Fiscal period values are FY, Q1, Q2, and Q3. 1st, 2nd and 3rd quarter 10-Q or 10-QT statements have value Q1, Q2, and Q3 respectively, with 10-K, 10-KT or other fiscal year statements having FY.
This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006.
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The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
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Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).
Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of additional paid-in capital associated with common and preferred stock. For additional paid-in capital associated with only common stock, use the element additional paid in capital, common stock. For additional paid-in capital associated with only preferred stock, use the element additional paid in capital, preferred stock.
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.
Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity.
Carrying amount as of the balance sheet date of obligations due all related parties. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer).
Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future.
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.
Carrying value as of the balance sheet date of notes payable (with maturities initially due after one year or beyond the operating cycle if longer), excluding current portion.
Sum of the carrying values as of the balance sheet date of the portions of long-term notes payable due within one year or the operating cycle if longer.
Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity.
Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.
Carrying value as of the balance sheet date of obligations incurred and payable for statutory income, sales, use, payroll, excise, real, property and other taxes. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).
Carrying amount as of the balance sheet date of value added taxes due either from customers arising from sales on credit terms, or as previously overpaid to tax authorities. For classified balance sheets, represents the current amount receivable, that is amounts expected to be collected within one year or the normal operating cycle, if longer.
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.
The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws.
Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt.
Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased.
Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.
The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.
The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line.
Amount of income (loss) from continuing operations, nonoperating income (expense) and income (loss) from equity method investments, before deduction of income tax expense (benefit) and income (loss) attributable to noncontrolling interest, and addition of interest income (expense).
Amount after tax and reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature, attributable to parent entity.
A fee charged for services from professionals such as doctors, lawyers and accountants. The term is often expanded to include other professions, for example, pharmacists charging to maintain a medicinal profile of a client or customer.
Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).
Amount of expense for salary and wage arising from service rendered by nonofficer employee. Excludes allocated cost, labor-related nonsalary expense, and direct and overhead labor cost included in cost of good and service sold.
The average number of shares or units issued and outstanding that are used in calculating diluted EPS or earnings per unit (EPU), determined based on the timing of issuance of shares or units in the period.
Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period.
Amount after tax and reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature.
Number, after forfeiture, of shares or units issued under share-based payment arrangement. Excludes shares or units issued under employee stock ownership plan (ESOP).
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.
Amount of increase (decrease) in cash, cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; including effect from exchange rate change. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
The increase (decrease) during the reporting period in the aggregate amount of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business.
Amount of cash paid for interest, excluding capitalized interest, classified as operating activity. Includes, but is not limited to, payment to settle zero-coupon bond for accreted interest of debt discount and debt instrument with insignificant coupon interest rate in relation to effective interest rate of borrowing attributable to accreted interest of debt discount.
Amount of cash inflow (outflow) from financing activities, including discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.
Amount of cash inflow (outflow) from operating activities, including discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.
The cash outflow for the payment of a long-term borrowing made from a related party where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Payments for Advances from Affiliates.
Advanced
Oxygen Technologies Inc, (“Advanced Oxygen Technologies”, “AOXY”, or the “Company”), was incorporated
in Delaware in 1981 under the name Aquanautics Corporation and was, from 1985 until May 1995, a startup stage specialty materials company
producing new oxygen control technologies. From May of 1995 through December of 1997 the Company had minimal operations and was seeking
funding for operations and companies to which it could merge or acquire. In March of 1998 the Company began operations again in California.
From 1998 through 2000, the business produced and sold CD- ROMS for conference events, advertisement sales on the CD’s, database
management and event marketing all associated with conference events. From 2000 through March of 2003, the business consisted solely
of database management. From 2003 through April 2005, the business operations were derived totally from the Company’s wholly owned
business, IP Service, ApS, a Danish IP security vulnerability company (“IP Service”). Since then, business operations have
been solely derived from its wholly owned subsidiaries Anton Nielsen Vojens, ApS (“ANV”), Sharx Inc. and its wholly owned
subsidiary Sharx DK ApS (collectively “Sharx”).
Lines
of Business:
Advanced
Oxygen Technologies, Inc. operations are derived from its wholly owned subsidiaries Anton Nielsen Vojens, ApS (“ANV”), Sharx
Inc. and its wholly owned subsidiary Sharx DK ApS (collectively “Sharx”).
ANV
is a Danish company that owns commercial real estate in Vojens, Denmark. ANV’s revenues are derived solely from the lease revenue
from its real estate. Circle K Denmark A/S, formerly StatOil A/S, leases the facility from ANV. The lease expires in 2026.
Sharx
Inc. is a Wyoming corporation incorporated in 2020 that owns Sharx DK ApS. Sharx Inc. operations are derived from its wholly owned subsidiary
Sharx DK ApS. Sharx Inc. has no other operations and performs administrative functions for itself and its subsidiary.
Sharx
DK ApS is a Danish company, incorporated in 2020. On June 30, 2020, Sharx DK ApS, entered into a Distribution Agreement with Cleaver
ApS, a Danish corporation (“Cleaver”), whereby Cleaver has appointed the Company as Cleaver’s nonexclusive distributor
of its products in Europe, South America and North America. Cleaver is a manufacturer of a line of products for the logistics and cargo
industry.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles
of Consolidation:
The
accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Anton Nielsen Vojens,
ApS, Sharx Inc. and Sharx DK ApS, after elimination of all intercompany accounts, transactions, and profits.
Basis
of Presentation:
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates. The Company’s fiscal year end is June 30.
The
accompanying condensed consolidated financial statements are unaudited. All adjustments considered necessary for a fair presentation
of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results
of operations of any interim period are not necessarily indicative of the results of operations for the full year. All intercompany balances
are eliminated in consolidation.
Certain
information and note disclosures normally included in annual financial statements have been condensed or omitted from these interim financial
statements; these financial statements should be read in conjunction with the financial statements and notes thereto included in our
Form 10-K for the year ended June 30, 2020.
Revenue
Recognition:
Revenue
from Contracts with Customers
For
our rental revenue and commission revenue, we recognize revenue under the five steps in Topic 606, which are as follows: 1) identify
the contract with the customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate
the transaction price to the performance obligations; and 5) recognize revenue when (or as) performance obligations are satisfied.
Rental
Revenue
Rental
revenue is derived from the Commercial Property lease in which quarterly payments are received pursuant to the property lease which is
in effect until 2026. (See Note 3 for further details) and from the sale of product pursuant to a non-exclusive distribution agreement.
We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to
a client. We measure revenue based upon the consideration set forth in an arrangement or contract with a client. We recognize revenue
from these services when the services are completed. If we are paid in advance for these services, we record such payment as a contract
liability until we complete the services. As of March31, 2021, the Company recorded $3,290 of contract liabilities in connection to rental
revenues.
Commission
revenue
The
Company recognizes commission revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the
contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the
performance obligations, and 5) recognize revenue as the performance obligations are satisfied as set forth below.
The
Company’s source of commission revenue is from the Company’s subsidiary Sharx in which quarterly payments are received when
the customer pre-pays or pays upon the date products are drop shipped from the manufacturer pursuant to a non-exclusive distribution
agreement. At such time the products are drop shipped, the Company’s performance obligation has been satisfied and revenue is recorded.
The Company has determined that it is an agent of the manufacturer and collects commission revenue at or before the delivery of product
(See Note 3 for further details).
Property
and Equipment:
Land
is recognized at cost. Land is carried at cost less accumulated impairment losses.
Foreign
currency translation:
Foreign
currency transactions are translated applying the current rate method. Assets and liabilities are translated at current rates. Stockholders’
equity accounts are translated at the appropriate historical rates and revenue and expenses are translated at weighted average rates
for the year.
Foreign
currency transactions:
The
Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section
830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification,
foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting
currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign
currency that will be received or paid. A change in exchange rates between the reporting currency and the currency in which a
transaction is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the
transaction. That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss that
generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction
gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized
upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the
transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to
certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments
and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall
apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each
asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional
currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB
Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other
than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange
rate.
The
Company’s wholly owned subsidiary ANV uses the Danish Krone, DKK as its reporting currency as well as its functional currency.
The wholly owned subsidiary Sharx DK ApS uses the US Dollar as its reporting currency as well as its functional currency and from time
to time has transactions in foreign currency. The change in exchange rates between the U.S. Dollar, the Company’s reporting and
functional currency and the foreign currency, the currency in which a transaction is denominated increases or decreases the expected
amount of reporting currency cash flows upon settlement of the transaction. That increase or decrease in expected reporting currency
cash flows is a foreign currency transaction gain or loss that generally is included in determining net income (loss) for the period
in which the exchange rate changes.
Income
Taxes:
The
Company accounts for income taxes under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation
allowance is required when it is less likely than not that the Company will be able to realize all or a portion of its deferred tax assets.
Because it is doubtful that the net operating losses of recent years will ever be used, a valuation allowance has been recognized equal
to the tax benefit of net operating losses generated.
Earnings
per Share:
Basic
earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available.
Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common
shares were dilutive. As of March 31, 2021, and March 31, 2020 there were 10,000 and 10,000 potential dilutive shares that need to be
considered as common share equivalents and because of the net income for March 31, 2021, the effect of these potential common shares
is dilutive for the nine-months ended March 31, 2021 and for the nine-months ended March 31, 2020these potential common shares are anti-dilutive.
For the three-months ended March 31, 2021 and three-months March 31, 2020 these potential shares are dilutive.
Cash
and Cash Equivalents:
For
purposes of the statement of cash flows, the Company considers all highly-liquid investments purchased with original maturities of three
months or less to be cash equivalents.
The
Company maintains its cash in bank deposit accounts which, at March 31, 2021 did not exceed federally insured limits. The Company has
not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on such amounts.
Stock-Based
Compensation:
The
Company records stock-based compensation in accordance with ASC 718, Compensation. All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received
or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees
and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments
issued and are recognized over the employees required service period, which is generally the vesting period.
Estimates:
The
preparation of the condensed consolidated 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 disclosures of contingent assets and
liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during
the reported period. Actual results could differ from those estimates.
Concentrations
of Credit Risk:
Financial
instruments that potentially subject the Company to major credit risk consist principally of a single subsidiary of Anton Nielsen Vojens
ApS. ANV’s rent revenues are derived from one customer. The Company’s commission revenues are subject to concentration risk
as the commission revenues are derived from one product, and one customer, but that should not be the case going forward.
Leases:
On
July 1, 2019 we adopted the new lease accounting guidance in Topic 842. As the lessor, we have elected the package of practical expedients
permitted in Topic 842. Accordingly, we have accounted for our existing leases as operating leases under the new guidance, without reassessing
(a) whether the contract contains a lease under Topic 842, (b) whether classification of the operating lease would be different in accordance
with Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2018) would have
met the definition of initial direct costs in Topic 842 at lease commencement. Additionally, as the lessor, we will use hindsight in
determining the lease term.
Upon
adoption of Topic 842, lessees and lessors are required to apply a modified retrospective transition approach. Reporting entities are
permitted to choose one of two methods to recognize and measure leases within the scope of Topic 842:
●
Apply Topic 842 to each
lease that existed at the beginning of the earliest comparative period presented in the financial statements as well as leases that
commenced after that date. Under this method, prior comparative periods presented are adjusted. For leases that commenced prior to
the beginning of the earliest comparative period presented, a cumulative-effect adjustment is recognized at that date.
●
Apply the guidance to each
lease that had commenced as of the beginning of the reporting period in which the entity first applies the lease standard with a
cumulative-effect adjustment as of that date. Prior comparative periods would not be adjusted under this method.
Topic
842 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases
and operating leases. Based on our election of the package of practical expedients, our existing commercial leases, where we are the
lessor, continue to be accounted for as operating leases under the new standard. However, Topic 842 changed certain requirements regarding
the classification of leases that could result in us recognizing certain long-term leases entered into or modified after July 1, 2019
as sales-type leases or finance leases, as opposed to operating leases. We will continue to monitor our leases following the adoption
date to ensure that they are classified in accordance with the new lease standards.
We
elected a practical expedient which allows lessors to not separate non-lease components from the lease component when the timing and
pattern of transfer for the lease components and non-lease components are the same and if the lease component is classified as an operating
lease. As a result, we now present all rentals and reimbursements from tenants as a single line item, Rental, within the consolidated
financial statements of operations.
The
Company leases land to a customer. The Company determines if an arrangement contains a lease at contract inception. An arrangement is
or contains a lease if the agreement identifies an asset, implicitly or explicitly, that the Customer has the right to use over a period
of time. If an arrangement contains a lease, the Company classifies the lease as either an operating lease or as a finance lease based
on the five criteria defined in ASC 842.
Lease
liabilities are recognized at commencement date based on the present value of the remaining lease payments over the lease term. The corresponding
right-of-use asset is recognized for the same amount as the lease liability adjusted for any payments made at or before the commencement
date, any lease incentives received, and any initial direct costs. The Company’s lease agreements may include options to renew,
extend or terminate the lease. These clauses are included in the initial measurement of the lease liability when at lease commencement
the Company is reasonably certain that it will exercise such options. The discount rate used is the interest rate implicit in the lease
or, if that cannot be readily determined, the Company’s incremental borrowing rate.
Operating
lease expense is recognized on a straight-line basis over the lease term and presented within cost of sales on the Company’s consolidated
statements of operations. Finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the useful life
of the asset or the lease term. Interest expense on the finance lease liability is recognized using the effective interest rate method
and is presented within interest expense on the Company’s consolidated statements of operations and comprehensive income. Variable
rent payments related to both operating and finance leases are expensed as incurred. The Company’s variable lease payments primarily
consist of real estate taxes, maintenance and usage charges. The Company made an accounting policy election to combine lease and non-lease
components.
The
Company has elected to exclude short-term leases from the recognition requirements of ASC 842. A lease is short-term if, at the commencement
date, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis
over the lease term.
New
Accounting Pronouncements already adopted:
In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure
Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring Level 3 fair value
measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure
of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and narrative description
of measurement uncertainty related to Level 3 measurements. ASU 2018-13 was effective for the Company for its fiscal year beginning July
1, 2020. The Company adopted this guidance on July 1, 2020. It’s adoption of the guidance did not have a material impact on the
Company’s financial statements.
In
August 2018, the FASB issued ASU 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.”
ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes
to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation
techniques and inputs used, uncertainty in measurement, and changes in measurements applied. ASU 2018-13 was effective for the Company
for its fiscal year beginning July 1, 2020. The Company adopted this guidance on July 1, 2020. It’s adoption of the guidance did
not have a material impact on the Company’s financial statements.
New
Accounting Pronouncements Not Yet Adopted
In
December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12
is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends
existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and
interim periods within those fiscal years, which is fiscal 2022 for us, with early adoption permitted. We do not expect adoption of the
new guidance to have a significant impact on our financial statements.
Other
recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s
present or future financial statements.
The
Company’s subsidiary, Anton Nielsen Vojens, ApS has one customer who is a non-related party and leases property from the Company.
Rent revenues related to the operating lease are recognized as incurred. The Company’s subsidiary Sharx DK ApS derived its commission
revenues from the sales of cargo security product from one customer. The Company has determined that it is an agent of the manufacturer
and collects commission revenue at or before the delivery of product.
The
Company disaggregates revenues by revenue type and geographic location. See the below tables:
Three
Months Ended March 31,
Revenue
Type
2021
2020
Real Estate Rental
$
10,404
$
9,326
Commission
Revenues
—
—
Total Sales
by Revenue Type
$
10,404
$
9,326
Nine
Months Ended March 31,
Revenue
Type
2021
2020
Real Estate Rental
$
31,017
$
27,936
Commission
Revenues
—
—
Total Sales
by Revenue Type
$
31,017
$
27,936
The
Company’s derives 100% of its revenue from foreign customers. For the period ending March 31, 2021 and March 31, 2020 the revenue
concentrations were as follows:
The
Land owned by the Company’s wholly owned subsidiary constitutes the largest asset of the Company. During the period ending March
31, 2021 the Company recorded an increase in the carrying value of the Land of $27,087, due to the currency translation difference. The
carrying value of the Land of the Company was as follows:
The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.
Crossfield,
Inc., a company of which the CEO, Robert Wolfe is an officer and director, has made advances to the Company which are not collateralized,
non-interest bearing, and payable upon demand; however, the Company does not expect to make payment within one year. At March 31, 2021
and June 30, 2020, the Company had a balance of $122,996 and $120,271 respectively. During the nine-month period ended March 31, 2021
and March 31,2020 expenses paid on behalf of the Company were $15,887 and $14,676 respectively. The Company repaid $12,512 and $11,069
of the advancement during the nine months ending March 31, 2021 and 2020, respectively.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
During
2006, the Company issued a promissory note (“Note”) for $650,000, payable to the Borkwood Development Ltd, a previous shareholder
of the Company (“Seller”), payable and amortized monthly and carrying an interest at 5% per year. The Company has the right
to prepay the note at any time with a notice of 14 days. To secure the payment of principal and interest the Sellers will receive a perfect
lien and security interest in the Shares in the company ANV until the note with accrued interest is paid in full, and, in the case that
the Note has not been repaid within 12 months from the day of closing the Sellers have the right to convert the debt to common stock
of Advanced Oxygen Technologies, Inc. in an amount of non-diluted shares calculated on the conversion Date, equal to the lesser of :
a) Six hundred and Fifty thousand $(650,000) or the Purchase Price minus the principal payments made by the buyer, whichever is greater,
divided by the previous ten day closing price of AOXY as quoted on the national exchange, or b) Fifteen million shares, whichever is
lesser. The Note has been extended until July 1, 2021, prior to period end and interest waived through the period ending June 30, 2021.
Due to the extension, the note is not in default and therefore not convertible as of March 31, 2021. As of March 31, 2021, the unpaid
balance was $127,029.
The
Company has a note payable with a bank. The original amount of the note was kr 1,132,000 Danish Krone (kr). The note is secured by the
subsidiary’s real estate, with a 2.00% interest rate and 2.75 years remaining on the term. The balance on the note as of March
31, 2021 was $50,433. During the period ended March 31, 2021, the Company paid $14,085 in principal payments and $2,087 in interest.
The
Company’s commitments and contingencies are $131,710 for 2021. See below table for the years 2021 through 2024 with total principal
payments due on outstanding notes payable of $177,463. The amounts stated reflect the Company’s commitments in the currencies that
those commitments were made, and the amounts are an estimate of what the US dollar amount would be if the currency rates did not change.
Year
Amount
2021
$
131,710
2022
18,959
2023
19,341
2024
7,452
Total
$
177,463
Less: Long-term portion of
notes payable
(32,487
)
Notes payable, current portion
$
144,975
The
amounts stated in this note reflect the Company’s commitments in the currencies that those commitments were made and the amounts
are an estimate of what the US dollar amount would be if the currency rates did not change going forward.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
On
September 23, 2019 the Company entered into a Stock Grant and Investment Agreement with Robert Wolfe, its CEO and a Director
(“Wolfe”) whereby the Company has granted 1,000,000 shares (the “Shares”) of common stock of the Company,
with a fair value of $113,000 based on the trading price of the stock on the date of issuance of $0.11. The shares were issued for
services rendered by Wolfe to the Company and which Shares are deemed irrevocably and fully earned and vested as of the date
thereof. The Shares have been issued in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities
Act of 1933, as amended.
Preferred
Stock:
Series
2 Convertible Preferred Stock:
The
Company is authorized to issue 10,000,000 shares of $0.01 par value of series 2 convertible preferred stock. Each Series 2 preferred
share also includes one warrant to purchase two common shares for $5.00. The warrants are exercisable over a three-year period. In the
event of the liquidation of the Company, holders of Series 2 preferred stock would be entitled to receive $5.00 per share, plus any unpaid
dividends declared on the Series 2 preferred stock from the funds remaining after the Company’s creditors, including directors,
have been paid. There have been no dividends declared. There are 177,000 Series 2 Convertible Preferred shares designated. During November
1997, 172,000 shares of Series 2 preferred stock were converted into 344,000 shares of the Company’s common stock. As of March
31, 2021, and June 30, 2020 there are 5,000 shares issued, which are convertible into 2 common shares. There are no warrants outstanding
that have been issued in connection with these preferred shares.
Series
3 Convertible Preferred Stock:
The
Company has designated 1,670,000 shares of series 3 convertible preferred stock with a par value $0.01. Each share automatically converts
on March 2, 2000 into either (a) one (1) share of the Company’s common stock if the average closing price of the common stock during
the ten trading days immediately prior to March 1, 2000 is equal to or greater than sixty-six cents ($0.66) per share, or (b) one and
one-half (1 1/2) shares of common stock if the average closing price of the common stock during the ten trading days immediately prior
March 1, 2000 is less than sixty-six cents ($0.66) per share. There are zero shares issued and outstanding at March 31, 2021 and June
30, 2020.
Series
5 Convertible Preferred Stock:
The
Company has designated 1 share of series 5 convertible preferred stock, no par value. There is 1 Series 5 Convertible Preferred share
designated. The shares are collectively convertible to common stock of the Company, in an amount equal to the greater of a.)290,000 shares
divided by the ten-day closing price, prior to the date of acquisition of IPS, of the Company’s common stock as quoted on the national
exchange and not to exceed twenty million shares, or b.) six million shares. There are zero shares issued and outstanding at March 31,
2021 and June 30, 2020.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
The
ANV lease segment which leases land in Denmark by long term leases.
●
The
Sharx’s segment which generate commissions for the sale cargo security products.
●
The
Corporate segment, Advanced Oxygen Technologies, Inc. which does not generate revenues, but
has administrative expenses.
The
following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented:
Nine
Months Ending March 31,
2021
2020
Revenue
by segment
Lease
revenues
$
31,017
$
27,936
Commission
revenues from security product sales
—
—
Corporate
revenues
—
—
Total
revenue
$
31,017
$
27,936
Segment
profitability
Lease
revenues
$
21,841
$
16,513
Commission
revenues from security product sales
(1,560
)
—
Corporate
revenues
(18,177
)
(127,700
)
Total
segment profitability
$
2,104
$
(111,187
)
Three
Months Ending March 31,
2021
2020
Revenue
by segment
Lease
revenues
$
10,404
$
9,326
Commission
revenues from security product sales
—
—
Corporate
revenues
—
—
Total
revenue
$
10,404
$
9,326
Segment
profitability
Lease
revenues
$
7,484
$
7,123
Commission
revenues from security product sales
(1,669
)
—
Corporate
revenues
(4,437
)
(2,947
)
Total
segment profitability
$
1,378
$
4,176
The
following table presents net sales, based on the location in which the sale originated, and long-lived assets, representing property,
plant and equipment, net of related depreciation, by geographic region. All of the assets are land that are held by the Company’s
subsidiary, ANV.
The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
The
accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Anton Nielsen Vojens,
ApS, Sharx Inc. and Sharx DK ApS, after elimination of all intercompany accounts, transactions, and profits.
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates. The Company’s fiscal year end is June 30.
The
accompanying condensed consolidated financial statements are unaudited. All adjustments considered necessary for a fair presentation
of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results
of operations of any interim period are not necessarily indicative of the results of operations for the full year. All intercompany balances
are eliminated in consolidation.
Certain
information and note disclosures normally included in annual financial statements have been condensed or omitted from these interim financial
statements; these financial statements should be read in conjunction with the financial statements and notes thereto included in our
Form 10-K for the year ended June 30, 2020.
For
our rental revenue and commission revenue, we recognize revenue under the five steps in Topic 606, which are as follows: 1) identify
the contract with the customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate
the transaction price to the performance obligations; and 5) recognize revenue when (or as) performance obligations are satisfied.
Rental
Revenue
Rental
revenue is derived from the Commercial Property lease in which quarterly payments are received pursuant to the property lease which is
in effect until 2026. (See Note 3 for further details) and from the sale of product pursuant to a non-exclusive distribution agreement.
We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to
a client. We measure revenue based upon the consideration set forth in an arrangement or contract with a client. We recognize revenue
from these services when the services are completed. If we are paid in advance for these services, we record such payment as a contract
liability until we complete the services. As of March31, 2021, the Company recorded $3,290 of contract liabilities in connection to rental
revenues.
Commission
revenue
The
Company recognizes commission revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the
contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the
performance obligations, and 5) recognize revenue as the performance obligations are satisfied as set forth below.
The
Company’s source of commission revenue is from the Company’s subsidiary Sharx in which quarterly payments are received when
the customer pre-pays or pays upon the date products are drop shipped from the manufacturer pursuant to a non-exclusive distribution
agreement. At such time the products are drop shipped, the Company’s performance obligation has been satisfied and revenue is recorded.
The Company has determined that it is an agent of the manufacturer and collects commission revenue at or before the delivery of product
(See Note 3 for further details).
Foreign
currency transactions are translated applying the current rate method. Assets and liabilities are translated at current rates. Stockholders’
equity accounts are translated at the appropriate historical rates and revenue and expenses are translated at weighted average rates
for the year.
The
Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section
830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification,
foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting
currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign
currency that will be received or paid. A change in exchange rates between the reporting currency and the currency in which a
transaction is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the
transaction. That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss that
generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction
gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized
upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the
transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to
certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments
and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall
apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each
asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional
currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB
Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other
than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange
rate.
The
Company’s wholly owned subsidiary ANV uses the Danish Krone, DKK as its reporting currency as well as its functional currency.
The wholly owned subsidiary Sharx DK ApS uses the US Dollar as its reporting currency as well as its functional currency and from time
to time has transactions in foreign currency. The change in exchange rates between the U.S. Dollar, the Company’s reporting and
functional currency and the foreign currency, the currency in which a transaction is denominated increases or decreases the expected
amount of reporting currency cash flows upon settlement of the transaction. That increase or decrease in expected reporting currency
cash flows is a foreign currency transaction gain or loss that generally is included in determining net income (loss) for the period
in which the exchange rate changes.
The
Company accounts for income taxes under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation
allowance is required when it is less likely than not that the Company will be able to realize all or a portion of its deferred tax assets.
Because it is doubtful that the net operating losses of recent years will ever be used, a valuation allowance has been recognized equal
to the tax benefit of net operating losses generated.
Basic
earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available.
Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common
shares were dilutive. As of March 31, 2021, and March 31, 2020 there were 10,000 and 10,000 potential dilutive shares that need to be
considered as common share equivalents and because of the net income for March 31, 2021, the effect of these potential common shares
is dilutive for the nine-months ended March 31, 2021 and for the nine-months ended March 31, 2020these potential common shares are anti-dilutive.
For the three-months ended March 31, 2021 and three-months March 31, 2020 these potential shares are dilutive.
For
purposes of the statement of cash flows, the Company considers all highly-liquid investments purchased with original maturities of three
months or less to be cash equivalents.
The
Company maintains its cash in bank deposit accounts which, at March 31, 2021 did not exceed federally insured limits. The Company has
not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on such amounts.
The
Company records stock-based compensation in accordance with ASC 718, Compensation. All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received
or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees
and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments
issued and are recognized over the employees required service period, which is generally the vesting period.
The
preparation of the condensed consolidated 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 disclosures of contingent assets and
liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during
the reported period. Actual results could differ from those estimates.
Financial
instruments that potentially subject the Company to major credit risk consist principally of a single subsidiary of Anton Nielsen Vojens
ApS. ANV’s rent revenues are derived from one customer. The Company’s commission revenues are subject to concentration risk
as the commission revenues are derived from one product, and one customer, but that should not be the case going forward.
On
July 1, 2019 we adopted the new lease accounting guidance in Topic 842. As the lessor, we have elected the package of practical expedients
permitted in Topic 842. Accordingly, we have accounted for our existing leases as operating leases under the new guidance, without reassessing
(a) whether the contract contains a lease under Topic 842, (b) whether classification of the operating lease would be different in accordance
with Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2018) would have
met the definition of initial direct costs in Topic 842 at lease commencement. Additionally, as the lessor, we will use hindsight in
determining the lease term.
Upon
adoption of Topic 842, lessees and lessors are required to apply a modified retrospective transition approach. Reporting entities are
permitted to choose one of two methods to recognize and measure leases within the scope of Topic 842:
●
Apply Topic 842 to each
lease that existed at the beginning of the earliest comparative period presented in the financial statements as well as leases that
commenced after that date. Under this method, prior comparative periods presented are adjusted. For leases that commenced prior to
the beginning of the earliest comparative period presented, a cumulative-effect adjustment is recognized at that date.
●
Apply the guidance to each
lease that had commenced as of the beginning of the reporting period in which the entity first applies the lease standard with a
cumulative-effect adjustment as of that date. Prior comparative periods would not be adjusted under this method.
Topic
842 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases
and operating leases. Based on our election of the package of practical expedients, our existing commercial leases, where we are the
lessor, continue to be accounted for as operating leases under the new standard. However, Topic 842 changed certain requirements regarding
the classification of leases that could result in us recognizing certain long-term leases entered into or modified after July 1, 2019
as sales-type leases or finance leases, as opposed to operating leases. We will continue to monitor our leases following the adoption
date to ensure that they are classified in accordance with the new lease standards.
We
elected a practical expedient which allows lessors to not separate non-lease components from the lease component when the timing and
pattern of transfer for the lease components and non-lease components are the same and if the lease component is classified as an operating
lease. As a result, we now present all rentals and reimbursements from tenants as a single line item, Rental, within the consolidated
financial statements of operations.
The
Company leases land to a customer. The Company determines if an arrangement contains a lease at contract inception. An arrangement is
or contains a lease if the agreement identifies an asset, implicitly or explicitly, that the Customer has the right to use over a period
of time. If an arrangement contains a lease, the Company classifies the lease as either an operating lease or as a finance lease based
on the five criteria defined in ASC 842.
Lease
liabilities are recognized at commencement date based on the present value of the remaining lease payments over the lease term. The corresponding
right-of-use asset is recognized for the same amount as the lease liability adjusted for any payments made at or before the commencement
date, any lease incentives received, and any initial direct costs. The Company’s lease agreements may include options to renew,
extend or terminate the lease. These clauses are included in the initial measurement of the lease liability when at lease commencement
the Company is reasonably certain that it will exercise such options. The discount rate used is the interest rate implicit in the lease
or, if that cannot be readily determined, the Company’s incremental borrowing rate.
Operating
lease expense is recognized on a straight-line basis over the lease term and presented within cost of sales on the Company’s consolidated
statements of operations. Finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the useful life
of the asset or the lease term. Interest expense on the finance lease liability is recognized using the effective interest rate method
and is presented within interest expense on the Company’s consolidated statements of operations and comprehensive income. Variable
rent payments related to both operating and finance leases are expensed as incurred. The Company’s variable lease payments primarily
consist of real estate taxes, maintenance and usage charges. The Company made an accounting policy election to combine lease and non-lease
components.
The
Company has elected to exclude short-term leases from the recognition requirements of ASC 842. A lease is short-term if, at the commencement
date, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis
over the lease term.
In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure
Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring Level 3 fair value
measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure
of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and narrative description
of measurement uncertainty related to Level 3 measurements. ASU 2018-13 was effective for the Company for its fiscal year beginning July
1, 2020. The Company adopted this guidance on July 1, 2020. It’s adoption of the guidance did not have a material impact on the
Company’s financial statements.
In
August 2018, the FASB issued ASU 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.”
ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes
to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation
techniques and inputs used, uncertainty in measurement, and changes in measurements applied. ASU 2018-13 was effective for the Company
for its fiscal year beginning July 1, 2020. The Company adopted this guidance on July 1, 2020. It’s adoption of the guidance did
not have a material impact on the Company’s financial statements.
New
Accounting Pronouncements Not Yet Adopted
In
December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12
is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends
existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and
interim periods within those fiscal years, which is fiscal 2022 for us, with early adoption permitted. We do not expect adoption of the
new guidance to have a significant impact on our financial statements.
Other
recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s
present or future financial statements.
Disclosure of accounting policy for basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value.
Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.
Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.
Disclosure of accounting policy for (1) transactions denominated in a currency other than the reporting enterprise's functional currency, (2) translating foreign currency financial statements that are incorporated into the financial statements of the reporting enterprise by consolidation, combination, or the equity method of accounting, and (3) remeasurement of the financial statements of a foreign reporting enterprise in a hyperinflationary economy.
Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.
Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact.
Disclosure of accounting policy for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.
Disclosure of accounting policy for award under share-based payment arrangement. Includes, but is not limited to, methodology and assumption used in measuring cost.
Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles.
The
Company’s derives 100% of its revenue from foreign customers. For the period ending March 31, 2021 and March 31, 2020 the revenue
concentrations were as follows:
Tabular disclosure of disaggregation of revenue into categories depicting how nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factor.
Tabular disclosure of physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, balances by class of assets, depreciation and depletion expense and method used, including composite depreciation, and accumulated deprecation.
Tabular disclosure of future minimum payments required in the aggregate and for each of the five succeeding fiscal years for operating leases having initial or remaining noncancelable lease terms in excess of one year and the total minimum rentals to be received in the future under noncancelable subleases as of the balance sheet date.
The
following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented:
Nine
Months Ending March 31,
2021
2020
Revenue
by segment
Lease
revenues
$
31,017
$
27,936
Commission
revenues from security product sales
—
—
Corporate
revenues
—
—
Total
revenue
$
31,017
$
27,936
Segment
profitability
Lease
revenues
$
21,841
$
16,513
Commission
revenues from security product sales
(1,560
)
—
Corporate
revenues
(18,177
)
(127,700
)
Total
segment profitability
$
2,104
$
(111,187
)
Three
Months Ending March 31,
2021
2020
Revenue
by segment
Lease
revenues
$
10,404
$
9,326
Commission
revenues from security product sales
—
—
Corporate
revenues
—
—
Total
revenue
$
10,404
$
9,326
Segment
profitability
Lease
revenues
$
7,484
$
7,123
Commission
revenues from security product sales
(1,669
)
—
Corporate
revenues
(4,437
)
(2,947
)
Total
segment profitability
$
1,378
$
4,176
The
following table presents net sales, based on the location in which the sale originated, and long-lived assets, representing property,
plant and equipment, net of related depreciation, by geographic region. All of the assets are land that are held by the Company’s
subsidiary, ANV.
Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.
Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.
Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.
Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.
Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.
Amount of foreign currency translation gain (loss) which increases (decreases) assets, excluding financial assets and goodwill, lacking physical substance with a finite life.
Carrying amount as of the balance sheet date of obligations due all related parties. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer).
Amount of cash inflow (outflow) from long-term debt by a related party. Related parties, include, but are not limited to, affiliates, owners or officers and their immediate families, and pension trusts.
Amount of long-term debt payable, sinking fund requirement, and other securities issued that are redeemable by holder at fixed or determinable price and date, maturing in next fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of long-term debt payable, sinking fund requirement, and other securities issued that are redeemable by holder at fixed or determinable price and date, maturing in fourth fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of long-term debt payable, sinking fund requirement, and other securities issued that are redeemable by holder at fixed or determinable price and date, maturing in third fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of long-term debt payable, sinking fund requirement, and other securities issued that are redeemable by holder at fixed or determinable price and date, maturing in second fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Carrying value as of the balance sheet date of notes payable (with maturities initially due after one year or beyond the operating cycle if longer), excluding current portion.
Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer.
Sum of the carrying values as of the balance sheet date of the portions of long-term notes payable due within one year or the operating cycle if longer.
The Company has the right to prepay the note at any time with a notice of 14 days. To secure the payment of principal and interest the Sellers will receive a perfect lien and security interest in the Shares in the company ANV until the note with accrued interest is paid in full, and, in the case that the Note has not been repaid within 12 months from the day of closing the Sellers have the right to convert the debt to common stock of Advanced Oxygen Technologies, Inc. in an amount of non-diluted shares calculated on the conversion Date, equal to the lesser of : a) Six hundred and Fifty thousand $(650,000) or the Purchase Price minus the principal payments made by the buyer, whichever is greater, divided by the previous ten day closing price of AOXY as quoted on the national exchange, or b) Fifteen million shares, whichever is lesser.
Amount equal to the present value (the principal) at the beginning of the lease term of minimum lease payments during the lease term (excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, together with any profit thereon) net of payments or other amounts applied to the principal through the balance sheet date.
Period of time between issuance and maturity of debt instrument, in PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days.
The interest rate applicable to the portion of the carrying amount of long-term borrowings outstanding as of the balance sheet date, including current maturities, which accrues interest at a set, unchanging rate.
The amount for notes payable (written promise to pay), due to related parties. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).
Including the current and noncurrent portions, the carrying value as of the balance sheet date of notes payable to banks, excluding mortgage notes, initially due beyond one year or beyond the operating cycle if longer.
Amount of required minimum rental payments for operating leases having an initial or remaining non-cancelable lease term in excess of one year due in the next fiscal year following the latest fiscal year. Excludes interim and annual periods when interim periods are reported on a rolling approach, from latest balance sheet date.
Amount of required minimum rental payments for operating leases having an initial or remaining non-cancelable lease term in excess of one year due after the fifth fiscal year following the latest fiscal year. Excludes interim and annual periods when interim periods are reported on a rolling approach, from latest balance sheet date.
Each share automatically converts on March 2, 2000 into either (a) one (1) share of the Company’s common stock if the average closing price of the common stock during the ten trading days immediately prior to March 1, 2000 is equal to or greater than sixty-six cents ($0.66) per share, or (b) one and one-half (1 1/2) shares of common stock if the average closing price of the common stock during the ten trading days immediately prior March 1, 2000 is less than sixty-six cents ($0.66) per share.
The shares are collectively convertible to common stock of the Company, in an amount equal to the greater of a.)290,000 shares divided by the ten-day closing price, prior to the date of acquisition of IPS, of the Company’s common stock as quoted on the national exchange and not to exceed twenty million shares, or b.) six million shares.
Additional shares included in the calculation of diluted EPS as a result of the potentially dilutive effect of convertible preferred stock using the if-converted method.
The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws.
Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt.
Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased.
Period between issuance and expiration of outstanding warrant and right embodying unconditional obligation requiring redemption by transferring asset at specified or determinable date or upon event certain to occur, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days.
Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income after deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).
Long-lived assets other than financial instruments, long-term customer relationships of a financial institution, mortgage and other servicing rights, deferred policy acquisition costs, and deferred tax assets.
Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income after deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income after deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).
