Discontinued Operations

6 Months Ended

Dec. 31, 2022

Discontinued Operations:

Discontinued Operations

7. Discontinued Operations

Following the end of the COVID cannabis delivery boom, along with a challenging cannabis retail climate from inflation, the black market, increased marketing expenses, and the cannabis excise tax moving from distribution to retail, the company has decided to reduce investments in retail operations. The company made this decision as we see more promising opportunities to increase shareholder equity by pivoting the business strategy to deploy capital to invest in cannabis real estate, cultivation, and wholesale sectors vs. cannabis retail operations.

After discussions with ECGI, Inc. and the management of Nug Avenue, we could not find a path to short term profitability. The company then decided to cease investing in Nug Avenue, which ultimately led to Nug Avenue discontinuing operations.

The Company has reclassified its previously issued financial statements to segregate the discontinued operations as of the earliest period reported.

Assets and liabilities related to the discontinued operations were as follows:

	December 31, 2022			June 30, 2022
	(Unaudited)			(Audited)
Assets
Current assets:
Other current assets		70,723			70,723
Total current assets		70,723			70,723
Noncurrent assets:
Property, plant and equipment, net		4,715			16,492
Intangible asset, net		2,256			3,222
Total noncurrent assets		6,971			19,714
Total assets		77,692			90,436
Liabilities and Stockholders’ Deficiency
Current liabilities:
Accounts payable and accrued liabilities		675,319			675,012
Loan payable - Related Parties, Current		1,657,444			1,633,097
Total liabilities		2,332,763			2,308,109
Stockholders’ equity (deficiency):
Additional paid-in capital		869,045			869,045
Accumulated deficit		(3,174,122	)		(3,136,725	)
Total stockholders’ equity (deficiency)		(2,305,077	)		(2,267,680	)
Non-Controlling Interest		50,007			50,007
Total stockholders’ equity (deficiency)		(2,255,070	)		(2,217,673	)
Total liabilities and stockholders’ equity (deficiency)		77,692			90,436

	For the three Months Ended						For the six Months Ended
	December 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021
Revenues, net		-			697,010			-			1,427,248
Cost of goods sold		-			-			-			-
Gross profit		-			697,010			-			1,427,248
Selling, general and administrative expenses		9,955			346,765			11,918			641,247
Advertising and promotion expense		-			541,173			-			1,054,640
Marketing and research expense		-			-			-			985
Professional expense		14,513			106,700			24,513			220,635
Salaries and wages		-			392,588			-			713,555
Total operating expenses		24,468			1,387,226			36,431			2,631,062
Loss from continuing operations		(24,468	)		(690,215	)		(36,431	)		(1,203,815	)
Non-operating income (expense):
Other (expense) income		-			-			-			(105	)
Interest expense		-			(135	)		-			(178	)
Amortization of intangible assets		(483	)		(483	)		(967	)		(967	)
Total nonoperating expenses		(483	)		(618	)		(967	)		(1,249	)
Loss before income taxes		(24,951	)		(690,833	)		(37,397	)		(1,205,064	)
Income tax expense		-			-			-			-
Net loss from operations		(24,951	)		(690,833	)		(37,397	)		(1,205,064	)