Equity

6 Months Ended

Dec. 31, 2020

Equity [Abstract]

Equity

Note 15 – Equity

Preferred Stock

The Company has authorized 10,000,000 shares of preferred stock with a par value of $0.001 per share. There are no preferred shares designated, issued, and outstanding as of December 31, 2020 and June 30, 2020.

Common Stock 

During the six months ended December 31, 2020, the Company issued 482,992 shares of its common stock for services rendered with a weighted average fair value of $5.91 per share or $2,856,613 in the aggregate.

During the six months ended December 31, 2020, the Company issued 1,119,871 shares of common stock for the exercise of warrants with a weighted average exercise price of $3.85 per share or $4,258,042 in the aggregate.

During the six months ended December 31, 2020, the Company issued 650,000 shares of common stock in relation to the LHE Enterprises Limited acquisition. The Company recorded these shares at fair value in the amount of $3,802,500 (see Note 3).

On September 14, 2020, the Company issued 93,808 shares of common stock in relation to the Flip acquisition. The Company recorded these shares at fair value on the date of grant in the amount of $500,000 (see Note 3).

During the six months ended December 31, 2019, the Company issued 16,667 shares of common stock related to a consulting agreement dated June 4, 2019.

During the six months ended December 31, 2019, the Company issued 8,889 shares of its common stock for services rendered with a weighted average fair value of $6.52 per share or $58,000 in the aggregate.

During the six months ended December 31, 2019, the Company issued 4,444 shares of common stock for the exercise of warrants with a weighted average exercise price of $2.25 per share or $10,000 in the aggregate.

On October 8, 2019, the Company issued 41,779 shares of its common stock upon the exercise of 79,444 warrants upon a cashless exercise.

On October 9, 2019, the Company issued 11,248 shares of its common stock upon the exercise of 21,389 warrants upon a cashless exercise.

During the six months ended December 31, 2019, the Company issued 5,435 shares of its common stock upon entering waiver agreements.   In consideration for the investors entrance into the waiver agreements, the Company issued to each investor an additional warrant  to purchase such number of shares of the Company’s Common Stock equal to 5% of the warrant shares initially issuable to such investor under the warrant issued to such investor in the November 13, 2018 offering, as amended. The additional warrant has an exercise price of $11.25 per share.

Common Stock Warrants 

During the six months ended December 31, 2020, the Company issued a warrant to purchase 1,000,000 shares of common stock in relation to the LHE Enterprises Limited acquisition. The warrant is exercisable at $8.00 per share and expires on July 31, 2023. The Company recorded the warrant at fair value of $5,488,171 (see Note 3). The warrant contains a cash settlement feature which results in a warrant liability. For the period ending December 31, 2020, the Company recorded a warrant liability of $4,859,782 in relation to the cash settlement feature. For the three months ending December 31, 2020, the Company recorded a loss on the change in fair value of warrant liability in the amount of $1,472,564. For the six months ending December 31, 2020, the Company recorded a gain on the change in fair value of warrant liability in the amount of $628,389. The Company valued the warrant using the Black-Scholes option pricing model with the following terms on July 31, 2020: (a) exercise price of $8.00, (b) volatility rate of 223.33%, (c) discount rate of 0.11%, (d) term of three years, and (e) dividend rate of 0%. The Company valued the warrant using the Black-Scholes option pricing model with the following terms on December 31, 2020: (a) exercise price of $8.00, (b) volatility rate of 156.04%, (c) discount rate of 0.17%, (d) term of 2 years and 6 months, and (e) dividend rate of 0%.

The warrant issued to LHE Enterprises Limited has a call feature where the Company shall have the right to cause the exercise of the warrant (the “Forced Exercise”) if the volume weighted average price of the common stock of the Company shall equal or exceed 125% of the $8.00 exercise price of the warrant. For twenty consecutive trading days. As of December 31, 2020, the warrants are callable by the Company.

A summary of the Company’s warrant activities is as follows:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Intrinsic Value
Outstanding and Exercisable, June 30, 2020		5,276,592		$	4.28		0.86	$	14,654,296
Issued		1,000,000			8.00		3.00		-
Exercised		(1,119,871	)		3.85				2,853,035
Expired		-
Outstanding and Exercisable, December 31, 2020		5,156,722		$	5.09		0.77	$	8,561,967

Common Stock Options

On August 1, 2017, the Company adopted the 2017 Stock Incentive Plan (the “2017 Plan”) whereby incentive stock options issued to employees, officers, and directors of the Company shall not exceed 166,667 of which the purchase price of the stock options shall not be less than 100% of the fair value of the Company’s common stock and the period for exercising the stock options not to exceed 10 years from the date of grant. The option price per share with respect to each option shall be determined by the committee for non-qualified stock options. On September 10, 2020, the Company’s board of directors adopted the 2020 Equity and Incentive Plan (the “2020 Plan”) which allows for 1,500,000 shares that may be awarded under the 2020 Plan. As of December 31, 2020, there were 683,854 shares available for issuance under the 2020 Plan.

A summary of the Company’s stock option activity is as follows:

	Number of Options			Weighted Average Exercise Price
Outstanding, June 30, 2020		51,942		$	10.50
Granted		408,400		$	4.82
Exercised		-			-
Cancelled		(3,333	)
Outstanding, December 31, 2020		457,009		$	5.42

As of December 31, 2020, the weighted average remaining life of the options outstanding was 4.94 years. As of December 31, 2020, there were 48,609 stocks options that were available for exercise.

Stock Based Compensation

During the six months ended December 31, 2020 and 2019, the Company recorded stock-based compensation expense of $2,311,591 and $329,960, respectively, for the amortization of stock options and the issuance of common stock to employees which has been recorded as general and administrative expense in the unaudited condensed consolidated statements of operations.

As of December 31, 2020, unamortized stock compensation for stock options was $1,051,455 with a weighted-average recognition period of 1.07 years.

The options granted during the six months ended December 31, 2020 were valued using the Black-Scholes option pricing model using the following weighted average assumptions:

	Six Months Ended December 31, 2020
Expected term, in years		2.63
Expected volatility		128.5	%
Risk-free interest rate		0.33	%
Dividend yield		-
Grant date fair value	$	4.60