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STOCKHOLDERS’ EQUITY
 12 Months Ended
Jun. 30, 2022
Equity [Abstract]  
STOCKHOLDERS’ EQUITY STOCKHOLDERS’ EQUITY
SERIES E PREFERRED STOCK PRIVATE PLACEMENT AND RENEGOTIATION

On March 21, 2022, the Company filed with the Nevada Secretary of State a Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock, pursuant to NRS 78.1955 of the Nevada Revised Statutes (the “CoD”). Pursuant to the CoD, the Company authorized 500,000 shares of Series E Preferred Stock, $.01 par value, with a Stated Value of $100 per share.

As of March 18, 2022, pursuant to the Nevada Revised Statutes (the “NRS”), we received a written consent in lieu of a meeting of Stockholders from 20 principal stockholders, representing approximately 57.0% of the total possible votes outstanding (the “Majority Stockholders”), authorizing the following:

The sale of $50.0 million of shares of Series E Convertible Preferred Stock, par value $0.01 per share (the Series E Preferred Stock”), with accompanying, 100% warrant coverage (the “Warrants”), with certain purchasers’ signatory thereto (the “Purchasers”). The Series E Preferred Stock and Warrants include certain reset and anti-dilution provisions that could reduce the conversion prices and exercise prices thereof down to $0.25 (the “Floor Price”) which is a significant discount to the current market price. For purposes of complying with Rule 5635(d) of the Nasdaq Stock Market rules, the shareholders approved the issuance of more than 19.99% of the current total issued and outstanding shares of Common Stock upon conversion of the Series E Preferred Stock and exercise of the Warrants, including, but not limited to, reducing the Floor Price.

In addition, the Majority Stockholders approved the amendment to Article Three of the Articles of Incorporation to reflect an increase in the number of authorized shares of all classes of stock which the Company shall have the authority to issue from 315,000,000 shares to 825,000,000 shares, such shares being designated as follows: (i) 800,000,000 shares of Common Stock, and (ii) 25,000,000 shares of preferred stock, par value $.01 per share.

On September 26, 2022, we entered into an Exchange Agreement (the “Exchange Agreement”) with the Purchasers, pursuant to which (i) each Purchaser exchanged its Warrants for new warrants to purchase our common stock (the “New Warrants”) and (ii) ) each Purchaser consented to an amendment and restatement of the terms of our Series E convertible preferred stock, par value $0.01 per share (the “Series E Preferred Stock”) as well as other changes in the terms of the private placement effected by the Company on March 16, 2022 (collectively, the “New PIPE Terms”).

In consideration for the issuance of the New Warrants and the other New PIPE Terms, we filed an amended and restated certificate of designation for the Series E Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to effect certain changes contemplated by the Exchange Agreement.

The New PIPE Terms effect the following changes, among others, to the rights Series E Holders:
New Warrant Exercise Price: The New Warrant exercise price per share of common stock is $0.55, provided that if all shares of Series E Preferred Stock issued pursuant to the Certificate of Designation are not repurchased by the Company on or prior to November 26, 2022, on such date, the exercise price per share of the New Warrants will revert to $2.00, subject to further adjustment as set forth in the New Warrant.

Series E Conversion Price: The conversion price for the Series E Preferred Stock shall initially equal $0.40 per share, and so long as the arithmetic average of the daily volume-weighted average prices of the Common Stock for the calendar week prior to each of the following respective dates is lower than the Conversion Price at that time, the Conversion Price shall be downwardly adjusted by $0.01 on each of October 24, 2022, October 31, 2022, November 7, 2022, November 14, 2022 and November 21, 2022.

Standstill Period: The Company and the Purchasers will enter into a 60-day standstill period ending on November 26, 2022 (the “Standstill Period”), during which each Series E Holder may convert not more than 50% of the Series E Preferred Stock held by such holder at the beginning of the Standstill Period.

Series E Buyout. During the Standstill Period the Company will use commercially reasonable efforts to raise funds to repurchase all outstanding shares of Series E Preferred Stock held by the Purchasers at a purchase price of $100 per share, subject to the provisions of the Certificate of Designation.

As of the date of this filing , the Company had paid an aggregate of $2.0 million as partial liquidated damages as a result of not filing the registration statement by July 5, 2022. It is also expected that the Company will owe an additional $1.6 million in partially liquidated damages for the month of September. As such, as of June 30, 2022, the Company has recorded a contingent liability in the amount of $3.6 million.

REVERSE STOCK SPLIT

In September 2020, the Company amended its articles of incorporation and enacted a reverse stock split of one share for each fifteen (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.
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 for aggregate gross proceeds of $24.0 million. After deducting underwriting commissions and other offering expenses, the Company received approximately $20.7 million in net proceeds. 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.
COMMON STOCK
As of June 30, 2022 and 2021, the Company has 64,209,616 and 39,496,588 shares of common stock issued and outstanding, respectively.
In January 2021, the Company reported the return of the 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. Please see Note 11 – Commitments and Contingencies for additional detail.
STOCK PAYABLE
In the fiscal year ended June 30, 2021, the Company recorded a stock payable of approximately $1.2 million relating to the acquisition of Redeeem, LLC. As per the asset purchase agreement dated May 21, 2021, 452,929 shares of common stock were due to be issued to Redeeem’s employees and were valued at $2.6715 per share. These shares were issued in the year ended June 30, 2022.
PREFERRED STOCK

On April 14, 2022, notice was given that all 720,000 shares of the Issuer’s outstanding 9% Series A Preferred Stock will be redeemed. The redemption of the Series A Preferred Stock was effected on May 31, 2022 (the “Redemption Date”) at a price equal to $0.20 per share, plus an amount equal to all accrued and unpaid dividends thereon but not including the Redemption Date in an amount equal to $0.42 per share, for a total payment of $0.62 per share (the “Redemption Price”). The total aggregate amount of the redemption was $446,440. Holders of record as of the Redemption Date received the Redemption Price upon presentation and surrender of the Preferred Stock as described in the notice. Upon redemption, dividends on the Preferred Stock ceased to accrue and all rights of the Holders terminated, except to the proceeds of the Redemption Price. As of June 30, 2022, 0 shares of Series A Preferred Stock were issued and outstanding
On March 16, 2022, the Company entered into a Securities Purchase Agreement with certain institutional investors to issue and sell in a private offering an aggregate of $50.0 million of securities, consisting of shares of Series E convertible preferred stock of the Company, par value $.01 per share and warrants to purchase (100% coverage) shares of common. Under the terms of the Purchase Agreement, the Company agreed to sell 500,000 shares of its Series E Preferred Stock and Warrants to purchase up to 33,333,333 shares of the Company’s common stock. Each share of the Series E Preferred Stock has a stated value of $100 per share and is convertible into shares of common stock at a conversion price of $1.50 per share subject to adjustment. The Preferred Stock is perpetual and has no maturity date. The Preferred Stock will not be subject to any mandatory redemption or other similar provisions. All future shares of Preferred Stock shall rank junior to the Series E Preferred Stock, except if at least a majority of the Series E Preferred Stock expressly consent, to the creation of the Parity Stock of Senior Preferred Stock.
The Conversion Price of the Series E Preferred Stock and the Exercise Price of the Warrants is subject to adjustment for: (a) stock dividends and stock distributions; (b) subsequent rights offerings; (c) pro rata distributions; and (d) Fundamental Transactions (as defined).

The Conversion Price is also subject to downward adjustment (the “Registration Reset Price”) to the greater of (i) eighty (80%) percent of the average of the ten (10) lowest daily VWAPs during the forty (40) trading day period beginning on and including the Trading Day immediately follow the Effective Date of the initial Registration Statement in July 2022, and (ii) the Floor Price of $0.25 per share.

The Company issued accompanying Common Stock Purchase Warrants (the “Warrants”) exercisable for five (5) years at $2.00 per share, to purchase an aggregate of 33,333,333 shares of Common Stock. The exercise price is subject to the same Registration Reset Price, as described above. The Floor Price is $0.25 per share.

At the time, using the Black-Scholes model, the Company recorded a market value of approximately $28.4 million which is included on the balance sheet within derivative liabilities- financing warrants. At June 30, 2022 the market value of such warrants was $28.4 million and a resultant gain on change in fair value of derivative liabilities was recorded for approximately $0.6 million.

As of June 30, 2022, 0 shares of Series A Preferred Stock were issued and outstanding; 0 shares of Series B Preferred Stock were issued and outstanding; 0 shares of Series C Preferred Stock were issued and outstanding; 0 shares of Series D Preferred Stock were issued and outstanding; and 500,000 shares of Series E Preferred Stock were issued and outstanding.

On September 26, 2022, we entered into an Exchange Agreement with the Purchasers, pursuant to which (i) each Purchaser exchanged its Warrants for new warrants to purchase our common stock and (ii) each Purchaser consented to an amendment and restatement of the terms of our Series E Convertible Preferred Stock, as well as other changes in the terms of the private placement effected by the Company on March 16, 2022. See Note 16 – Subsequent Events.

CONVERSION OF CONVERTIBLE NOTE PAYABLE RELATED PARTY
In July 2020, the holder of a related party convertible promissory note of $1.3 million 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.
CONVERSION OF CONVERTIBLE NOTE PAYABLES
In the fiscal year ended June 30, 2021, the Company issued a total of 746,069 shares of the Company’s common stock as a result of holders of convertible note payables electing to convert. A total of approximately $1.8 million convertible note payables were converted at an average conversion price of $2.15 per share.
DEFERRED COMPENSATION

On May 21, 2021, the Company entered into an agreement to acquire the assets and specific liabilities of Redeeem, LLC for $2.6 million consisting of $1.2 million in cash, $166,000 in specific liabilities, and $1.2 million of the Company’s common stock (Note 3 – Business combinations and dispositions).  In addition, the Company agreed to provide equity to its employees to be vested over three (3) years valued at approximately $9.7 million representing 3,623,433 shares of the Company’s common stock at conversion price of $2.6715 per share. Given the equity is contingent on the employees being employed and are vested over three (3) years, the Company is treating this as deferred compensation and the expenses are recorded as the equity is vested. The vested portion of the deferred compensation was charged to additional paid-in capital and the expenses are recorded as stock-based compensation. In August 2021, all 3,623,433 shares of the Company’s common stock were issued to Redeeem’s employees and held in an escrow account subject to the vesting schedule in the aforementioned escrow agreement.

On June 7, 2022, Mr. Kyle Hill, the seller of Redeeem, entered into a separation agreement with the Company (“Separation Agreement”). The terms of the Separation Agreement provided that the compensation for the Redeeem purchase would be modified and Hill would forfeit 1,231,967 of the shares presently in escrow and the remaining 1,231,968 shares would continue to be governed by the terms of the escrow agreement. As of June 30, 2022, 1,231,968 shares of the Company’s common stock were issued, but not vested.

During the year ended June 30, 2022, and 2021, the Company recorded approximately $3.0 million and $0.4 million, respectively, in stock-based compensation associated with the vested portion of the deferred compensation. In addition, during the fourth quarter fiscal year 2022, the Company recorded in settlement expense approximately $3.3 million in deferred stock compensation expense related to the aforementioned additional shares related to the Separation Agreement. As of June 30, 2022, there was $0 deferred compensation outstanding related to the Redeeem acquisition. Please see Note 3 for further discussion on the Redeeem disposition.
EXERCISE OF WARRANTS BY FORMER DIRECTOR
In May 13, 2021, 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 cashless issuance of 122,183 shares of common stock.
EXERCISE OF OPTIONS BY FORMER OFFICER
In May 14, 2021, former officer Robert Schwartz exercised 222,000 in warrants at a closing price of $2.92 and an exercise price of $0.75 resulting in the cashless issuance of 165,145 shares of common stock.
WARRANTS
During the fiscal year ended June 30, 2022, the Company issued warrants to certain directors and consultants to purchase 300,000 shares of the Company’s common stock between $0.36 and $1.24 per share which vested during various terms and were valued at $174,634. The Company recorded compensation of $68,000 for the vested portion during the fiscal year ended June 30, 2022.

FINANCING WARRANTS

Classified as Derivative Liabilities

During the fiscal year ended June 30, 2022, the Company recorded $6,000 gain on change in fair value of derivative liabilities related to warrants issued to Series E investors, which were initially valued at approximately $28.4 million. 
During the fiscal year ended June 30, 2022, the Company recorded approximately $0.6 million gain on change in fair value of derivative liabilities related to warrants issued to the our Lender in connection with our Credit Facility, which were initially valued at approximately $2.4 million.

Reconciliation of the derivative liabilities are as follows:
During the fiscal year ended June 30, 2021, the Company issued warrants to current investors to purchase 832,223 shares of the Company’s common stock between $0.75 and $3.75 per share as additional consideration, which were valued at approximately $2.5 million. The Company recorded warrants expense of approximately $2.1 million during the year ended June 30, 2021, related to these issuances.
During the fiscal year ended June 30, 2021, the Company issued warrants to current note holders to purchase 480,000 shares of the Company’s common stock between $0.75 and $1.95 per share as additional consideration, which were valued at approximately $1.8 million. The Company recorded warrants expense of $413,000 during the year ended June 30, 2021, 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, 2022 and 2021:
20222021
Volatility - range
63.5% - 65.0%
63.5% - 65.8%
Risk-free rate
0.7% - 3.6%
0.2% - 0.9%
Contractual term
4 years - 10 years
4.0 - 5.0 years
Exercise price
$0.36 - $3.75
$0.75 - $3.75
A summary of the warrants granted, exercised, forfeited, and expired are presented in the table below:
Number of WarrantsWeighted-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, 20207,858,741$1.52 $1.92 $9,234,295 3
Granted1,439,5561.00 3.00 3,938,467 0.80
Exercised(166,667)0.75 — — 0
Forfeited—— — — 0
Expired(835,222)5.48 4.17 (1,014,295)0
Outstanding June 30, 20218,296,408$1.05 $1.90 $12,158,467 2.2
Granted300,0000.36 0.26 35,500 9.9
Exercised—— — — 0
Forfeited—— — — 0
Expired(1,825,185)0.75 0.28 (1,950,000)0
Outstanding June 30, 20226,771,223$1.05 $1.94 $10,243,967 2.4
Vested and exercisable June 30, 20225,770,2630.99 1.90 8,710,260 2.4
Non-vested June 30, 20221,000,960$1.35 $2.20 $1,533,707 3.5
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, 2022.
Outstanding Warrant SharesExercisable Warrant Shares
Exercise price rangeNumber of Warrant SharesWeighted average remaining contractual lifeNumber of Warrant SharesWeighted average remaining contractual life
$0.75 5,476,2222.4 years4,903,1182.3 years
$0.36 125,0009.2 years——
$1.24 150,0003.3 years75,0003.3 years
$1.50 400,0001.9 years400,0001.9 years
$1.95 26,6673.5 years8,9083.5 years
$0.84 25,0003.5 years12,5003.5 years
$3.00 66,6672.7 years66,6672.7 years
$3.75 501,6682.7 years304,0703.0 years
6,771,2242.4 years5,770,2632.4 years
During the years ended June 30, 2022 and 2021, the Company has recorded approximately $0.9 million and $3.2 million, respectively, as compensation expense related to vested warrants issued, net of forfeitures. As of June 30, 2022, the Company had approximately $1.1 million in unvested warrants to be expensed in subsequent periods.
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 options (“ISOs”) under IRS section 422, or a non-qualified stock option (“Non-ISOs”) (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, 2022, the Company has granted, under the Plan, awards in the form of non-qualified stock options ("NQSOs") for all 3,333,334 shares.

2021 EQUITY INCENTIVE PLAN

On October 28, 2021, the Board adopted, and a majority of outstanding shares subsequently approved, the 2021 Employee, Director & Consultant Equity Incentive Plan (the “2021 Plan”). The prior Equity Plan did not have any remaining authorized shares. The 2021 Plan is intended to attract and retain employees, directors and consultants, to involve them to work for the benefit of the Company or its affiliated entities, and to provide additional incentive for them to promote the Company’s success. The 2021 Plan provides for the award of stock options, either ISOs or NQSOs, restricted shares and restricted stock units (RSUs). The 2021 Plan authorized 12,300,000 shares of Common Stock for the issuance of awards under the 2021 Plan. As of the date of this report, an aggregate of 4,400,000 RSUs had been awarded to executive officers and directors and 7,900,000 RSUs had been awarded to employees. In addition the Company has issued 3,500,000 RSUs to certain executives of Converge related to the acquisition agreement and related to their continued employment with the Company. These RSUs were issued outside the 2021 Equity Incentive Plan.
ISOs Awards
In the fiscal year ending June 30, 2022, the Company issued to employees and directors of the Company options to purchase, in the aggregate, 720,169 shares of the Company’s common stock between $1.49 and $3.75 per share which were valued at $850,000. The Company recorded options expense of $89,000 during the fiscal year ending June 30, 2022, related to these issuances.
In the fiscal year ending June 30, 2021, the Company did not issue any options to purchase the Company’s common stock.
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 year ended June 30, 2022 :
2022
Volatility - range
64.2% - 65.2%
Risk-free rate
0.7% - 1.2%%
Contractual term3.0 years
Exercise price
$1.49 - $3.75
A summary of the Options granted to employees under the Plan as of June 30, 2022, are presented in the table below:
Number of OptionsWeighted-Average Exercise
Price		Weighted-Average Grant-
Date Fair Value		Aggregate Intrinsic Value of
Outstanding Option Shares		Weighted-Average
Remaining Contractual
Term (in years)
Outstanding June 30, 20203,377,222$1.10 $1.06 $2,030,000 0.7
Granted—— — — —
Exercised(222,222)0.75 — — —
Forfeited—— — — —
Cancelled(66,667)0.75 3.12 (200,001)—
Outstanding June 30, 20213,088,3331.13 1.06 1,829,999 0.4
Granted720,1692.51 1.18 (5,767)3
Exercised—— — — —
Forfeited—— — — —
Cancelled(150,669)— — — —
Outstanding June 30, 20223,657,8331.39 1.12 1,824,232 0.6
Vested and exercisable June 30, 20222,997,9721.04 1.09 1,806,539 0.2
Non vested June 30, 2022659,861$2.96 $1.28 $17,693 2.3
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, 2022.
 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 2,456,6660.1 years2,534,4440.1 years
$1.49 10,0002.4 years0—
$1.50 200,0000.0 years200,0000.0 years
$2.08 245,0011.9 years3,8891.5 years
$2.61 344,5003.0 years57,4173.0 years
$2.84 —0.0 years——
$3.00 —0.7 years——
$3.75 401,6661.0 years202,2220.7 years
3,657,8330.6 years2,997,9720.2 years
During the years ended June 30, 2022 and 2021, the Company has recorded $538,000 and $0, respectively, as compensation expense related to vested options issued, net of forfeitures. As of June 30, 2022 and 2021, total unrecognized share-based compensation related to unvested options was approximately $1.1 million and $0, respectively.