XML 56 R44.htm IDEA: XBRL DOCUMENT v3.21.2
Business Combination (Tables)
 12 Months Ended
Jun. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
Schedule of Fair Value of Purchase Price Consideration

The following table summarizes the fair value of purchase price consideration to acquire Lemon Glow (In US $000’s):

 

Purchase Consideration Summary            
In US $000’s         Fair Value  
             
Cash Consideration     (1)     $ 4,256  
                 
Equity Consideration     (2)     $ 7,450  
                 
Interest-Bearing Debt Assumed           $ 2,043  
Total Purchase Consideration           $ 13,749  

 

Notes:

 

  (1) The cash consideration consists of $280,000 in cash and $3,976,000 in promissory notes with 5% simple interest.
  (2) The equity consideration consists of 660,571,429 shares of Common stock and 2,000,000 shares of Series B Preferred stock.
Schedule of Fair Value of Assets Acquired and Liabilities Assumed

The following is an allocation of purchase price as of the May 25, 2021 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):

 

Allocation Summary            
In US $000’s         Fair Value  
Assets Acquired           $ 6  
Property, Plant & Equipment     (3)     $ 2,348  
Total Tangible Asset Allocation           $ 2,354  
                 
Cannabis Cultivation License           $ 10,637  
Total Identifiable Intangible Assets           $ 10,637  
                 
Assembled Workforce           $ 275  
Goodwill (Excluding Assembled Workforce)           $ 483  
Total Economic Goodwill           $ 758  
                 
Purchase Consideration to be Allocated           $ 13,749  

 

Notes:

 

  (3) The value of the land is excluded in the calculation of depreciation.
Schedule of Pro Forma Combined Financial Information

The following table presents unaudited pro forma combined financial information for each of the periods presented, as if the acquisitions of Lemon Glow had occurred at March 31, 2021 and June 30, 2020:

 

Unaudited Pro Forma Condensed Combined Balance Sheets

As of March 31, 2021

 

    Lemon Glow Company     Sugarmade Inc.     Pro Forma Merger Adjustment         Pro Forma Combined  
Assets                                    
Current assets:                                    
Cash     18,211       269,885       280,000     a     568,096  
Accounts receivable, net     -       75,040       -           75,040  
Inventory, net     -       692,460       -           692,460  
Loan receivables, current     -       -       -           -  
Loan receivables - related party, current     -       208,931       -           208,931  
Other current assets     -       1,066,597       -           1,066,597  
Right of use asset, current     -       237,556       -           237,556  
Total current assets     18,211       2,550,469       280,000           2,848,680  
Noncurrent assets:                                    
Machinery and Equipment, net     87,645       390,189       -           477,834  
Land Improvements, net     341,681       -       -           341,681  
Estate Property - Land     1,922,376       -       -           1,922,376  
Intangible asset, net     -       14,578       10,572,600     e     10,587,178  
Goodwill                     573,000     f     573,000  
Other assets     -       -       -           -  
Loan receivables - related party, noncurrent     -       196,000       -           196,000  
Right of use asset, noncurrent     -       549,261       -           549,261  
Investment to Indigo Dye     -       564,819       -           564,819  
Total noncurrent assets     2,351,702       1,714,847       11,145,600           15,212,149  
Total assets     2,369,913       4,265,316       11,425,600           18,060,829  
                                     
Liabilities and Stockholders’ Equity (Deficiency)                                    
Current liabilities:                                    
Note payable due to bank     -       25,982       -           25,982  
Accounts payable and accrued liabilities     85,157       1,753,855       -           1,839,012  
Customer deposits     400,000       660,268       -           1,060,268  
Customer overpayment     -       53,183       -           53,183  
Unearned revenue     -       9,379       -           9,379  
Other payables     -       812,069       -           812,069  
Accrued interest     3,500       515,767       -           519,267  
Accrued compensation and personnel related payables     -       -       -           -  
Notes payable - Current     -       20,000       -           20,000  
Notes payable - Related Parties, Current     -       15,427       -           15,427  
Lease liability - Current     -       231,305       -           231,305  
Loans payable - Current     113,891       350,221       -           464,112  
Loan payable - Related Parties, Current     -       238,150       -           238,150  
Convertible notes payable, Net, Current     -       1,982,902       -           1,982,902  
Derivative liabilities, net     -       2,723,899       -           2,723,899  
Due to related parties     4,244       -       -           4,244  
Warrants liabilities     -       24,216       -           24,216  
Shares to be issued     -       136,577       -           136,577  
Total curent liabilities     606,792       9,553,200       -           10,159,992  
Non-current liabilities:                                    
Note Payable     1,381,593       -       3,976,000     b     5,357,593  
Loans payable     54,408       366,495       -           420,903  
Lease liability     -       591,116       -           591,116  
Total liabilities     2,042,793       10,510,811       3,976,000           16,529,604  
                                     
Stockholders’ equity (deficiency):                                    
Preferred stock, $0.001 par value, 10,000,000 shares authorized 1,541,500 shares issued outstanding at March 31, 2021             1,542       5,600     d     7,142  
Common stock, $0.001 par value, 10,000,000,000 shares authorized, 4,718,104,197 shares issued and outstanding at March 31, 2021     394,773       4,718,105       660,571     c     5,773,449  
Additional paid-in capital             63,095,927       6,783,429     cd     69,879,356  
Share to be issued, Preferred stock             (1 )                 (1 )
Common Stock Subscribed             236,008                   236,008  
Accumulated deficit     (67,653 )     (74,350,923 )     -           (74,418,576 )
Total stockholders’ deficiency     327,120       (6,299,342 )     7,449,600           1,477,378  
Non-Controlling Interest     -       53,847       -           53,847  
Total stockholders’ equity (deficiency)     327,120       (6,245,495 )     7,449,600           1,531,225  
Total liabilities and stockholders’ equity (deficiency)     2,369,913       4,265,316       11,425,600           18,060,829  

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

Unaudited Pro Forma Condensed Combined Statements of Operations

For the Nine Months Ended March 31, 2021

 

   

Lemon Glow

Company

    

Sugarmade

Inc.

    

Pro Forma

Merger

Adjustment

    

Pro Forma

Combined

  
Revenues, net   $ -     $ 2,851,822     $        -     $ 2,851,822  
Cost of goods sold     -       1,502,247       -       1,502,247  
Gross profit     -       1,349,575       -       1,349,575  
                                 
Selling, general and administrative expenses     11,256       1,446,038       -       1,457,294  
Advertising and Promotion Expense     -       378,068       -       378,068  
Marketing and Research Expense     -       364,580       -       364,580  
Professional Expense     4,136       756,444       -       760,580  
Salaries and Wages     7,080       368,616       -       375,696  
Stock Compensation Expense     -       82,250       -       82,250  
Loss from operations     (22,472 )     (2,046,421 )     -       (2,068,893 )
                                 
Non-operating income (expense):                                
Other income     -       5,099       -       5,099  
Gain in loss of control of VIE     -       313,928       -       313,928  
Interest expense     (45,181 )     (1,920,660 )     -       (1,965,841 )
Bad debts     -       (133,235 )     -       (133,235 )
Change in fair value of derivative liabilities     -       506,559       -       506,559  
Warrant Expense     -       55,695       -       55,695  
Loss on notes conversion     -       -       -       -  
Loss on settlement     -       (80,000 )     -       (80,000 )
Gain on asset disposal     -       -       -       -  
Amortization of debt discount     -       (2,605,144 )     -       (2,605,144 )
Debt forgiveness     -       -       -       -  
Other expenses     -       (55,054 )     -       (55,054 )
Total non-operating expenses, net     (45,181 )     (3,912,812 )     -       (3,957,993 )
Equity Method Investment Loss     -       (2,114 )     -          
Net loss   $ (67,653 )   $ (5,961,347 )   $ -          
                                 
Less: net loss attributable to the noncontrolling interest   $ -     $ (48,756 )   $ -       (48,756 )
Net loss attributable to SugarMade Inc.   $ (67,653 )   $ (5,912,591 )   $ -     $ (48,756 )
                                 
Basic net income (loss) per share   $ -     $ (0.00 )   $ -     $ (0.00 )
Diluted net income (loss) per share   $ -     $ (0.00 )   $ -     $ (0.00 )
                                 
Basic and diluted weighted average common shares outstanding *     0       3,247,070,176       0       3,247,070,176  

 

* Shares issuable upon conversion of convertible debts and exercising of warrants were excluded in calculating diluted loss per share

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

Unaudited Pro Forma Condensed Combined Statements of Operations

As of June 30, 2020

 

   

Lemon Glow

Company

    

Sugarmade

Inc.

    

Pro Forma

Merger

Adjustment

    

Pro Forma

Combined

  
                         
Revenues, net   $ -     $ 4,354,102     $              -     $ 4,354,102  
                                 
Cost of goods sold     -       2,851,940       -       2,851,940  
                                 
Gross profit     -       1,502,162       -       1,502,161.64  
                                 
Selling, general and administrative expenses     -       13,620,529       -       13,620,529  
                                 
Loss from operations     -       (12,118,367 )     -       (12,118,367 )
                                 
Non-operating income (expense):                                
Other income     -       3,064       -       3,064  
Interest expense     -       (1,613,044 )     -       (1,613,044 )
Bad debts     -       (240,157 )     -       (240,157 )
Change in fair value of derivative liabilities     -       (1,442,295 )     -       (1,442,295 )
Warrant Expense     -       (119,526 )     -       (119,526 )
Gain on debt conversion     -       (184,626 )     -       (184,626 )
Loss on settlement     -       (393,135 )     -       (393,135 )
Loss on asset disposal     -       (119,044 )     -       (119,044 )
Amortization of debt discount     -       (3,823,500 )     -       (3,823,500 )
Debt forgiveness     -       590,226       -       590,226  
Miscellaneous     -       (7,201 )     -       (7,201 )
Impairment Loss     -       (2,066,958 )     -       (2,066,958 )
Other expenses     -       -       -       -  
                                 
Total non-operating expenses, net     -       (9,416,195 )     -       (9,416,195 )
                                 
Net loss   $ -     $ (21,534,562 )   $ -     $ (21,534,562 )
                                 
Less: net loss attributable to the noncontrolling interest     -       (195,416 )     -       (195,416 )
                                 
Net loss attributable to SugarMade Inc.   $ -     $ (21,339,146 )   $ -     $ (21,339,146 )
                                 
Basic net income (loss) per share   $ -     $ (0.02 )   $ -     $ (0.02 )
Diluted net income (loss) per share   $ -     $ (0.02 )   $ -     $ (0.02 )
                                 
Basic and diluted weighted average common shares outstanding *     0       958,183,933       0       958,183,933  

 

* Shares issuable upon conversion of convertible debts and exercising of warrants were excluded in calculating diluted loss per share