SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles 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 period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates. |
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| Reclassification | Certain accounts from prior periods have been reclassified to conform to the current period presentation. |
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| Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, MedWell Direct, MedWell Facilities, Medwell USA, and Healthy Lifestyles. The Company owns 51% of Healthy Lifestyles, which has been included in the consolidated financial statements and the Company has recorded a noncontrolling interest for the 49% interest that they do not own.
All significant intercompany transactions and balances have been eliminated. |
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| Cash and Cash Equivalents | The Company maintains cash balances in non-interest-bearing accounts that at times may exceed federally insured limits. For the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The Company had no cash equivalents at March 31, 2026. |
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| Property and Equipment | Property and equipment, consisting primarily of computer, other equipment, and leasehold improvements is stated at the lower of cost or estimated realizable value and is depreciated when placed into service using the straight-line method over estimated useful lives. Management has assessed the basis of depreciation of these assets and believes they should be depreciated over three – five years depending on the asset. Computers, due to their technological obsolescence reflecting rapid development of hardware that have faster processing capacity and other factors are depreciated over three years. Leasehold improvements are depreciated over five years representing the lease term. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. |
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| Intangible Assets | The Company accounts for its intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill. ASC Subtopic 350-30, which requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs to renew or extend the term of intangible assets are recognized as an expense when incurred. |
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| Impairment of Long-Lived Assets | All assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with ASC 350 and ASC 360. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value or net realizable value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations. |
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| Goodwill | Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company operates as one reporting unit. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. Goodwill of approximately $670,000 was impaired in fiscal year 2025. No goodwill impairment was recorded during the nine months ended March 31, 2026 and 2025. |
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| Leases | The Company follows the provisions of ASC 842, and records right-of-use (“ROU”) assets and lease obligations for its operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. If the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.
The lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less. |
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| Discontinued Operations | The Company follows the provisions of ASC 205-20, Presentation of Discontinued Operations, which requires separate reporting if a company sells part of its business. In order to recognize discontinued operation a major product line or division of an entity must be both a component and a strategic shift in operations. The Company assessed its digital asset mining business and determined it met the criteria of ASC 205-20. We disclosed our discontinued operations separately in the consolidated balance sheets, statements of operations, and statements of cash flows as items held for sale and discontinued operations. See Note 14. Discontinued Operations. |
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| Mezzanine | Series C and D preferred stock that contain certain default provisions requiring mandatory cash redemption that are outside the control of the Company are recorded as Mezzanine in the accompanying balance sheets. Effective August 1, 2025, the Company amended and restated the Certificate of Designation for its Series C Preferred Stock, effecting the consolidation of the Series C Preferred Stock and Series D Preferred Stock classes into a single series of convertible preferred stock. |
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| Convertible Preferred Stock | The Company follows the provisions of ASC 480, Distinguishing Liabilities from Equity in determining if a financial instrument should be classified as a liability or equity on the balance sheet. This standard provides, among others, that the conversion of preferred stock into a variable number of equity shares and at inception, the monetary value is fixed, the instrument should be classified as a liability. As such upon the exchange of the Series C & D preferred shares on August 1, 2025 into convertible preferred stock, the Company determined the Series C convertible preferred stock met the requirements to be classified as a liability. Further, due to their convertible nature at any time at the option of the holder they are presented as current liability on the balance sheet. |
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| Stock-Based Compensation | The Company accounts for all equity-based payments in accordance with ASC Topic 718, Compensation – Stock Compensation. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock awards, stock options, warrants and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The fair value of a stock award is recorded at the fair market value of a share of the Company’s stock on the grant date. The Company estimates the fair value of stock options and warrants at the grant date by using an appropriate fair value model such as the Black-Scholes option pricing model or multinomial lattice models. |
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| Revenue Recognition | The following table presents the Company’s revenue by revenue source for the three months ended March 31:
The following table presents the Company’s revenue by revenue source for the nine months ended March 31:
Commissions
The Company earns commissions by informing, educating, and initiating sales of health and wellness products offered by a third party to customers. The commissions earned is based on the gross sales of products to customers less costs and fees. Periodically, the third party computes the commission payable since the previous Reconciliation Date. The third party then pays the Company the amount due. The transactions price is set as the commissions to be received based on the agreed terms. The commissions are earned at a point in time upon the successful sale of products to a customer.
The timing of commission revenue recognition may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. As of March 31, 2026, the Company had receivables from commissions of $0.
Online Sales
The Company’s online sales, which are no longer being pursued due to regulatory hurdles, consisted of sales of health and wellness products and services through the Company’s websites, including prescription drugs. In contracts that contained prescription products issued as the result of a consultation, revenue also included medical consultation services and post-consultation service support provided by Affiliated Medical Groups (defined below). The Company defined its customer as an individual who purchased products or services through its websites. The transaction price in the Company’s contracts with customers was the total amount of consideration to which the Company expected to be entitled in exchange for transferring products or services to the customer.
The Company’s contracts that contain prescription products issued as the result of a consultation primarily included the following performance obligations: access to (i) products, as well as medication adjustments, as applicable, and (ii) consultation services, as well as post-consultation service support, as applicable. Revenue was recognized at the time the related performance obligation was satisfied by transferring the promised product to the customer and, in contracts that contain services, by the provision of consultation services to the customer. The Company satisfied its performance obligation for products at a point in time, which was upon delivery of the products to a third-party carrier. The Company satisfied its performance obligation for consultation services typically within one day and for post-consultation service support over the contract term. The customer obtained control of the products and services upon the Company’s completion of its performance obligations.
For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling price is based on market and cost plus estimates. For the three and nine months ended March 31, 2026, service revenue represented less than 10% of consolidated revenues.
To fulfill its promise to customers for contracts that include professional medical consultations, the Company maintained relationships with various “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services. The Company accounts for service revenue as a principal in the arrangement with its customers. This conclusion is reached because (i) the Company determines which Affiliated Medical Group and Provider provides the consultation to the customer; (ii) the Company is primarily responsible for the satisfactory fulfillment and acceptability of the services; (iii) the Company incurs costs for consultation services even for visits that do not result in a prescription and the sale of products; and (iv) the Company, in its sole discretion, sets all listed prices charged on its websites and mobile applications for products and services.
Additionally, to fulfill its promise to customers for contracts that include sale of prescription products, the Company maintained relationships with certain third-party pharmacies (“Partner Pharmacies” or individually, a “Partner Pharmacy”). The Company accounted for prescription product revenue as a principal in the arrangement with its customers. This conclusion was reached because (i) the Company had sole discretion in determining which pharmacy fills a customer’s prescription; (ii) the pharmacies filled the prescription based on fulfillment instructions provided by the Company; (iii) the Company was primarily responsible to the customer for the satisfactory fulfillment and acceptability of the order; (iv) the Company was responsible for refunds of the prescription medication after transfer of control to the customer; and (v) the Company, in its sole discretion, sets all listed prices charged on its websites and mobile applications for products and services.
Payment for prescription medication was typically collected from the customer a few days in advance of product shipment in accordance with contract terms. Contract liabilities are recorded when payments have been received from the customer for undelivered products or services and are recognized as revenue when the performance obligations are later satisfied. As of June 30, 2025 and March 31, 2026, the Company had $203 and $0 of deferred revenue for its online sales, respectively. As of June 30, 2025 and March 31, 2026, the Company had 287 and $0 of receivables for its online sales, respectively.
Product Sales
The Company’s product sales revenue consists of the bulk sale of GLP medications for weight loss and diabetes management to doctors’ offices and clinics. The Company’s performance obligation is to deliver the products to customers. Therefore, revenue is recognized once delivery occurs. Customers remit payment at the time of order placement, therefore payment received by the Company prior to product delivery is recorded as deferred revenue. As of June 30, 2025 and March 31, 2026, the Company had $0 and $19,660 of deferred revenue for its product sales, respectively. Shipping and handling costs that occur are paid by the customer and are recorded as revenue. The Company has a policy to provide a refund on any product returned by the customer. As of June 30, 2025 and March 31, 2026, the Company had $0 and $2,943 of receivables for its product sales, respectively. Rental Income
The Company recognizes rent revenue from the lease of its sub-leased properties in accordance with ASC 842, Leases. The sub-lease is categorized as an operating lease according to ASC criteria for the lease definitions. Rent revenue is recognized on a straight-line basis over the lease term, reflecting the pattern of the economic benefits derived from the lease.
The Company’s leases generally have fixed rental payments over the lease term, with occasional escalations based on predetermined factors. Rent revenue is recognized monthly as the lessor fulfills its obligations under the lease agreement.
Any lease incentives or concessions provided to lessees, such as rent-free periods or tenant improvement allowances, are recognized as a reduction of rent revenue over the lease term.
For the three and nine months ended March 31, 2026, the Company had only one lease arrangement with a single customer. |
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| Income Taxes | Income taxes are recorded in accordance with ASC Topic 740, Income Taxes, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the consideration of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Changes in assumptions in future periods may require we adjust our valuation allowance, which could materially impact our financial position and results of operations. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return, if such a position is more likely than not to be sustained. |
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| Net Income (Loss) Per Share | Basic net income or loss per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income or loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as “in-the-money” stock options and warrants, convertible debt and convertible preferred stock, were exercised or converted into common stock. Equivalent shares are not utilized when the effect is anti-dilutive. For the three and nine months ended March 31, 2026 and 2025 basic and diluted income per share were the same, as all securities had an anti-dilutive effect.
The following tables present potentially dilutive securities that were not included in the computation of diluted net income per share as their inclusion would be anti-dilutive.
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| Fair Value of Financial Instruments | Assets and liabilities measured at fair value on a recurring basis
We recognize financial instruments under the following fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
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. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The Company will update its assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the agreements expire or contingency is resolved, as applicable.
As of March 31, 2026 and June 30, 2025 the Company did not have any assets and liabilities measured at fair value on a recurring basis.
Assets and liabilities not measured at fair value on a recurring basis
In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, property and equipment, intangible assets, and operating lease right-of-use assets are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.
As of March 31, 2026 and June 30, 2025, the fair values of cash, prepaid expenses and other current assets, accounts payable, and accrued expenses approximated their carrying values because of their short-term nature. |
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| Recently Issued Accounting Pronouncements | In November 2024, the FASB issued ASU No. 2024-03 “Disaggregation of Income Statement Expenses (“ASU 2024-03”). The amendments in ASU 2024-03 aim to improve the decision usefulness of expense information on public business entities’ income statement through the disaggregation of relevant expense captions in the notes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.
There were no new accounting pronouncements issued or proposed by the FASB during the year ended June 30, 2025 and through the date of filing this report which the Company believes will have a material impact on its financial statements. |
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