees to reflect current reduced demands associated with those client sets. However, as of mid-February 2021, we started to see business dramatically improve and expect greater improvement in our results in our next fiscal quarters. As cities have commenced openings with the improvement of vaccines distribution and infection rates declining, our client activities have doubled and there is a real optimism that the economic conditions are improving. Sports, Entertainment, Pharma clients are contracting our services across all entities at rates similar to 2019.

We took steps to strengthen our financial position during this period of heightened uncertainty. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide relief as a result of the COVID-19 outbreak. The CARES Act, among other things, includes 1) provisions relating to compensation, benefits and payroll tax relief, 2) the availability of net operating loss carrybacks for periods beginning in 2018 and before 2021 and alternative minimum tax credit refunds, and 3) modifications to the net interest deduction limitations. The Company continues to examine the impacts the CARES Act may have on its business. The governments in which our International subsidiaries are located are offering similar business relief programs and the Company is examining the impacts of these programs on its operations as well.

In the current environment, a major priority for us is preserving liquidity. Our primary liquidity sources are operating cash flow, cash and cash equivalents and short-term investments. Although we expect to experience a decrease in our cash flow from operations as a result of the impact of COVID-19, we have obtained relief under the CARES Act in the form of a Small Business Administration backed loans. In aggregate we received $1.7 million in SBA stimulus “Payroll Protection Program” funding in April 2020 of which the majority of these funds were used for payroll. As per the US Government rules, the funds used for payroll, healthcare benefits, and other applicable operating expenses can be forgiven and the Company reported them as such in December 2020 considering the Company believes we have substantially met these conditions. On August 14, 2020, the Company received an additional $500,000 in loans with 30 year terms under the SBA’s “Economic Injury Disaster Loan” program which the Company intends to use to address any cash shortfalls that may result from the current pandemic. In February 2021, the Company obtained additional relief under the CARES Act in the form of a Small Business Administration backed loans and received an additional $1.7 million in SBA stimulus “Payroll Protection Program” funds which will be used for payroll, healthcare benefits, and other applicable operating expenses.

In the United Kingdom, as of April 1, 2020, Mission furloughed 27 employees, saving £78,000 in April payroll, being made up of £55,000 of furlough monies from the government and £16,000 in associated payroll savings and applied for a 3-month rent holiday. In May 1, 2020, Mission put on furlough an additional 5 employees bringing the total to 32, alongside a 10% pay cut for all employees not furloughed, saving £111,000 in May payroll, being made up of £62,000 of furlough monies from the government, £33,000 of associated payroll savings and £16,000 in savings related to the pay cut. On April 1, 2020, Troika Design Group actioned a 15% salary reduction across the majority of the Los Angeles staff and furloughed one office manager for a total savings of $112,000 per month. Finally, certain members of the Company’s executive team deferred compensation temporarily. In August 2020, the Company received £50,000 in loans related to the COVID pandemic with an interest rate of 2.5% to be paid over five years beginning one year after receipt. The Company used these proceeds to address any cash shortfalls that resulted from the pandemic.

The extent to which the COVID-19 outbreak continues to impact the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact. While the Company’s revenue has declined by $8.3 million from $20.8 million to $12.4 million in the nine months ending March 31, 2021 and 2020 respectively, the Company is still quantifying how much of this decline in revenue was caused by the pandemic as well as the impact from the departure of Mission’s founder.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of TMG, and its wholly-owned subsidiaries, Troika Design Group, Inc. (California), Troika Services Inc. (New York), Troika Analytics Inc. (New York), Troika Productions, LLC (California), Troika-Mission Holdings, Inc. (New York), Mission Culture LLC (Delaware), Mission-Media Holdings Limited (England and Wales), and Mission Media USA, Inc. (New York). All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements include the accounts of TMG, and its wholly-owned subsidiaries, Troika Design Group, Inc. (California), Troika Services Inc. (New York), Troika Analytics Inc. (New York), Troika Productions, LLC (California), Troika-Mission Holdings, Inc. (New York), Mission Culture LLC (Delaware), Mission-Media Holdings Limited (England and Wales), and Mission Media USA, Inc. (New York). All significant intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting periods.

Significant estimates and assumptions made by management include, among others, the assessment of the collectability of accounts receivable and the determination of the allowance for doubtful accounts, the valuation and useful life of capitalized equipment costs and long-lived assets, valuation of warrants and options, the determination of the useful lives and any potential impairment of long-lived assets such as intangible assets, the valuation of goodwill, stock-based compensation, and deferred tax assets. Actual results could differ from those estimates.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting periods.

Significant estimates and assumptions made by management include, among others, the assessment of the collectability of accounts receivable and the determination of the allowance for doubtful accounts, the valuation and useful life of capitalized equipment costs and long-lived assets, valuation of warrants and options, the determination of the useful lives and any potential impairment of long-lived assets such as intangible assets, the valuation of goodwill, stock-based compensation, and deferred tax assets. Actual results could differ from those estimates.

FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS

The Company has estimated the fair value of its financial instruments using the available market information and valuation methodologies considered to be appropriate and has determined that the book value of the Company’s accounts receivable, prepaid expenses, accounts payable, and accrued expenses, as of March 31, 2021 and 2020, respectively, approximate fair value based on their short-term nature.

FAIR VALUE MEASUREMENT

Fair value is defined 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 as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as March 31, 2021 and 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts payable, accrued liabilities, and convertible notes payable. Fair values for these items were assumed to approximate carrying values because of their short-term nature or they are payable on demand.

Fair value is defined 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 as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as June 30, 2020 and 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued liabilities, and convertible notes payable. Fair values for these items were assumed to approximate carrying values because of their short term nature or they are payable on demand.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the undiscounted value of expected future operating cash flows is used to determine whether the asset is recoverable and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or discounted future operating cash flows.

The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the undiscounted value of expected future operating cash flows is used to determine whether the asset is recoverable, and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or discounted future operating cash flows.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalent account balances with financial institutions in the United States and United Kingdom which at times exceed federally insured limits for accounts in the United States. Considering deposits with these institutions can be redeemed on demand, the Company believes there is minimal risk. As of March 31, 2021 and 2020, the Company had $365,000 and $401,000 in cash that was uninsured, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalent account balances with financial institutions in the United States and United Kingdom which at times exceed federally insured limits for accounts in the United States. Considering deposits with these institutions can be redeemed on demand, the Company believes there is minimal risk. As of June 30, 2020 and 2019, the Company had $822,000 and $1,241,000 in cash that was uninsured, respectively.

For the fiscal years ending June 30, 2020 and 2019, (6) customers accounted for 45.1% and 44.9% of our net revenues, respectively. As of June 30, 2020, three customers made up 35.6% of the net receivable balance however it was collected subsequent to year-end. As of June 30, 2019, three customers made up 37.6% of the net receivable balance. The Company believes there is minimal risk however it will continue to monitor.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of March 31, 2021 and 2020, the Company had no cash equivalents.

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of June 30, 2020 and 2019, the Company had no cash equivalents.

ACCOUNTS RECEIVABLE

Our accounts receivable are amounts due from our clients. The Company accounts for unbilled accounts receivable using the percentage-of-completion accounting method for revenue recognized and the customer has not been invoiced due to the terms of the contract or the timing of the account invoicing cycle.

For those clients to whom we extend credit, we perform periodic evaluations of accounts receivable and maintain allowances for potential credit losses as deemed necessary.

The Company periodically reviews the outstanding accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. When a customer’s account is deemed to be uncollectible the outstanding balance is charged to the allowance for doubtful accounts. As of March 31, 2021 and 2020, the Company had $579,000 and $518,000 in allowance for doubtful accounts, respectively.

Our accounts receivable are amounts due from our clients. The Company accounts for unbilled accounts receivable using the percentage-of-completion accounting method for revenue recognized and the customer has not been invoiced due to the terms of the contract or the timing of the account invoicing cycle.

For those clients to whom we extend credit, we perform periodic evaluations of accounts receivable and maintain allowances for potential credit losses as deemed necessary.

The Company periodically reviews the outstanding accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. When a customer’s account is deemed to be uncollectible the outstanding balance is charged to the allowance for doubtful accounts. As of June 30, 2020 and 2019, the Company had $781,000 and $385,000, in allowance for doubtful accounts, respectively.

PROPERTY AND EQUIPMENT, NET

Property and equipment are stated at cost less accumulated depreciation and amortization. Property and equipment consist of furniture and computer equipment. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, generally ranging from three to seven years. Maintenance and repairs are charged to expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is reflected in the statements of income in the period realized.

GOODWILL AND INTANGIBLE ASSETS

            As a result of acquisitions, the Company recorded goodwill and identifiable intangible assets as part of its allocation of the purchase consideration.

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at June 30 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value then an impairment loss is recognized equal to that excess. A goodwill impairment charge of $598,000 was recorded as a result of the Company’s annual impairment assessment on June 30, 2020. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired.

We test our goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is June 30. Internal evaluations on both March 31, 2021 and 2020 determined that impairments were not necessary and this will be reevaluated June 30, 2021.

None of the goodwill is deductible for income tax purposes.

Intangibles

Intangible assets with finite useful lives consist of tradenames, non-compete agreements, acquired workforce and customer relationships and are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. It was determined by the Company that the COVID-19 pandemic was a triggering event and after an internal evaluation it was concluded that an impairment for intangibles was required on March 31, 2020 for $1,387,000. An internal evaluation was also carried out on March 31, 2021 and it was determined that an impairment was not necessary.

As a result of acquisitions, the Company recorded goodwill and identifiable intangible assets as part of its allocation of the purchase consideration.

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at June 30 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value, then an impairment loss is recognized equal to that excess. A goodwill impairment charge of $1,985,000 and $3,082,000 was recorded as a result of the Company’s annual impairment assessment in fiscal year 2020 and 2019 respectively. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired.

We test our goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is June 30.

None of the goodwill is deductible for income tax purposes.

Intangibles

Intangible assets with finite useful lives consist of tradenames, non-compete agreements, acquired workforce and customer relationships and are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. There was an impairment of intangibles recorded of $1,867,000 and $0 for the year ended June 30, 2020 and 2019, respectively.

REVENUE RECOGNITION

In accordance with the FASB issued amended guidance in the form of ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASC 606”), the Company has modified its revenue recognition policy beginning in fiscal year 2019 using modified retrospective (cumulative effect) transition method. Under this transition method, results for reporting periods beginning July 1, 2018 or later are presented under ASC 606, while prior period results continue to be reported in accordance with previous guidance. The cumulative effect of the initial application of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings. The timing of revenue recognition for our various revenue streams was not materially impacted by the adoption of this standard. Overall, the adoption of ASC 606 did not have a material impact on the Company’s consolidated balance sheet, statement of operations and comprehensive loss and statement of cash flows for the year ended June 30, 2019. ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

The Company recognizes primarily four revenue streams and they are retainer fees, project fees, reimbursement income, and fee income.

Retainer fees are non-refundable fixed amounts being received from a client often on a recurring basis and the performance obligation is the staff being available to provide consultation services. Consulting engagements do not incur a significant amount of direct costs however any costs are recognized as incurred. Consulting fees are recognized evenly throughout the term of the agreement.

Project fees are associated with the delivery of services and/or goods to a client and the revenue includes both the anticipated costs to deliver the product as well as the Company’s margin. As per ASC 606-10-25-31, the Company recognizes project fees over time by measuring the progress toward complete satisfaction of a performance obligation by measuring its performance in transferring control of the services contractually delivered to a client by applying the input method. Revenue is recognized based on the extent of inputs expended toward satisfying a performance obligation and it was determined that the best judge of inputs is the costs consumed by a project in relation to its total anticipated costs. As part of the close process the Company compiles a preliminary percentage of completion (POC) for each project which is the ratio of incurred costs to date in relation to the anticipated costs from the production team’s approved budgets. The POC ratio is then applied to the contracted revenue and the pro-rated revenue is then recognized accordingly.

Reimbursement income represents compensation relating to the out-of-pocket costs associated with a staging of a live event. As per 606-10-25-31, the Company recognizes reimbursement income over time by measuring the progress toward complete satisfaction of a performance obligation by measuring its performance in transferring control of the services contractually delivered to a client by applying the input method. The revenue is recognized based on the extent of inputs expended toward satisfying a performance obligation and it was determined that the best judge of input is the costs incurred to date in relation to the anticipated costs. As a result, unless an overage or saving is identified, the reimbursement income equates to the reimbursement costs incurred. Given that the Company contracts directly with the majority of the vendors and is liable for any overages, the Company is deemed a principal in this revenue transaction as they have control over the asset and transfer the asset themselves. As a result, this transaction is recorded gross rather than net.

Fee income represents the Company’s margin on the staging of a live event, is negotiated with the client prior and fixed. Based on ASC 606, the Company’s progress in satisfying the performance obligation in a contract is difficult to determine so as a result the fee income is only recognized at the conclusion of a project. Only upon confirmation the Company has performed all its contractual obligations as per the contract does the Company record fee income.

Contract Assets

The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s consolidated balance sheet are from contracts with customers.

Contract Costs

Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of June 30, 2020 and 2019.

Contract Liabilities - Deferred Revenue

The Company’s contract liabilities consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized.

ADVERTISING

The Company generally expenses marketing and advertising costs as incurred. During the years ended June 30, 2020 and 2019, the Company incurred $12,000 and $52,000, respectively, on marketing, trade shows and advertising.

The Company received rebates on advertising from co-operative advertising agreements with several vendors and suppliers. These rebates have been recorded as a reduction to the related advertising and marketing expense.

BENEFICIAL CONVERSION FEATURE

The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20, Debt with Conversion and Other Options, Emerging Issues Task Force (“EITF”) 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF 00-27, Application of Issue No 98-5 To Certain Convertible Instruments. The Beneficial Conversion Feature (“BCF”) of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

The BCF of a convertible note is measured by allocating a portion of the note’s proceeds to the warrants, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid-in-capital. The value of the proceeds received from a convertible note is then allocated between the conversion features and warrants on an allocated fair value basis. The allocated fair value is recorded in the financial statements as a debt discount (premium) from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense using interest method.

The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20, Debt with Conversion and Other Options, Emerging Issues Task Force (“EITF”) 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF 00-27, Application of Issue No 98-5 To Certain Convertible Instruments. The Beneficial Conversion Feature (“BCF”) of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

The BCF of a convertible note is measured by allocating a portion of the note’s proceeds to the warrants, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid-in-capital. The value of the proceeds received from a convertible note is then allocated between the conversion features and warrants on an allocated fair value basis. The allocated fair value is recorded in the financial statements as a debt discount (premium) from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense using interest method.

STOCK-BASED COMPENSATION

The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

For non-employee stock-based compensation, the Company has adopted ASC 2018-07, Improvements to Nonemployee Share-Based Payment Accounting which expands on the scope of ASC 718 to include share-based payment transactions for acquiring services from non-employees and requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock.

The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

For non-employee stock-based compensation, the Company has adopted ASC 2018-07, Improvements to Nonemployee Share-Based Payment Accounting which expands on the scope of ASC 718 to include share-based payment transactions for acquiring services from non-employees and requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or the fair value of the services at the grant date, whichever is more readily determinable in accordance with ASC Topic 718.

FOREIGN CURRENCY TRANSLATION

The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company is U.S. dollars for all entities other than Mission Media Limited whose operations are based in the United Kingdom and their functional currency is British Pound Sterling (GBP). Transactions in currencies other than the functional currencies are recorded using the appropriate exchange rate at the time of the transaction. All assets and liabilities are translated into U.S. Dollars at balance sheet date, stockholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) income. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.

The relevant translation rates are as follows: for the quarter ended March 31, 2021 closing rate at 1.378900 US$: GBP, average rate at 1.342278 US$: GBP, for the quarter ended March 31, 2020 closing rate at 1.241200 US$: GBP, average rate at 1.268544 US$.

The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company is U.S. dollars for all entities other than Mission Media Limited whose operations are based in the United Kingdom and their functional currency is British Pound Sterling (GBP). Transactions in currencies other than the functional currencies are recorded using the appropriate exchange rate at the time of the transaction. All assets and liabilities are translated into U.S. Dollars at balance sheet date, stockholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) income. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations.

The relevant translation rates are as follows: for the year ended June 30, 2020 closing rate at 1.238900 US$: GBP, yearly average rate at 1.262367 US$: GBP, for the year ended June 30, 2019 closing rate at 1.268980 US$: GBP, yearly average rate at 1.294241 US$: GBP.

INCOME TAXES

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax 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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse.

The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company has net operating losses for both their US and UK entities however a full valuation allowance was recorded due to uncertainties in realizing the deferred tax asset (Note 14 – Income Taxes).

COMPREHENSIVE LOSS

Comprehensive loss is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. For the Company, comprehensive loss for the three and nine months ended March 31, 2021 and 2020 included net loss and unrealized losses from foreign currency translation adjustments.

Comprehensive loss is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. For the Company, comprehensive loss for the years ending June 30, 2020 and 2019 included net loss and unrealized gains from foreign currency translation adjustments.

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table provides the numerators and denominators in the basic and diluted earnings per share computations for the three months ended March 31. The figures represent the converted common stock equivalent.

	Three Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(4,679,000	)	$	(7,817,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		17,687,179			15,454,623
Weighted average common stock retired		(2,576,779	)		-
Weighted average common shares issued during the period		-			-
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,110,400			15,454,623
Diluted EPS:
Common shares outstanding, beginning of period		17,687,179			15,454,623
Weighted average common stock retired		(2,576,779	)		-
Weighted average common shares issued during the period		-			-
Denominator for basic earnings per common shares		-			-
Preferred Stock Series A, beginning of period		720,000			720,000
Preferred Stock Series B, beginning of period		2,495,000			2,495,000
Preferred Stock Series C, beginning of period		911,149			911,149
Preferred Stock Series D, beginning of period		1,979,000			1,979,000
Stock payable, beginning of period		156,000			1,300,000
Weighted average diluted effect of stock options		2,771,081			2,342,660
Weighted average diluted effect of warrants		7,622,411			6,110,534
Lock-Up Agreements - common stock equivalents		-			(5,711,111	)
Weighted average common shares		31,765,041			25,601,854

The following table provides the numerators and denominators in the basic and diluted earnings per share computations for the nine months ended March 31. The figures represent the converted common stock equivalent.

	Nine Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(9,223,000	)	$	(15,195,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		15,454,623			15,211,290
Weighted average common stock retired		(836,983	)		(296,533	)
Weighted average common shares issued during the period		1,257,143			498,613
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,874,783			15,413,370
Diluted EPS:
Common shares outstanding, beginning of period		15,454,623			15,211,290
Weighted average common stock retired		(836,983	)		(296,533	)
Weighted average common shares issued during the period		1,257,143			498,613
Denominator for basic earnings per common shares		-			-
Preferred Stock Series A, beginning of period		720,000			720,000
Preferred Stock Series B, beginning of period		2,495,000			2,495,000
Preferred Stock Series C, beginning of period		911,149			911,149
Preferred Stock Series D, beginning of period		1,979,000			1,881,500
Stock payable, beginning of period		1,300,000			1,743,000
Weighted average preferred stock series D purchased during the period		-			260,000
Weighted average stock payable issued during the period		-			-
Weighted average diluted effect of stock options		2,686,722			2,127,915
Weighted average diluted effect of warrants		7,756,204			6,443,472
Lock-Up Agreements - common stock equivalents		-			(5,711,111	)
Weighted average common shares		33,722,857			26,284,295

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table provides the numerators and denominators in the basic and diluted earnings per share computations for the years ended June 30. The figures represent the converted common stock equivalent.

	Year Ended June 30,
	2020			2019
Numerator:
Net loss attributable to common stockholders	$	(14,447,000	)	$	(6,861,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		15,211,290			15,211,290
Weighted average common shares issued during the period		212,365			-
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,423,655			15,211,290
Diluted EPS:
Common shares outstanding, beginning of period		15,211,290			15,211,290
Weighted average common shares issued during the period		212,365			-
Preferred Stock Series A, beginning of period		48,000			48,000
Preferred Stock Series B, beginning of period		594,048			594,048
Preferred Stock Series C, beginning of period		12,148,653			11,798,653
Preferred Stock Series D, beginning of period		5,017,333			1,644,000
Stock payable, beginning of period		2,324,000			590,667
Reduction of stock payable due to issuance		(660,000	)		-
Weighted average preferred stock series C purchased during the period		-			271,960
Weighted average preferred stock series D purchased during the period		197,078			2,703,616
Weighted average stock payable issued during the period		-			940,273
Weighted average diluted effect of stock options		2,453,486			2,492,996
Weighted average diluted effect of warrants		6,901,474			5,722,661
Lock-Up Agreements - common stock equivalents		(5,711,111	)		-
Denominator for diluted earnings per common shares		-			-
Weighted average common shares		38,736,615			42,018,163

CORRECTION OF AN IMMATERIAL MISSTATEMENT

During the nine months ending March 31, 2021 the Company identified certain liabilities recorded as of June 30, 2020 relating to “Payroll Protection Program” stimulus funding totaling $1,704,000 that were to be treated as a government grant rather than debt. In accordance with IAS-20, Accounting for Government Grants and Disclosure of Government Assistance, the proceeds from government grants are to be recognized as a deferred income liability and reported as income as the related costs are expensed. On June 30, 2020, the Company recorded these funds as debt and should have recorded the balance of $1,704,000 as a deferred income liability. The Company believes this is an immaterial misstatement as the total liabilities would have been unchanged.

RECLASSIFICATION OF PRIOR YEAR PRESENTATION

Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported consolidated balance sheets and statement of operations and comprehensive loss.

Certain prior year’s amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported consolidated balance sheets and statement of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In February 2016 the FASB issued amended guidance in the form of ASU No. 2016-02, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting for all leases with terms longer than twelve months. Lessees initially recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The right-of-use asset is measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs. Leases will be classified as either finance (formerly “capital leases”) or operating, with classification affecting the pattern of expense recognition in the income statement. The standard provides for a modified retrospective transition approach for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain optional practical expedients. In July 2018, the FASB issued ASU 2018-11, “Leases: Targeted Improvements”, allowing for an alternative transition method (the effective date approach). It allows an entity to initially apply the new lease guidance at the adoption date (rather than at the beginning of the earliest period presented). The Company adopted the new guidance on July 1, 2019 using the optional transitional method and elected to use the package of three practical expedients which allows the Company not to reassess whether contracts are or contain leases, lease classification and whether initial direct costs qualify for capitalization. Upon adoption of the standard, the Company has recognized an $8.9 million right-of-use asset and offsetting lease liability on the balance sheet which resulted in no impact on accumulated deficit. The Company also removed deferred rent of approximately $842,000 when adopting the new guidance.

In July 2017, the FASB issued amended guidance in the form of ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In February 2018 the FASB issued amended guidance in the form of ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)”, which amends the previous guidance to allow for certain tax effects “stranded” in accumulated other comprehensive income, which are impacted by the Tax Cuts and Jobs Act (the “Tax Reform Act”), to be reclassified from accumulated other comprehensive income into retained earnings. This amendment pertains only to those items impacted by the new tax law and will not apply to any future tax effects stranded in accumulated other comprehensive income. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In June 2018, the FASB issued amended guidance in the form of ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In October 2018, the FASB issued amended guidance in the form of ASU No. 2018-17, “Targeted Improvements to Related Party Guidance for Variable Interest Entities.” This ASU amends the guidance for determining whether a decision-making fee is a variable interest. ASU No. 2018-17 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company has adopted this standard effective July 1, 2019 and has determined that there were no such instances resulting in no material impact to the financials.

Recently Adopted Accounting Pronouncements

In February 2016 the FASB issued amended guidance in the form of ASU No. 2016-02, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting for all leases with terms longer than twelve months. Lessees initially recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The right-of-use asset is measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs. Leases will be classified as either finance (formerly “capital leases”) or operating, with classification affecting the pattern of expense recognition in the income statement. The standard provides for a modified retrospective transition approach for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain optional practical expedients. In July 2018, the FASB issued ASU 2018-11, “Leases: Targeted Improvements”, allowing for an alternative transition method (the effective date approach). It allows an entity to initially apply the new lease guidance at the adoption date (rather than at the beginning of the earliest period presented). The Company adopted the new guidance on July 1, 2019 using the optional transitional method and elected to use the package of three practical expedients which allows the Company not to reassess whether contracts are or contain leases, lease classification and whether initial direct costs qualify for capitalization. Upon adoption of the standard, the Company has recognized a $8.3 million right-of-use asset and offsetting lease liability on the balance sheet which resulted in no impact on accumulated deficit. The Company also removed deferred rent of approximately $842,000 when adopting the new guidance.

In July 2017, the FASB issued amended guidance in the form of ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception”. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In February 2018 the FASB issued amended guidance in the form of ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)”, which amends the previous guidance to allow for certain tax effects “stranded” in accumulated other comprehensive income, which are impacted by the Tax Cuts and Jobs Act (the “Tax Reform Act”), to be reclassified from accumulated other comprehensive income into retained earnings. This amendment pertains only to those items impacted by the new tax law and will not apply to any future tax effects stranded in accumulated other comprehensive income. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In June 2018, the FASB issued amended guidance in the form of ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

In October 2018, the FASB issued amended guidance in the form of ASU No. 2018-17, “Targeted Improvements to Related Party Guidance for Variable Interest Entities.” This ASU amends the guidance for determining whether a decision-making fee is a variable interest. ASU No. 2018-17 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company has adopted this standard effective July 1, 2019 and has determined that there was no material impact to the financials.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued amended guidance in the form of ASU No. 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on July 1, 2020 with early adoption permitted. The Company is in the initial stage of evaluating the impact of this new standard on its trade and other receivables.

In December 2019, the FASB issued amended guidance in the form of ASU No. 2019-12, ”Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is in the initial stage of evaluating the impact of this new standard however it does not believe the guidance will have a material impact on our financial statements.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE

In August 2020, FASB issued ASU 2020-06, ”Debt—Debt with Conversion and Other and Derivatives and Hedging—Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the accounting for convertible instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. These changes will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was bifurcated according to previously existing rules. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The new guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 however it is not believed that it will result in a material to the financials.

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PRESENTATION OF THE FINANCIAL STATEMENTS (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

PRESENTATION OF THE FINANCIAL STATEMENTS

Schedule of basic and diluted earnings per share

	Three Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(4,679,000	)	$	(7,817,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		17,687,179			15,454,623
Weighted average common stock retired		(2,576,779	)		-
Weighted average common shares issued during the period		-			-
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,110,400			15,454,623
Diluted EPS:
Common shares outstanding, beginning of period		17,687,179			15,454,623
Weighted average common stock retired		(2,576,779	)		-
Weighted average common shares issued during the period		-			-
Denominator for basic earnings per common shares		-			-
Preferred Stock Series A, beginning of period		720,000			720,000
Preferred Stock Series B, beginning of period		2,495,000			2,495,000
Preferred Stock Series C, beginning of period		911,149			911,149
Preferred Stock Series D, beginning of period		1,979,000			1,979,000
Stock payable, beginning of period		156,000			1,300,000
Weighted average diluted effect of stock options		2,771,081			2,342,660
Weighted average diluted effect of warrants		7,622,411			6,110,534
Lock-Up Agreements - common stock equivalents		-			(5,711,111	)
Weighted average common shares		31,765,041			25,601,854

	Nine Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(9,223,000	)	$	(15,195,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		15,454,623			15,211,290
Weighted average common stock retired		(836,983	)		(296,533	)
Weighted average common shares issued during the period		1,257,143			498,613
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,874,783			15,413,370
Diluted EPS:
Common shares outstanding, beginning of period		15,454,623			15,211,290
Weighted average common stock retired		(836,983	)		(296,533	)
Weighted average common shares issued during the period		1,257,143			498,613
Denominator for basic earnings per common shares		-			-
Preferred Stock Series A, beginning of period		720,000			720,000
Preferred Stock Series B, beginning of period		2,495,000			2,495,000
Preferred Stock Series C, beginning of period		911,149			911,149
Preferred Stock Series D, beginning of period		1,979,000			1,881,500
Stock payable, beginning of period		1,300,000			1,743,000
Weighted average preferred stock series D purchased during the period		-			260,000
Weighted average stock payable issued during the period		-			-
Weighted average diluted effect of stock options		2,686,722			2,127,915
Weighted average diluted effect of warrants		7,756,204			6,443,472
Lock-Up Agreements - common stock equivalents		-			(5,711,111	)
Weighted average common shares		33,722,857			26,284,295

	Year Ended June 30,
	2020			2019
Numerator:
Net loss attributable to common stockholders	$	(14,447,000	)	$	(6,861,000	)
Denominator:
Basic EPS:
Common shares outstanding, beginning of period		15,211,290			15,211,290
Weighted average common shares issued during the period		212,365			-
Denominator for basic earnings per common shares		-			-
Weighted average common shares		15,423,655			15,211,290
Diluted EPS:
Common shares outstanding, beginning of period		15,211,290			15,211,290
Weighted average common shares issued during the period		212,365			-
Preferred Stock Series A, beginning of period		48,000			48,000
Preferred Stock Series B, beginning of period		594,048			594,048
Preferred Stock Series C, beginning of period		12,148,653			11,798,653
Preferred Stock Series D, beginning of period		5,017,333			1,644,000
Stock payable, beginning of period		2,324,000			590,667
Reduction of stock payable due to issuance		(660,000	)		-
Weighted average preferred stock series C purchased during the period		-			271,960
Weighted average preferred stock series D purchased during the period		197,078			2,703,616
Weighted average stock payable issued during the period		-			940,273
Weighted average diluted effect of stock options		2,453,486			2,492,996
Weighted average diluted effect of warrants		6,901,474			5,722,661
Lock-Up Agreements - common stock equivalents		(5,711,111	)		-
Denominator for diluted earnings per common shares		-			-
Weighted average common shares		38,736,615			42,018,163

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ACQUISITIONS (Tables)

12 Months Ended

Jun. 30, 2020

ACQUISITIONS

Schedule of fair value of consideration to contingent payment

Cash paid at Closing	$	11,000,000
Fair value of common stock issued at Closing		12,500,000
Estimated value of earn out payments		3,377,000
Estimated value of earn-out consideration		4,194,000
Total purchase price	$	31,071,000

Summary of allocation of purchase price

Current assets		$	5,800,000
Furniture and equipment			362,000
Director loan			835,000
Intangible assets:
Customer relationships	7,100,000
Non-compete agreements	2,200,000
Workforce acquired	1,900,000		11,200,000
Goodwill			19,531,000
Current liabilities			(6,557,000	)
Foreign currency translation adjustment			(100,000	)
Consideration		$	31,071,000

Schedule of intangible assets

Intangible Asset	Life in Years
Customer relationships		3
Non-compete agreements		5
Workforce acquired		3

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

PROPERTY AND EQUIPMENT

Schedule of Property and equipment

	March 31, 2021			June 30, 2020
Computer equipment	$	650,000		$	620,000
Website design		6,000			6,000
Office machine & equipment		97,000			89,000
Furniture & fixtures		437,000			429,000
Leasehold improvements		191,000			173,000
Tenant incentives		145,000			145,000
		1,526,000			1,462,000
Accumulated depreciation		(1,253,000	)		(1,118,000	)
Net book value	$	273,000		$	344,000

	2020			2019
Computer equipment	$	620,000		$	566,000
Website design		6,000			6,000
Office machine & equipment		89,000			88,000
Furniture & fixtures		429,000			427,000
Leasehold improvements		173,000			997,000
Tenant incentives		145,000			136,000
		1,462,000			2,220,000
Accumulated depreciation		(1,118,000	)		(1,438,000	)
Net book value	$	344,000		$	782,000

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INTANGIBLE ASSETS (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

INTANGIBLE ASSETS

Schedule of intangible assets

	March 31, 2021			June 30, 2020
Customer relationship	$	4,960,000		$	8,510,000
Non-core customer relationships		760,000			760,000
Non-compete agreements		1,430,000			2,200,000
Tradename		410,000			410,000
Workforce acquired		2,125,000			2,790,000
		9,685,000			14,670,000
Less: impairment expense		-			(1,867,000	)
Less: accumulated amortization		(7,113,000	)		(8,612,000	)
Net book value	$	2,572,000		$	4,191,000

	2020			2019
Customer relationship	$	8,510,000		$	8,510,000
Non-core customer relationships		760,000			760,000
Non-compete agreements		2,200,000			2,200,000
Tradename		410,000			410,000
Workforce acquired		2,790,000			2,790,000
		14,670,000			14,670,000
Less: impairment expense		(1,867,000	)		-
Less: accumulated amortization		(8,612,000	)		(4,610,000	)
Net book value	$	4,191,000		$	10,060,000

Schedule of future amortization expense

Future amortization expense is as follow for the years ending June 30,
2021		2,158,000
2022		563,000
2023		563,000
2024		277,000
2025		273,000
Thereafter		357,000
	$	4,191,000

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ACCOUNTS PAYABLE ACCRUED EXPENSES (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

ACCOUNTS PAYABLE ACCRUED EXPENSES

Schedule of accounts payable

	March 31, 2021		June 30, 2020
Accounts payable	$	2,774,000	$	3,578,000
Accrued expenses		6,116,000		3,750,000
Accrued payroll		822,000		482,000
Accrued taxes		841,000		327,000
	$	10,553,000	$	8,137,000

	As of June 30,
	2020		2019
Accounts payable	$	3,578,000	$	4,461,000
Accrued expenses		3,750,000		3,291,000
Accrued payroll		482,000		370,000
Accrued taxes		327,000		240,000
	$	8,137,000	$	8,362,000

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CONVERTIBLE NOTES PAYABLE (Tables)

12 Months Ended

Jun. 30, 2020

CONVERTIBLE NOTES PAYABLE

Schedule of forementioned convertible note payable

Amount allocated to detachable warrants	$	25,000
Amount allocated to beneficial conversion feature		19,000
Amount allocated to convertible note		156,000
Par value of convertible note payable		200,000
Unamortization of debt discount		-
Balance of convertible note payable	$	200,000

Following is an analysis of the aforementioned convertible note payable as of the fiscal year ending June 30, 2020:

Amount allocated to detachable warrants	$	22,000
Amount allocated to beneficial conversion feature		26,000
Amount allocated to convertible note		152,000
Par value of convertible note payable		200,000
Unamortization of debt discount		-
Balance of convertible note payable	$	200,000

Following is an analysis of the aforementioned convertible note payable as of the fiscal year ending June 30, 2020:

Amount allocated to detachable warrants	$	437,000
Amount allocated to beneficial conversion feature		563,000
Amount allocated to convertible note		-
Par value of convertible note payable		1,000,000
Unamortization of discount		-
Balance of convertible note payable	$	1,000,000

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NOTE PAYABLE RELATED PARTY (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

NOTE PAYABLE RELATED PARTY

Schedule of notes payable related party

	March 31, 2021		June 30, 2020
Short term portion
Dan Pappalardo	$	217,000	$	217,000
Estate of Sally Pappalardo		235,000		235,000
		452,000		452,000
Long term portion
Tom Ochocki		2,198,000		1,975,000
	$	2,198,000	$	1,975,000

	As of June 30,
	2020		2019
Short term portion
Dan Pappalardo	$	217,000	$	95,000
Estate of Sally Pappalardo		235,000		112,000
	$	452,000	$	207,000
Long term portion
Dan Pappalardo	$	-	$	105,000
Estate of Sally Pappalardo		-		123,000
Thomas Ochocki		1,975,000		2,023,000
	$	1,975,000	$	2,251,000

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CONTRACT LIABILITIES (Tables)

12 Months Ended

Jun. 30, 2020

CONTRACT LIABILITIES

Schedule of contract liabilities

Contract liabilities at June 30, 2019	$	3,516,000
Contract liabilities recorded June 30, 2019 and recognized fiscal year 2020		(3,516,000	)
Contract liabilities acquired in fiscal year ending June 30, 2020		3,327,000
Contract liabilities at June 30, 2020	$	3,327,000

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DEFERRED RENT (Tables)

12 Months Ended

Jun. 30, 2020

DEFERRED RENT

Schedule of breakout of deferred rent between short term and long-term portions

		Deferred Rent
Entity	Location	Short Term		Long Term
Troika Design	Los Angeles, CA	$	289,000	$	293,000
Mission US	Brooklyn, NY		34,000		226,000
		$	323,000	$	519,000

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LEASE LIABILITIES (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

LEASE LIABILITIES

Schedule of Future minimum lease payments

	Troika Gower			Troika LaBrea			Corporate Englewood			Mission US Brooklyn			Mission US Manhattan			Mission UK London			Undiscounted Cash Flows
Discount rate		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%
2021		310,000			838,000			14,000			602,000			93,000			166,000			2,023,000
2022		536,000			-			55,000			460,000			-			677,000			1,728,000
2023		558,000			-			19,000			497,000			-			677,000			1,751,000
2024		580,000			-			-			509,000			-			677,000			1,766,000
2025		346,000			-			-			522,000			-			677,000			1,545,000
2026		-			-			-			535,000			-			564,000			1,099,000
2027		-			-			-			455,000			-			-			455,000
Total undiscounted minimum future payments		2,330,000			838,000			88,000			3,580,000			93,000			3,438,000			10,367,000
Imputed interest		(185,000	)		-			(4,000	)		(392,000	)		(93,000	)		(444,000	)		(1,118,000	)
Total operating lease liabilities	$	2,145,000		$	838,000		$	84,000		$	3,188,000		$	-		$	2,994,000		$	9,249,000
Short-term lease liabilities	$	610,000		$	838,000		$	52,000		$	899,000		$	-		$	523,000		$	2,922,000
Long-term lease liabilities	$	1,535,000		$	-		$	32,000		$	2,289,000		$	-		$	2,471,000		$	6,327,000

	Troika Gower			Troika LaBrea			Corporate Englewood			Mission US Brooklyn			Mission US Manhattan			Mission UK London			Undiscounted Cash Flows
Discount rate		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%
2021	$	605,000		$	733,000		$	54,000		$	557,000		$	251,000			484,000		$	2,684,000
2022		536,000			-			55,000			460,000			-			608,000			1,659,000
2023		558,000			-			19,000			497,000			-			608,000			1,682,000
2024		580,000			-			-			509,000			-			608,000			1,697,000
2025		346,000			-			-			522,000			-			608,000			1,476,000
2026		-			-			-			535,000			-			507,000			1,042,000
2027		-			-			-			455,000			-			-			455,000
Total undiscounted minimum future payments		2,625,000			733,000			128,000			3,535,000			251,000			3,423,000			10,695,000
Imputed interest		(307,000	)		-			(9,000	)		(597,000	)		(7,000	)		(517,000	)		(1,437,000	)
Total operating lease liabilities	$	2,318,000		$	733,000		$	119,000		$	2,938,000		$	244,000		$	2,906,000		$	9,258,000
Short-term lease liabilities	$	492,000		$	733,000		$	48,000		$	409,000		$	244,000		$	329,000		$	2,255,000
Long-term lease liabilities	$	1,826,000		$	-		$	71,000		$	2,529,000		$	-		$	2,577,000		$	7,003,000

Schedule of operating leases

	March 31, 2021
Weighted average remaining lease term in years	3.4 years
Weighted average discount rate		10.8	%

	Year Ended June 30, 2020
Weighted average remaining lease term in years	3.9 years
Weighted average discount rate		13.4	%

Summary of the rental income

	2020		2019
Troika Design	$	186,000	$	298,000
Mission US		292,000		378,000
Mission UK		213,000		85,000
	$	691,000	$	761,000

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LIABILITIES OF DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Jun. 30, 2020

LIABILITIES OF DISCONTINUED OPERATIONS

Schedule of liabilities of discontinued operations

	2020		2019
SPC – Accounts payable and other accrued liabilities	$	-	$	3,138,000
Roomlinx – Account payable and other accrued liabilities		107,000		3,314,000
	$	107,000	$	6,452,000

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STOCKHOLDERS EQUITY (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

STOCKHOLDERS EQUITY

Summary of warrant plans

		Outstanding Warrant Shares			Exercisable Warrant Shares
Exercise price range		Number of Warrant Shares		Weighted average remaining contractual life	Number of Warrant Shares		Weighted average remaining contractual life
$	0.75		7,440,667	2.5 years		6,658,444	2.3 years
$	1.50		400,000	3.2 years		400,000	3.2 years
$	1.50		26,667	0.0 years		-	0.0 years
$	3.00		66,667	3.9 years		66,667	3.9 years
$	3.75		435,000	3.2 years		291,667	3.7 years
$	6.00		163,333	0.2 years		163,333	0.2 years
$	27.00		18,518	0.4 years		18,518	0.4 years
			8,550,852	2.5 years		7,598,630	2.4 years

		Outstanding Warrant Shares			Exercisable Warrant Shares
Exercise price range		Number of Warrant Shares		Weighted average remaining contractual life	Number of Warrant Shares		Weighted average remaining contractual life
$	0.75		6,546,333	3.3 years		6,404,259	3.2 years
$	1.50		416,667	2.5 years		133,333	4.0 years
$	1.50		66,667	4.9 years		-		-
$	2.25		261,667	2.1 years		262,222	1.4 years
$	3.00		381,333	1.0 years		381,333	1.0 years
$	3.75		105,926	0.3 years		122,593	0.3 years
			7,778,593	3.1 years		7,303,741	3.1 years

		Outstanding Warrant Shares			Exercisable Warrant Shares
Exercise price range		Number of Warrant Shares		Weighted average remaining contractual life	Number of Warrant Shares		Weighted average remaining contractual life
$	0.75		6,533,148	3.2 years		6,289,444	3.2 years
$	1.50		400,000	2.5 years		133,333	3.7 years
$	3.00		66,667	4.0 years		-
$	3.75		385,000	4.4 years		246,667	4.5 years
$	6.00		381,333	0.7 years		381,333	0.7 years
$	27.00		92,593	0.1 years		92,593	0.1 years
			7,858,741	3.0 years		7,143,370	3.1 years

Summary of warrants granted, exercised, forfeited and expired

	Number of Warrant Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Warrant Shares			Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2020		7,858,741		$	1.52	$	1.92	$	9,234,295			3.0
Granted		1,256,667			0.93		3.04		3,845,945			4.7
Exercised		-			-		-		-			-
Forfeited		-			-		-		-			-
Expired		(564,556	)		3.16		3.13		(733,295	)		-
Outstanding March 31, 2021		8,550,852			1.12		1.88		12,039,000			2.5
Vested and exercisable March 31, 2021		7,598,630			1.10		1.73		9,644,333			2.4
Non-vested March 31, 2021		952,223		$	1.24	$	3.02	$	2,394,667			3.4

	Number of Warrant Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Warrant Shares			Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2019		6,275,593		$	1.65	$	1.65	$	5,509,850			3.8
Granted		1,667,815			1.50		2.85		3,845,945			3.0
Exercised		-			-		-		-			-
Forfeited		-			-		-		-			-
Cancelled		(164,815	)		-		-		(44,445	)		-
Outstanding March 31, 2020		7,778,593			1.50		1.95		9,311,350			3.1
Vested and exercisable March 31, 2020		7,303,741			1.65		1.95		7,814,295			3.1
Non vested March 31, 2020		474,852		$	1.65	$	2.55	$	1,497,055			2.3

	Number of Warrant Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Warrant Shares		Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2018		5,458,259		$	2.10	$	1.05	$	1,476,850		5.5
Granted		850,667			1.33		2.96		1,990,000		4.4
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Expired		(33,333	)		4.50		3.90		20,000		-
Outstanding June 30, 2019		6,275,593			1.66		1.73		5,509,850		3.8
Granted		1,613,148			1.44		2.87		3,724,445		4.0
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Expired		(30,000	)		27.00		13.20		-		-
Outstanding June 30, 2020		7,858,741			1.52		1.92		9,234,295		3.0
Vested and exercisable June 30, 2020		7,143,370			1.49		1.85		7,919,850		3.1
Non-vested June 30, 2020		715,370		$	7.73	$	2.57	$	1,314,445		2.9

Schedule of warrant assumptions

	2021	2020
Volatility - range	63.5% - 66.5%	56.4% – 74.1%
Risk-free rate	0.2% - 0.5%	0.3% - 1.8%
Contractual term	4.0 - 5.0 years	4.0 - 5.0 years
Exercise price	$0.75 - $3.75	$0.75 - $3.75

	2020		2019
Volatility - range	56.4% - 74.1	%	69.9% - 73.3	%
Risk-free rate	0.3% - 1.8	%	1.3% - 2.9	%
Contractual term	4.0 - 5.0 years		4.0 - 5.0 years
Exercise price	$0.75 - $3.75		$0.75 - $3.75

Summary of option plan

		Outstanding Option Shares			Exercisable Option Shares
Exercise price range		Number of Option Shares		Weighted average remaining contractual life	Number of Option Shares		Weighted average remaining contractual life
$	0.75		2,768,889	0.3 years		2,628,458	0.2 years
$	1.50		200,000	0.5 years		166,667	0.5 years
$	3.75		341,667	2.0 years		88,333	1.9 years
			3,310,556	0.5 years		2,883,458	0.3 years

		Outstanding Option Shares			Exercisable Option Shares
Exercise price range		Number of Option Shares		Weighted average remaining contractual life	Number of Option Shares		Weighted average remaining contractual life
$	0.75		3,326,667	0.6 years		2,334,398	0.4 years
$	1.50		200,000	1.5 years		177,778	1.1 years
$	3.00		16,667	1.8 years		7,222	2.0 years
$	3.75		341,667	3.0 years		3,333	0.9 years
			3,885,000	0.8 years		2,522,731	0.5 years

		Outstanding Options Shares			Exercisable Option Shares
Exercise price range		Number of Option Shares		Weighted average remaining contractual life	Number of Option Shares		Weighted average remaining contractual life
$	0.75		2,835,556	0.4 years		2,352,208	0.3 years
$	1.50		200,000	1.3 years		133,333	1.1 years
$	3.75		341,666	2.7 years		4,445	1.8 years
			3,377,222	0.7 years		2,489,986	0.3 years

Summary of Options granted to employees under Plan

	Number of Option Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Option Shares			Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2020		3,377,222		$	1.10	$	1.06	$	2,030,000			0.7
Granted		76,667			3.75		-		-			2.8
Exercised		-			-		-		-			-
Forfeited		-			-		-		-			-
Expired		(143,333	)		-		-		(200,000	)		-
Outstanding March 31, 2021		3,310,556			1.10		1.01		1,830,000			0.5
Vested and exercisable March 31, 2021		2,883,458			0.89		0.93		1,469,818			0.3
Non-vested March 31, 2021		427,098		$	2.59	$	1.90	$	360,182			1.5

	Number of Option Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Option Shares		Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2019		3,512,500		$	0.90	$	0.90	$	1,908,750		1.1
Granted		511,667			2.70		2.10		550,000		-
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Expired		(139,167	)		-		-		243,750		-
Outstanding March 31, 2020		3,885,000			1.05		1.05		2,152,500		0.8
Vested and exercisable March 31, 2020		2,522,731			0.75		0.90		1,155,000		0.5
Non-vested March 31, 2020		1,362,269		$	1.50	$	1.35	$	997,500		1.5

	Number of Option Shares			Weighted-Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value of Outstanding Option Shares		Weighted-Average Remaining Contractual Term (in years)
Outstanding July 1, 2018		2,761,667		$	0.75	$	0.39	$	-		5.2
Granted		820,833			1.17		2.88		2,078,750		-
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Cancelled		(70,000	)		3.15		2.59		170,000		-
Outstanding June 30, 2019		3,512,500			0.90		0.75		1,908,750		1.1
Granted		568,333			2.48		1.98		720,000		-
Exercised		-			-		-		-		-
Forfeited		-			-		-		-		-
Cancelled		(703,611	)		0.97		1.16		598,750		-
Outstanding June 30, 2020		3,377,222			1.10		1.06		2,030,000		0.7
Vested and exercisable June 30, 2020		2,489,986			0.79		0.78		974,401		0.3
Non vested June 30, 2020		887,237		$	1.91		1.85	$	1,055,599		1.7

Schedule of option assumptions

	2021			2020
Volatility - range		64.8	%	57.5% – 64.8%
Risk-free rate		0.3	%	0.9% - 1.7%
Contractual term		3.0 years		3.0 years
Exercise price	$	3.75		$0.75 - $3.75

	2020		2019
Volatility - range	56.4% - 69.0	%	34.6% - 74.1	%
Risk-free rate	0.9 - 1.7	%	1.8 - 2.8	%
Contractual term	3.0 years		2.5 - 5.0 years
Exercise price	$0.75 - $3.75		$0.75 - $3.75

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INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2020

INCOME TAXES

Schedule of effective income tax rate reconciliation

	June 30, 2020			June 30, 2019
Taxes calculated at federal rate		21.0	%		21.0	%
Foreign taxes		(2.9	)%	-		%
Debt settlement		9.2	%		20.2	%
Stock compensation		(1.0	)%		(7.4	)%
Change in valuation allowance		(21.2	)%		(21.4	)%
State taxes net of federal benefit		(0.1	)%		(2.3	)%
Revaluation of deferred	-		%	-		%
Acquisition - domestic	-		%	-		%
Acquisition - foreign	-		%	-		%
Goodwill impairment		(2.9	)%		(9.5	)%
Other adjustments		(2.3	)%		0.9	%
Provision for income taxes		(0.1	)%		1.4	%

Schedule of deferred tax asset and liabilities result

	June 30, 2020			June 30, 2019
Deferred Tax Assets
Net operating loss carryforwards	$	5,649,000		$	3,506,000
Accounts receivable reserve		201,000			110,000
Contribution carryover		995,000			6,000
Section 163 (j) limitation		123,000			51,000
Stock based compensation		1,053,000			-
Accrued interest		127,000			184,000
Contract liabilities		-			1,259,000
Deferred rent		29,000			281,000
Net right-of-use assets		24,000			-
Other accruals		-			-
Total Deferred Tax Assets		8,201,000			5,397,000
Deferred Tax Liabilities
Fixed Assets		(101,000	)		(10,000	)
Intangibles		(1,775,000	)		(2,952,000	)
Deferred Revenue		(205,000	)		-
Total Deferred Tax Liabilities		(2,081,000	)		(2,962,000	)
Net Deferred Tax Assets		6,120,000			2,435,000
Valuation Allowance		(6,120,000	)		(2,435,000	)
Net deferred tax / (liabilities)	$	-		$	-

Schedule of income tax (benefit) expense

	Current		Deferred			Total
Federal	$	-	$	(4,595,000	)	$	(4,595,000	)
State		-		(991,000	)		(991,000	)
Foreign		-		(533,000	)		(533,000	)
Subtotal		-		(6,119,000	)		(6,119,000	)
Valuation allowance		-		6,119,000			6,119,000
Total	$	-	$	-		$	-

	Current		Deferred			Total
Federal	$	-	$	(1,776,000	)	$	(1,776,000	)
State		-		(364,000	)		(364,000	)
Foreign		-		(294,000	)		(294,000	)
Subtotal		-		(2,434,000	)		(2,434,000	)
Valuation allowance		-		2,434,000			2,434,000
Total	$	-	$	-		$	-

Summarizes the net loss by geographic area

	June 30, 2020			June 30, 2019
United States	$	(11,295,000	)	$	(5,393,000	)
Foreign		(3,153,000	)		(1,405,000	)
Loss before income taxes	$	(14,448,000	)	$	(6,798,000	)

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2021

Jun. 30, 2020

DISAGGREGATION OF REVENUE LONG-LIVED ASSETS

Schedule of disaggregation of gross revenue

	Three Months Ended March 31,					Nine months Ended March 31,
	2021		2020			2021		2020
Project fees	$	1,627,000	$	697,000			5,268,000	$	5,091,000
Retainer fees		560,000		631,000			1,648,000		2,913,000
Fee income		676,000		1,003,000			2,435,000		4,602,000
Reimbursement income		991,000		1,290,000			3,086,000		8,149,000
Other revenue		-		(1,000	)		-		4,000
	$	3,854,000	$	3,620,000			12,437,000	$	20,759,000

	Three Months Ended March 31				Nine Months Ended March 31
	2021		2020		2021		2020
Gross Revenue:
United States	$	2,309,000	$	2,239,000	$	7,940,000	$	12,927,000
United Kingdom		1,545,000		1,381,000		4,497,000		7,832,000
Total gross revenue	$	3,854,000	$	3,620,000	$	12,437,000	$	20,759,000

	Three Months Ended March 31				Nine Months Ended March 31
	2021		2020		2021		2020
Gross Profit:
United States	$	1,078,000	$	439,000	$	3,770,000	$	5,509,000
United Kingdom		835,000		925,000		2,307,000		4,144,000
Total gross profit	$	1,913,000	$	1,364,000	$	6,077,000	$	9,653,000

	Three Months Ended March 31						Nine Months Ended March 31
	2021			2020			2021			2020
Net Gain or Loss:
United States	$	(4,188,000	)	$	(8,129,000	)	$	(8,147,000	)	$	(14,874,000	)
United Kingdom		(491,000	)		312,000			(1,076,000	)		(321,000	)
Total net gain/(loss)	$	(4,679,000	)	$	(7,817,000	)	$	(9,223,000	)	$	(15,195,000	)

	Years Ended June 30,
	2020		2020
Project fees	$	6,816,000	$	8,621,000
Retainer fees		3,194,000		3,632,000
Fee income		5,420,000		10,528,000
Reimbursement income		9,177,000		17,644,000
Other revenue		6,000		366,000
	$	24,613,000	$	40,791,000

	Years Ended June 30,
	2020		2019
Gross revenue:
United States	$	15,954,000	$	25,096,000
United Kingdom		8,659,000		15,695,000
Total gross revenue	$	24,613,000	$	40,791,000

	Years Ended June 30,
	2020		2019
Gross profit:
United States	$	8,084,000	$	11,026,000
United Kingdom		4,893,000		6,536,000
Total gross profit	$	12,977,000	$	17,562,000

	Years Ended June 30,
	2020			2019
Net loss:
United States	$	(11,294,000	)	$	(4,624,000	)
United Kingdom		(3,153,000	)		(1,417,000	)
Total net loss	$	(14,447,000	)	$	(6,041,000	)

Schedule of disaggregation of fixed assets

	United States			United Kingdom			Total
Computer equipment	$	457,000		$	193,000		$	650,000
Website design		6,000			-			6,000
Office machine & equipment		52,000			45,000			97,000
Furniture & fixtures		351,000			86,000			437,000
Leasehold improvements		62,000			129,000			191,000
Tenant incentives		145,000			-			145,000
		1,073,000			453,000			1,526,000
Accumulated depreciation		(844,000	)		(409,000	)		(1,253,000	)
Net book value	$	229,000		$	44,000		$	273,000

	United States			United Kingdom			Total
Computer equipment	$	460,000		$	160,000		$	620,000
Website design		6,000			-			6,000
Office machine & equipment		53,000			36,000			89,000
Furniture & fixtures		350,000			79,000			429,000
Leasehold improvements		54,000			119,000			173,000
Tenant incentives		145,000			-			45,000
		1,068,000			394,000			1,462,000
Accumulated depreciation		(770,000	)		(348,000	)		(1,118,000	)
Net book value	$	298,000		$	46,000		$	344,000

	United States			United Kingdom			Total
Computer equipment	$	460,000		$	160,000		$	620,000
Website design		6,000			-			6,000
Office machine & equipment		53,000			36,000			89,000
Furniture & fixtures		350,000			79,000			429,000
Leasehold improvements		54,000			119,000			173,000
Tenant incentives		145,000			-			145,000
		1,068,000			394,000			1,462,000
Accumulated depreciation		(770,000	)		(348,000	)		(1,118,000	)
Net book value	$	298,000		$	46,000		$	344,000

	United States			United Kingdom			Total
Computer equipment	$	401,000			165,000		$	566,000
Website design		6,000			-			6,000
Office machine & equipment		51,000			37,000			88,000
Furniture & fixtures		350,000			77,000			427,000
Leasehold improvements		881,000			116,000			997,000
Tenant incentives		136,000			-			136,000
		1,825,000			394,000			2,220,000
Accumulated depreciation		(1,116,000	)		(321,000	)		(1,438,000	)
Net book value	$	709,000		$	73,000		$	782,000

Schedule of disaggregation of intangible assets and goodwill policy

Intangibles	United States			United Kingdom		Total
Customer relationship	$	4,960,000		$	-	$	4,960,000
Non-core customer relationships		760,000			-		760,000
Non-compete agreements		1,430,000			-		1,430,000
Tradename		410,000			-		410,000
Workforce acquired		2,125,000			-		2,125,000
		9,685,000			-		9,685,000
Less: accumulated amortization		(7,113,000	)		-		(7,113,000	)
Net book value	$	2,572,000		$	-	$	2,572,000
Goodwill	$	9,831,000		$	7,531,000	$	17,362,000

Intangibles	United States			United Kingdom			Total
Customer relationship	$	4,960,000		$	3,550,000		$	8,510,000
Non-core customer relationships		760,000			-			760,000
Non-compete agreements		1,430,000			770,000			2,200,000
Tradename		410,000			-			410,000
Workforce acquired		2,125,000			665,000			2,790,000
		9,685,000			4,985,000			14,670,000
Less: impairment		-			(1,867,000	)		(1,867,000	)
Less: accumulated amortization		(5,494,000	)		(3,118,000	)		(8,612,000	)
Net book value	$	4,191,000		$	-		$	4,191,000
Goodwill	$	9,831,000		$	7,531,000		$	17,362,000

Intangibles	United States			United Kingdom			Total
Customer relationship	$	4,960,000		$	3,550,000		$	8,510,000
Non-core customer relationships		760,000			-			760,000
Non-compete agreements		1,430,000			770,000			2,200,000
Tradename		410,000			-			410,000
Workforce acquired		2,125,000			665,000			2,790,000
		9,685,000			4,985,000			14,670,000
Less: impairment		-			(1,867,000	)		(1,867,000	)
Less: accumulated amortization		(5,494,000	)		(3,118,000	)		(8,612,000	)
Net book value	$	4,191,000		$	-		$	4,191,000
Goodwill	$	9,831,000		$	7,531,000		$	17,362,000

Intangibles	United States			United Kingdom			Total
Customer relationship	$	4,960,000		$	3,550,000		$	8,510,000
Non-core customer relationships		760,000			-			760,000
Non-compete agreements		1,430,000			770,000			2,200,000
Tradename		410,000			-			410,000
Workforce acquired		2,125,000			665,000			2,790,000
		9,685,000			4,985,000			14,670,000
Less: accumulated amortization		(3,051,000	)		(1,559,000	)		(4,610,000	)
Net book value	$	6,634,000		$	3,426,000		$	10,060,000
Goodwill	$	11,816,000		$	7,531,000		$	19,347,000

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PRESENTATION OF THE FINANCIAL STATEMENTS (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net loss attributable to common stockholders	$ (4,679,000)	$ (7,817,000)	$ (9,223,000)	$ (15,195,000)	$ (14,447,000)	$ (6,861,000)
Basic EPS:
Common shares outstanding, beginning of period	17,687,179	15,454,623	15,454,623	15,211,290	15,211,290	15,211,290
Weighted average common stock retired	(2,576,779)	0	(836,983)	(296,533)
Weighted average common shares issued during the period	0	0	1,257,143	498,613	212,365
Denominator for basic earnings per common shares	0	0	0	0	0	0
Weighted average common shares	15,110,400	15,454,623	15,874,783	15,413,370	15,423,655	15,211,290
Diluted EPS:
Diluted Common shares outstanding, beginning of period	17,687,179	15,454,623	15,454,623	15,211,290	15,211,290	15,211,290
Diluted Weighted average common stock retired	(2,576,779)	0	(836,983)	(296,533)
Diluted Weighted average common shares issued during the period	0	0	1,257,143	498,613	212,365	0
Dilited Denominator for basic earnings per common shares	0	0	0	0
Preferred Stock Series A, beginning of period	720,000	720,000	720,000	720,000	48,000	48,000
Preferred Stock Series B, beginning of period	2,495,000	2,495,000	2,495,000	2,495,000	594,048	594,048
Preferred Stock Series C, beginning of period	911,149	911,149	911,149	911,149	12,148,653	11,798,653
Preferred Stock Series D, beginning of period	1,979,000	1,979,000	1,979,000	1,881,500	5,017,333	1,644,000
Stock payable, beginning of period	156,000	1,300,000	1,300,000	1,743,000	2,324,000	590,667
Reduction of stock payable due to issuance					(660,000)	0
Weighted average preferred stock series C purchased during the period					0	271,960
Weighted average preferred stock series D purchased during the period				260,000	197,078	2,703,616
Weighted average stock payable issued during the period	0	0	0	0	0	940,273
Weighted average diluted effect of stock options	2,771,081	2,342,660	2,686,722	2,127,915	2,453,486	2,492,996
Weighted average diluted effect of warrants	7,622,411	6,110,534	7,756,204	6,443,472	6,901,474	5,722,661
Lock-Up Agreements - common stock equivalents	0	(5,711,111)	0	(5,711,111)	(5,711,111)	0
Denominator for diluted earnings per common shares					$ 0	$ 0
Weighted average common shares	31,765,041	25,601,854	33,722,857	26,284,295	38,736,615	42,018,163

XML

PRESENTATION OF THE FINANCIAL STATEMENTS (Details Narrative)		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 14, 2020 USD ($)	Feb. 28, 2021 USD ($)	Apr. 30, 2020 USD ($)	Mar. 31, 2021 USD ($) $ / shares	Mar. 31, 2020 USD ($) $ / shares	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($) integer $ / shares	Jun. 30, 2019 USD ($) integer $ / shares	Jun. 30, 2018 USD ($)	Jun. 29, 2018 USD ($) shares	Jul. 14, 2017 USD ($) shares
Acquisation purchase price, cash											$ 3,333,334	$ 5,000,000
Acquisation purchase price, shares | shares											25,000,000	2,046,667
Proceeds from debt								$ 1,400,000
Advertising expenses								12,000	$ 52,000
Reduction in revenue						$ 8,300,000		16,200,000
Cash and cash equivalents				$ 1,426,000	$ 959,000	1,426,000	$ 959,000	1,706,000	1,589,000	$ 2,096,000
Total current assets				4,815,000		4,815,000		2,691,000	6,090,000
Total current liabilities				21,223,000		21,223,000		16,455,000	12,443,000
Proceeds from initial public offering								21,900,000
Project revenues, net				3,854,000	3,620,000	12,437,000	20,759,000	24,613,000	40,791,000
Uninsured cash				$ 365,000	$ 401,000	365,000	401,000	$ 822,000	$ 1,241,000
Closing rate US$: GBP | $ / shares				$ 1.378900	$ 1.241200			$ 1.238900	$ 1.268980
Average rate US$: GBP | $ / shares				$ 1.342278	$ 1.268544			$ 1.262367	$ 1.294241
Deferred rent								$ 842,000	$ 323,000
Right-of-use asset and offsetting lease liability								8,300,000
Goodwill impairment expense				$ 0	$ 1,387,000	0	1,387,000	1,985,000	3,082,000
Accumulated deficit				(180,115,000)		(180,115,000)		(170,892,000)	(156,445,000)
Allowance for doubtful accounts				$ 579,000	$ 518,000	579,000	$ 518,000	781,000	385,000
Impairment of intangibles								(1,867,000)	$ 0
Net loss						$ (9,223,000)		(14,400,000)
Economic Injury Disaster Loan [Member] | April 1, 2020 [Member]
Salary reduction percentage						25.00%
Total saving per month						$ 112,000
Payroll Protection Program[Member]
Proceeds from SBA loan	$ 500,000	$ 1,700,000	$ 1,700,000					500,000
Deferred income liabiity								$ 1,704,000
Revenue [Member]
Concentration Risk Percentage								45.10%	44.90%
Number of customer | integer								6	6
Receivable [Member]
Concentration Risk Percentage								35.60%	37.60%
Number of customer | integer								3	3

XML

ACQUISITIONS (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2018	Jun. 29, 2018
STOCKHOLDERS EQUITY
Cash paid at Closing		$ 11,000,000			$ 11,000,000
Fair value of common stock issued at Closing		12,500,000
Estimated value of earn out payments	$ 3,500,000	3,377,000	$ 3,000,000	$ 4,000,000	3,377,000
Estimated value of earn-out consideration		4,194,000			$ 4,194,000
Total purchase price		$ 31,071,000

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ACQUISITIONS (Details 1)	Jun. 29, 2018 USD ($)
STOCKHOLDERS EQUITY
Current assets	$ 5,800,000
Furniture and equipment	362,000
Director loan	835,000
Customer relationships	7,100,000
Non-compete agreements	2,200,000
Workforce acquired	1,900,000
Total Intangible assets	11,200,000
Goodwill	19,531,000
Current liabilities	(6,557,000)
Foreign currency translation adjustment	(100,000)
Consideration	$ 31,071,000

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ACQUISITIONS (Details 2)	1 Months Ended
	Jun. 29, 2018
Customer Relationships [Member]
Estimated useful lives	3 years
Non-Compete Agreements [Member]
Estimated useful lives	5 years
Workforce Acquired [Member]
Estimated useful lives	3 years

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ACQUISITIONS (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
	Jun. 29, 2018	Dec. 31, 2018	Dec. 31, 2020	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2018	Jul. 14, 2017
STOCKHOLDERS EQUITY
Estimated value of earn out payments	$ 3,377,000		$ 3,500,000	$ 3,377,000	$ 3,000,000	$ 4,000,000
Estimated value of earn-out consideration	$ 4,194,000			4,194,000
Discount rate	17.00%
Acquisation purchase price, shares	25,000,000						2,046,667
Mission earnings		$ 2,500,000
Mission payment by company		$ 4,000,000
Acquisation purchase price, cash	$ 3,333,334						$ 5,000,000
Cash paid at Closing	11,000,000			$ 11,000,000
Earn-out consideration	10,000,000					$ 7,571,000
Contigency consideration	$ 4,000,000
Fair value of shares acquired, shares	3,333,334
Fair value of acquired shares	$ 12,500,000
Common stock price per share, closing date	$ 3.75

XML

PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
Accumulated depreciation	$ (1,253,000)	$ (1,118,000)	$ (1,438,000)
Net book value	273,000	344,000	782,000
Property plant and equipment	1,526,000	1,462,000	2,220,000
Website Design [Member]
Property plant and equipment	6,000	6,000	6,000
Tenant Incentives [Member]
Property plant and equipment	145,000	145,000	136,000
Computer Equipment [Member]
Property plant and equipment	650,000	620,000	566,000
Office Machine & Equipment [Member]
Property plant and equipment	97,000	89,000	88,000
Furniture & Fixtures [Member]
Property plant and equipment	437,000	429,000	427,000
Leasehold Improvements [Member]
Property plant and equipment	$ 191,000	$ 173,000	$ 997,000

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
PROPERTY AND EQUIPMENT
Depereciation expense	$ 34,000	$ 90,000	$ 95,000	$ 281,000	$ 344,000	$ 480,000
Leasehold improvements					192,000
Difference between the right of use asset and the lease liability					356,000
Net gain					$ 164,000

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INTANGIBLE ASSETS (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2021
Accumulated amortization	$ (8,612,000)	$ (4,610,000)	$ (7,113,000)
Less : Impairment expense	(1,867,000)	0
Intangible assets, net	4,191,000	10,060,000	2,572,000
Intangible assets, Gross	14,670,000	14,670,000	9,685,000
Non-Compete Agreements [Member]
Intangible assets, Gross	2,200,000	2,200,000	1,430,000
Workforce Acquired [Member]
Intangible assets, Gross	2,790,000	2,790,000	2,125,000
Customer Relationship [Member]
Intangible assets, Gross	8,510,000	8,510,000	4,960,000
Tradename [Member]
Intangible assets, Gross	410,000	410,000	410,000
Non-Core Customer Relationships [Member]
Intangible assets, Gross	$ 760,000	$ 760,000	$ 760,000

XML

INTANGIBLE ASSETS (Details 1) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
INTANGIBLE ASSETS
2021		$ 2,158,000
2022		563,000
2023		563,000
2024		277,000
2025		273,000
Thereafter		357,000
Total	$ 2,572,000	$ 4,191,000	$ 10,060,000

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INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
INTANGIBLE ASSETS
Impairment expense					$ (1,867,000)	$ 0
Amortization expense	$ 540,000	$ 1,003,000	$ 1,619,000	$ 3,010,000	4,002,000	4,013,000
Goodwill impairment expense	$ 0	$ 1,387,000	$ 0	$ 1,387,000	$ 1,985,000	$ 3,082,000

XML

ACCOUNTS PAYABLE (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
ACCOUNTS PAYABLE ACCRUED EXPENSES
Accounts payable	$ 2,774,000	$ 3,578,000	$ 4,461,000
Accrued expenses	6,116,000	3,750,000	3,291,000
Accrued payroll	822,000	482,000	370,000
Accrued taxes	841,000	327,000	240,000
Accounts payable and accrued expenses	$ 10,553,000	$ 8,137,000	$ 8,362,000

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ACCOUNTS PAYABLE (Details Narrative) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
ACCOUNTS PAYABLE ACCRUED EXPENSES
Accounts payable and accrued expense	$ 10,525,000	$ 8,137,000	$ 8,362,000

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CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
Balance of convertible note payable	$ 535,000	$ 1,435,000	$ 35,000
Convertible Note Payable One [Member]
Amount allocated to detachable warrants		22,000
Amount allocated to beneficial conversion feature		26,000
Amount allocated to convertible note		152,000
Par value of convertible note payable		200,000
Unamortization of debt discount		0
Balance of convertible note payable		200,000
Convertible Note Payable [Member]
Amount allocated to detachable warrants		25,000
Amount allocated to beneficial conversion feature		19,000
Amount allocated to convertible note		156,000
Par value of convertible note payable		200,000
Unamortization of debt discount		0
Convertible Note Payable Two [Member]
Amount allocated to detachable warrants		437,000
Amount allocated to beneficial conversion feature		563,000
Amount allocated to convertible note		0
Par value of convertible note payable		1,000,000
Unamortization of debt discount		0
Balance of convertible note payable		$ 1,000,000

XML

CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	1 Months Ended						3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2020	Oct. 31, 2020	Sep. 30, 2020	Aug. 31, 2020	Aug. 31, 2020	Jul. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Notes payable outstanding							$ 535,000		$ 535,000		$ 1,435,000	$ 35,000
Interest expense, convertible note payables							12,000		54,000		51,000	2,000
Amortization expenses									409,000	$ 0
Proceeds fom convertible promissory note									300,000
Payments to convertible note payable									0	44,000	0	55,000
Imputed interest									22,000	35,000	1,000	2,000
Interest expense related to convertible notes payable								$ 7,000	7,000
Warrants value											25,000
Amortization expense of note payable discount							$ 0	$ 786,000	$ 409,000	786,000	1,092,000	$ 0
Interest rate									10.00%			5.00%
Risk free rate									0.30%
Volality rate									64.80%
Promissory note												$ 1,300,000
Maturity date		Dec. 07, 2020	Mar. 31, 2021	Nov. 30, 2020
Common stock conversion price		$ 3.00
Interest expense									$ 0	$ 0	$ 29,000	$ 0
Common stock shares issued							15,020,512		15,020,512		15,454,623	15,211,290
October 2020 [Member]
Fair market value of the embedded conversion feature			$ 25,000
Interest rate									10.00%
Risk free rate									0.10%
Volality rate									66.48%
Amortization of discount									$ 37,000
Warrants exercise price									$ 2.25
Toal discount							$ 37,000		$ 37,000
Gross proceeds									50,000
Discount attributed to market									25,000
Discount attributed to warrants									$ 12,000
Issuance of warrants									6,667
Interest expense							1,000
April 2020 [Member] | Lender [Member]
Interest expense related to convertible notes payable											$ 34,000
Additional warrants share of common stock											66,666
Common stock shares issued											400,000
Exercise price											$ 0.75
Convertible Notes [Member] | Lendor [Member]
Interest expense related to convertible notes payable												$ 9,000
Debt discount			24,000		$ 49,000
Amortization expense of note payable discount							21,000		$ 21,000
Current liability and interest expense			1,000				$ 2,000		2,000
Fair market value of the embedded conversion feature			$ 25,000						$ 49,000
Interest rate			10.00%
Risk free rate									0.10%
Volality rate									66.48%
Amortization of discount			$ 12,000
Prospective interest rate			20.00%		20.00%
Common stock shares exercise price											3.75
Warrants Exercise price											$ 3.75
Warrants received											13,333
Promissory note			$ 50,000		$ 100,000						$ 200,000
Additional warrants share of common stock											333,334
Convertible Notes Three [Member]
Current liability and interest expense		$ 7,000
Interest rate		10.00%
Maturity date		Dec. 07, 2020
Warrants exercise price		$ 1.95
Issuance of restricted shares of common stock		106,667
Issuance of restricted shares of common stock, discount		$ 156,000
Common stock conversion price		$ 3.00
Toal discount		$ 300,000
Gross proceeds	$ 52,500	$ 247,500
Convertible Notes One [Member]
Interest expense related to convertible notes payable											$ 8,000
Warrants value											$ 22,000
Interest rate											10.00%
Common stock shares exercise price											$ 3.75
Warrants Exercise price											$ 3.75
Warrants received											66,667
Promissory note											$ 200,000
Loan fees											$ 10,000
Convertible Notes Two [Member]
Interest rate											10.00%
Common stock shares exercise price											$ 1.50
Warrants Exercise price											$ 0.75
Warrants received											13,334
Promissory note											$ 1,000,000
Additional warrants share of common stock						26,667					26,667
Loan fees											$ 120,000
Convertible Promissory Note [Member]
Warrants received											200,000
Exercise price											$ 3.00
Common stock shares of warrant											66,667

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NOTES PAYABLE RELATED PARTY (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019	Jan. 27, 2019
Short term portion
Short term Notes payable - related party	$ 452,000	$ 452,000	$ 207,000
Long term portion
Long term Notes payabe - related parties	2,198,000	1,975,000	2,251,000
Tom Ochocki [Member]
Short term portion
Short term Notes payable - related party	2,198,000	1,975,000	2,023,000
Long term portion
Long term Notes payabe - related parties	2,198,000			$ 2,023,022
Estate Of Sally Pappalardo [Member]
Long term portion
Long term Notes payabe - related parties		0	123,000
Note payable - related parties	235,000	235,000	112,000
Dan Pappalardo [Member]
Short term portion
Short term Notes payable - related party	$ 217,000	217,000	95,000
Long term portion
Long term Notes payabe - related parties		$ 0	$ 105,000

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NOTES PAYABLE RELATED PARTY (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 27, 2019	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Promissory note							$ 1,300,000
Interest rate				10.00%			5.00%
Common stock shares issued upon conversion of debt							1,733,334
Conversion price per share							$ 0.75
Interest expense, note payable related party						$ 42,000	$ 117,000
Imputed interest				$ 22,000	$ 35,000	1,000	2,000
Interest expense		$ 10,000	$ 10,000	30,000	$ 30,000
Note payable - related party - short term portion		452,000		452,000		452,000	207,000
Long term Notes payabe - related parties		2,198,000		2,198,000		1,975,000	2,251,000
Dan Pappalardo [Member]
Note payable - related party - short term portion		217,000		217,000		217,000	95,000
Long term Notes payabe - related parties						0	105,000
Related Parties [Member]
Promissory note							$ 1,300,000
Interest rate							5.00%
Common stock shares issued upon conversion of debt							29,000
Conversion price per share							$ 0.75
Facility Agreement [Member]
Imputed interest						40,000	$ 22,000
Estate Of Sally Pappalardo [Member]
Note payable - related parties		235,000		$ 235,000		235,000	112,000
Long term Notes payabe - related parties						0	123,000
Mr. Jankowski [Member]
Interest rate	0.00%			0.00%
Long term Notes payabe - related parties	$ 1,259,964	1,369,000		$ 1,369,000
Tom Ochocki [Member]
Note payable - related party - short term portion		2,198,000		2,198,000		$ 1,975,000	$ 2,023,000
Long term Notes payabe - related parties	$ 2,023,022	$ 2,198,000		$ 2,198,000

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CONTRACT LIABILITIES (Details)	12 Months Ended
	Jun. 30, 2020 USD ($)
CONTRACT LIABILITIES
Contract liabilities at June 30, 2019	$ 3,516,000
Contract liabilities recorded June 30, 2019 and recognized fiscal year 2020	(3,516,000)
Contract liabilities acquired in fiscal year ending June 30, 2020	3,327,000
Contract liabilities at June 30, 2020	$ 3,327,000

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DEFERRED RENT (Details) - USD ($)	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2020
Short Term, Deferred Rent	$ 323,000	$ 842,000
Long Term, Deferred Rent	519,000
Troika Design [Member]
Short Term, Deferred Rent	289,000
Long Term, Deferred Rent	$ 293,000
Location	Los Angeles, CA
Mission US [Member]
Short Term, Deferred Rent	$ 34,000
Long Term, Deferred Rent	$ 226,000
Location	Brooklyn, NY

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LEASE LIABILITIES (Details) - USD ($)	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Imputed interest	$ 22,000	$ 35,000	$ 1,000	$ 2,000
Mission US Manhattan [Member]
2021	$ 93,000		$ 251,000
Discount rate	5.50%		5.50%
Long-term lease liabilities	$ 0		$ 0
Short-term lease liabilities	0		244,000
Total operating lease liabilities	0		244,000
2022	0		0
2023	0		0
2024	0		0
2025	0		0
2026	0		0
2027	0		0
Total undiscounted minimum future payments	93,000		251,000
Imputed interest	(93,000)		(7,000)
Mission UK London [Member]
2021	$ 166,000		$ 484,000
Discount rate	5.50%		5.50%
Long-term lease liabilities	$ 2,471,000		$ 2,577,000
Short-term lease liabilities	523,000		329,000
Total operating lease liabilities	2,994,000		2,906,000
2022	677,000		608,000
2023	677,000		608,000
2024	677,000		608,000
2025	677,000		608,000
2026	564,000		507,000
2027	0		0
Total undiscounted minimum future payments	3,438,000		3,423,000
Imputed interest	(444,000)		(517,000)
Undiscounted Cash Flows [Member]
2021	2,023,000		2,684,000
Long-term lease liabilities	6,327,000		7,003,000
Short-term lease liabilities	2,922,000		2,255,000
Total operating lease liabilities	9,249,000		9,258,000
2022	1,728,000		1,659,000
2023	1,751,000		1,682,000
2024	1,766,000		1,697,000
2025	1,545,000		1,476,000
2026	1,099,000		1,042,000
2027	455,000		455,000
Total undiscounted minimum future payments	10,367,000		10,695,000
Imputed interest	(1,118,000)		(1,437,000)
Mission US Brooklyn [Member]
2021	$ 602,000		$ 557,000
Discount rate	5.50%		5.50%
Long-term lease liabilities	$ 2,289,000		$ 2,529,000
Short-term lease liabilities	899,000		409,000
Total operating lease liabilities	3,188,000		2,938,000
2022	460,000		460,000
2023	497,000		497,000
2024	509,000		509,000
2025	522,000		522,000
2026	535,000		535,000
2027	455,000		455,000
Total undiscounted minimum future payments	3,580,000		3,535,000
Imputed interest	(392,000)		(597,000)
Corporate Englewood [Member]
2021	$ 14,000		$ 54,000
Discount rate	5.50%		5.50%
Long-term lease liabilities	$ 32,000		$ 71,000
Short-term lease liabilities	52,000		48,000
Total operating lease liabilities	84,000		119,000
2022	55,000		55,000
2023	19,000		19,000
2024	0		0
2025	0		0
2026	0		0
2027	0		0
Total undiscounted minimum future payments	88,000		128,000
Imputed interest	(4,000)		(9,000)
Troika LaBrea [Member]
2021	$ 838,000		$ 733,000
Discount rate	5.50%		5.50%
Short-term lease liabilities	$ 838,000		$ 733,000
Total operating lease liabilities	838,000		733,000
2022	0		0
2023	0		0
2024	0		0
2025	0		0
2026	0		0
2027	0		0
Total undiscounted minimum future payments	838,000		733,000
Imputed interest			0
Troika Gower [Member]
2021	$ 310,000		$ 605,000
Discount rate	5.50%		5.50%
Long-term lease liabilities	$ 1,535,000		$ 1,826,000
Short-term lease liabilities	610,000		492,000
Total operating lease liabilities	2,145,000		2,318,000
2022	536,000		536,000
2023	558,000		558,000
2024	580,000		580,000
2025	346,000		346,000
Total undiscounted minimum future payments	2,330,000		2,625,000
Imputed interest	$ (185,000)		$ (307,000)

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LEASE LIABILITIES (Details 1)	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
LEASE LIABILITIES
Weighted average discount rate	10.80%	13.40%
Weighted average remaining lease term in years	3 years 4 months 24 days	3 years 10 months 24 days

XML

LEASE LIABILITIES (Details 2) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Rental income	$ 691,000	$ 761,000
Troika Design [Member]
Rental income	186,000	298,000
Mission US [Member]
Rental income	292,000	378,000
Mission UK [Member]
Rental income	$ 213,000	$ 85,000

XML

LEASE LIABILITIES (Details Narrative) - USD ($)					1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	May 02, 2017	Apr. 06, 2016	Jan. 09, 2014	Feb. 08, 2013	Feb. 01, 2020	Feb. 01, 2018	Jan. 19, 2018	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Long term Operating lease liability								$ 6,327,000		$ 6,327,000		$ 7,003,000	$ 0
Operating lease Right of use assets								7,404,000		7,404,000		8,297,000	0
Current Operating lease liability								2,922,000		2,922,000		2,255,000
Rent expense								537,000	$ 733,000	1,283,000	$ 1,439,000	1,983,000	1,945,000
Lease expense	$ 34,278	$ 22,432	$ 19,230			$ 4,120				537,000
Net gain												164,000
Difference between the right of use asset and the lease liability												356,000
Leasehold improvements												192,000
Lease Agreement [Member]
Lease expense	$ 34,278	$ 22,432	$ 19,230		$ 42,265	$ 4,120			$ 733,000	54,016
Annual rate increase	2.50%		2.50%		3.50%	3.50%
Lease expires dates	May 01, 2027	Apr. 05, 2026	May 08, 2021		Jan. 31, 2025	Jan. 31, 2023
Remainder of lease, monthly payment		$ 52,855
Description of lease agreements				The lease commenced upon move in, December 15, 2013. As part of the lease agreement, Troika received a rent abatement in months two through six of the lease and partial rent abatement in months seven through nine. The lease also provides for an escalation clause where the Company will be subject to an annual rent increase of 3%, year over year. Initially the lease expired on May 31, 2021, however the Company surrendered the premises in January 2020
Right of use assets												1,030,000
Lease liability												1,386,000
Net gain												164,000
Difference between the right of use asset and the lease liability												356,000
Leasehold improvements												192,000
Sublease Agreements [Member]
Annual rate increase							3.00%
Lease income							$ 22,496
May 2, 2017 [Member] | Mission US Brooklyn [Member]
Lease expense												$ 34,278
Annual rate increase												2.50%
Lease expires dates												May 01, 2017
February 1, 2020 [Member] | Troika Production Group [Member]
Lease expense												$ 42,265
Annual rate increase												3.50%
Lease expires dates												Jan. 31, 2025
July 1, 2019 [Member]
Long term Operating lease liability								6,916,000		6,916,000		$ 2,255,000	7,003,000
Operating lease Right of use assets								8,348,000		8,348,000		8,348,000
Current Operating lease liability								$ 2,275,000		$ 2,275,000		2,275,000	$ 6,916,000
Cash payments												1,382,000
April 6, 2016 [Member] | Mission UK London [Member]
Lease expense												$ 29,557
Lease expires dates												Apr. 05, 2026
Remainder of lease, monthly payment												$ 69,639
Englewood Cliffs, NJ [Member] | February 1, 2018 [Member]
Lease expense												$ 45,275
Annual rate increase												3.50%
Lease expires dates												Jan. 31, 2023
New York, NY [Member] | January 9, 2014 [Member]
Lease expense												$ 19,230
Annual rate increase												2.50%
Lease expires dates												May 08, 2021

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LEGAL CONTINGENCIES (Details Narrative) - USD ($)		1 Months Ended
	Jan. 04, 2021	Jan. 28, 2021	Mar. 31, 2019
Damages net amount	$ 900,000		$ 90,000
Mission Culture LLC [Member]
Amount due for services		$ 197,000

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LIABILITIES OF DISCONTINUED OPERATIONS (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Liabilities from discontinued operations	$ 107,000	$ 6,452,000
United States [Member] | Customer Relationship [Member]
Liabilities from discontinued operations	107,000	3,314,000
SPC - Accounts Payable And Other Accrued Liabilities [Member]
Liabilities from discontinued operations	$ 0	$ 3,138,000

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LIABILITIES OF DISCONTINUED OPERATIONS (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Liabilities from discontinued operations	$ 107,000	$ 6,452,000
Income from discontinued operation	6,319,000	6,528,000
SPC - Accounts Payable And Other Accrued Liabilities [Member]
Liabilities from discontinued operations	0	$ 3,138,000
Income from discontinued operation	6,319,000
Collection of debt by the related party	$ 6,319,000

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STOCKHOLDERS EQUITY (Details) - $ / shares	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Volatility	64.80%
Risk-free rate	0.30%
Contractual term	3 years	3 years	3 years
Exercise price	$ 3.75	$ 2.70
Warrant [Member]
Exercise price	$ 0.93	$ 1.50	$ 1.44	$ 1.33
Warrant [Member] | Minimum [Member]
Volatility	63.50%	56.40%	56.40%	69.90%
Risk-free rate	0.20%	0.30%	0.30%	1.30%
Contractual term	4 years	4 years	4 years	4 years
Exercise price	$ 0.75	$ 0.75	$ 0.75	$ 0.75
Warrant [Member] | Maximum [Member]
Volatility	66.50%	74.10%	74.10%	73.30%
Risk-free rate	0.50%	1.80%	1.80%	2.90%
Contractual term	5 years	5 years	5 years	5 years
Exercise price	$ 3.75	$ 3.75	$ 3.75	$ 3.75

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STOCKHOLDERS EQUITY (Details 1) - USD ($)	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Weighted-Average Exercise Price, Granted	$ 3.75	$ 2.70
Warrant [Member]
Number of Shares, Outstanding Beginning Balance	7,858,741	6,275,593	6,275,593	5,458,259
Number of Shares, Granted	1,256,667	1,667,815	1,613,148	850,667
Number of Shares, Exercised	0	0	0	0
Number of Shares, Forfeited	0	0	0	0
Number of Shares, Expired	(564,556)	(164,815)	(30,000)	(33,333)
Number of Shares, Outstanding Ending Balance	8,550,852	7,778,593	7,858,741	6,275,593
Number of Shares, Vested and exercisable Ending Balance	7,598,630	7,303,741	7,143,370
Number of Shares, Non-vested Ending Balance	952,223	474,852	715,370
Weighted-Average Exercise Price, Outstanding Beginning Balance	$ 1.52	$ 1.66	$ 1.66	$ 2.10
Weighted-Average Exercise Price, Granted	0.93	1.50	1.44	1.33
Weighted-Average Exercise Price, Exercised	0	0	0	0
Weighted-Average Exercise Price, Forfeited	0	0	0	0
Weighted-Average Exercise Price, Expired	3.16	0	27	4.50
Weighted-Average Exercise Price, Outstanding Ending Balance	1.12	1.50	1.52	1.66
Weighted-Average Exercise Price, Vested and exercisable Ending Balance	1.10	1.65	1.49
Weighted-Average Exercise Price, Non-vested Ending Balance	1.24	1.65	7.73
Weighted-Average Grant-Date Fair Value, Outstanding Beginning Balance	1.92	1.73	1.73	1.05
Weighted-Average Grant-Date Fair Value, Granted	3.04	2.85	2.87	2.96
Weighted-Average Grant-Date Fair Value, Exercised	0	0	0	0
Weighted-Average Grant-Date Fair Value, Forfeited	0	0	0	0
Weighted-Average Grant-Date Fair Value, Expired	3.13	0	13.20	3.90
Weighted-Average Grant-Date Fair Value, Outstanding Ending Balance	1.88	1.95	1.92	$ 1.73
Weighted-Average Grant-Date Fair Value, Vested and exercisable Ending Balance	1.73	1.95	1.85
Weighted-Average Grant-Date Fair Value, Non-vested Ending Balance	$ 3.02	$ 2.55	$ 2.57
Aggregate Intrinsic Value of Outstanding Warrant Shares, Outstanding Beginning Balance	$ 9,234,295	$ 5,509,850	$ 5,509,850	$ 1,476,850
Aggregate Intrinsic Value of Outstanding Warrant Shares, Granted	3,845,945	3,845,945	3,724,445	1,990,000
Aggregate Intrinsic Value of Outstanding Warrant Shares, Exercised	0	0	0	0
Aggregate Intrinsic Value of Outstanding Warrant Shares, Forfeited	0	0	0	0
Aggregate Intrinsic Value of Outstanding Warrant Shares, Expired	(733,295)	(44,445)	0	20,000
Aggregate Intrinsic Value of Outstanding Warrant Shares, Outstanding Ending Balance	12,039,000	9,311,350	9,234,295	$ 5,509,850
Aggregate Intrinsic Value of Outstanding Warrant Shares, Vested and exercisable Ending Balance	9,644,333	7,814,295	7,919,850
Aggregate Intrinsic Value of Outstanding Warrant Shares, Non-vested Ending Balance	$ 2,394,667	$ 1,497,055	$ 1,314,445
Weighted-Average Remaining Contractual Term (in years), Outstanding Beginning Balance	3 years	3 years 9 months 18 days	3 years 9 months 18 days	5 years 5 months 30 days
Weighted-Average Remaining Contractual Term (in years), Granted	4 years 8 months 12 days	3 years	4 years	4 years 4 months 24 days
Weighted-Average Remaining Contractual Term (in years), Outstanding Ending Balance	2 years 5 months 30 days	3 years 1 month 6 days	3 years	3 years 9 months 18 days
Weighted-Average Remaining Contractual Term (in years), Vested and exercisable Ending Balance	2 years 4 months 24 days	3 years 1 month 6 days	3 years 1 month 6 days
Weighted-Average Remaining Contractual Term (in years), Non-vested Ending Balance	3 years 4 months 24 days	2 years 3 months 18 days	2 years 10 months 24 days

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STOCKHOLDERS EQUITY (Details 2) - shares	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
1.50 [Member]
Number of Shares, Outstanding	400,000	416,667	400,000
Weighted average remaining contractual life, Outstanding	3 years 2 months 12 days	2 years 5 months 30 days	3 years 8 months 12 days
Number of Shares, Exercisable	400,000	133,333	133,333
Weighted average remaining contractual life, Exercisable	3 years 2 months 12 days	4 years	2 years 5 months 30 days
0.75 [Member]
Number of Shares, Outstanding	7,440,667	6,546,333	6,533,148
Weighted average remaining contractual life, Outstanding	2 years 6 months	3 years 3 months 18 days	3 years 2 months 12 days
Weighted average remaining contractual life, Exercisable	2 years 3 months 18 days	3 years 2 months 12 days	3 years 2 months 12 days
Number of Shares, Exercisable	6,658,444	6,404,259	6,289,444
2.25 [Member]
Number of Shares, Outstanding		261,667
Weighted average remaining contractual life, Outstanding		2 years 1 month 6 days
Number of Shares, Exercisable		262,222
Weighted average remaining contractual life, Exercisable		1 year 4 months 24 days
1.50 One [Member]
Number of Shares, Outstanding	26,667	66,667
Weighted average remaining contractual life, Outstanding	0 years	4 years 10 months 24 days
Number of Shares, Exercisable	0	0
Weighted average remaining contractual life, Exercisable	0 years	0 years
3.00 [Member]
Number of Shares, Outstanding	66,667	381,333	66,667
Weighted average remaining contractual life, Outstanding	3 years 10 months 24 days	1 year	4 years
Number of Shares, Exercisable	66,667	0
Weighted average remaining contractual life, Exercisable	3 years 10 months 24 days	1 year
3.75 [Member]
Number of Shares, Outstanding	435,000	105,926	385,000
Weighted average remaining contractual life, Outstanding	3 years 2 months 12 days	3 months 18 days	4 years 4 months 24 days
Number of Shares, Exercisable	291,667	122,593	246,667
Weighted average remaining contractual life, Exercisable	3 years 8 months 12 days	3 months 18 days	4 years 5 months 30 days
6.00 [Member]
Number of Shares, Outstanding	163,333		381,333
Weighted average remaining contractual life, Outstanding	2 months 12 days		8 months 12 days
Number of Shares, Exercisable	163,333		381,333
Weighted average remaining contractual life, Exercisable	2 months 12 days		8 months 12 days
27.00 [Member]
Number of Shares, Outstanding	18,518		92,593
Weighted average remaining contractual life, Outstanding	4 months 24 days		1 month 6 days
Number of Shares, Exercisable	18,518		92,593
Weighted average remaining contractual life, Exercisable	4 months 24 days		1 month 6 days
Warrant [Member]
Number of Shares, Outstanding	8,550,852	7,778,593	7,858,741
Weighted average remaining contractual life, Outstanding	2 years 6 months	3 years 1 month 6 days	3 years
Number of Shares, Exercisable	7,598,630	7,303,741	7,143,370
Weighted average remaining contractual life, Exercisable	2 years 4 months 24 days	3 years	3 years 1 month 6 days

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STOCKHOLDERS EQUITY (Details 3) - $ / shares	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Volatility	64.80%
Risk-free rate	0.30%
Contractual term	3 years	3 years	3 years
Weighted-Average Exercise Price, Granted	$ 3.75	$ 2.70
Options [Member]
Weighted-Average Exercise Price, Granted	$ 3.75	$ 2.70	$ 2.48	$ 1.17
Options [Member] | Minimum [Member]
Volatility		57.50%	56.40%	34.60%
Risk-free rate		0.90%	0.90%	1.80%
Contractual term				2 years 5 months 30 days
Weighted-Average Exercise Price, Granted		$ 0.75	$ 0.75	$ 0.75
Options [Member] | Maximun [Member]
Volatility		64.80%	69.00%	74.10%
Risk-free rate		1.70%	1.70%	2.80%
Contractual term				5 years
Weighted-Average Exercise Price, Granted		$ 3.75	$ 3.75	$ 3.75

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STOCKHOLDERS EQUITY (Details 4) - USD ($)	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Weighted-Average Exercise Price, Granted	$ 3.75	$ 2.70
Options [Member]
Number of Shares, Outstanding Beginning Balance	3,377,222	3,512,500	3,512,500	2,761,667
Number of Shares, Granted	76,667	511,667	568,333	820,833
Number of Shares, Exercised	0	0	0	0
Number of Shares, Forfeited	0	0	0	0
Number of Shares, Expired	(143,333)	(139,167)	(703,611)	(70,000)
Number of Shares, Outstanding Ending Balance	3,310,556	3,885,000	3,377,222	3,512,500
Number of Shares, Vested and exercisable Ending Balance	2,883,458	2,522,731	2,489,986
Number of Shares, Non-vested Ending Balance	427,098	1,362,269	887,237
Weighted-Average Exercise Price, Outstanding Beginning Balance	$ 1.10	$ 0.90	$ 0.90	$ 0.75
Weighted-Average Exercise Price, Granted	3.75	2.70	2.48	1.17
Weighted-Average Exercise Price, Exercised	0	0	0	0
Weighted-Average Exercise Price, Forfeited	0	0	0	0
Weighted-Average Exercise Price, Expired	0	0	0.97	3.15
Weighted-Average Exercise Price, Outstanding Ending Balance	1.10	1.05	1.10	0.90
Weighted-Average Exercise Price, Vested and exercisable Ending Balance	0.89	0.75	0.79
Weighted-Average Exercise Price, Non-vested Ending Balance	2.59	1.50	1.91
Weighted-Average Grant-Date Fair Value, Outstanding Beginning Balance	1.06	0.75	0.75	0.39
Weighted-Average Grant-Date Fair Value, Granted	0	2.10	1.98	2.88
Weighted-Average Grant-Date Fair Value, Exercised	0	0	0	0
Weighted-Average Grant-Date Fair Value, Forfeited	0	0	0	0
Weighted-Average Grant-Date Fair Value, Expired	0	0	1.16	2.59
Weighted-Average Grant-Date Fair Value, Outstanding Ending Balance	1.01	1.05	1.06	$ 0.75
Weighted-Average Grant-Date Fair Value, Vested and exercisable Ending Balance	0.93	0.90	0.78
Weighted-Average Grant-Date Fair Value, Non-vested Ending Balance	$ 1.90	$ 1.35	$ 1.85
Aggregate Intrinsic Value of Outstanding Warrant Shares, Outstanding Beginning Balance	$ 2,030,000	$ 1,908,750	$ 1,908,750	$ 0
Aggregate Intrinsic Value of Outstanding Warrant Shares, Granted	0	550,000	720,000	2,078,750
Aggregate Intrinsic Value of Outstanding Warrant Shares, Exercised	0	0	0	0
Aggregate Intrinsic Value of Outstanding Warrant Shares, Forfeited	0	0	0	0
Aggregate Intrinsic Value of Outstanding Warrant Shares, Expired	(200,000)	243,750	598,750	170,000
Aggregate Intrinsic Value of Outstanding Warrant Shares, Outstanding Ending Balance	1,830,000	2,152,500	2,030,000	$ 1,908,750
Aggregate Intrinsic Value of Outstanding Warrant Shares, Vested and exercisable Ending Balance	1,469,818	1,155,000	974,401
Aggregate Intrinsic Value of Outstanding Warrant Shares, Non-vested Ending Balance	$ 360,182	$ 997,500	$ 1,055,599
Weighted-Average Remaining Contractual Term (in years), Outstanding Beginning Balance	8 months 12 days	1 year 1 month 6 days	1 year 1 month 6 days	5 years 2 months 12 days
Weighted-Average Remaining Contractual Term (in years), Granted	2 years 9 months 18 days
Weighted-Average Remaining Contractual Term (in years), Outstanding Ending Balance	5 months 30 days	9 months 18 days	8 months 12 days	1 year 1 month 6 days
Weighted-Average Remaining Contractual Term (in years), Vested and exercisable Ending Balance	3 months 18 days	5 months 30 days	3 months 18 days
Weighted-Average Remaining Contractual Term (in years), Non-vested Ending Balance	1 year 5 months 30 days	1 year 5 months 30 days	1 year 8 months 12 days

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STOCKHOLDERS EQUITY (Details 5) - shares	9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Options [Member]
Number of Shares, Outstanding Ending Balance	3,310,556	3,885,000	3,377,222
Weighted average remaining contractual life, Exercisable	3 months 18 days	5 months 30 days	3 months 18 days
Weighted average remaining contractual life, Outstanding	6 months	9 months 18 days	8 months 12 days
Number of Shares, Vested and exercisable Ending Balance	2,883,458	2,522,731	2,489,986
0.75 [Member]
Number of Shares, Outstanding Ending Balance	2,768,889	3,326,667	2,835,556
Weighted average remaining contractual life, Exercisable	2 months 12 days	4 months 24 days	4 months 24 days
Weighted average remaining contractual life, Outstanding	3 months 18 days	7 months 6 days	3 months 18 days
Number of Shares Exercisable, Ending balance	2,628,458	2,334,398	2,352,208
1.50 [Member]
Number of Shares, Vested and exercisable Ending Balance	400,000	133,333	133,333
1.50 [Member] | Options [Member]
Number of Shares, Outstanding Ending Balance	200,000	200,000	200,000
Weighted average remaining contractual life, Exercisable	5 months 30 days	1 year	1 year 1 month 6 days
Weighted average remaining contractual life, Outstanding	5 months 30 days	1 year 5 months 30 days	1 year 3 months 18 days
Number of Shares, Vested and exercisable Ending Balance	166,667	177,778	133,333
3.75 [Member]
Number of Shares, Vested and exercisable Ending Balance	291,667	122,593	246,667
3.75 [Member] | Options [Member]
Number of Shares, Outstanding Ending Balance	341,667	341,667	341,666
Weighted average remaining contractual life, Exercisable	1 year 10 months 24 days	10 months 24 days	1 year 9 months 18 days
Weighted average remaining contractual life, Outstanding	2 years	3 years	2 years 8 months 12 days
Number of Shares, Vested and exercisable Ending Balance	88,333	3,333	4,445
3.00 [Member]
Number of Shares, Vested and exercisable Ending Balance	66,667	0
3.00 [Member] | Options [Member]
Number of Shares, Outstanding Ending Balance		16,667
Weighted average remaining contractual life, Exercisable		2 years
Weighted average remaining contractual life, Outstanding		1 year 9 months 18 days
Number of Shares, Vested and exercisable Ending Balance		7,222

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STOCKHOLDERS EQUITY (Details Narrative) - USD ($)		1 Months Ended			3 Months Ended		12 Months Ended
	Jun. 13, 2017	Jan. 31, 2021	Jul. 31, 2020	Jun. 30, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Oct. 31, 2020
Common stock, shares outstanding				15,464,623	15,020,512		15,464,623	15,211,290
Common stock, shares issued				15,454,623	15,020,512		15,454,623	15,211,290
Common stock, shares authorized				300,000,000	300,000,000		300,000,000	600,000,000
Common stock, shares par value				$ 0.001	$ 0.001		$ 0.001	$ 0.001
Restricted shares held in escrow		2,666,667
Preferred stock, shares authorized				15,000,000	15,000,000		15,000,000	15,000,000
Reverse stock split desciption				Board of Directors to effect a reverse stock split of our common stock at a certain exchange ratios from 1:10 to 1:15 with our Board of Directors retaining the discretion as to whether to implement the reverse stock split and which exchange ratio to implement
Price per share								$ 0.75
Common stock shares purchase for legal settlement								10,000
convertible note payables								$ 142,000
Warrants issued								353,333
Warrant expense							$ 0	$ 33,000
Compensation expenses							0	1,142,000
Common stock value				$ 16,000	$ 15,000		16,000	15,000
Compensation expenses, for vested options							671,000	$ 474,000
Unrecognized share based expenses							$ 1,753,000
Lock up Agreeement descriptions							Company entered into lock-up agreements with some of its officers restricting them from exercising their vested warrants and options. Representing the common stock equivalent of 3,966,667 shares, the agreements restricted 2,333,334 warrants and 1,633,334 options from being converted until the Company’s Articles of Incorporation are amended upon stockholder and Board of Directors approval.
Conversion price									$ 3.00
Preferred stock, shares par value				$ 0.01	$ 0.01		$ 0.01	$ 0.01
Investors [Member]
Price per share				$ 3.75	$ 1.95		$ 3.75
convertible note payables				$ 539,000	$ 66,000	$ 1,075,000	$ 539,000
Warrants issued					26,667	438,333	231,667	96,667
Expenses					$ 0	$ 748,000	$ 353,000
Directors and consultants [Member]
convertible note payables				$ 217,000	$ 1,682,000	$ 858,000	$ 217,000	$ 774,000
Warrants issued					566,667	327,333	1,021,482	266,667
Compensation expenses					$ 1,558,000	$ 0	$ 13,000	$ 179,000
Investor One [Member]
Preferred stock, shares par value				$ 0.01	$ 0.01		$ 0.01
Consultants [Member]
convertible note payables				$ 335,000			$ 335,000	$ 335,000
Warrants issued								124,000
Note Holder [Member]
Warrants issued							26,666
Expenses							$ 47,000
Warrants issued, Value							$ 47,000
Series D Convertible Preferred Stock [Member]
Preferred stock, shares authorized				2,500,000	2,500,000		2,500,000	2,500,000
Price per share								$ 3.75
Preferred stock, shares outstanding				1,979,000	1,979,000		1,979,000	1,881,500
Preferred stock, shares issued				1,979,000	1,979,000		1,979,000	1,881,500
Sale of preferred stock shares descriptions								Series D convertible preferred stock (“Series D Preferred”) filed with the secretary of State of Nevada last filed on June 20, 2018, the Company offered for sale up to $20,000,000 face value of Series D Preferred on a best efforts basis, with a $5,000,000 over-subscription option, (the “Series D Offering”) at $10.00 per share of Series D Preferred.
Sale of common stock shares								1,265,000
Offering cost of shares							$ 976,000	$ 7,710,000
Preferred stock shares convertible								3
Preferred stock, shares par value				$ 0.01	$ 0.01		$ 0.01	$ 0.01
Series A Preferred Stock [Member]
Preferred stock, shares authorized				5,000,000	5,000,000		5,000,000	5,000,000
Preferred stock, shares outstanding				720,000	720,000		720,000	720,000
Preferred stock, shares issued				720,000	720,000		720,000	720,000
Preferred stock, shares par value				$ 0.01	$ 0.01		$ 0.01	$ 0.01
Series C Convertible Preferred Stock [Member]
Preferred stock, shares authorized				1,200,000	1,200,000		1,200,000	1,200,000
Price per share								$ 0.75
Preferred stock, shares outstanding				911,149	911,149		911,149	911,149
Preferred stock, shares issued				911,149	911,149		911,149	911,149
Sale of preferred stock shares descriptions								Series C convertible preferred stock (“Series C Preferred”) filed with the secretary of state of Nevada on April 11, 2017, the Company offered for sale up to $8,000,000 face value of Series C Preferred on a best efforts basis, with a $2,000,000 overallotment, (the “Series C Offering”) at $10.00 per Series C Preferred.
Sale of common stock shares								26,250
Offering cost of shares								$ 200,000
Preferred stock shares convertible								14
Preferred stock, shares par value				$ 0.01	$ 0.01		$ 0.01	$ 0.01
Aggregate shares of common stock								12,148,654
Series B Convertible Preferred Stock [Member]
Preferred stock, shares authorized				3,000,000	3,000,000		3,000,000	3,000,000
Preferred stock, shares outstanding				2,495,000	2,495,000		2,495,000	2,495,000
Preferred stock, shares issued				2,495,000	2,495,000		2,495,000	2,495,000
Preferred stock, shares par value				$ 0.01	$ 0.01		$ 0.01	$ 0.01
Convertible Promissory Note [Member]
Warrants issued							333,333
Compensation expenses							$ 209,000
Warrants issued, Value							209,000
Convertible promissory note one [Member]
Convertible promissory note, amount			$ 1,000,000				$ 443,000
Common shares issued upon debt conversion			387,222				660,000
Conversion price			$ 1.50	$ 0.01			$ 0.01
Shares cancelled							416,667
Convertible promissory note two [Member]
Convertible promissory note, amount			$ 200,000
Common shares issued upon debt conversion			56,000
Conversion price			$ 3.75
2017 Equity Incentive Plan [Member]
Issuance of equity shares	3,333,334
ISO's Awards [Member]
convertible note payables				$ 1,300,000	$ 582,000		$ 1,300,000	$ 2,360,000
Compensation expenses					$ 271,000	$ 314,000	$ 607,000	$ 333,000
Options purchased					308,333		568,333	820,833
Total compensation					$ 812,000		$ 135,000
Option expenses							71,000
ISO's Awards [Member] | Minimum [Member]
Price per share					$ 0.75
ISO's Awards [Member] | Maximum [Member]
Price per share					$ 3.75
Black Scholes models [Member]
Warrants issued					8,551,000	7,187,518
Compensation expenses							2,650,000
Warrants issued, Value					$ 16,050,000	$ 11,934,000	$ 3,076,000

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Income Taxes (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Loss before income taxes	$ (14,448,000)	$ (6,798,000)
Foreign [Member]
Loss before income taxes	(3,153,000)	(1,405,000)
Deferred Tax Assets [Member]
Loss before income taxes	$ (11,295,000)	$ (5,393,000)

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Income Taxes (Details 1) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
INCOME TAXES
Federal	$ (4,595,000)	$ (1,776,000)
State	(991,000)	(364,000)
Foreign	(533,000)	(294,000)
Subtotal	(6,119,000)	(2,434,000)
Valuation allowance	6,119,000	2,434,000
Total	0	0
Current
State, Current	0	0
Federal, Current	0	0
Foreign, Current	0	0
Subtotal, Current	0	0
Valuation allowance, Current	0	0
Total, Current	0	0
Deferred
Federal, Deferred	(4,595,000)	(1,776,000)
State, Deferred	(991,000)	(364,000)
Foreign, Deferred	(533,000)	(294,000)
Subtotal, Deferred	(6,119,000)	(2,434,000)
Valuation allowance, Deferred	6,119,000	2,434,000
Total, Deferred	$ 0	$ 0

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Income Taxes (Details 2)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Oct. 31, 2020	Sep. 30, 2020	Aug. 31, 2020
INCOME TAXES
Foreign taxes	(2.90%)	(0.00%)
Taxes calculated at federal rate	21.00%	21.00%
Debt settlement	9.20%	20.20%	10.00%	3.75%	10.00%
Stock compensation	(1.00%)	(7.40%)
Change in valuation allowance	(21.20%)	21.40%
State taxes net of federal benefit	(0.10%)	(2.30%)
Revaluation of deferred	(0.00%)	(0.00%)
Acquisition - domestic	(0.00%)	(0.00%)
Acquisition - foreign	(0.00%)	(0.00%)
Goodwill impairment	(2.90%)	(9.50%)
Other adjustments	(2.30%)	0.90%
Provision for income taxes	(0.10%)	1.40%

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Income Taxes (Details 3) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
Valuation Allowance		$ (6,120,000)	$ (2,435,000)
Net Deferred Tax Assets		6,120,000	2,435,000
Net deferred tax / (liabilities)		0	0
Contract liabilities	$ 6,647,000	3,327,000	3,516,000
Short Term, Deferred Rent		842,000	323,000
Net right-of-use assets	7,404,000	8,297,000	0
Other accruals	$ 841,000	327,000	240,000
Deferred Tax Assets [Member]
Net operating loss carryforwards		5,649,000	3,506,000
Accounts receivable reserve		201,000	110,000
Contribution carryover		995,000	6,000
Section 163 (j) limitation		123,000	51,000
Stock based compensation		1,053,000	0
Accrued interest		127,000	184,000
Contract liabilities		0	1,259,000
Short Term, Deferred Rent		29,000	281,000
Net right-of-use assets		24,000	0
Other accruals		0	0
Total Deferred Tax Assets		8,201,000	5,397,000
Deferred Tax Liabilities [Member]
Fixed Assets		(101,000)	(10,000)
Intangibles		(1,775,000)	(2,952,000)
Deferred Revenue		(205,000)	0
Total Deferred Tax Liabilities		$ (2,081,000)	$ (2,962,000)

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Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2017
INCOME TAXES
Net operating loss carryforward	$ 9,198,000	$ 4,225,000	$ 20,128,000
US federal income tax rate	21.00%
Operating loss	$ 3,153,000
State tax rate	9.00%
Tax rate	19.00%
Estimate valuation allowance	$ 6,120,000	2,435,000
Federal net operating loss	$ 8,344,000	$ 4,213,000
Corporate tax rate	21.00%

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Project revenues, net	$ 3,854,000	$ 3,620,000	$ 12,437,000	$ 20,759,000	$ 24,613,000	$ 40,791,000
Project fees [Member]
Project revenues, net	1,627,000	697,000	5,268,000	5,091,000	6,816,000	8,621,000
Other Revenue [Member]
Project revenues, net	0	(1,000)	0	4,000	6,000	366,000
Retainer Fees [Member]
Project revenues, net	560,000	631,000	1,648,000	2,913,000	3,194,000	3,632,000
Fee Income [Member]
Project revenues, net	676,000	1,003,000	2,435,000	4,602,000	5,420,000	10,528,000
Reimbursement Income [Member]
Project revenues, net	$ 991,000	$ 1,290,000	$ 3,086,000	$ 8,149,000	$ 9,177,000	$ 17,644,000

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Details 1) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Project revenues, net	$ 3,854,000	$ 3,620,000	$ 12,437,000	$ 20,759,000	$ 24,613,000	$ 40,791,000
United Kingdom [Member]
Project revenues, net	1,545,000	1,381,000	4,497,000	7,832,000	8,659,000	15,695,000
United States [Member] | Computer Equipment [Member]
Project revenues, net	$ 2,309,000	$ 2,239,000	$ 7,940,000	$ 12,927,000	$ 15,954,000	$ 25,096,000

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Details 2) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Gross profit	$ 1,913,000	$ 1,364,000	$ 6,077,000	$ 9,653,000	$ 12,977,000	$ 17,562,000
United States [Member]
Gross profit	1,078,000	439,000	3,770,000	5,509,000	8,084,000	11,026,000
United Kingdom [Member]
Gross profit	$ 835,000	$ 925,000	$ 2,307,000	$ 4,144,000	$ 4,893,000	$ 6,536,000

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Details 3) - USD ($)	3 Months Ended						9 Months Ended		12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Net loss	$ (4,679,000)	$ (623,000)	$ (3,921,000)	$ (7,817,000)	$ (2,804,000)	$ (4,573,000)	$ (9,223,000)	$ (15,195,000)	$ (14,447,000)	$ (6,041,000)
United States [Member]
Net loss	(4,188,000)			(8,129,000)			(8,147,000)	(14,874,000)	(11,294,000)	(4,624,000)
United Kingdom [Member]
Net loss	$ (491,000)			$ 312,000			$ (1,076,000)	$ (321,000)	$ (3,153,000)	$ (1,417,000)

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Details 4) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019
Property plant and equipment	$ 1,526,000	$ 1,462,000	$ 2,220,000
Accumulated depreciation	1,253,000	1,118,000	1,438,000
Net book value	273,000	344,000	782,000
United Kingdom [Member]
Property plant and equipment	453,000	394,000	394,000
Accumulated depreciation	409,000	348,000	321,000
Net book value	44,000	46,000	73,000
United States [Member]
Property plant and equipment	1,073,000	1,068,000	1,825,000
Accumulated depreciation	844,000	770,000	1,116,000
Net book value	229,000	298,000	709,000
Tenant Incentives [Member]
Property plant and equipment	145,000	145,000	136,000
Website Design [Member]
Property plant and equipment	6,000	6,000	6,000
Computer Equipment [Member]
Property plant and equipment	650,000	620,000	566,000
Office Machine & Equipment [Member]
Property plant and equipment	97,000	89,000	88,000
Furniture & Fixtures [Member]
Property plant and equipment	437,000	429,000	427,000
Leasehold Improvements [Member]
Property plant and equipment	191,000	173,000	997,000
Computer Equipment [Member] | United Kingdom [Member]
Property plant and equipment	193,000	160,000	165,000
Computer Equipment [Member] | United States [Member]
Property plant and equipment	457,000	460,000	401,000
Website Design [Member] | United Kingdom [Member]
Property plant and equipment	0	0	0
Website Design [Member] | United States [Member]
Property plant and equipment	6,000	6,000	6,000
Office Machine & Equipment [Member] | United Kingdom [Member]
Property plant and equipment	45,000	36,000	37,000
Office Machine & Equipment [Member] | United States [Member]
Property plant and equipment	52,000	53,000	51,000
Furniture & Fixtures [Member] | United Kingdom [Member]
Property plant and equipment	86,000	79,000	77,000
Furniture & Fixtures [Member] | United States [Member]
Property plant and equipment	351,000	350,000	350,000
Leasehold Improvements [Member] | United Kingdom [Member]
Property plant and equipment	129,000	119,000	116,000
Leasehold Improvements [Member] | United States [Member]
Property plant and equipment	62,000	54,000	881,000
Tenant Incentives[Member] | United Kingdom [Member]
Property plant and equipment	0	0	0
Tenant Incentives[Member] | United States [Member]
Property plant and equipment	$ 145,000	$ 145,000	$ 136,000

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DISAGGREGATION OF REVENUE LONG-LIVED ASSETS (Details 5) - USD ($)	12 Months Ended
	Jun. 30, 2020	Mar. 31, 2021	Jun. 30, 2019
Intangible assets, gross	$ 14,670,000	$ 9,685,000	$ 14,670,000
Accumulated amortization	(8,612,000)	(7,113,000)	(4,610,000)
Less : Impairment expense	(1,867,000)
Net book value	4,191,000	2,572,000	10,060,000
Goodwill	17,362,000	17,362,000	19,347,000
United Kingdom [Member]
Intangible assets, gross	4,985,000	0	4,985,000
Accumulated amortization	(3,118,000)	0	(1,559,000)
Less : Impairment expense	(1,867,000)
Net book value	0	0	3,426,000
Goodwill	7,531,000	7,531,000	7,531,000
United States [Member]
Intangible assets, gross	9,685,000	9,685,000	9,685,000
Accumulated amortization	(5,494,000)	(7,113,000)	(3,051,000)
Less : Impairment expense	0
Net book value	4,191,000	2,572,000	6,634,000
Goodwill	9,831,000	9,831,000	11,816,000
Customer Relationship [Member]
Intangible assets, gross	8,510,000	4,960,000	8,510,000
Tradename [Member]
Intangible assets, gross	410,000	410,000	410,000
Tradename [Member] | United Kingdom [Member]
Intangible assets, gross	0	0	0
Tradename [Member] | United States [Member]
Intangible assets, gross	410,000	410,000	410,000
Workforce Acquired [Member]
Intangible assets, gross	2,790,000	2,125,000	2,790,000
Non-Core Customer Relationships [Member]
Intangible assets, gross	760,000	760,000	760,000
Non-Compete Agreements [Member]
Intangible assets, gross	2,200,000	1,430,000	2,200,000
Customer Relationship [Member] | United Kingdom [Member]
Intangible assets, gross	3,550,000	0	3,550,000
Customer Relationship [Member] | United States [Member]
Intangible assets, gross	4,960,000	4,960,000	4,960,000
Non-Core Customer Relationships [Member] | United Kingdom [Member]
Intangible assets, gross	0	0	0
Non-Core Customer Relationships [Member] | United States [Member]
Intangible assets, gross	760,000	760,000	760,000
Non-Compete Agreements [Member] | United Kingdom [Member]
Intangible assets, gross	770,000	0	770,000
Non-Compete Agreements [Member] | United States [Member]
Intangible assets, gross	1,430,000	1,430,000	1,430,000
Workforce Acquired [Member] | United Kingdom [Member]
Intangible assets, gross	665,000	0	665,000
Workforce Acquired [Member] | United States [Member]
Intangible assets, gross	$ 2,125,000	$ 2,125,000	$ 2,125,000

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)			1 Months Ended							9 Months Ended	12 Months Ended
	May 13, 2021	May 10, 2021	May 21, 2021	Apr. 30, 2021	Apr. 22, 2021	Oct. 31, 2020	Sep. 30, 2020	Aug. 31, 2020	Jul. 31, 2020	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019	May 30, 2021
Current market value								25.00%
Gross proceeds						$ 247,500		$ 50,000
Interest rate						10.00%	3.75%	10.00%			9.20%	20.20%
Warrants exercise price						$ 1.95
Conversion price						$ 3.00
Issuance shares of restricted shares of common stock						106,667
Public offering common stock and warrants shares						26,667
Maturity date						Dec. 07, 2020	Mar. 31, 2021	Nov. 30, 2020
Payroll protection program							$ 500,000
Settelment of note payable related party											$ 0	$ 4,554,000
Assets acquisions											$ 0	$ 154,000
Rate of price per share												$ 0.75
Debt conversion, converted instrument, shares												1,733,334
Lock Up Agreements [Member]
Debt conversion, converted instrument, shares									5,711,134
Common stock equivalant shares									1,744,467
Warrants converted, shares									1,744,467
Mr Bressman [Member]
Remaining balance of Consultant's fees										$ 1,291,833
Total accrued and unpaid consulting fees, expenses										378,837
One-half of the consulting fees paid										$ 1,291,833
Series C Convertible Preferred Stock [Member]
Rate of price per share												$ 0.75
Series D Convertible Preferred Stock [Member]
Rate of price per share												$ 3.75
Subsequent Event [Member] | Settlement Of Note Payable [Member]
Interest rate													10.00%
Principal amount note payable													$ 100,000
Accrued interest													19,000
Promissory note holder													$ 119,000
Subsequent Event [Member] | Estate Of Sally Pappalardo [Member]
Settelment of note payable related party				$ 300,000
Subsequent Event [Member] | Mr Machinist [Member]
Cash bonus				$ 100,000
Description of base salary				Under the first amendment Mr. Machinist’s base salary was increased from $210,000 to $300,000.
Subsequent Event [Member] | Jeffrey Schwartz [Member]
Public offering common stock and warrants shares	122,183
Options purchased	166,667
Closing price	$ 2.81
Exercise price	$ 0.75
Subsequent Event [Member] | Kyle Hill [Member] | Redeeem LLC [Member]
Consideration in Common stock			$ 10,890,000
Executive compensated per year			300,000
Assets acquisions			165,000
Total purchase price			12,100,000
Acquisions price in cash			$ 1,210,000
Subsequent Event [Member] | Series B Convertible Preferred Stock [Member]
Conversion price		$ 4.20
Series B Convertible Preferred Stock Shares		2,495,000
Preferred Stock Conversion into Common stock shares		594,051
Subsequent Event [Member] | Series C Convertible Preferred Stock [Member]
Conversion price		$ 0.75
Series B Convertible Preferred Stock Shares		911,149
Preferred Stock Conversion into Common stock shares		12,148,654
Subsequent Event [Member] | Series D Convertible Preferred Stock [Member]
Conversion price		$ 3.75
Series B Convertible Preferred Stock Shares		1,979,000
Preferred Stock Conversion into Common stock shares		5,277,335
Subsequent Event [Member] | Preferred Stocks [Member]
Total of common stock shares		18,020,040
Convertible Notes Payable [Member]
Current market value								25.00%
Gross proceeds					$ 24,000,000			$ 100,000
Interest rate								10.00%
Public offering common stock and warrants shares					5,783,133
Payroll protection program							$ 1,700,000
Public offering description					The Company has granted the underwriters a 45 day option to purchase up to 867,469 additional shares and warrants at the public offering price of $4.15 less discounts and commissions.
Public offering price					$ 4.15
Net proceeds					$ 21,700,000
Convertible Note Payable One [Member]
Debt conversion, converted instrument, amount									$ 1,000,000
Issuances of shares of common stock									333,333
Loan fees									$ 120,000
Additional shares of common stock									40,000
Representing shares of common stock									13,889
Rate of price per share									$ 3.00
Convertible Note Payable Two [Member]
Debt conversion, converted instrument, amount									$ 200,000
Issuances of shares of common stock									53,334
Loan fees									$ 10,000
Additional shares of common stock									2,667
Rate of price per share									$ 3.75
Convertible Note Payable Three [Member]
Debt conversion, converted instrument, amount									$ 200,000
Issuances of shares of common stock									53,334
Loan fees									$ 10,000
Additional shares of common stock									2,667
Rate of price per share									$ 3.75
Convertible Note Payable four [Member]
Debt conversion, converted instrument, amount									$ 1,300,000
Rate of price per share									$ 0.75
Debt conversion, converted instrument, shares									1,733,334