0001558370-23-010248 | 10-Q | XBRL Viewer

Debt Arrangements (Tables)

9 Months Ended

Mar. 31, 2023


	As of March 31,		As of June 30,
	2023		2022
Convertible promissory notes	$	—	$	89,663
Term loans		53,979		25,443
PPP Loan		—		2,000
Total debt		53,979		117,106
Less: debt, current		(53,979)		(115,106)
Total debt, noncurrent	$	—	$	2,000

Schedule of Maturities of Debt


	As of March 31,
	2023
2023 (remaining)	$	—
2024		—
2025		55,000
Total future payments on debt obligations	$	55,000

Leases - Future minimum lease payments (Details) - USD ($)	Mar. 31, 2023	Jun. 30, 2022
Future minimum lease payments
Remainder of 2023	$ 100,000
2024	404,000
2025	143,000
Gross lease payments	647,000
Less: imputed interest	(77,000)
Operating lease liability	$ 570,000	$ 0

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (UNAUDITED) - USD ($) $ in Thousands	Common Stock Previously Reported	Common Stock Revision of Prior Period, Adjustment	Common Stock	Additional Paid-in Capital Previously Reported	Additional Paid-in Capital Revision of Prior Period, Adjustment	Additional Paid-in Capital	Accumulated Deficit Previously Reported	Accumulated Deficit	Convertible Preferred Stock Previously Reported	Convertible Preferred Stock Revision of Prior Period, Adjustment	Previously Reported	Total
Beginning balance at Jun. 30, 2021	$ 5	$ (2)	$ 3	$ 74,417	$ 30	$ 74,447	$ (144,469)	$ (144,469)	$ 28	$ (28)	$ (70,019)	$ (70,019)
Beginning balance (in shares) at Jun. 30, 2021	5,132,354	21,980,406	27,112,760						28,343,420	(28,343,420)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock options						104						104
Issuance of common stock upon exercise of stock options (in shares)			241,393
Fair value of issued warrants on common stock						348						348
Stock-based compensation						1,384						1,384
Net income (Loss)								(34,062)				(34,062)
Ending balance at Mar. 31, 2022			$ 3			76,283		(178,531)				(102,245)
Ending balance (in shares) at Mar. 31, 2022			27,354,153
Beginning balance at Dec. 31, 2021			$ 3			75,459		(187,485)				(112,023)
Beginning balance (in shares) at Dec. 31, 2021			27,260,624
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock options						46						46
Issuance of common stock upon exercise of stock options (in shares)			93,529
Fair value of issued warrants on common stock						348						348
Stock-based compensation						430						430
Net income (Loss)								8,954				8,954
Ending balance at Mar. 31, 2022			$ 3			76,283		(178,531)				(102,245)
Ending balance (in shares) at Mar. 31, 2022			27,354,153
Beginning balance at Jun. 30, 2022	$ 6	$ (3)	$ 3	$ 78,290	$ 31	78,321	$ (200,783)	(200,783)	$ 28	$ (28)	$ (122,459)	(122,459)
Beginning balance (in shares) at Jun. 30, 2022	6,196,257	21,778,182	27,974,439						28,343,420	(28,343,420)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock options						280						$ 280
Issuance of common stock upon exercise of stock options (in shares)			517,515									511,670
Fair value of issued warrants on common stock						1,352						$ 1,352
Issuance of common stock upon net exercise of warrants (in shares)			136,681
Issuance of common stock						1,100						1,100
Issuance of common stock (in shares)			143,333
Issuance of common stock upon vesting of restricted stock units (in shares)			798,239
Issuance of shares and transfer of warrants upon termination of convertible note agreement						2,412						2,412
Issuance of shares and transfer of warrants upon termination of convertible note agreement (in shares)			323,968
Conversion of convertible notes into common stock			$ 1			41,391						41,392
Conversion of convertible notes into common stock (in shares)			8,147,938
Warrants issued with Credit Agreement						2,076						2,076
Reclassification of liability classified warrants to equity						830						830
Contribution by shareholder in conjunction with Credit Agreement						2,779						2,779
Earnout shares stock-based compensation						3,478						3,478
Merger and PIPE Financing			$ 1			35,737						35,738
Merger and PIPE Financing (in shares)			13,879,828
Stock-based compensation						6,710						6,710
Net income (Loss)								2,080				2,080
Ending balance at Mar. 31, 2023			$ 5			176,466		(198,703)				(22,232)
Ending balance (in shares) at Mar. 31, 2023			51,921,941
Beginning balance at Dec. 31, 2022			$ 5			170,794		(183,023)				(12,224)
Beginning balance (in shares) at Dec. 31, 2022			51,231,608
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock options						220						220
Issuance of common stock upon exercise of stock options (in shares)			370,692
Fair value of issued warrants on common stock						499						499
Issuance of common stock						100						100
Issuance of common stock (in shares)			10,000
Issuance of common stock upon vesting of restricted stock units (in shares)			309,641
Earnout shares stock-based compensation						1,604						1,604
Stock-based compensation						3,249						3,249
Net income (Loss)								(15,680)				(15,680)
Ending balance at Mar. 31, 2023			$ 5			$ 176,466		$ (198,703)				$ (22,232)
Ending balance (in shares) at Mar. 31, 2023			51,921,941

Summary of Business and Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023 USD ($) item	Mar. 31, 2022 USD ($) item	Mar. 31, 2023 USD ($) item	Mar. 31, 2022 USD ($) item
Disaggregation of Revenue [Line Items]
Number of revenue streams \| item	2	2	2	2
Contra Revenue Associated with Warrant Agreement	$ (500)	$ 0	$ (1,073)	$ 0
AI Platform
Disaggregation of Revenue [Line Items]
Contra Revenue Associated with Warrant Agreement	$ 500		$ 1,100
Minimum
Disaggregation of Revenue [Line Items]
Contract term			12 months
Maximum
Disaggregation of Revenue [Line Items]
Contract term			48 months

Summary of Business and Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2023

Summary of Business and Significant Accounting Policies

Description of Business

Presto Automation Inc. and its subsidiaries (together, “Presto” or the “Company”) is headquartered in San Carlos, California. Prior to the Merger (as defined below), the Company operated as E la Carte, Inc. (“Legacy Presto”). E la Carte, Inc. was incorporated in the State of Delaware in October 2008. In 2018, E la Carte, Inc. together with its subsidiary adopted “Presto” as its trade name or doing business as (“dba”) name. In February 2019, the Company formed Presto Technology, Inc. as a wholly owned subsidiary located in Ontario, Canada.

Merger with Ventoux CCM Acquisition Corp.

On September 21, 2022, Ventoux CCM Acquisition Corp. (“Ventoux” or “VTAQ”) and its subsidiaries, then a special purpose acquisition corporation, acquired Legacy Presto via a series of mergers, whereby Legacy Presto became a limited liability company and a wholly owned subsidiary of Ventoux (the “Merger”). Upon completion of the Merger, Ventoux CCM Acquisition Corp. was renamed Presto Automation Inc. Prior to the Merger, Ventoux Acquisition Holdings LLC and Chardan International Investments, LLC were the co-sponsors of Ventoux (together the “Sponsors”) and with the close of the Merger remained significant shareholders in the Company.

Trust Proceeds and PIPE investment

Following the closing of the Ventoux’s initial public offering on December 30, 2020, $151.5 million was placed in a trust account, (the “Trust”), for which various redemptions of amounts in the Trust were made up until the date of the Merger. On the closing date of the Merger, $9.5 million of unredeemed funds were released to Ventoux from the Trust.

In connection with the execution of the Merger, Ventoux entered into separate subscription with a number of investors, pursuant to which the subscribers agreed to purchase, and Ventoux agreed to sell to the subscribers, an aggregate of 7,133,687 shares of common stock (the “PIPE Shares”), for an aggregate purchase price of $55.4 million, in a private placement pursuant to the subscription agreements (the “PIPE”). The PIPE investment closed simultaneously with the consummation of the Merger.

Upon consummation of the Merger, Presto received approximately $49.8 million from the Trust and PIPE, net of transaction costs and other payments as set forth as follows:


	Net Cash
Cash—Ventoux Trust and working capital cash	$	9,584
Cash—PIPE investment		55,400
Less: transaction costs and other payments⁽¹⁾		(15,144)
Total	$	49,840

(1)

Amount reflects (1) the repayment of $1.9 million of Ventoux related party loans utilizing proceeds from Trust, (2) the payment of $7.8 million in Ventoux transaction costs related to the Merger, (3) the payment of $4.9 million in Legacy Presto transaction costs related to the Merger and (4) the payment of certain other costs not directly related to the Merger in the amount of $0.5 million. Legacy Presto also incurred $2.1 million in transaction costs which were paid via the issuance of 260,000 Company shares. Further in conjunction with the Merger, Legacy Presto incurred $3.2 million in transaction costs which were either paid prior to or after the Merger. As of March 31, 2023, all of the transaction costs incurred by Legacy Presto have been fully paid. Accordingly, in total Legacy Presto incurred transaction costs amounting to $10.4 million.

Legacy Presto Convertible Promissory Notes and Equity and the Exchange

Immediately prior to the closing of the Merger, all convertible promissory notes were converted into Legacy Presto common stock, all shares of outstanding redeemable convertible preferred stock of Legacy Presto were automatically converted into shares of Legacy Presto common stock, and all outstanding warrants for Legacy Presto shares were either exercised or exchanged into warrants of common stock of Presto. Upon the consummation of the Merger, each share of Legacy Presto common stock issued and outstanding was canceled and converted into the right to receive 0.8099 shares (the “Exchange Ratio”) of common stock of Ventoux. Further the outstanding equity awards (including warrant, stock option and RSU holders) of Legacy Presto were canceled and converted using the Exchange Ratio with the holders receiving equivalent outstanding equity awards (including warrant, stock option and RSU holders) in the Company.

Earnout Arrangement with holders of Legacy Presto Common Stock and Outstanding Equity Awards

Concurrent with the closing of the Merger, holders of Legacy Presto common stock and outstanding equity awards (including warrant, stock option and RSU holders) had the right to receive up to an aggregate amount of 15,000,000 shares of Company common stock (or equivalent equity award) that would be issued as follows:

●

7,500,000 shares, if, during the period from and after the closing of the Merger until the third anniversary of the closing of the Merger, the Volume Weighted Average Price (“VWAP” as defined in the Agreement and Plan of Merger among Ventoux CCM Acquisition Corp., as Acquiror, Ventoux Merger Sub I Inc. as First Merger Sub., Ventoux Merger Sub II LLC as Second Merger Sub and E La Carte, Inc. as the Company, dated November 10, 2021 (the “Business Combination Agreement”) of Presto common stock is greater than or equal to $12.50 for any 20 trading days within a period of 30 consecutive trading days, and

●

an additional 7,500,000 shares, if, during the period from and after the closing of the Merger until the fifth anniversary of the closing of the Merger, the VWAP of Presto common stock is greater than or equal to $15.00 for any 20 trading days within a period of 30 consecutive trading days

The earnout shares are equity classified since they do not meet the liability classification criteria outlined in ASC 480, Distinguishing Liabilities from Equity and are under ASC 815-40 are both (i) indexed to the Company’s own shares and (ii) meet the criteria for equity classification. The fair value of the earnout shares is determined based on “Level 3” inputs, due to a lack of market data over inputs such as the volatility and the time incurred to meet the minimum VWAP as discussed above. The earnout shares are measured at fair value using the Monte Carlo valuation model. The valuation model utilized various key assumptions, such as volatility, discount rate and time incurred to meet the minimum VWAP. The grant date fair value of each earnout share was $3.17. Of the 15,000,000 earn-out shares, 4,771,116 earnout shares were given to common stock, option and RSU holders that are held by current employees and directors are accounted for under ASC 718. During the period from the date of the Merger through March 31, 2023, the Company recorded stock-based compensation expense associated with earnouts in the amount of $3.5 million to equity award holders who held awards associated with the Company’s equity incentive plan and to common stock holders held by current employees and directors, of which $2.3 million, $1.0 million, and $0.2 million are recorded within general and administrative, research and development and sales and marketing expenses, respectively, on the condensed consolidated statement of operations and comprehensive income (loss). During three months ended March 31, 2023, the Company recorded stock-based compensation expense associated with earnouts, to the same equity award holders as above, in the amount of $1.6 million of which $1.1 million, $0.4 million, and $68 thousand are recorded within general and administrative, research and development and sales and marketing expenses, respectively, on the condensed consolidated statement of operations and comprehensive income (loss).

As of March 31, 2023, unrecognized stock-based compensation expense is $11.3 million which is expected to be recognized over a weighted-average period of 1.5 years. Stock-based compensation for awards with a performance-based vesting condition that was previously deemed not probable to occur as of December 31, 2022, was modified in the three months ended March 31, 2023 to waive the condition and thus the performance condition was removed and resulted in an immaterial modication of expense and the awards are now vesting according to the original awards vesting schedule. As of March 31, 2023, 360,813 earnout shares held by current employees and directors were forfeited. The Earnout shares given to common stockholders not held by current employees and directors and warrant holders have been recorded with equal and offsetting effects on additional paid-in capital on its condensed consolidated balance sheet. As of March 31, 2023, all of the earnout shares remain unissued as the conditions to issuance have not been achieved.

Unvested Founder Share Arrangement with Founders

At the Closing, 444,500 founders shares held by the Sponsors (the “unvested founders shares”) became subject to the following vesting and forfeiture provisions:

(i)

the first 25% of such unvested founder shares owned by the Sponsors vest at such time as a $12.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date,

(ii)

the next 25% of such unvested founder shares owned by the Sponsors vests at such time as a $15.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date.,

(iii)

the next 25% of such unvested founder shares owned by the Sponsors vest at such time as a $20.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date and

(iv)

the remaining 25% of such unvested founder shares owned by the Sponsors shall vest at such time as a $25.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date.

A “Stock Price Level” is considered achieved when the VWAP of the common stock is greater than or equal to the applicable threshold for any 40 consecutive trading days within a 60 trading day period. If the applicable Stock Price Level is not achieved on or prior to the date that is five years after the Closing Date, the applicable unvested founder shares shall not vest and shall be automatically forfeited and cancelled for no consideration. In the event of a change of control, any unvested founder shares shall automatically vest. As of March 31, 2023, all of the unvested founder shares remain unvested as the vesting conditions have not been achieved.

The Company has concluded that the unvested founder shares are accounted for as equity-linked instruments under ASC 815-40 and are not indexed to the entity’s own stock and accordingly, such financial instruments are classified as liabilities. With the closing of the Merger, the Company recorded $1.6 million within other long-term liabilities. During the period from the closing of the Merger until March 31, 2023 and the three months ended March 31, 2023 the Company recorded a gain on remeasurement of $1.4 million and $0.2 million respectively, which are included in change in fair value of warrants and convertible promissory notes in the condensed consolidated statement of operations and comprehensive income (loss).

Upon the closing of the Merger, Ventoux’s certificate of incorporation was amended and restated to, among other things, change its name from Ventoux CCM Acquisition Corp. to Presto Automation Inc., increase the total number of authorized shares of all classes of capital stock to 181,500,000 shares, of which 180,000,000 shares are designated as common stock, $0.0001 par value per share; and 1,500,000 shares designated preferred stock, $0.0001 par value per share. Immediately following the closing of the Merger, there were 50,639,837 shares of the Company’s common stock issued and outstanding and warrants to purchase 18,415,453 shares of the Company’s common stock outstanding.

The Merger is accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Under the guidance in ASC 805, Business Combinations, Ventoux was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Presto having a majority of the voting power of the post-combination company, Presto’s senior management comprising substantially all of the senior management of the post-combination company, the relative size of Presto compared to Ventoux, and Presto’s operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Legacy Presto issuing stock for the net assets of Ventoux, accompanied by a recapitalization. Accordingly, all historical financial information presented in the unaudited condensed consolidated financial statements represents the accounts of Presto and its wholly owned subsidiaries as if Legacy Presto is the predecessor to the Company. The shares and net loss per common share, prior to the Merger, have been retroactively restated as shares reflecting the Exchange Ratio established in the Merger (0.8099 shares of Company common stock for every one share of Legacy Presto common stock).

Total net liabilities of Ventoux assumed by the Company was $9.8 million, which is inclusive of a liability for the private warrants of $9.4 million but excludes the $55.4 million in PIPE proceeds raised by Ventoux immediately prior to the Merger. The remaining net liabilities assumed from Ventoux were immaterial to the Company.

Cyborg Ops

As a consequence to the closing of the Merger, bonus and deferred consideration amounts owed to certain founding members of CyborgOps became due and payable resulting in an expense of $1.9 million, of which $1.8 million and $0.1 million has been recorded within research and development and sales and marketing, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for nine months ended March 31, 2023.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s condensed consolidated financial statements may not be comparable to financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards based on public company effective dates.

The Company will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the Company’s total annual gross revenue is at least $1.1 billion, (ii) the last day of the fiscal year following the fifth anniversary of the completion of Ventoux’s initial public offering, which occurred on December 30, 2020, (iii) the date on which the Company issued more than $1.0 billion in non-convertible debt securities during the prior three-year period, or (iv) the date on which the Company becomes a large accelerated filer.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission (“SEC”). References to ASC and ASU included herein refer to the Accounting Standards Codification and Accounting Standards Update established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative U.S. GAAP. All intercompany balances and transactions have been eliminated in consolidation.

In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. They include all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2023, and its results of operations for the three and nine months ended March 31, 2023 and 2022 and cash flows for the nine months ended March 31, 2023 and 2022. The results for the three and nine months ended March 31, 2023 and 2022, are not necessarily indicative of the results expected for the year or any other periods. These interim financial statements should be read in conjunction with the Legacy Presto’s financial statements and related notes for the fiscal year ended June 30, 2022 included as Exhibit 99.1 of the Current Report on Form 8-K as filed with the SEC on December 16, 2022, where we include additional information on our critical accounting estimates, policies, and the methods and assumptions used in our estimates. The unaudited condensed consolidated balance sheet as of June 30, 2022, has been derived from the Company’s audited financial statements.

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues, expenses, and disclosures. Accordingly, actual amounts could differ from those estimates, and those differences could be material.

Uses of estimates include, but are not limited to, the collectability of accounts receivable, the useful lives of property and equipment and intangible assets, inventory valuation, the fair value of financial instruments, valuation of deferred tax assets and liabilities, valuation assumptions utilized in calculating the estimated value of stock-based compensation, valuation of warrants, earnout arrangements and unvested founder shares, valuation of goodwill and intangible assets acquired and impairment of long-lived assets. The Company has assessed the impact and is not aware of any specific events or circumstances that required an update to the

Company’s estimates and assumptions or materially affected the carrying value of the Company’s assets or liabilities as of the date of issuance of this report. These estimates may change as new events occur and additional information is obtained.

Risk and Uncertainties

The Company is subject to a number of risks common to emerging, technology-based companies, including a limited operating history; dependence on key individuals; rapid technological changes; competition from substitute products and larger companies; the need for additional financing to fund future operations; and the successful development, marketing, and outsourced manufacturing of the Company’s products and services as well as the impact of the novel coronavirus disease (“COVID-19”) on the restaurant industry.

Impact of COVID19

Impact of COVID-19

The Company has been subject to risks and uncertainties because of the outbreak of COVID-19, and actions takend by the federal, state and local governments to control the spread of infections. The extent of any continuing impact of the COVID-19 pandemic on the Company’s business remains uncertain and difficult to predict, as government authorities may implement new restrictions in response to changes in the number of COVID-19 infections or new variants of the disease. Additionally, economies worldwide have been negatively impacted by the COVID-19 pandemic, which resulted in a global economic slowdown, supply chain issues and inflationary pressures.

The Company took several actions to mitigate the effects of the COVID-19 pandemic on its operations and franchisees. In April 2020, the Company received a loan of approximately $2.6 million under the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”), to assist with the economic hardships caused by the pandemic. In March 2021, the Company received a second loan of approximately $2.0 million under the PPP. In August 2021, the Company was granted forgiveness of the first loan of approximately $2.6 million. In July 2022, the Company was granted forgiveness of the second loan of approximately $2.0 million. Refer to Note 7 for further details.

In the three and nine months ended March 31, 2022, the volume of repair charges the Company experienced was higher than usual due to a liquid ingress issue resulting from COVID-19 related actions by its customers. The Company’s devices failed primarily due to the use of extremely strong commercial disinfectant solutions by customers to clean the hardware devices as a mandatory precaution protocol due to COVID-19. Due to use of commercial cleaning products, the solution leaked into the hardware causing significant damage to the devices and requiring replacement of such devices. To prevent disruption to customers’ businesses, the Company incurred losses on infrequent customer repairs of $0.1 million and $0.6 million for the three and nine months ended March 31, 2022, respectively, for this issue. The Company has an outstanding claim to recover the costs from its third-party subcontractor who manufactures the hardware, for which the Company received a favorable arbitrator ruling in June 2022. Refer to Note 8 for further details.

The severity of any continued impact of the COVID-19 pandemic or similar health emergencies or pandemics in the future on the Company’s business will depend on a number of factors, including, but not limited to, how long the pandemic will last, whether/when recurrences of the virus may arise, what restrictions on in-restaurant dining may be enacted or re-enacted, the availability and acceptance of vaccines, the timing, and extent of customer re-engagement with its brands and, in general, what the short- and long-term impact on consumer discretionary spending may be on the Company and the restaurant industry as a whole, all of which are uncertain and cannot be predicted. The Company’s future results of operations and liquidity could be impacted adversely by future dine-in restrictions and the failure of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by it and its franchisees. As such, the extent to which the Company’s financial condition , liquidity, or results of operations may be negatively impacted by COVID-19 or other health emergencies or pandemics, resulting supply chain disruptions, inflationary pressures and general macroeconomic conditions remains highly uncertain.

Liquidity and Capital Resources

As of March 31, 2023 and June 30, 2022, the Company’s principal sources of liquidity were cash and cash equivalents of $27.0 and $3.0, respectively, which were held for working capital purposes.

Since inception, the Company has financed its operations primarily through financing transactions such as the issuance of convertible promissory notes and loans, and sales of convertible preferred stock. The Company has incurred recurring operating losses since its inception, including operating losses of $42.3 million and $21.6 million for the nine months ended March 31, 2023 and 2022,

respectively. As of March 31, 2023 and June 30, 2022, respectively, the Company had an accumulated deficit of $198.7 million and $200.8 million and the Company expects to generate operating and net losses for the near term. Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, including timing of cash collections from customers. While the Company received net cash of $49.8 million from the completion of the Merger and raised net cash proceeds of $13.7 million from the issuance of new debt and payment of certain legacy debt obligations, additional capital infusion will be necessary in order to fund currently anticipated expenditures, and to meet the Company’s obligations as they come due. The Company’s future capital requirements will depend on many factors, including the revenue growth rate, subscription renewal activity, billing frequency, the success of future product development, and the timing and extent of spending to support further sales and marketing and research and development efforts.

The Company intends to secure additional fundings from either public or private financing sources, and these plans for additional financings are intended to mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of management’s control, the Company cannot ensure they will be effectively implemented. In the event that additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital when desired, its business, results of operations, and financial condition would be materially and adversely affected. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. The Company’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Concentrations of Risks, Significant Customers and Investments

The Company’s financial instruments are exposed to concentrations of credit risk and consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high-quality financial institutions with investment-grade ratings. In the event of a failure of any financial institutions where the Company maintains deposits, it may lose timely access to its funds and incur losses to the extent its deposits exceed amounts insured by the Federal Deposit Insurance Corporation, as described below.

The following three largest restaurant logos (including, as applicable, the franchisees of such restaurants aggregated as a single customer for reporting purposes) accounted for more than 10% of revenues:


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Customer A	62	%	51	%	61	%	51	%
Customer B	16	%	26	%	21	%	26	%
Customer C	18	%	14	%	15	%	16	%
	96	%	91	%	97	%	93	%

The following restaurant logos accounted for more than 10% of accounts receivable:


	As of March 31,		As of June 30,
	2023		2022
Customer A	39	%	31	%
Customer B	20	%	41	%
Customer D	27	%	11	%
	86	%	83	%

*Customer C represents less than 10% of accounts receivable and therefore was omitted from the above schedule.

The Company also is exposed to vendor concentration risk as it supplies tablets from one vendor and currently source some hardware and software components used in the AI Platform from one vendor. The Company’s operating results could be adversely affected should any of the following occur: the vendor used to supply tablets increases their prices or either vendor incurs disruptions in its supply of goods or services.

Financial Institutions

Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash and cash equivalents on deposit with financial institutions, the balances of which frequently exceed federally insured limits. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. If any of the financial institutions with whom we do business were to be placed into receivership, we may be unable to access to the cash we have on deposit with such institutions. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected. The Company has $26.5 million in deposits in excess of the FDIC limits at March 31, 2023.

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Co-CODMs are the Chief Executive Officer and the Chief Financial Officer, who review financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company’s operations constitute a single operating segment and one reportable segment.

The Company has operations in the United States and Canada. The Company earns primarily all of its revenue in the United States and all of its long-lived assets are held in the United States.

Investment in non-affiliate

Investments in non-affiliates include equity security investments in third party entities without a readily determinable fair value in which the Company’s influence is deemed non-significant. Investments in non-affiliates are recorded using the measurement alternative for investments without readily determinable fair values, whereby the investment is measured at cost less any impairment recorded or observable price changes. Any impairments or observable price changes are reported in other income, net in the condensed consolidated statements of operations and comprehensive income (loss).

Leases

The Company leases real estate facilities under a non-cancelable operating lease with remaining lease terms of six months to three years. The Company determines if an arrangement contains a lease at inception based on whether there is an identified property or equipment and whether the Company controls the use of the identified asset throughout the period of use.

The Company adopted ASU No. 2016-02, Leases (Topic 842) on July 1, 2022, using the modified retrospective approach

Upon adoption the Company recorded a right of use asset (“ROU”) and an operating lease liabilities. The operating lease ROU asset represents the Company’s right to use the underlying asset for the lease term and the lease liability represents the Company’s obligation to make lease payments arising from the lease.

The operating lease liability is measured and recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating lease does not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for borrowings with a similar term.

The Company’s operating lease ROU asset is measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred, and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company does not allocate consideration between lease and non-lease components. The Company’s lease agreement contains variable costs such as common area maintenance, operating expenses, or other costs. Variable lease payments are recognized in the period in which the obligation for those payments are incurred. In addition, the Company does not recognize ROU assets or lease liabilities for leases with a term of twelve months or less of all asset classes; lease expense from these leases are recognized on a straight-line basis over the lease term.

Revenue Recognition

During the three and nine months ended March 31, 2023 and 2022, the Company derived its revenues from two revenue streams: (1) sales and leases of the Presto Touch and AI Platform products (“Platform revenue”), which includes hardware, hardware accessories, software and customer support and maintenance, and (2) Premium Content (gaming) and other revenue, which includes professional services (“Transaction revenue”).

Platform Revenue

The platform revenue stream is generated from fees charged to customers for access to the Company’s Presto Touch, which is recognized ratably. Part of the total contract value is due upon execution of the contract, and the remainder is due when the customer goes live. The contracts with customers are generally for a term ranging from 12 to 48 months. Amounts invoiced in excess of revenue recognized are recorded as deferred revenue. Revenue generated from the AI Platform (previously Voice and Vision) was not material for the three and nine months ended March 31, 2023 and 2022. Such revenue generated from the AI Platform is inclusive of contra-revenue related to the fair value of the warrant treated as a reduction to the transaction price of an AI Platform customer of $0.5 million and $1.1 million for the three and nine months ended March 31, 2023, respectively. For further details of the terms of the warrant, refer to Note 10.

The Company also maintains arrangements with certain customers whereby the Company leases the Presto Touch to its customer. Revenue associated with the lease is recognized on a straight-line basis as platform revenue over the lease term in the condensed consolidated statements of operations and comprehensive loss.

Transaction Revenue

Transaction revenue consists of a single performance obligation recognized at a point in time when the content is delivered and used. Transaction revenue is recognized on a gross basis as the Company is the principal in the relationship and the restaurant acts as a sales agent between the Company and the diner to upsell premium content purchases during the dining experience. The Company is the principal as the Company is the primary obligor responsible for fulfillment, controls the gaming license and its accessibility and has influence in establishing the price charged to the diner. The portion of gaming service collections withheld by the restaurant for sales commission are recorded to transaction cost of revenues.

The Company determines revenue recognition through the following steps:

Identification of the contract, or contracts, with a customer — the Company enters into a master sales agreement (“MSA”) with the customer which is signed by both parties. The rights and obligations are outlined in the MSA and payment terms are clearly defined. The Company then enters into a license agreement, typically with each franchisee, which outlines the specified goods and services to be provided. The Company may also enter into separate gaming agreements with diners, whereby the customer agrees to pay for use of the premium content. Each MSA, in conjunction with a license agreement, and each gaming agreement, has commercial substance, whereby the Company is to provide products and services in exchange for payment, and collectability is probable.

Identification of the performance obligations in the contract — The Company’s contracts with customers include promises to transfer multiple goods and services. For all arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In the Company’s assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract.

The Company identified the following performance obligations: for the MSAs and license agreements, 1) sales or leases of hardware, software-as-a-service (“Saas”) and maintenance as one combined performance obligation (“Presto Touch”) and for gaming agreements, 2) premium content, or gaming. Professional services were insignificant during the three and nine months ended March 31, 2023 and 2022.

The Presto Touch is considered a single performance obligation because each element of the Presto Touch is interdependent and cannot function independently. The software and hardware for the Presto Touch represent one combined output and the customer cannot benefit from the use of one element without the other.

When the Company enters into gaming agreements, the Company’s Presto Touch includes the capability of providing entertainment services, designed (either on its own or through other subcontractors) and provided by the Company via internet, that can be purchased by diners. The games are only accessible over the internet, and upon the diner making the decision to pay for the content, the diner receives the right to access the game on the Presto Touch. Gaming fees are usage based through the diner’s use of the device and stipulated in a separate contract with the diner. Any fees that are incurred are collected by the restaurant as part of the normal payment for the dining check from the diner and remitted back to the Company, net of commissions paid to the restaurant as the sales agent. Premium content revenue, or gaming revenue, is therefore one performance obligation.

Determination of the transaction price — the Company’s MSAs stipulate the terms and conditions, and separate license agreements dictate the transaction price, and typically outlines as a price per store location or price per number of Presto Touches used. The transaction price is generally a fixed fee, with a portion due upfront upon signing of the contract and the remainder due upon installation of the Presto Touch. The transaction price for transaction revenue is a fixed fee charged per game. The Company occasionally provides consideration payable to a customer, which is recorded as a capitalized asset upon payment and included as part of deferred costs and amortized as contra-revenue over the expected customer life.

Allocation of the transaction price to the performance obligations in the contract — As the Presto Touch is one combined performance obligation, no reallocation of the contract price is required. The Company’s premium content contract is comprised of one performance obligation and does not require reallocation of the contract price.

Recognition of revenue when, or as, the Company satisfies a performance obligation — As the customer simultaneously receives and consumes the benefits provided by the Company through continuous access to its SaaS platform, revenue from the Presto Touch is satisfied ratably over the contract period as the service is provided, commencing when the subscription service is made available to the customer. Transaction revenue does not meet the criteria for ratable recognition and is recognized at a point in time when the gaming service is provided.

Net Income (Loss) Per Share

The Company computes net income (loss) per share, or earnings per share (“EPS”), following ASC Topic 260, Earnings per Share. Basic EPS is measured as the income or loss available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive impacts of potentially convertible securities are calculated using the if-converted method; the potentially dilutive effect of options or warrants are computed using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from diluted EPS calculation.

Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted

Recently Adopted Accounting Standards

In February 2016, the FASB issued Topic 842 which generally requires companies to recognize operating and financing lease liabilities and corresponding ROU assets on the balance sheet. The Company adopted the standard as of July 1, 2022, using the modified retrospective approach and has elected to use the optional transition method which allows the Company to apply the guidance of ASC Topic 840, Leases, including disclosure requirements, in the comparative periods presented. The Company elected certain practical expedients, including the option not to apply lease recognition for short-term leases; an election to not separate lease from non-lease components; and a package of practical expedients such that, upon the initial adoption of Topic 842, the Company did not reassess whether expired or existing contracts contain leases, nor did the Company reassess the lease classification for expired or existing leases. The Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of ROU assets.

The adoption of the new standard resulted in recognition of an operating lease ROU asset and operating lease liability of $0.5 million and $0.5 million, respectively, as of July 1, 2022. There was no cumulative impact of transition to retained earnings as of the

adoption date. The standard did not impact the accompanying condensed consolidated statements of operations and comprehensive income (loss) and the accompanying condensed consolidated statements of cash flows.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in ASC 740, Income Taxes in order to reduce cost and complexity of its application. The standard is effective for the Company beginning in fiscal year 2023 and interim periods in the following years. Most amendments within this guidance are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted this guidance on July 1, 2022 and it did not have a material impact at the time of adoption on our condensed consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. The standard is effective for the Company beginning in fiscal year 2023 and interim periods within that year. We adopted this guidance on July 1, 2022 and it did not have a material impact at the time of adoption on our condensed consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Topic 326: Credit Losses Measurement of Credit Losses on Financial Instruments (Topic 326), which requires an entity to utilize a new impairment model known as the current expected credit loss (CECL) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities. Entities will apply the standard’s provisions as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The FASB subsequently issued ASU 2018-19, ASU 2019-04, and ASU 2019-10, which clarified the implementation guidance and effective date of Topic 326. Topic 326 is effective for the Company beginning fiscal year 2024. The Company is currently evaluating the impact of the adoption of this standard on the Company’s condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020 06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity, which simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. The standard also simplifies guidance in Topic 815-40 by removing certain criteria that must be satisfied in order to classify a contract as equity and revises the guidance on calculating earnings per share, requiring the use of the if-converted method for all convertible instruments. The standard is effective for the Company beginning in fiscal year 2025. The Company is currently evaluating the impact of the adoption of this standard on the Company’s condensed consolidated financial statements.

In March 2020 with an update in January 2021, the FASB issued ASU 2020 04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and ASU 2021 01, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for applying current U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance can be adopted immediately and is applicable to contracts entered into on or before December 31, 2022. The Company is currently evaluating its contracts that reference LIBOR and the potential effects of adopting this new guidance but does not expect this standard to have a material effect. The Company does not intend to adopt the standard early

Stockholders' Deficit - Common stock reserved (Details)	Mar. 31, 2023 shares
Stockholders' Deficit
Common stock reserved for future issuance	52,462,974
Equity awards available for future grants
Stockholders' Deficit
Common stock reserved for future issuance	4,617,400
Common stock options and RSUs
Stockholders' Deficit
Common stock reserved for future issuance	14,390,934
Earnout Shares
Stockholders' Deficit
Common stock reserved for future issuance	14,639,187
Warrants to purchase common stock
Stockholders' Deficit
Common stock reserved for future issuance	18,815,453

Summary of Business and Significant Accounting Policies (Tables)

9 Months Ended

Mar. 31, 2023

Summary of Business and Significant Accounting Policies

Schedule of Trust and PIPE net of transaction costs and other payments


	Net Cash
Cash—Ventoux Trust and working capital cash	$	9,584
Cash—PIPE investment		55,400
Less: transaction costs and other payments⁽¹⁾		(15,144)
Total	$	49,840

(1)

Schedule of percentage of concentration risk


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Customer A	62	%	51	%	61	%	51	%
Customer B	16	%	26	%	21	%	26	%
Customer C	18	%	14	%	15	%	16	%
	96	%	91	%	97	%	93	%


	As of March 31,		As of June 30,
	2023		2022
Customer A	39	%	31	%
Customer B	20	%	41	%
Customer D	27	%	11	%
	86	%	83	%

*Customer C represents less than 10% of accounts receivable and therefore was omitted from the above schedule.

Warrants (Tables)

9 Months Ended

Mar. 31, 2023

Warrants

Schedule of warrants on common stock outstanding

The following tables represent the warrants on common stock outstanding:


	As of March 31, 2023
	Expiration date	Exercise Price		Number of Shares		Term (years)	Classification
Common	[C]	$	7.80	12,811		7	Equity
Common	[C]	$	7.80	41,636		7	Equity
Common	[C]	$	7.80	16,654		7	Equity
Common	March 2026	$	9.25	84,461		6.5	Liability
Common	June 2028	$	0.01	404,961	^[E]	6.7	Equity
Common	[F]	$	0.37	178,395		10	Equity
Common	March 2026	$	0.37	57,952		10	Liability
Common	July 2027	$	9.25	86,532		6	Liability
Common	July 2027	$	0.37	402,679		6	Equity
Common	[A]	$	8.16	182,158		[A]	Equity
Common	January 2031	$	8.16	27,577		10	Liability
Common	[B]	$	6.53	294,725	^[B]	10	Equity
Common	March 2032	$	8.16	374,912		10	Liability
Common	September 2027	$	11.50	1,500,000		5	Equity
Common	September 2027	$	8.21	8,625,000		5	Equity
Common	September 2027	$	11.50	6,125,000		5	Liability
Common	March 2028	$	0.01	400,000		5	Liability
Total				18,815,453


	As of June 30, 2022
	Expiration date	Exercise Price		Number of Shares		Term (years)	Classification
Common	[C]	$	7.80	12,811		7	Equity
Common	[C]	$	7.80	41,636		7	Equity
Common	[C]	$	7.80	16,654		7	Equity
Common	March 2026	$	9.25	84,461		10	Liability
Common	October 2027	$	0.37	141,970		10	Equity
Common	[D]	$	0.01	2,575,190		[D]	Liability
Common	June 2028	$	0.01	404,961	^[E]	6.7	Equity
Common	March 2026	$	0.37	178,395		10	Equity
Common	March 2026	$	0.37	57,952		10	Liability
Common	July 2027	$	9.25	86,532		10	Liability
Common	July 2027	$	7.80	402,679		10	Liability
Common	[A]	$	8.16	182,158		[A]	Equity
Common	January 2031	$	8.16	27,577		10	Liability
Common	March 2031	$	6.53	294,725	^[B]	10	Liability
Common	March 2032	$	8.16	205,602		10	Liability
Total				4,713,303

[A] —

Warrants will expire at the earliest of a consummation of an acquisition or one year after the effective date of a registration statement for an initial public offering.

[B] —

Warrant has the option of being converted into a variable number of shares based on the class of shares that the warrant is exercised at the discretion of the warrant holder. The Company notes the most likely conversion is to Common Stock and have calculated the number of shares as the quotient of the aggregate warrant coverage dollar amount value of $1.9 million over the exercise price of $6.53 per share as of March 31, 2023 and June 30, 2022. Warrant will also expire at the earliest of 10 years from the issuance date of March 5, 2021 or a consummation of an acquisition in which the sole consideration is cash or marketable securities.

[C] —

Warrants expire 5 years from the effective date of a registration statement for an initial public offering should one occur.

[D] —

Warrants are exercisable after the conversion of the related convertible notes and will expire, if not exercised, at the earliest of a public liquidity event, the effective date of a registration statement for an initial public offering and 5 years from the issuance date. Warrants are exercisable for a variable number of shares dependent on the fully diluted capitalization and are estimated at each reporting date. The warrants were converted into Common Stock on September 21, 2022 in conjunction with the Merger.

[E] —

Warrants were issued in October 2021 and are exercisable contingent on rollouts of the Company’s products and services to the warrant holder. Number of shares represents the maximum number of shares to be issued to the warrant holder of 404,961, of which 144,377 and 321,943 remained contingent as of March 31, 2023 and June 30, 2022, respectively. Expense related to the cost of these warrants being recognized as a reduction to revenue in the Company’s condensed consolidated statements of operations and comprehensive income (loss).

[F] —

Warrants will expire at the earliest of 10 years from the issuance date of March 11, 2016, a consummation of an acquisition or one year after the effective date of a registration statement for an initial public offering.

Leases (Details) - USD ($)	3 Months Ended	9 Months Ended
Leases (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2023	Jun. 30, 2022
Leases
Operating lease right of use asset	$ 600,000	$ 600,000	$ 0
Operating lease right of use asset , balance sheet location	Other long-term assets	Other long-term assets
Operating lease liability	$ 570,000	$ 570,000	$ 0
Operating lease liabilities, current	$ 340,000	$ 340,000
Operating lease liabilities, current, balance sheet location	Accrued liabilities	Accrued liabilities
Operating lease liabilities, Non-current	$ 230,000	$ 230,000
Operating lease liabilities, Non-current, balance sheet location	Other long-term liabilities	Other long-term liabilities
Operating lease costs	$ 100,000	$ 300,000
Variable operating lease costs	$ 100,000	$ 100,000

Debt Arrangements - Future principal payments on debt (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Future principal payments on debt
2025	$ 55,000
Total future payments on debt obligations	$ 55,000

Stock-Based Compensation - Equity incentive plan RSU activity (Details)	9 Months Ended
	Mar. 31, 2023 $ / shares shares
Number of Awards Outstanding
Number of Awards Outstanding, Beginning unvested balance \| shares	350,426
Number of Awards Outstanding, Granted \| shares	4,758,115
Number of Awards Outstanding, Vested \| shares	(798,239)
Number of Awards Outstanding, Forfeited \| shares	(372,215)
Number of Awards Outstanding, Ending unvested balance \| shares	3,938,087
Weighted- Average Grant Date Fair Value
Weighted- Average Grant Date Fair Value, Beginning unvested balance \| $ / shares	$ 7.98
Weighted- Average Grant Date Fair Value, Granted \| $ / shares	4.80
Weighted- Average Grant Date Fair Value, Vested \| $ / shares	4.28
Weighted- Average Grant Date Fair Value, Forfeited \| $ / shares	4.32
Weighted- Average Grant Date Fair Value, Ending unvested balance \| $ / shares	$ 5.24
Previously Reported
Number of Awards Outstanding
Number of Awards Outstanding, Beginning unvested balance \| shares	432,666
Weighted- Average Grant Date Fair Value
Weighted- Average Grant Date Fair Value, Beginning unvested balance \| $ / shares	$ 6.46
Revision of Prior Period, Adjustment
Number of Awards Outstanding
Number of Awards Outstanding, Beginning unvested balance \| shares	82,240
Weighted- Average Grant Date Fair Value
Weighted- Average Grant Date Fair Value, Beginning unvested balance \| $ / shares	$ 1.52

Debt Arrangements - Credit Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Sep. 21, 2022	Mar. 31, 2023	Mar. 31, 2023	Mar. 31, 2022	Sep. 22, 2022	Jun. 30, 2022	Oct. 29, 2021
Debt Instrument [Line Items]
Warrants to purchase shares of common stock		18,815,453	18,815,453			4,713,303	404,961
Number of shares warrants can be converted to					18,415,453
Common stock par value		$ 0.0001	$ 0.0001		$ 0.0001	$ 0.0001
Exercise Price		$ 6.53	$ 6.53			$ 6.53
Warrants issued with Credit Agreement			$ 2,076
Amortization of debt discount and debt issuance costs			2,433	$ 405
Total debt		$ 53,979	53,979			$ 117,106
Credit Agreement
Debt Instrument [Line Items]
Term loans principal outstanding						0
Credit Agreement
Debt Instrument [Line Items]
Debt covenant net leverage ratio	1.20
Amount of cash on top of prior six months of operating expenses held in a separate account, per the cash covenant	$ 1,100
Warrants to purchase shares of common stock	1,500,000
Warrants issued with Credit Agreement	$ 2,100
Debt conversion, shares issued	600,000
Debt issuance costs	$ 1,000
Discount	$ 2,800
Payment in kind interest		2,200	4,600
Amortization of debt discount		$ 600	$ 1,200
The amount the interest rate could increase due to various provisions of the credit agreement	5.00%
Term loans
Debt Instrument [Line Items]
Debt principal amount	$ 55,000
Debt interest rate	15.00%
Number of shares warrants can be converted to		400,000	400,000
Exercise Price		$ 0.01	$ 0.01
Debt issuance costs		$ 200	$ 200
Discount		800	800
Term loans, noncurrent		54,000	54,000
Term loans principal outstanding		55,000	55,000
Payment in kind interest accrual net		4,600	4,600
Unamortized debt issuance expense		5,500	5,500
Total debt		$ 53,979	$ 53,979			$ 25,443
Term loans \| Credit Agreement
Debt Instrument [Line Items]
Debt term	18 months
Term loans \| First nine months
Debt Instrument [Line Items]
Percentage of capitalized interest payment	100.00%
Term loans \| After nine months to 18 months
Debt Instrument [Line Items]
Percentage of capitalized interest payment	50.00%

Summary of Business and Significant Accounting Policies - Earnout Arrangement (Details) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 21, 2022 D $ / shares shares	Mar. 31, 2023 USD ($) shares	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($) shares	Mar. 31, 2023 USD ($) shares	Mar. 31, 2022 USD ($)
Summary of Business and Significant Accounting Policies
Shares received \| shares	15,000,000
Grant date fair value of each earnout share \| $ / shares	$ 3.17
Earn out shares to common stock and RSU \| shares	4,771,116
Earn out shares \| shares	15,000,000
Common stock reserved for future issuance \| shares		52,462,974		52,462,974	52,462,974
Compensation expense		$ 2,792	$ 430		$ 5,794	$ 1,378
Unrecognized stock-based compensation		11,300		$ 11,300	$ 11,300
Weighted average period of recognition					1 year 6 months
Number of shares forfeited \| shares					360,813
Other long-term liabilities		426		426	$ 426
Third anniversary
Summary of Business and Significant Accounting Policies
Common stock shares issued (in Shares) \| shares	7,500,000
Number of trading days \| D	20
Number of consecutive trading days \| D	30
Third anniversary \| Minimum
Summary of Business and Significant Accounting Policies
Stock price \| $ / shares	$ 12.50
Fifth anniversary
Summary of Business and Significant Accounting Policies
Common stock shares issued (in Shares) \| shares	7,500,000
Number of trading days \| D	20
Number of consecutive trading days \| D	30
Fifth anniversary \| Minimum
Summary of Business and Significant Accounting Policies
Stock price \| $ / shares	$ 15.00
Earnout Shares [Member]
Summary of Business and Significant Accounting Policies
Compensation expense		1,600	0	3,500	3,500	0
Options
Summary of Business and Significant Accounting Policies
Unrecognized stock-based compensation		2,000		2,000	$ 2,000
Weighted average period of recognition					3 years 2 months 1 day
Performance Shares
Summary of Business and Significant Accounting Policies
Compensation expense		300			$ 400
General and administrative
Summary of Business and Significant Accounting Policies
Compensation expense		1,933	221		4,474	706
General and administrative \| Earnout Shares [Member]
Summary of Business and Significant Accounting Policies
Compensation expense		1,100		2,300
Research and development
Summary of Business and Significant Accounting Policies
Compensation expense		682	99		959	349
Research and development \| Earnout Shares [Member]
Summary of Business and Significant Accounting Policies
Compensation expense		400		1,000
Sales and marketing
Summary of Business and Significant Accounting Policies
Compensation expense		177	$ 110		$ 361	$ 323
Sales and marketing \| Earnout Shares [Member]
Summary of Business and Significant Accounting Policies
Compensation expense		$ 68		$ 200

Summary of Business and Significant Accounting Policies - Trust Proceeds and PIPE investment (Details) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
	Sep. 22, 2022	Sep. 21, 2022	Mar. 31, 2023	Mar. 31, 2023	Dec. 30, 2020
Summary of Business and Significant Accounting Policies
Cash-PIPE investment	$ 55,400
Net cash received from completion of merger				$ 49,800
Amount placed in trust account					$ 151,500
Unredeemed Funds		$ 9,500
Issuance of common stock			$ 100	1,100
Repayment of loans		1,900
Transaction costs related to merger		7,800
Other costs		500
Exchange ratio	0.8099%
Private Placement
Summary of Business and Significant Accounting Policies
Cash-Ventoux Trust and working capital cash		9,584
Cash-PIPE investment		55,400
Less: transaction costs and other payments		(15,144)
Net cash received from completion of merger		$ 49,840
Issuance of common stock (in shares)		7,133,687
Issuance of common stock		$ 55,400
Legacy Presto
Summary of Business and Significant Accounting Policies
Net cash received from completion of merger		$ 49,800
Issuance of common stock (in shares)		260,000
Transaction costs related to merger		$ 2,100
Unpaid transaction costs			$ 10,400	$ 10,400
Payment of transaction cost		4,900
Merger related transaction cost payable		$ 3,200
Exchange ratio		0.8099%

Consolidated Balance Sheet Components (Tables)

9 Months Ended

Mar. 31, 2023

Consolidated Balance Sheet Components

Schedule of inventories


	As of		As of
	March 31,		June 30,
	2023		2022
Finished goods	$	395	$	869
Total inventories	$	395	$	869

Schedule of property and equipment


	As of		As of
	March 31,		June 30,
	2023		2022
Tablets	$	5,758	$	5,663
Computer equipment		625		519
Software		4		562
Total property and equipment		6,387		6,744
Less: accumulated depreciation		(5,172)		(4,769)
Property and equipment, net	$	1,215	$	1,975

Schedule of intangible assets


	As of		As of
	March 31,		June 30,
	2023		2022
Capitalized software	$	7,574	$	3,135
Developed technology		1,300		1,300
Domain name		151		151
Intangible assets, gross		9,025		4,586
Less: accumulated amortization		(589)		(360)
Intangible assets, net	$	8,436	$	4,226


		Years
Capitalized software		4
Developed technology		4
Domain Name		15

Schedule of future amortization expense


Remainder of 2023	$	84
2024		335
2025		335
2026		308
2027		10
Thereafter		56
Total	$	1,128

Schedule of accrued liabilities


	As of		As of
	March 31,		June 30,
	2023		2022
Accrued expenses	$	585	$	2,176
Accrued vacation		954		874
Accrued payroll		672		1,686
Operating lease liability, current		340		—
Accrued interest		371		402
Accrued repair cost (Refer to Note 8)		311		724
Accrued sales tax		114		86
Accrued other		805		267
Total accrued liabilities	$	4,152	$	6,215

Schedule of other long-term liabilities


	As of		As of
	March 31,		June 30,
	2023		2022
Unvested founder shares liability	$	196	$	—
Operating lease liability, net of current portion		230		—
Total other long-term liabilities	$	426	$	—

Stock-Based Compensation - Employee Stock Purchase Plan (Details) - ESPP	Sep. 21, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Exercise price percentage	15.00%
Employee stock offering period	6 months
Percentage of common stock on first day	85.00%
Percentage of common stock on last day	85.00%

Revenue - Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue
Deferred revenue, beginning of year	$ 10,769	$ 25,623
Additions	2,060	2,355
Revenue recognized	(11,014)
Revenue recognized		(13,271)
Deferred revenue, end of period	$ 1,815	$ 14,707

Stockholders' Deficit (Tables)

9 Months Ended

Mar. 31, 2023

Stockholders' Deficit

Schedule of common stock reserved for future issuance


		As of
		March 31,
		2023
Warrants to purchase common stock		18,815,453
Common stock options and RSUs		14,390,934
Equity awards available for future grants		4,617,400
Earnout shares		14,639,187
		52,462,974

Summary of Business and Significant Accounting Policies - Segment Information (Details)	9 Months Ended
	Mar. 31, 2023 segment
Summary of Business and Significant Accounting Policies
Number of reportable segments	1

Summary of Business and Significant Accounting Policies - Emerging Growth Company Status (Details) $ in Billions	Mar. 31, 2023 USD ($)
Summary of Business and Significant Accounting Policies
Total annual gross revenue	$ 1.1
Non-convertible debt	$ 1.0

Net Income (Loss) Per Share

9 Months Ended

Mar. 31, 2023

Net Income (Loss) Per Share

Net Income (Loss) Per Share

13. Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders for the periods presented:


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Numerator:
Net income (loss) attributable to common stockholders, basic and diluted	$	(15,680)	$	8,954	$	2,080	$	(34,062)

Less: Change in fair value of convertible promissory notes		—		(16,307)		—		—
Net income (loss) attributable to common stockholders, diluted	$	(15,680)	$	(7,353)	$	2,080	$	(34,062)

Denominator:
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic		51,453,368		27,316,602		44,173,570		27,213,403
Add: Weighted average dilutive effect of stock options, RSUs and warrants		—		—		10,366,225		—
Add: Weighted average dilutive effect of convertible promissory notes		—		4,522,105		—		—
Weighted average shares outstanding - diluted		51,453,368		31,838,707		54,539,795		27,213,403
Net income (loss) per share attributable to common stockholders, basic	$	(0.30)	$	0.33	$	0.05	$	(1.25)
Net income (loss) per share attributable to common stockholders, diluted	$	(0.30)	$	(0.23)	$	0.04	$	(1.25)

The potential weighted average shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:


	Three months ended March 31,		Nine Months Ended March 31,
	2023	2022	2023	2022
Stock options and RSUs	13,856,065	11,848,316	356,342	11,903,763
Convertible notes	—	-	—	4,535,520
Common stock warrants	18,154,571	4,582,204	12,509,788	4,372,633
Non-voting common stock warrants	—	—	—	—
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share	32,010,636	16,430,520	12,866,130	20,811,916

Warrants to purchase a weighted average of 12,509,788 shares of common stock were outstanding during the nine months ended March 31, 2023 but were not included in the computation of diluted EPS because the warrants’ exercise prices were greater than the average market price of the common shares.

The Company excluded a weighted average of 300,376 options for the three and nine months ended March 31, 2022. These equity awards were excluded from the calculation of diluted EPS as they are subject to performance conditions for which the necessary conditions were not been satisfied.

The Company excluded a weighted average of 14,819,594 and 10,494,505 earnout shares from the calculation of diluted EPS for the three and nine months ended March 31, 2023 as they are subject to market conditions for which the necessary conditions have not been satisfied.

Consolidated Balance Sheet Components - Intangible Assets, net (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2022	Mar. 31, 2023	Jun. 30, 2022
Consolidated Balance Sheet Components
Intangible assets, gross		$ 9,025	$ 4,586
Less: accumulated amortization		(589)	(360)
Total		8,436	4,226
Capitalized software
Consolidated Balance Sheet Components
Intangible assets, gross		7,574	3,135
Impairment	$ 100
Developed technology
Consolidated Balance Sheet Components
Intangible assets, gross		1,300	1,300
Domain name
Consolidated Balance Sheet Components
Intangible assets, gross		$ 151	$ 151

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 26,978	$ 3,017
Accounts receivable, net of allowance for doubtful accounts of $135 and $353, respectively	2,207	1,518
Inventories	395	869
Deferred costs, current	3,772	8,443
Prepaid expenses and other current assets	1,851	707
Total current assets	35,203	14,554
Deferred costs, net of current portion	22	2,842
Investment in non-affiliate	2,000
Deferred transaction costs		5,765
Property and equipment, net	1,215	1,975
Intangible assets, net	8,436	4,226
Goodwill	1,156	1,156
Other long-term assets	578	18
Total assets	48,610	30,536
Current liabilities:
Accounts payable	3,267	5,916
Accrued liabilities	4,152	6,215
Financing obligations, current	3,720	8,840
Term loans, current	53,979	25,443
Convertible promissory notes and embedded warrants, current		89,663
Deferred revenue, current	1,551	10,532
Total current liabilities	66,669	146,609
Financing obligations, net of current	1,860
PPP loans		2,000
Warrant liabilities	1,623	4,149
Deferred revenue, net of current portion	264	237
Other long-term liabilities	426
Total liabilities	70,842	152,995
Commitments and Contingencies (Refer to Note 8)
Stockholders' deficit:
Preferred stock, $0.0001 par value-1,500,000 shares authorized as of March 31, 2023 and June 30, 2022, respectively; no shares issued and outstanding as of March 31, 2023 and June 30, 2022 respectively
Common stock, $0.0001 par value-180,000,000 shares authorized as of March 31, 2023 and June 30, 2022, and 51,921,941 and 27,974,439 shares issued and outstanding as of March 31, 2023 and June 30, 2022, respectively	5	3
Additional paid-in capital	176,466	78,321
Accumulated deficit	(198,703)	(200,783)
Total stockholders' deficit	(22,232)	(122,459)
Total liabilities and stockholders' deficit	$ 48,610	$ 30,536

Financing Obligations (Tables)

9 Months Ended

Mar. 31, 2023

Financing Obligations

Schedule of financing obligations net of discounts


	As of March 31,		As of June 30,
	2023		2022
Receivable financing facility	$	4,314	$	5,911
Equipment financing facility		1,266		2,929
Total financing obligations		5,580		8,840
Less: financing obligations, current		(3,720)		(8,840)
Total financing obligations, noncurrent	$	1,860	$	—

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash Flows from Operating Activities
Net income (loss)	$ 2,080	$ (34,062)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation, amortization and impairment	1,262	1,524
Stock-based compensation	5,794	1,384
Earnout share stock-based compensation	3,478
Contra-revenue associated with warrant agreement (Refer to Note 2)	1,073	0
Noncash expense attributable to fair value liabilities assumed in Merger	34
Change in fair value of liability classified warrants	(12,555)	1,066
Change in fair value of warrants and convertible promissory notes	(48,271)	10,602
Amortization of debt discount and debt issuance costs	2,433	405
Loss on extinguishment of debt and financing obligations	8,095
Paid-in-kind interest expense	4,604	15
Share and warrant cost on termination of convertible note agreement	2,412
Forgiveness of PPP Loan	(2,000)	(2,599)
Change in fair value of unvested founder shares liability	(1,392)
Noncash lease expense	264
Loss on disposal off property and equipment	16
Changes in operating assets and liabilities:
Accounts receivable, net	(689)	(524)
Inventories	474	(905)
Deferred costs	7,769	8,978
Prepaid expenses and other current assets	(742)	538
Other long-term assets		(80)
Accounts payable	1,480	(4,297)
Vendor financing facility		(6,792)
Accrued liabilities	(2,137)	(2,551)
Deferred revenue	(8,954)	(10,917)
Other long-term liabilities	(247)	(200)
Net cash used in operating activities	(35,719)	(38,415)
Cash Flows from Investing Activities
Purchase of property and equipment	(229)	(214)
Payments relating to capitalized software	(3,584)	(1,249)
Investment in non-affiliate	(2,000)
Net cash used in investing activities	(5,813)	(1,463)
Cash Flows from Financing Activities
Proceeds from the exercise of common stock options	280	104
Proceeds from the issuance of term loans	60,250	12,600
Payment of debt issuance costs	(1,294)	(1,287)
Repayment of term loans	(32,980)
Payment of penalties and other costs on extinguishment of debt	(6,144)
Proceeds from issuance of convertible promissory notes and embedded warrants		5,500
Principal payments of financing obligations	(3,669)	(2,009)
Proceeds from the issuance of common stock	1,100
Contributions from Merger and PIPE financing, net of transaction costs and other payments	49,840
Payments of deferred transaction costs	(1,890)	(1,541)
Net cash provided by financing activities	65,493	13,367
Net increase (decrease) in cash and cash equivalents	23,961	(26,511)
Cash and cash equivalents at beginning of period	3,017	36,909
Cash and cash equivalents at end of period	26,978	10,398
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Capitalization of stock-based compensation expense to capitalized software	916	9
Issuance of warrants (Refer to Note 2)	1,352	1,466
Capital contribution from shareholder in conjunction with Credit Agreement	2,779
Issuance of warrants in conjunction with Credit Agreement	2,705
Issuance of warrants in conjunction with Lago Term Loan	843
Convertible note conversion to common stock	41,392
Reclassification of warrants from liabilities to equity	830
Recognition of liability classified warrants upon Merger	9,388
Recognition of Unvested Founder Shares liability	1,588
Forgiveness of PPP Loan	2,000	2,599
Transaction costs recorded in accounts payable and accrued liabilities		5,584
Right of use asset in exchange for operating lease liability	$ 308
Cancellation of June 2021 Note and related accrued interest, with issuance of February 2022 Note		$ 20,663

Consolidated Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Consolidated Balance Sheet Components
Accrued expenses	$ 585	$ 2,176
Accrued vacation	954	874
Accrued payroll	672	1,686
Operating lease liability - current portion	340
Accrued interest	371	402
Accrued repair cost (Refer to Note 8)	311	724
Accrued sales tax	114	86
Accrued other	805	267
Total accrued liabilities	$ 4,152	$ 6,215

Consolidated Balance Sheet Components

9 Months Ended

Mar. 31, 2023

Consolidated Balance Sheet Components

Consolidated Balance Sheet Components

4. Consolidated Balance Sheet Components

Inventories

Inventories consisted of the following:


	As of		As of
	March 31,		June 30,
	2023		2022
Finished goods	$	395	$	869
Total inventories	$	395	$	869

Investments in Non-Affiliates

In December 2022, the Company entered into a simple agreement for future equity (SAFE) with a non-affiliated entity, with the Company making a $2.0 million investment in the entity. The non-affiliated entity is a closely held early stage technology company, focused on the research and development of voice-related AI products, which to date has been financed through equity and other SAFE investments. The Company’s investment was made to provide further financing to the non-affiliated entity’s research and development efforts. The investment does not provide for the voluntary right to redeem or automatic redemption on a stated date, nor does the Company have the right to voluntarily convert. Rather under a defined next financing, liquidity event, or dissolution conditions of the non-affiliated entity, the investment will either be converted into a future series of preferred stock of the issuer or may be redeemed for cash.

The Company has determined that the Company’s investment in the non-affiliate is an equity security, whereby such investment does not give the Company a controlling financial interest or significant influence over the investee. Further, the Company has determined that the Company’s investment in the non-affiliated entity represents an interest in a variable interest entity (“VIE”), for which the Company has determined it is not the primary beneficiary of such non-affiliated entity. Based on the Company’s knowledge and interaction with the non-affiliated entity, in the Company’s judgment, the activities that most significantly impact the non-affiliated entity’s economic performance are those related to the governance and management decisions regarding operations risk. The Company has determined that it does not have the power to direct such activities, because it has no participation on the board of directors of the VIE or through other ways to influence such activities. Accordingly, the Company has accounted for the investment as a financial instrument without a readily determinable fair value. Such investment is recorded using the measurement alternative for investments without readily determinable fair values, whereby the investment is measured at cost less any impairment recorded or adjustments for observable price changes. During the period ended March 31, 2023, no impairments or observable price changes were identified or recorded. The Company considers the cost of the investment to be the maximum exposure to loss as a result of its involvement with the non-affiliated entity.

Property and Equipment, net

Property and equipment, net consisted of the following:


	As of		As of
	March 31,		June 30,
	2023		2022
Tablets	$	5,758	$	5,663
Computer equipment		625		519
Software		4		562
Total property and equipment		6,387		6,744
Less: accumulated depreciation		(5,172)		(4,769)
Property and equipment, net	$	1,215	$	1,975

Depreciation expense was $0.4 million and $1.0 million for the three and nine months ended March 31, 2023, respectively, and $0.2 million and $1.2 million for the three and nine months ended March 31, 2022, respectively.

Intangible Assets, net

Intangible assets, net consisted of the following:


	As of		As of
	March 31,		June 30,
	2023		2022
Capitalized software	$	7,574	$	3,135
Developed technology		1,300		1,300
Domain name		151		151
Intangible assets, gross		9,025		4,586
Less: accumulated amortization		(589)		(360)
Intangible assets, net	$	8,436	$	4,226

Intangible assets have weighted-average amortization periods as follows:


		Years
Capitalized software		4
Developed technology		4
Domain Name		15

Amortization expense of intangible assets was $0.1 million and $0.3 million for the three and nine months ended March 31, 2023, respectively, and was less than $20 thousand and $70 thousand for the three and nine months ended March 31, 2022, respectively. Within capitalized software as of March 31, 2023 and June 30, 2022, $7.3 million and $2.8 million are in-process capitalized software costs, respectively, and accordingly, the amortization of such costs are excluded from the table below. During the nine months ended March 31, 2022, the Company recognized a loss on impairment of $0.1 million related to its capitalized software in cost of revenue in the Company’s condensed consolidated statement of operations and comprehensive loss.

Total future amortization expense for intangible assets was estimated as follows:


Remainder of 2023	$	84
2024		335
2025		335
2026		308
2027		10
Thereafter		56
Total	$	1,128

Accrued Liabilities

Accrued liabilities consisted of the following:


	As of		As of
	March 31,		June 30,
	2023		2022
Accrued expenses	$	585	$	2,176
Accrued vacation		954		874
Accrued payroll		672		1,686
Operating lease liability, current		340		—
Accrued interest		371		402
Accrued repair cost (Refer to Note 8)		311		724
Accrued sales tax		114		86
Accrued other		805		267
Total accrued liabilities	$	4,152	$	6,215

Other Long-term Liabilities

Other long-term liabilities consisted of the following:


	As of		As of
	March 31,		June 30,
	2023		2022
Unvested founder shares liability	$	196	$	—
Operating lease liability, net of current portion		230		—
Total other long-term liabilities	$	426	$	—

Stock-Based Compensation - Other Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended
	Sep. 21, 2022	Jun. 11, 2022	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Weighted average period of recognition					1 year 6 months
Grant date fair value					$ 4.80
Compensation expense			$ 2,792	$ 430	$ 5,794	$ 1,378
Unrecognized stock-based compensation			11,300		$ 11,300
CyborgOps
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock shares issued (in Shares)	475,638
Weighted average period of recognition					3 years 1 month 13 days
Grant date fair value	$ 8.75
Compensation expense			300		$ 800
Unrecognized stock-based compensation			$ 3,300		$ 3,300
Stock based compensation vesting period		4 years

Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net income (loss) attributable to common stockholders, basic and diluted	$ (15,680)	$ 8,954	$ 2,080	$ (34,062)
Less: Change in fair value of convertible promissory notes		(16,307)
Net income (loss) attributable to common stockholders, diluted	$ (15,680)	$ (7,353)	$ 2,080	$ (34,062)
Denominator:
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic	51,453,368	27,316,602	44,173,570	27,213,403
Add: Weighted average dilutive effect of stock options, RSUs and warrants			10,366,225
Add: Weighted average dilutive effect of convertible promissory notes		4,522,105
Weighted average shares outstanding - diluted	51,453,368	31,838,707	54,539,795	27,213,403
Net income (loss) per share attributable to common stockholders, basic	$ (0.30)	$ 0.33	$ 0.05	$ (1.25)
Net income (loss) per share attributable to common stockholders, diluted	$ (0.30)	$ (0.23)	$ 0.04	$ (1.25)

Leases - Future minimum lease payments - ASC 840 (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2023	Jun. 30, 2022
Future minimum lease payments under ASC 840
2023			$ 273
2024			218
2025			127
Total			$ 618
Rent expense
Rent expense	$ 100	$ 300

Stock-Based Compensation - Equity incentive plan activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares	Jun. 30, 2022 $ / shares shares
Number of Options Outstanding
Number of Options Outstanding, Beginning balance \| shares	11,213,615
Number of Options Outstanding, Exercised \| shares	(511,670)
Number of Options Outstanding, Forfeited and expired \| shares	(253,625)
Number of Options Outstanding, Ending balance \| shares	10,448,320	11,213,615
Number of Options Outstanding, Vested and expected to vest \| shares	10,448,320
Number of Options Outstanding, Exercisable \| shares	9,512,184
Weighted- Average Exercise Price
Weighted- Average Exercise Price, Beginning balance \| $ / shares	$ 0.73
Weighted- Average Exercise Price, Exercised \| $ / shares	0.54
Weighted- Average Exercise Price, Forfeited and expired \| $ / shares	1.07
Weighted- Average Exercise Price, Ending balance \| $ / shares	0.73	$ 0.73
Weighted- Average Exercise Price, Vested and expected to vest \| $ / shares	0.73
Weighted- Average Exercise Price, Exercisable \| $ / shares	$ 0.57
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value
Weighted-Average Remaining Contractual Life (years)	4 years 6 months 25 days	6 years 7 months 28 days
Weighted-Average Remaining Contractual Life (years), Vested and expected to vest	4 years 6 months 25 days
Weighted-Average Remaining Contractual Life (years), Exercisable	4 years 2 months 26 days
Aggregate Intrinsic Value, Vested and expected to vest \| $	$ 8,842
Aggregate Intrinsic Value, Exercisable \| $	$ 9,591
Previously Reported
Number of Options Outstanding
Number of Options Outstanding, Beginning balance \| shares	13,845,291
Number of Options Outstanding, Ending balance \| shares		13,845,291
Weighted- Average Exercise Price
Weighted- Average Exercise Price, Beginning balance \| $ / shares	$ 0.59
Weighted- Average Exercise Price, Ending balance \| $ / shares		$ 0.59
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value
Weighted-Average Remaining Contractual Life (years)		6 years 7 months 28 days
Revision of Prior Period, Adjustment
Number of Options Outstanding
Number of Options Outstanding, Beginning balance \| shares	2,631,676
Number of Options Outstanding, Ending balance \| shares		2,631,676
Weighted- Average Exercise Price
Weighted- Average Exercise Price, Beginning balance \| $ / shares	$ 0.14
Weighted- Average Exercise Price, Ending balance \| $ / shares		$ 0.14

Consolidated Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Consolidated Balance Sheet Components
Total property and equipment	$ 6,387		$ 6,387		$ 6,744
Less: accumulated depreciation	(5,172)		(5,172)		(4,769)
Property and equipment, net	1,215		1,215		1,975
Depreciation expense	400	$ 200	1,000	$ 1,200
Tablets
Consolidated Balance Sheet Components
Total property and equipment	5,758		5,758		5,663
Computer equipment
Consolidated Balance Sheet Components
Total property and equipment	625		625		519
Software
Consolidated Balance Sheet Components
Total property and equipment	$ 4		$ 4		$ 562

Consolidated Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Consolidated Balance Sheet Components
Finished goods	$ 395	$ 869
Total inventories	$ 395	$ 869

Summary of Business and Significant Accounting Policies - Impact of COVID 19 (Details) - USD ($) $ in Thousands	1 Months Ended				3 Months Ended	9 Months Ended
	Jul. 31, 2022	Aug. 31, 2021	Mar. 31, 2021	Apr. 30, 2020	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Summary of Business and Significant Accounting Policies
Loss on infrequent product repairs					$ 119		$ 582
PPP
Summary of Business and Significant Accounting Policies
Loan received			$ 2,000	$ 2,600
Forgiveness of PPP Loan	$ 2,000	$ 2,600				$ 2,000	$ 2,600

Consolidated Balance Sheet Components - Weighted-average Amortization Periods (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Consolidated Balance Sheet Components
Amortization expense of intangible assets	$ 100	$ 20	$ 300	$ 70
Capitalized software
Consolidated Balance Sheet Components
Intangible assets weighted average amortization periods			4 years
Amortization expense of intangible assets			$ 7,300		$ 2,800
Developed technology
Consolidated Balance Sheet Components
Intangible assets weighted average amortization periods			4 years
Domain name
Consolidated Balance Sheet Components
Intangible assets weighted average amortization periods			15 years

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	Apr. 30, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Entity Registrant Name	PRESTO AUTOMATION INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-39830
Entity Tax Identification Number	84-2968594
Entity Address, Address Line One	985 Industrial Road
Entity Address, City or Town	San Carlos
Entity Address State Or Province	CA
Entity Address, Postal Zip Code	94070
City Area Code	650
Local Phone Number	817-9012
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		51,997,674
Entity Central Index Key	0001822145
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	PRST
Security Exchange Name	NASDAQ
Warrants
Document Information [Line Items]
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of Common Stock, each at an exercise price of $8.21 per share
Trading Symbol	PRSTW
Security Exchange Name	NASDAQ

Revenue - Remaining performance obligations (Details) - USD ($) $ in Millions	Mar. 31, 2023	Jul. 29, 2019
Revenue
Revenue expected to be recognized from remaining performance obligations	$ 2.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue
Revenue expected to be recognized from remaining performance obligations	$ 2.5
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 \| Customer A
Revenue
Revenue, remaining performance obligation, expected timing of satisfaction, period		4 years

Warrants

9 Months Ended

Mar. 31, 2023

Warrants

Warrants

10. Warrants

Since inception, the Company has issued warrants in conjunction with various debt financings. The Company accounts for its warrants in accordance with ASC 815-40 as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. Warrants are classified as liabilities when there is variability in the number of shares, and when the variability is not related to an implicit or explicit input to the valuation of the Company. Liability-classified warrants are remeasured at each reporting date until settlement, with changes in the fair value recognized in change in fair value of warrants and convertible promissory notes in the condensed consolidated statement of operations and comprehensive income (loss). Warrants that meet the fixed-for-fixed criteria or contain variability related to an implicit or explicit input to the valuation of the Company are classified as equity instruments. Warrants classified as equity instruments are initially recognized at fair value and are not subsequently remeasured.

During the period from June 30, 2022, through the date of the Merger, the Company had various warrant transactions:

●

The issuance of 169,309 warrants to purchase common stock in conjunction with an amendment to the warrant agreement with Lago Loan, such amendment occurring in August of 2022.

●

In September 2022, the holder of 141,970 warrants net exercised such warrants with the Company issuing 136,681 common shares to the holder.

●

The issuance at the Merger date of 1,500,000 warrants to the Lenders to the Credit Agreement.

●

With the Merger, the Company assumed 8,625,000 public warrants and 6,125,000 private warrants.

●

With the consummation of the Merger and the repayment of the Horizon loan, 294,725 of previously liability classified warrants were reclassified on the Merger date into equity in the amount of $0.8 million.

The following tables represent the warrants on common stock outstanding:


	As of March 31, 2023
	Expiration date	Exercise Price		Number of Shares		Term (years)	Classification
Common	[C]	$	7.80	12,811		7	Equity
Common	[C]	$	7.80	41,636		7	Equity
Common	[C]	$	7.80	16,654		7	Equity
Common	March 2026	$	9.25	84,461		6.5	Liability
Common	June 2028	$	0.01	404,961	^[E]	6.7	Equity
Common	[F]	$	0.37	178,395		10	Equity
Common	March 2026	$	0.37	57,952		10	Liability
Common	July 2027	$	9.25	86,532		6	Liability
Common	July 2027	$	0.37	402,679		6	Equity
Common	[A]	$	8.16	182,158		[A]	Equity
Common	January 2031	$	8.16	27,577		10	Liability
Common	[B]	$	6.53	294,725	^[B]	10	Equity
Common	March 2032	$	8.16	374,912		10	Liability
Common	September 2027	$	11.50	1,500,000		5	Equity
Common	September 2027	$	8.21	8,625,000		5	Equity
Common	September 2027	$	11.50	6,125,000		5	Liability
Common	March 2028	$	0.01	400,000		5	Liability
Total				18,815,453


	As of June 30, 2022
	Expiration date	Exercise Price		Number of Shares		Term (years)	Classification
Common	[C]	$	7.80	12,811		7	Equity
Common	[C]	$	7.80	41,636		7	Equity
Common	[C]	$	7.80	16,654		7	Equity
Common	March 2026	$	9.25	84,461		10	Liability
Common	October 2027	$	0.37	141,970		10	Equity
Common	[D]	$	0.01	2,575,190		[D]	Liability
Common	June 2028	$	0.01	404,961	^[E]	6.7	Equity
Common	March 2026	$	0.37	178,395		10	Equity
Common	March 2026	$	0.37	57,952		10	Liability
Common	July 2027	$	9.25	86,532		10	Liability
Common	July 2027	$	7.80	402,679		10	Liability
Common	[A]	$	8.16	182,158		[A]	Equity
Common	January 2031	$	8.16	27,577		10	Liability
Common	March 2031	$	6.53	294,725	^[B]	10	Liability
Common	March 2032	$	8.16	205,602		10	Liability
Total				4,713,303

[A] —

Warrants will expire at the earliest of a consummation of an acquisition or one year after the effective date of a registration statement for an initial public offering.

[B] —

[C] —

Warrants expire 5 years from the effective date of a registration statement for an initial public offering should one occur.

[D] —

[E] —

[F] —

Debt Arrangements - Term Loans (Details) $ in Thousands						9 Months Ended
Debt Arrangements - Term Loans (Details) $ in Thousands	Nov. 21, 2022 USD ($)	Sep. 21, 2022 USD ($)	Aug. 04, 2022 USD ($) shares	Mar. 11, 2022 USD ($) payment shares	Mar. 04, 2021 USD ($) payment	Mar. 31, 2023 USD ($)	Sep. 22, 2022 shares
Debt Instrument [Line Items]
Loss on extinguishment of debt and financing obligations	$ (300)					$ (8,095)
Number of shares warrants can be converted to \| shares							18,415,453
Cash proceeds from issuance of debt						13,700
Debt prepayment and other penalties						6,144
Horizon Term Loan
Debt Instrument [Line Items]
Debt principal amount					$ 15,000
Debt term				24 months	54 months
Number of payment of accrued interest \| payment					24
Number of payment of principal and accrued interest \| payment					30
Cash disbursement for loan repayment		$ 17,000
Repayment of principal amount		15,000
Payment of interest amount		600
Loss on extinguishment of debt and financing obligations						(1,700)
Horizon Term Loan \| Prime Rate
Debt Instrument [Line Items]
Debt interest variable rate					6.50%
Lago Term Loans
Debt Instrument [Line Items]
Debt principal amount				$ 12,600
Number of interest only payment dates \| payment				12
Debt Instrument, Interest Rate, Paid in Kind, Percentage				2.00%
Cash disbursement for loan repayment		22,400
Repayment of principal amount		17,900
Payment of interest amount		100
Loss on extinguishment of debt and financing obligations						$ (6,000)
Number of shares warrants can be converted to \| shares			169,310	205,602
Cash proceeds from issuance of debt			$ 5,300
Debt prepayment and other penalties		$ 4,400
Lago Term Loans \| Minimum
Debt Instrument [Line Items]
Debt interest rate				12.00%
Debt interest variable rate				1.00%

Warrants - Common Stock Outstanding (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended	12 Months Ended
	Mar. 31, 2023	Jun. 30, 2022	Sep. 22, 2022	Oct. 31, 2021	Oct. 29, 2021	Mar. 05, 2021	Mar. 11, 2016
Warrants
Exercise Price	$ 6.53	$ 6.53
Number of Shares	18,815,453	4,713,303			404,961
Common warrants one
Warrants
Exercise Price	$ 7.80	$ 7.80
Number of Shares	12,811	12,811
Term (years)	7 years	7 years
Common warrants two
Warrants
Exercise Price	$ 7.80	$ 7.80
Number of Shares	41,636	41,636
Term (years)	7 years	7 years
Common warrants three
Warrants
Exercise Price	$ 7.80	$ 7.80
Number of Shares	16,654	16,654
Term (years)	7 years	7 years
Common warrants four
Warrants
Exercise Price	$ 9.25	$ 9.25
Number of Shares	84,461	84,461
Term (years)	6 years 6 months	10 years
Common warrants five
Warrants
Exercise Price	$ 0.01	$ 0.37
Number of Shares	404,961	141,970
Term (years)	6 years 8 months 12 days	10 years
Common warrants six
Warrants
Exercise Price	$ 0.37	$ 0.01
Number of Shares	178,395	2,575,190
Term (years)	10 years		5 years
Common warrants seven
Warrants
Exercise Price	$ 0.37	$ 0.01
Number of Shares	57,952	404,961		404,961
Term (years)	10 years	6 years 8 months 12 days
Number of contingent warrants outstanding	144,377	321,943
Common warrants eight
Warrants
Exercise Price	$ 9.25	$ 0.37
Number of Shares	86,532	178,395
Term (years)	6 years	10 years
Common warrants nine
Warrants
Exercise Price	$ 0.37	$ 0.37
Number of Shares	402,679	57,952
Term (years)	6 years	10 years
Common warrants ten
Warrants
Exercise Price	$ 8.16	$ 9.25
Number of Shares	182,158	86,532
Term (years)		10 years
Common warrants eleven
Warrants
Exercise Price	$ 8.16	$ 7.80
Number of Shares	27,577	402,679
Term (years)	10 years	10 years
Common warrants twelve
Warrants
Exercise Price	$ 6.53	$ 8.16
Number of Shares	294,725	182,158
Term (years)	10 years					10 years
Coverage dollar amount	$ 1.9	$ 1.9
Common warrants thirteen
Warrants
Exercise Price	$ 8.16	$ 8.16
Number of Shares	374,912	27,577
Term (years)	10 years	10 years
Common warrants fourteen
Warrants
Exercise Price	$ 11.50	$ 6.53
Number of Shares	1,500,000	294,725
Term (years)	5 years	10 years
Common warrants fifteen
Warrants
Exercise Price	$ 8.21	$ 8.16
Number of Shares	8,625,000	205,602
Term (years)	5 years	10 years
Common warrants sixteen
Warrants
Exercise Price	$ 11.50
Number of Shares	6,125,000
Term (years)	5 years
Common warrants seventeen
Warrants
Exercise Price	$ 0.01
Number of Shares	400,000
Term (years)	5 years
Common warrants one, two and three
Warrants
Term (years)	5 years
Common warrants eight, nine and ten
Warrants
Term (years)							10 years

Stock-Based Compensation

9 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Stock-Based Compensation

11. Stock-Based Compensation

Stock-Based Compensation Plans

Prior to the Merger, the Company utilized the 2018 equity incentive plan (“2018 Plan”) which replaced the 2008 Stock Incentive Plan (“2008 Plan”). Effective with the Merger, the Board of Directors adopted the 2022 Incentive Award Plan (the “2022 Plan”). As of March 31, 2023, the number of shares of common stock reserved for future issuance under the 2022 Plan was 4,617,400. The Board of Directors may grant incentive and non-statutory stock options and restricted stock units (“RSUs”) to employees, outside directors, investors and consultants at an exercise price of not less than 100% of the fair market value, as determined by the Board of Directors, at the date of grant. Awards generally vest ratably over periods determined by the Board of Directors, generally four or five years, and expire no later than ten years from the date of grant. For options subject to the one-year cliff, the expense is recognized as 25% of the total option value, which is recognized on a straight-line basis over the first year and remaining option expense continues to be recognized straight-line as vesting occurs monthly thereafter.

In February 2023, the Company granted an aggregate of 2,721,486 RSUs to its employees, consultants and directors with service-based vesting conditions with a weighted average grant date fair value of $3.26 per RSU, based on the closing stock price on the date of grant. The awards vest ratably over five years and one year for directors. As of March 31, 2023, $7.6 million of stock-based compensation related to these RSUs remains unrecognized, which is expected to time-vest over a remaining weighted-average period of 4.5 years. The Company recorded $0.7 million in additional stock based compensation expense due to modifications of individual awards for certain executives upon termination from the Company for accelerated vesting and extension of award exercise periods in the three and nine months ended March 31, 2023.

In July 2022, the Company granted an aggregate of 836,657 RSUs to its employees and consultants that contain a service-based vesting condition and a performance-based vesting condition, with a grant date fair value of $8.26 per RSU. Such RSUs are in addition to the 350,426 of RSUs that were outstanding at June 30, 2022, which contain the same vesting conditions. The service-based vesting condition is generally satisfied by rendering continuous service for 5 years, with 20% vesting each year. The performance-based vesting condition is satisfied in connection with an initial public offering or a change in control. However, the consummation of the deSPAC did not result in satisfaction of the performance condition and as such the Board of Directors approved a modification of the awards to waive the performance condition in consideration of consummating the deSPAC. The Company recorded compensation expense of $0.9 million during the three and nine months ended March 31, 2023 related to these RSUs as achievement of the performance-based vesting condition was waived and a cumulative catch up adjustment was recorded. As of March 31, 2023, $2.4 million of stock-based compensation related to these RSUs remains unrecognized, which is expected to time-vest over a remaining weighted-average period of 4.24 years.

In September 2022, the Company granted 1,200,000 of RSUs to a director and the current interim CEO of the Company with a grant date fair value of $4.56 per RSU. The RSUs vest in the following tranches, subject to the continuous service through each applicable vesting date: 33.33% of the RSUs vested on September 30, 2022, 56.67% of the RSUs has, and shall continue to, vest in equal monthly installments on the last day of each month during the subsequent 23-month period, and the remaining 10% shall vest upon the third anniversary of the vesting commencement date. The Company recorded compensation expense during the three and nine months ended March 31, 2023 related to the RSUs of $394 and $2.6 million, respectively. As of March 31, 2023, $2.8 million of stock-based compensation related to the RSU remains unrecognized, which is expected to be recognized over a remaining weighted-average period of 1.6 years. The RSUs time-based vesting would accelerate upon an acquisition of the Company. A deSPAC does not meet the definition of an acquisition as defined in the 2018 Plan.

During fiscal year 2021, the Company granted 600,752 performance-based options that contained a service-based vesting condition and a performance-based vesting condition. The service-based vesting condition is satisfied by rendering continuous service for four years after the performance-based vesting condition occurs. The performance-based vesting condition is satisfied in connection with a financing event or a public liquidity event for a first group of 300,376 options and in connection with a public

liquidity event for a second group of 300,376 options. A financing event occurred as of June 30, 2021 that satisfied the performance-based vesting condition for the first group of 300,376 options. Effective with the closing of the Merger, the public liquidity event performance condition was achieved for the second group of 300,376 options. The Company recognized expense associated with these options in the amount of $0.3 million and $0.4 million, for the three and nine months ended March 31, 2023, respectively. The expense is inclusive of a one-time charge to extend the exercise period that occurred in the three months ended March 31, 2023. Compensation costs attributable to such awards were insignificant during the three and nine months ended March 31, 2022.

In the event of voluntary or involuntary termination of employment with the Company for any reason, with or without cause, all unvested options are forfeited and all vested options must be exercised within a 90-day period under the 2018 Plan and within a 30-day period under the 2008 Plan or they are forfeited.

The following summary of the equity incentive plan activity is shown collectively for the 2022 Plan, the 2018 Plan and the 2008 Plan:


	Number of	Weighted-		Weighted-	Aggregate
	Options	Average		Average Remaining	Intrinsic
	Outstanding	Exercise Price		Contractual Life (years)	Value
Balance – June 30, 2022	13,845,291	$	0.59	6.66
Retrospective application of recapitalization	(2,631,676)		0.14
Adjusted Balance – beginning of period	11,213,615		0.73	6.66
Exercised	(511,670)		0.54
Forfeited and expired	(253,625)		1.07
Balance –March 31, 2023	10,448,320		0.73	4.57
Vested and expected to vest at March 31, 2023	10,448,320		0.73	4.57	$	8,842
Exercisable at March 31, 2023	9,512,184		0.57	4.24		9,591

The following is a summary of the equity incentive plan RSU activity for the 2022 Plan and the 2018 Plan:


	Number of	Weighted- Average
	Awards Outstanding	Grant Date Fair Value
Unvested Balance – June 30, 2022	432,666	$	6.46
Retrospective application of recapitalization	(82,240)		1.52
Adjusted, unvested balance – beginning of period	350,426		7.98
Granted	4,758,115		4.80
Vested	(798,239)		4.28
Forfeited	(372,215)		4.32
Unvested Balance - March 31, 2023	3,938,087		5.24

Stock-based Compensation Expense

Stock-based compensation expense, excluding stock-based compensation in capitalized software, related to employees and non-employees, by function is as follows:


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Research and development	$	682	$	99	$	959	$	349
Sales and marketing		177		110		361		323
General and administrative		1,933		221		4,474		706
	$	2,792	$	430	$	5,794	$	1,378

Stock-based compensation allocated to cost of goods sold was not material for the three and nine months ended March 31, 2023 and 2022. As of March 31, 2023, the unrecognized stock-based compensation expense related to outstanding unvested stock options was $2.0 million which is expected to be recognized over a weighted-average period of 3.17 years.

During the three and nine months ended March 31, 2023 the Company recorded $1.6 million and $3.5 million, respectively, of stock-based compensation expense associated with earnout shares granted to holders of common stock held by current employees and directors and holders of options and RSUs. No amounts were recorded during the three and nine months ended March 31, 2022

associated with earnout shares. Refer to Note 1 for further discussion of compensation recorded related to earnout shares granted to holders of common stock, options and RSUs.

Employee Stock Purchase Plan

Effective with the closing of the Merger, the Company adopted and employee stock purchase plan (“ESPP”). There was no activity under the plan during the three and nine months ended March 31, 2023, as the Company has not yet conducted any offerings pursuant to the ESPP.

The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations, during designated 6 month offering periods. At the end of each offering period, employees are able to purchase shares at the lesser of (i) 85% of the fair market value of the Company’s common stock on the first day of the offering period and (ii) 85% of the fair market value of the Company’s common stock on the last day of the offering period, based on the closing sales price of the Company’s common stock as quoted on the NASDAQ on such date.

Other Stock-based Compensation

In connection with the acquisition of CyborgOps (refer to Note 1), the Company issued 475,638 shares of common stock to former employees of CyborgOps who have continued employment with the Company, and are accounted for as stock-based compensation because the shares are subject to forfeiture based on post-acquisition time-based service vesting. The shares vest in monthly increments over four years commencing on June 11, 2022. The fair value was determined to be $8.75 per share based on the acquisition date fair value. During the three and nine months ended March 31, 2023, the Company recognized $0.3 million and $0.8 million of stock-based compensation expense related to these equity awards, respectively. As of March 31, 2023, unrecognized stock-based compensation expense associated with these equity awards was $3.3 million, which is expected to be recognized over a weighted-average period of 3.12 years.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2023	Jun. 30, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Allowance for doubtful accounts	$ 135	$ 353
Preferred stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock shares authorized	1,500,000	1,500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	180,000,000	180,000,000
Common stock, shares issued	51,921,941	27,974,439
Common stock, shares outstanding	51,921,941	27,974,439

Financing Obligations

9 Months Ended

Mar. 31, 2023

Financing Obligations

Financing Obligations

6. Financing Obligations

The Company’s financing obligations, net of discounts, consist of the following:


	As of March 31,		As of June 30,
	2023		2022
Receivable financing facility	$	4,314	$	5,911
Equipment financing facility		1,266		2,929
Total financing obligations		5,580		8,840
Less: financing obligations, current		(3,720)		(8,840)
Total financing obligations, noncurrent	$	1,860	$	—

Receivable Financing Facility

On April 27, 2021, the Company entered into an investment arrangement in which the Company provides future receivables available to an outside investor to invest in, in exchange for an upfront payment. Through this arrangement, the Company obtains financing in the form of a large upfront payment, which the Company accounts for as a borrowing by recording the proceeds received as a financing obligation, which will be repaid through payments collected from accounts receivable debtors relating to future receivables. The financing obligation is non-recourse; however, the Company is responsible for collections as the Company must first collect payments from the debtors and remit them to the investor. The Company recognizes interest on the financed amount using the effective interest method. The effective interest rate is the interest rate that equates the present value of the cash amounts to be received by the investor with the present value of the cash amounts paid by the investor to the Company. The receivable financing facility has a term of 5 years and the arrangement allows the Company and the financier to mutually agree to roll forward the Company’s borrowings as they come due.

On August 15, 2021, November 16, 2021, February 22, 2022, May 31, 2022, and August 18, 2022, in accordance with the terms of the receivable financing facility, the Company rolled forward the receivable financing facility, enabling the Company to continue its quarterly borrowings for a minimum of a rolling twelve-months. Subject to the approval of the financier, the Company may continue rolling forward the receivable financing facility.

On April 15, 2023, the Company entered into an amended and restated investment arrangement to amend the payment due dates and periodic payment amounts to be made under the investment agreement. The amended arrangement calls for payments of principal and interest of $0.7 million, $3.5 million and $0.9 million in fiscal years 2023, 2024 and 2025, respectively.

Equipment Financing Facility

Beginning in 2019, the Company entered into arrangements with third party financiers to secure payments of certain tablet purchases. Such arrangements generally have terms ranging from three – five years and interest rates ranging from 8%-14%. The Company then leases the tablets monetized by the financiers to one of its customers through operating leases that have 4-year terms.

In fiscal year 2022 and during the nine months ended March 31, 2023, due to the Company’s liquidity position and other commitments, the Company postponed certain payments on certain arrangements with third party financiers, which resulted in the Company defaulting on said arrangements. The Company remedied the matter via repayment agreements with its third-party financiers, as discussed below.

On November 4, 2022, the Company executed an amendment with one of its third-party financiers to defer the non-payments, which increased the monthly payments due for the remaining term of the arrangement.

On November 21, 2022, the Company entered into an agreement to early terminate one of its third-party financiers’ arrangement. The Company repaid such arrangement by making a cash disbursement of $0.4 million, which extinguished all obligations and resulted in $0.3 million being recorded as a loss on extinguishment of debt and financial obligations on the condensed consolidated statement of operations and comprehensive income (loss).

As a result of the amendment executed on November 4, 2022 and early termination executed on November 21, 2022, the default on payments due as described above has been waived and the Company is in compliance as of March 31, 2023. We have classified all of our obligations under these arrangements as short-term within financing obligations, current as of March 31, 2023 and June 30, 2022.

Stockholders' Deficit

9 Months Ended

Mar. 31, 2023

Stockholders' Deficit

Stockholders' Deficit

9. Stockholders’ Deficit

Effective with the closing of the Merger the Company restated its articles of incorporation. Under the amended and restated articles of incorporation the Company is authorized to issue 180,000,000 shares of common stock and 1,500,000 shares of preferred stock. The holders of common stock shall have the right to one vote for each share of common stock held. The holders of non-voting common stock do not have the right to vote on any matter.

On September 15, 2022, the Company (then Legacy Presto), received an equity investment of $1.0 million from an investor in exchange for 133,333 shares in the Company. Further, such investor held a significant portion of outstanding convertible notes on the date the investment was made. The Company recorded the proceeds received as an increase to additional paid-in capital. On September 21, 2022, in connection with the closing of the Merger, Ventoux and Legacy Presto and a proposed convertible note lender (“Silver Rock”) agreed to terminate the proposed amended and restated convertible note subscription agreement, dated July 25, 2022, which was to be funded at the closing of the Merger. Pursuant to the termination agreement, Silver Rock agreed to the termination in exchange for 400,000 shares of common stock of Legacy Presto which were converted into 322,868 shares of Company common stock pursuant to the terms of the Merger Agreement. The share transfer was determined to be termination fee valued at $1.6 million recorded within other financing and financial instrument (costs) income, net on the condensed consolidated statement of operations and comprehensive income (loss), with an offsetting increase to additional paid-in capital. The Company also agreed to pay certain expenses of Silver Rock in the amount of $0.5 million which is recorded within other financing and financial instrument (costs) income, net on the condensed consolidated statement of operations and comprehensive income (loss). In addition to the consideration transferred directly by the Company, 500,000 warrants to purchase common stock, held by the Sponsors, were transferred to Silver Rock. The substance of the warrant transfer by the Sponsor to Silver Rock under the termination agreement was such that the

Sponsors made a capital contribution to the Company, and the Company then made a share-based payment to Silver Rock in exchange for termination of the convertible note agreement. Accordingly, the Company recorded the transaction as an other financing cost of $0.8 million within other financing and financial instrument (costs) income, net on the condensed consolidated statement of operations and comprehensive income (loss) with an offsetting increase to additional paid-in capital for the contribution.

The Company has the following shares of common stock reserved for future issuance:


		As of
		March 31,
		2023
Warrants to purchase common stock		18,815,453
Common stock options and RSUs		14,390,934
Equity awards available for future grants		4,617,400
Earnout shares		14,639,187
		52,462,974

- Definition

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.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Summary of Business and Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($)	Mar. 31, 2023	Jul. 01, 2022	Jun. 30, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right of use asset	$ 600,000		$ 0
Operating lease liability	$ 570,000		$ 0
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right of use asset		$ 500,000
Operating lease liability		$ 500,000

Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Sep. 15, 2022	Mar. 31, 2023	Jun. 30, 2022
Related Party Transactions
Equity investment received		$ 1,100
Share based compensation arrangement by share based payment, granted		4,758,115
Grant date fair value		$ 4.80
Investor
Related Party Transactions
Equity investment received	$ 1,000	$ 1,000
Shares issued in exchange of pre merger shares	133,333	133,133
Director and current interim CEO \| RSU
Related Party Transactions
Share based compensation arrangement by share based payment, granted		1,200,000
Grant date fair value		$ 4.56
Director
Related Party Transactions
Due to related party		$ 0	$ 9,600

Debt Arrangements - PPP Loans (Details) - USD ($) $ in Thousands	1 Months Ended			9 Months Ended
	Jul. 31, 2022	Aug. 31, 2021	Mar. 31, 2021	Mar. 31, 2023	Mar. 31, 2022	Apr. 30, 2020
Financing Obligations
Proceeds from the issuance of term loans				$ 60,250	$ 12,600
PPP
Financing Obligations
Debt principal amount			$ 2,000			$ 2,600
Proceeds from the issuance of term loans			$ 4,600
Forgiveness of PPP Loan	$ 2,000	$ 2,600		$ 2,000	$ 2,600
Percentage of loan to be use for payroll in order to forgiven fully			60.00%

Fair Value Measurements - Weighted Average Assumptions (Details)	Jun. 30, 2022 Y
Probability of conversion \| Private Financing
Fair Value Measurements
Warrants, measurement inputs	0.100
Probability of conversion \| Public Financing
Fair Value Measurements
Warrants, measurement inputs	0.800
Probability of conversion \| Change in Control
Fair Value Measurements
Warrants, measurement inputs	0.050
Probability of conversion \| Maturity Date
Fair Value Measurements
Warrants, measurement inputs	0.050
Expected term (in years) \| Private Financing
Fair Value Measurements
Warrants, measurement inputs	0.3
Expected term (in years) \| Public Financing
Fair Value Measurements
Warrants, measurement inputs	0.2
Expected term (in years) \| Change in Control
Fair Value Measurements
Warrants, measurement inputs	0.2
Expected term (in years) \| Maturity Date
Fair Value Measurements
Warrants, measurement inputs	0.3
Discount rate \| Private Financing
Fair Value Measurements
Warrants, measurement inputs	0.165
Discount rate \| Public Financing
Fair Value Measurements
Warrants, measurement inputs	0.165
Discount rate \| Change in Control
Fair Value Measurements
Warrants, measurement inputs	0.165

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 21, 2022	Feb. 28, 2023	Sep. 30, 2022	Jul. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2021	Jun. 30, 2022
Stock-Based Compensation
Common stock reserved for future issuance					52,462,974		52,462,974
Stock based compensation expiration period	5 years
Share based compensation arrangement by share based payment, granted							4,758,115
Grant date fair value							$ 4.80
Awards outstanding					3,938,087		3,938,087			350,426
Unrecognized stock-based compensation					$ 11,300		$ 11,300
Weighted average period of recognition							1 year 6 months
Compensation expense					2,792	$ 430	$ 5,794	$ 1,378
Share based compensation arrangement by share based payment, vested							798,239
Exercised term							4 years 2 months 26 days
Options
Stock-Based Compensation
Percentage of shares vested							25.00%
Unrecognized stock-based compensation					2,000		$ 2,000
Weighted average period of recognition							3 years 2 months 1 day
Performance Shares
Stock-Based Compensation
Share based compensation arrangement by share based payment, granted									600,752
Compensation expense					300		$ 400
Service Based Vesting Award
Stock-Based Compensation
Service period									4 years
First specified vesting period
Stock-Based Compensation
Stock based compensation expiration period	5 years
Percentage of shares vested	25.00%
First specified vesting period \| Performance Shares
Stock-Based Compensation
Share based compensation arrangement by share based payment, granted									300,376
Second specified vesting period
Stock-Based Compensation
Stock based compensation expiration period	5 years
Percentage of shares vested	25.00%
Second specified vesting period \| Performance Shares
Stock-Based Compensation
Share based compensation arrangement by share based payment, granted	300,376								300,376
Third specified vesting period
Stock-Based Compensation
Stock based compensation expiration period	5 years
Percentage of shares vested	25.00%
Employees, Consultants And Directors [Member] \| RSU
Stock-Based Compensation
Stock based compensation vesting period		5 years
Share based compensation arrangement by share based payment, granted		2,721,486
Grant date fair value		$ 3.26
Unrecognized stock-based compensation					7,600		$ 7,600
Weighted average period of recognition							4 years 6 months
Additional stock-based compensation					700		$ 700
Employees and consultants \| RSU
Stock-Based Compensation
Stock based compensation vesting period				5 years
Percentage of shares vested				20.00%
Share based compensation arrangement by share based payment, granted				836,657
Grant date fair value				$ 8.26
Awards outstanding										350,426
Unrecognized stock-based compensation					2,400		$ 2,400
Weighted average period of recognition							4 years 2 months 26 days
Compensation expense					900		$ 900
Director \| RSU
Stock-Based Compensation
Stock based compensation vesting period		1 year
Director and current interim CEO \| RSU
Stock-Based Compensation
Share based compensation arrangement by share based payment, granted			1,200,000
Grant date fair value			$ 4.56
Unrecognized stock-based compensation					2,800		$ 2,800
Weighted average period of recognition							1 year 7 months 6 days
Compensation expense					$ 394		$ 2,600
Director and current interim CEO \| First specified vesting period \| RSU
Stock-Based Compensation
Percentage of shares vested			33.33%
Director and current interim CEO \| Second specified vesting period \| RSU
Stock-Based Compensation
Percentage of shares vested			56.67%
Director and current interim CEO \| Third specified vesting period \| RSU
Stock-Based Compensation
Percentage of shares vested			10.00%
Maximum
Stock-Based Compensation
Stock based compensation vesting period							5 years
Stock based compensation expiration period							10 years
Minimum
Stock-Based Compensation
Exercise price percentage							100.00%
Stock based compensation vesting period							4 years
2008 Plan
Stock-Based Compensation
Exercised term							30 days
2018 Plan
Stock-Based Compensation
Exercised term							90 days
2022 Plan
Stock-Based Compensation
Common stock reserved for future issuance					4,617,400		4,617,400

Summary of Business and Significant Accounting Policies - Revision of Prior Financial Statements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 6,607	$ 7,534	$ 21,316	$ 22,459
Platform
Disaggregation of Revenue [Line Items]
Revenue	3,088	5,083	11,617	14,754
Cost of revenue	$ 2,743	$ 4,057	$ 10,951	$ 11,872

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Consolidated Balance Sheet Components - Investments in Non-Affiliates (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Dec. 31, 2022	Mar. 31, 2023
Consolidated Balance Sheet Components
Investment in non-affiliated entity	$ 2,000	$ 2,000

Net Income (Loss) Per Share -Potential Weighted Average Shares of Common Stock Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Net Income (Loss) Per Share
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share	32,010,636	16,430,520	12,866,130	20,811,916
RSU
Net Income (Loss) Per Share
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share		300,376		300,376
Stock options and RSUs
Net Income (Loss) Per Share
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share	13,856,065	11,848,316	356,342	11,903,763
Convertible promissory notes
Net Income (Loss) Per Share
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share				4,535,520
Warrants to purchase common stock
Net Income (Loss) Per Share
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share	18,154,571	4,582,204	12,509,788	4,372,633
Earnout Shares
Net Income (Loss) Per Share
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share	14,819,594		10,494,505

Summary of Business and Significant Accounting Policies

9 Months Ended

Mar. 31, 2023

Summary of Business and Significant Accounting Policies

Summary of Business and Significant Accounting Policies

1. Summary of Business and Significant Accounting Policies

Description of Business

Merger with Ventoux CCM Acquisition Corp.

Trust Proceeds and PIPE investment

Upon consummation of the Merger, Presto received approximately $49.8 million from the Trust and PIPE, net of transaction costs and other payments as set forth as follows:


	Net Cash
Cash—Ventoux Trust and working capital cash	$	9,584
Cash—PIPE investment		55,400
Less: transaction costs and other payments⁽¹⁾		(15,144)
Total	$	49,840

(1)

Legacy Presto Convertible Promissory Notes and Equity and the Exchange

Earnout Arrangement with holders of Legacy Presto Common Stock and Outstanding Equity Awards

●

Unvested Founder Share Arrangement with Founders

At the Closing, 444,500 founders shares held by the Sponsors (the “unvested founders shares”) became subject to the following vesting and forfeiture provisions:

(i)

the first 25% of such unvested founder shares owned by the Sponsors vest at such time as a $12.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date,

(ii)

the next 25% of such unvested founder shares owned by the Sponsors vests at such time as a $15.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date.,

(iii)

the next 25% of such unvested founder shares owned by the Sponsors vest at such time as a $20.00 Stock Price Level is achieved on or before the date that is five years after the Closing Date and

(iv)

Cyborg Ops

Emerging Growth Company Status

Basis of Presentation

Use of Estimates

Risk and Uncertainties

Impact of COVID-19

Liquidity and Capital Resources

As of March 31, 2023 and June 30, 2022, the Company’s principal sources of liquidity were cash and cash equivalents of $27.0 and $3.0, respectively, which were held for working capital purposes.

Concentrations of Risks, Significant Customers and Investments


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Customer A	62	%	51	%	61	%	51	%
Customer B	16	%	26	%	21	%	26	%
Customer C	18	%	14	%	15	%	16	%
	96	%	91	%	97	%	93	%

The following restaurant logos accounted for more than 10% of accounts receivable:


	As of March 31,		As of June 30,
	2023		2022
Customer A	39	%	31	%
Customer B	20	%	41	%
Customer D	27	%	11	%
	86	%	83	%

*Customer C represents less than 10% of accounts receivable and therefore was omitted from the above schedule.

Financial Institutions

Segment Information

The Company has operations in the United States and Canada. The Company earns primarily all of its revenue in the United States and all of its long-lived assets are held in the United States.

Investment in non-affiliate

Leases

The Company adopted ASU No. 2016-02, Leases (Topic 842) on July 1, 2022, using the modified retrospective approach

Revenue Recognition

Platform Revenue

Transaction Revenue

The Company determines revenue recognition through the following steps:

Net Income (Loss) Per Share

Recently Adopted Accounting Standards

Recently Issued Accounting Standards Not Yet Adopted

Summary of Business and Significant Accounting Policies - Concentrations of Risks (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Summary of Business and Significant Accounting Policies
Deposits in excess of the FDIC limits	$ 26.5		$ 26.5
Major Customers \| Revenue \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage	96.00%	91.00%	97.00%	93.00%
Major Customers \| Accounts Receivable \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage			86.00%		83.00%
Customer A \| Revenue \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage	62.00%	51.00%	61.00%	51.00%
Customer A \| Accounts Receivable \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage			39.00%		31.00%
Customer B \| Revenue \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage	16.00%	26.00%	21.00%	26.00%
Customer B \| Accounts Receivable \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage			20.00%		41.00%
Customer C \| Revenue \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage	18.00%	14.00%	15.00%	16.00%
Customer C \| Accounts Receivable \| Customer Concentration Risk \| Maximum
Summary of Business and Significant Accounting Policies
Concentration risk percentage			10.00%		10.00%
Customer D \| Accounts Receivable \| Customer Concentration Risk
Summary of Business and Significant Accounting Policies
Concentration risk percentage			27.00%		11.00%

Commitments and Contingencies

9 Months Ended

Mar. 31, 2023

Commitments and Contingencies.

Commitments and Contingencies

8. Commitments and Contingencies

Warranties, Indemnification, and Contingencies

The Company enters into service level agreements with customers which warrant defined levels of uptime and support response times and permit those customers to receive credits for prepaid amounts in the event that those performance and response levels are not met. In the three and nine months ended March 31, 2023, the Company has incurred costs to refurbish customer tablets of $0.3 million and $1.2 million, respectively, while in the three and nine months ended March 31, 2022, the Company incurred costs to refurbish customer tablets of $0.8 million and $2.8 million, respectively, recorded in cost of platform revenue in the Company’s condensed consolidated statement of operations and comprehensive income (loss). In connection with the service level agreements, the Company has recorded $0.3 million and $0.7 million in accrued liabilities in the condensed consolidated balance sheets for expected repair costs for customer tablets currently in the Company’s return merchandise authorization process as of March 31, 2023 and June 30, 2022, respectively.

In the ordinary course of business, the Company enters into contractual arrangements under which the Company agrees to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from the Company’s platform or the Company’s acts or omissions. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments.

In addition, the Company has agreed to indemnify the Company’s directors and executive officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid.

Loss on Infrequent Product Repairs

During the nine months ended March 31, 2022, the Company continued to experience higher than normal hardware returns for repair or replacement using a Return Merchandise Authorization (“RMA”). While the Company has incurred RMA charges in the past, the volume of repair charges was extremely unusual and very high due to a liquid ingress issue resulting from COVID-19 related actions by the Company’s customers. The Company’s devices failed primarily due to the use of extremely strong commercial disinfectant solutions by the Company’s customers to clean the hardware devices as a mandatory precaution protocol due to COVID-19. Due to use of commercial cleaning products, the solution leaked into the hardware causing significant damage to the devices and requiring replacement of such devices.

The standard warranty the Company provides covers regular wear and tear and does not cover any damage caused by mishandling of the product. However, given the nature of issues, the Company, in order to prevent disruption to the Company’s customers’ businesses, incurred approximately $0.1 million and $0.6 million of repair and replacement expenses related to this issue during the three and nine months ended March 31, 2022, respectively. The Company provided repair and replacement of its hardware devices to all of its customers as a one-time only offer due to COVID-19. The Company has also made a claim to recover the costs

from its third-party subcontractor who manufactures the hardware. The Company incurred no repair and replacement expenses related to this issue in the three and nine months ended March 31, 2023.

Legal Proceedings

In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These estimates are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events pertaining to a particular matter. In general, the resolution of a legal matter could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s operating results. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable, and subject to significant uncertainties. At this time, the Company does not have any such matters that, if resolved unfavorably, would have a material impact on its financial condition, results of operations or cash flows.

In February 2022, the Company was added as a co-defendant in a patent infringement lawsuit that was brought against Hi Auto, Inc. (“Hi Auto”) by Valyant AI, Inc. (“Valyant”) in December 2021, alleging infringement of Valyant’s patent relating to a speech-based/natural language order process system. The claims against the Company relate to the Company’s alleged inclusion of Hi Auto’s technology in the AI voice ordering system the Company uses for one of its customers. The lawsuit seeks to enjoin the co-defendants from continued alleged infringement and seeks unspecified statutory and other damages. A motion to dismiss is currently pending in the matter, as is a petition by Hi Auto challenging the validity of Valyant’s patent. Valyant itself is seeking a reissue of its patent to correct a priority date issue, which may result in amendments to the claims and further validity challenges based on additional prior art made relevant by a later priority date for some or all claims that may be examined or issued. The court has stayed the infringement action pending an initial decision on Hi Auto’s petition challenging the validity of the patent. The Company intends to vigorously defend all claims asserted against it. Because of the early stages of the proceedings, the Company currently is unable to predict the outcome of the lawsuit or to estimate the range of loss, if any, that could result were there to be an unfavorable outcome, but also believes that it has rights to indemnification from Hi Auto in such event.

In June 2022, the Company received a favorable arbitrator ruling related to a matter with its third-party subcontractor and was awarded approximately $11.3 million in damages related to the Company’s loss on infrequent product repairs and to cover its legal expenses. This arbitration ruling was affirmed by the appellate court in the country of the arbitration ruling on March 6, 2023. On May 2, 2023, the vendor appealed the ruling to the highest court there. The award has not met the criteria to be considered realizable as of March 31, 2023. As a result, the Company has not recognized any gain related to this settlement in its condensed consolidated statement of operations and comprehensive income (loss).

Fair Value Measurements - Fair Value and Carrying Amount (Details) - USD ($)	Mar. 31, 2023	Jun. 30, 2022
Fair Value Measurements
Convertible promissory notes and embedded warrants	$ 0
Carrying Amount \| Level 3
Fair Value Measurements
Convertible promissory notes and embedded warrants		$ 51,816,000
Amount Charged to Earnings \| Level 3
Fair Value Measurements
Convertible promissory notes and embedded warrants		37,847,000
Fair Value \| Level 3
Fair Value Measurements
Convertible promissory notes and embedded warrants		$ 89,663,000

Leases (Tables)

9 Months Ended

Mar. 31, 2023

Leases

Schedule of supplemental information related to the Company's operating lease


Operating cash flows used for operating lease	$	332
Operating lease liability arising from obtaining ROU asset (1)	$	570
Weighted average remaining lease term		1.1	years
Weighted average discount rate		15	%

(1)	Amount includes $0.5 million related to the adoption of ASC 842 for existing operating leases on July 1, 2022, and $0.3 million related to the Company entering into a new non-cancelable operating lease agreement during the nine months ended March 31, 2023.

Schedule of future minimum lease payments under the Company's non-cancelable operating leases


	As of March 31,
	2023
Remainder of 2023	$	100
2024		404
2025		143
Gross lease payments		647
Less: imputed interest		(77)
Present value of net future minimum lease payments	$	570

Schedule of future minimum lease payments under ASC 840


	As of June 30,
	2022
2023	$	273
2024		218
2025		127
Total	$	618

Fair Value Measurements - Fair Value of Financial Instruments (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Fair Value Measurements
Total financial assets	$ 2,042
Total financial liabilities	1,819	$ 93,812
Unvested founder shares liability
Fair Value Measurements
Total financial liabilities	196
Convertible promissory notes and embedded warrants
Fair Value Measurements
Total financial liabilities		89,663
Warrants to purchase common stock
Fair Value Measurements
Total financial liabilities	1,623	4,149
Money Market Funds [Member]
Fair Value Measurements
Total financial assets	2,042
Level 1
Fair Value Measurements
Total financial assets	2,042
Level 1 \| Money Market Funds [Member]
Fair Value Measurements
Total financial assets	2,042
Level 3
Fair Value Measurements
Total financial liabilities	1,819	93,812
Level 3 \| Unvested founder shares liability
Fair Value Measurements
Total financial liabilities	196
Level 3 \| Convertible promissory notes and embedded warrants
Fair Value Measurements
Total financial liabilities		89,663
Level 3 \| Warrants to purchase common stock
Fair Value Measurements
Total financial liabilities	$ 1,623	$ 4,149

Warrants (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
Warrants (Details) - USD ($) $ in Thousands	Sep. 21, 2022	Sep. 30, 2022	Mar. 31, 2023	Mar. 31, 2023	Sep. 22, 2022	Aug. 31, 2022	Aug. 04, 2022	Jun. 30, 2022	Mar. 11, 2022	Oct. 29, 2021
Warrants
Number of Shares			18,815,453	18,815,453				4,713,303		404,961
Number of shares warrants can be converted to					18,415,453
Warrants exercised		141,970
Reclassification of liability classified warrants to equity				$ 830
Lago Term Loans
Warrants
Number of Shares						169,309
Number of shares warrants can be converted to							169,310		205,602
Horizon Term Loan
Warrants
Shares of liability classified warrants reclassified to equity	294,725
Reclassification of liability classified warrants to equity	$ 800
Credit Agreement
Warrants
Number of Shares	1,500,000
Common Stock
Warrants
Issuance of common stock (in shares)		136,681	10,000	143,333
Public warrants
Warrants
Number of Shares	8,625,000
Private warrants
Warrants
Number of Shares	6,125,000

Financing Obligations (Details) - USD ($) $ in Thousands					9 Months Ended
Financing Obligations (Details) - USD ($) $ in Thousands	Apr. 15, 2023	Nov. 21, 2022	Apr. 27, 2021	Jan. 01, 2019	Mar. 31, 2023
Financing Obligations
Repayment of term loans		$ 400			$ 32,980
Loss on extinguishment of debt and financing obligations		$ (300)			$ (8,095)
Receivable financing facility
Financing Obligations
Debt term			5 years
Receivable financing facility \| Subsequent Event [Member] \| 2023
Financing Obligations
Monthly payment	$ 700
Receivable financing facility \| Subsequent Event [Member] \| 2024
Financing Obligations
Monthly payment	3,500
Receivable financing facility \| Subsequent Event [Member] \| 2025
Financing Obligations
Monthly payment	$ 900
Equipment financing facility \| Tablets
Financing Obligations
Lease term				4 years
Equipment financing facility \| Maximum \| Tablets
Financing Obligations
Debt term				5 years
Debt interest rate				14.00%
Equipment financing facility \| Minimum \| Tablets
Financing Obligations
Debt term				3 years
Debt interest rate				8.00%

Summary of Business and Significant Accounting Policies - Liquidity and Capital Resources (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Summary of Business and Significant Accounting Policies
Cash and cash equivalents	$ 26,978		$ 26,978		$ 3,017
Operating losses	(14,542)	$ (7,977)	(42,307)	$ (21,584)
Accumulated deficit	$ (198,703)		(198,703)		$ (200,783)
Net cash received from completion of merger.			49,800
Cash proceeds from issuance of debt			$ 13,700

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Total revenue	$ 6,607	$ 7,534	$ 21,316	$ 22,459
Depreciation and impairment	291	279	873	1,206
Total cost of revenue	6,118	6,521	20,385	19,827
Gross profit	489	1,013	931	2,632
Operating expenses:
Research and development	5,496	3,927	16,877	11,733
Sales and marketing	2,127	1,966	6,753	4,791
General and administrative	7,408	2,978	19,608	7,110
Loss on infrequent product repairs		119		582
Total operating expenses	15,031	8,990	43,238	24,216
Loss from operations	(14,542)	(7,977)	(42,307)	(21,584)
Change in fair value of warrants and convertible promissory notes	1,599	18,102	61,043	(11,668)
Interest expense	(2,991)	(1,162)	(9,397)	(3,418)
Loss on extinguishment of debt and financing obligations			(8,095)
Other financing and financial instrument expenses, net			(1,768)
Other income (expense), net	257	(12)	2,612	2,629
Total other income (expense), net	(1,135)	16,928	44,395	(12,457)
Income (loss) before provision for income taxes	(15,677)	8,951	2,088	(34,041)
Provision (benefit) for income taxes	3	(3)	8	21
Net income (loss) and comprehensive income (loss)	(15,680)	8,954	2,080	(34,062)
Numerator adjustments for diluted earnings per share:
Less: Change in fair value of convertible notes		(16,307)
Net income (loss) attributable to common stockholders, diluted	$ (15,680)	$ (7,353)	$ 2,080	$ (34,062)
Net income (loss) per share attributable to common stockholders, basic	$ (0.30)	$ 0.33	$ 0.05	$ (1.25)
Net income (loss) per share attributable to common stockholders, diluted	$ (0.30)	$ (0.23)	$ 0.04	$ (1.25)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic	51,453,368	27,316,602	44,173,570	27,213,403
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted	51,453,368	31,838,707	54,539,795	27,213,403
Platform
Total revenue	$ 3,088	$ 5,083	$ 11,617	$ 14,754
Cost of revenue	2,743	4,057	10,951	11,872
Transaction
Total revenue	3,519	2,451	9,699	7,705
Cost of revenue	$ 3,084	$ 2,185	$ 8,561	$ 6,749

Fair Value Measurements - Changes in Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in fair value	$ (12,555)	$ 1,066
Convertible promissory notes and embedded warrants \| Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at the beginning of period	89,663	62,581
Issuance of convertible promissory notes/Warrants		5,500
Change in fair value	(48,271)	10,602
Conversion of warrant liabilities and convertible promissory notes	(41,392)
Balance at the end of period		78,683
Warrants to purchase common stock \| Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at the beginning of period	4,149	1,434
Reclassification of liability classified warrants to equity	(830)
Issuance of convertible promissory notes/Warrants	1,471	1,118
Recognition of warrants and unvested founder shares liabilities assumed upon Merger	9,388
Change in fair value	(12,555)	1,066
Balance at the end of period	1,623	$ 3,618
Unvested founder shares liability \| Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Recognition of warrants and unvested founder shares liabilities assumed upon Merger	1,588
Change in fair value	(1,392)
Balance at the end of period	$ 196

Subsequent Events (Details) - Subsequent Event - USD ($)	May 03, 2023	Apr. 15, 2023
Consulting Agreement \| Consultant
Subsequent Event [Line Items]
Monthly fee	$ 50,000
Consulting Agreement \| Consultant \| RSU
Subsequent Event [Line Items]
Granted	250,000
2023 \| Receivable financing facility
Subsequent Event [Line Items]
Monthly payment		$ 700,000
2024 \| Receivable financing facility
Subsequent Event [Line Items]
Monthly payment		3,500,000
2025 \| Receivable financing facility
Subsequent Event [Line Items]
Monthly payment		$ 900,000

Revenue (Tables)

9 Months Ended

Mar. 31, 2023

Revenue

Schedule of deferred revenue


	Deferred
	Revenue
Balance as of June 30, 2021	$	25,623
Additions		2,355
Revenue recognized		(13,271)
Balance as of March 31, 2022	$	14,707


	Deferred
	Revenue
Balance as of June 30, 2022	$	10,769
Additions		2,060
Revenue recognized		(11,014)
Balance as of March 31, 2023	$	1,815

Fair Value Measurements - Unvested founder share liability (Details)	Mar. 31, 2023 Y	Sep. 21, 2022 Y
Expected volatility
Fair Value Measurements
Unvested founder share liability, measurement input	0.719	0.762
Expected term (in years)
Fair Value Measurements
Unvested founder share liability, measurement input	4.5	5.0
Risk-free interest rate
Fair Value Measurements
Unvested founder share liability, measurement input	0.036	0.037

Stock-Based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2023	Mar. 31, 2022
Stock-Based Compensation
Compensation expense	$ 2,792	$ 430		$ 5,794	$ 1,378
Unrecognized stock-based compensation	11,300		$ 11,300	$ 11,300
Weighted average period of recognition				1 year 6 months
Research and development
Stock-Based Compensation
Compensation expense	682	99		$ 959	349
Sales and marketing
Stock-Based Compensation
Compensation expense	177	110		361	323
General and administrative
Stock-Based Compensation
Compensation expense	1,933	221		4,474	706
Options
Stock-Based Compensation
Unrecognized stock-based compensation	2,000		2,000	$ 2,000
Weighted average period of recognition				3 years 2 months 1 day
Earnout Shares
Stock-Based Compensation
Compensation expense	1,600	$ 0	3,500	$ 3,500	$ 0
Earnout Shares \| Research and development
Stock-Based Compensation
Compensation expense	400		1,000
Earnout Shares \| Sales and marketing
Stock-Based Compensation
Compensation expense	68		200
Earnout Shares \| General and administrative
Stock-Based Compensation
Compensation expense	$ 1,100		$ 2,300

Leases

9 Months Ended

Mar. 31, 2023

Leases

Leases

5. Leases

As of March 31, 2023, the Company recorded a right of use asset of $0.6 million within other long-term assets on the condensed consolidated balance sheet. As of March 31, 2023, the Company also recorded operating lease liabilities of $0.6 million, of which $0.3 million and $0.2 million were included in accrued liabilities and other long-term liabilities, respectively, on the condensed consolidated balance sheet. The Company adopted ASC 842 on July 1, 2022, and accordingly, no amounts were recorded for right of use assets or operating lease liabilities as of June 30, 2022. Refer to Note 1 for further details.

For the three and nine months ended March 31, 2023, the Company recorded operating lease costs of $0.1 million and $0.3 million, respectively. The operating lease costs for the three and nine months ended March 31, 2023 included variable operating lease costs of less than $0.1 million and $0.1 million, respectively.

Supplemental information related to the Company’s operating lease was as follows for the nine months ended March 31, 2023:


Operating cash flows used for operating lease	$	332
Operating lease liability arising from obtaining ROU asset (1)	$	570
Weighted average remaining lease term		1.1	years
Weighted average discount rate		15	%

(1)	Amount includes $0.5 million related to the adoption of ASC 842 for existing operating leases on July 1, 2022, and $0.3 million related to the Company entering into a new non-cancelable operating lease agreement during the nine months ended March 31, 2023.

Future minimum lease payments under the Company’s non-cancelable operating leases with an initial lease term in excess of one year subsequent to March 31, 2023 are as follows:


	As of March 31,
	2023
Remainder of 2023	$	100
2024		404
2025		143
Gross lease payments		647
Less: imputed interest		(77)
Present value of net future minimum lease payments	$	570

Under the previous lease accounting standard ASC 840, Leases, the aggregate future minimum lease payments under the Company’s non-cancelable operating lease, as of June 30, 2022, was as follows:


	As of June 30,
	2022
2023	$	273
2024		218
2025		127
Total	$	618

Rent expense for the three and nine months ended March 31, 2022 was $0.1 million and $0.3 million, respectively.

Consolidated Balance Sheet Components - Other Long-term Liabilities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Other Long-term Liabilities
Unvested founder shares liability	$ 196
Operating lease liability, net of current portion	230
Total other long-term liabilities	$ 426

Stockholders' Deficit (Details) $ in Thousands			9 Months Ended
Stockholders' Deficit (Details) $ in Thousands	Sep. 21, 2022 USD ($) Vote shares	Sep. 15, 2022 USD ($) shares	Mar. 31, 2023 USD ($) shares	Sep. 22, 2022 shares	Jun. 30, 2022 shares
Stockholders' Deficit
Common stock shares authorized	180,000,000		180,000,000	180,000,000	180,000,000
Preferred stock shares authorized	1,500,000		1,500,000	1,500,000	1,500,000
Voting rights \| Vote	1
Proceeds from the issuance of common stock \| $			$ 1,100
Number of shares warrants can be converted to				18,415,453
Other Financing and Financial Instrument (Costs) Income, Net \| $			(1,768)
Investor
Stockholders' Deficit
Proceeds from the issuance of common stock \| $		$ 1,000	$ 1,000
Issuance of common stock (in shares)		133,333	133,133
Silver rock
Stockholders' Deficit
Issuance of common stock (in shares)	322,868
Shares held by investor	400,000
Termination fee \| $	$ 1,600
Expenses agreed to pay \| $	$ 500
Number of shares warrants can be converted to	500,000
Other Financing and Financial Instrument (Costs) Income, Net \| $	$ 800

Related Party Transactions

9 Months Ended

Mar. 31, 2023

Related Party Transactions

Related Party Transactions

14. Related Party Transactions

As of June 30, 2022, the Company had $9.6 million of convertible promissory notes and embedded warrants with entities in which a member of the Company’s board of directors is an officer of the entity and has a financial interest in the entity (“affiliated entities”), classified as a current liability on the condensed consolidated balance sheet at that time. The convertible promissory notes and embedded warrants due to a related party were converted into shares of common stock in the Company during the nine months ended March 31, 2023. As of March 31, 2023, the Company has no convertible promissory notes and embedded warrants balance due to a related party. Refer to Note 7 for further details.

During the nine months ended March 31, 2023, the Company received an equity investment of $1.0 million from an investor in exchange for 133,133 shares in the Company. Refer to Note 9 for further details.

Additionally, during the nine months ended March 31, 2023, the Company granted 1,200,000 of RSUs to a director and the current interim CEO of the Company with a grant date fair value of $4.56 per RSU. Refer to Note 11 for further details.

Consolidated Balance Sheet Components - Future Amortization Expense (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Consolidated Balance Sheet Components
Remainder of 2023	$ 84
2024	335
2025	335
2026	308
2027	10
Thereafter	56
Total	$ 1,128

Commitments and Contingencies (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Commitments and Contingencies
Cost incurred		$ 0	$ 100	$ 0	$ 600
Third-party subcontractor \| Settled Litigation
Commitments and Contingencies
Amount received from third party	$ 11,300
Accrued liabilities
Commitments and Contingencies
Expected repair costs accrual	$ 700	300		300
Cost of revenue \| Platform
Commitments and Contingencies
Cost incurred		$ 300	$ 800	$ 1,200	$ 2,800

Debt Arrangements

9 Months Ended

Mar. 31, 2023

Debt Arrangements

Debt Arrangements

7. Debt Arrangements

The Company’s outstanding debt, net of debt discounts, consists of the following:


	As of March 31,		As of June 30,
	2023		2022
Convertible promissory notes	$	—	$	89,663
Term loans		53,979		25,443
PPP Loan		—		2,000
Total debt		53,979		117,106
Less: debt, current		(53,979)		(115,106)
Total debt, noncurrent	$	—	$	2,000

Credit Agreement

On September 21, 2022, in connection with the consummation of the Merger, the Company entered into a Credit Agreement (the “Credit Agreement”) with the subsidiary guarantors party thereto, Metropolitan Partners Group Administration, LLC, as administrative, payment and collateral agent (the “Agent”), the lenders (“Lenders”) and other parties party thereto, pursuant to which the Lenders extended term loans having an aggregate original principal amount of $55.0 million (the “Term Loans”). In March 2023, the Company entered into a First Amendment to Credit Agreement (the “First Amendment”) in which the parties amended certain covenants and payment provisions of the existing Credit Agreement. In connection with the First Amendment, the Company entered into the Amended and Restated Fee Letter (the “Fee Letter”) with Metropolitan, pursuant to which Presto paid an amendment fee equal to $0.2 million and granted warrants to purchase 400,000 shares of Presto common stock with an exercise price of $0.01 per share, to Metropolitan Levered Partners Fund VII, LP, Metropolitan Partners Fund VII, LP, Metropolitan Offshore Partners Fund VII, LP and CEOF Holdings LP (the “Metropolitan Entities”). The Company recorded additional debt discount of $0.8 million which represents the fees paid plus the fair value of the warrants and recorded the warrants as liabilities.

The Term Loans were borrowed in full on September 21, 2022. Amounts outstanding under the Credit Agreement will incur interest at the rate of 15% per annum. During the first 18 months following the closing date, the Company may elect to pay a portion of the accrued and unpaid interest by capitalizing the amount of such interest on a monthly basis and adding the same to the principal balance of the Term Loans, after which such capitalized interest shall accrue interest at the interest rate and otherwise constitute principal under the Term Loan (“PIK Interest”). With respect to interest accruing during the first nine months after the closing date, the Company may elect for 100% of the interest payment to be capitalized as PIK Interest on a monthly basis. With respect to interest accruing after the nine month anniversary of the closing date, but before the 18 month anniversary of the closing date, the Company may elect for 50% of the interest payment to be capitalized as PIK Interest on a monthly basis. The Term Loans mature on March 21, 2025.

The Term Loans may be prepaid by the Company; however, any voluntary or mandatory prepayment made prior to the 18 month anniversary of the closing date must be accompanied by payment of a make whole premium equal to the interest and fees that would have accrued on the aggregate principal amount of the Term Loans (including any interest that could have been capitalized as PIK Interest during such period) from the date of payment through the 18 month anniversary of the closing date. The Term Loans may not be reborrowed once repaid. The Company is required to pay the Agent certain upfront fees and administrative fees in

connection with the Term Loans. The Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets.

The Company must comply with certain financial covenants as set forth in the Credit Agreement, including a minimum cash covenant and maximum net leverage ratio of 1.20 to 1.00. The minimum cash covenant requires us to maintain cash in a separate account in an amount equal to the prior six months of operating expenses plus $1.1 million. The Company was unable to comply with these financial covenants and, as noted below, have obtained a waiver. The Credit Agreement also contains customary affirmative and restrictive covenants, including covenants regarding the incurrence of additional indebtedness or liens, investments, transactions with affiliates, delivery of financial statements, payment of taxes, maintenance of insurance, dispositions of property, mergers or acquisitions, among other customary covenants. The Company is also restricted from paying dividends or making other distributions or payments on its capital stock, subject to limited exceptions. The Credit Agreement also includes customary representations and warranties, events of default and termination provisions, upon which the Term Loans may be accelerated and the interest rate applicable to any outstanding payment obligations will increase by 5%. On March 31, 2023, the Company obtained a waiver, pursuant to the First Amendment noted above, of the minimum cash covenant for February 28, 2023 and March 31, 2023, the net leverage ratio for the period from February 28, 2023 through May 31, 2023 and any default occurring from the separation of the Company’s chief executive officer from the Board of Directors in March 2023. The Company is seeking a further waiver in conjunction with its efforts to raise additional financing. The Company is in compliance with all other applicable covenants. However, since the Company cannot be certain it will be in compliance with all covenants in the next twelve months if additional financing is not secured, the Company has classified the balance of the Credit Agreement as current on the condensed consolidated balance sheet as of March 31, 2023.

In conjunction with the Credit Agreement, the Company issued 1,500,000 warrants to purchase common stock to the Lenders. Such warrants were determined to be equity classified and the Company recorded the value associated with such warrants of $2.1 million within additional paid in capital, with an offsetting debt discount being recorded. Refer to Note 10 for further details on the aforementioned warrants.

As a condition to entering into the Credit Agreement, the Sponsors agreed to transfer 600,000 Presto Automation Inc. shares to the Lender to the Credit Agreement. The share transfer by the Sponsor to the Lenders to the Credit Agreement was such that the substance of the transaction was that the Sponsors made a capital contribution to the Company, and the Company then made a share-based payment to the Lenders as an incentive for the Lenders to enter into the Credit Agreement. Accordingly, the Company recorded the transaction as debt issuance costs discount of $2.8 million in condensed consolidated balance sheet with an offsetting increase to additional paid-in capital for the contribution.

The Company incurred other debt issuance costs associated with professional services and fees paid to the lender of $1.0 million in conjunction with the signing of the Credit Agreement which were recorded as a debt discount.

During the three and nine months ended March 31, 2023, the Company recorded PIK interest expense amounts of $2.2 million and $4.6 million, respectively, which has been reflected as an increase to the outstanding debt balance. Further, during the three and nine months ended March 31, 2023 the Company recorded interest expense associated with the amortization of debt discounts of $0.6 million and $1.2 million, respectively. Accordingly, as at March 31, 2023, the term loans, noncurrent balance of $54.0 million reflects $55.0 million of principal and $4.6 million of PIK interest accrual, reduced by $5.5 million of unamortized debt issuance costs. The Company had no outstanding amounts related to the Credit Agreement as of June 30, 2022.

Convertible Promissory Notes

As of June 30, 2022, the Company had $89.7 million of convertible notes outstanding to various investors, all of which were accounted for under the fair value option. In conjunction with the Merger all convertible promissory notes converted into shares of common stock. Further on the date of the Merger, certain convertible notes which were together with warrants also had the related warrants converted into shares of common stock. As a consequence of the note and warrant conversion, 8,147,938 shares of common stock were issued. Immediately prior to conversion, the convertible promissory notes were remeasured to the then fair value of $41.4 million, resulting in a gain on remeasurement of $48.3 million which was recorded within change in fair value of warrants and convertible promissory notes on the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended March 31, 2023. As a consequence of the conversion, $41.4 million was reclassified into additional paid-in capital. Accordingly, there were no remeasurement effects related to the convertible promissory notes, as such notes were longer outstanding during three month period ended March 31, 2023.

During the nine months ended March 31, 2022 the Company issued the July 2021 notes for $0.5 million of convertible promissory notes and issued the February 2022 notes for $25.7 million and repaid the June 2021 notes for $20.0 million with the February 2022 notes. During the three and nine months ended March 31, 2022, the Company recorded a gain on remeasurement of $19.2 million and loss of $10.6 million, respectively, on all outstanding convertible promissory notes, which were recorded within change in fair value of warrants and convertible promissory notes on the condensed consolidated statement of operations and comprehensive income (loss).

Term Loans

Horizon Term Loan

On March 4, 2021, the Company entered into a loan agreement (the “Horizon Loan”) with Horizon Technology Finance Corporation, which provided the Company with $15.0 million, bears interest at prime rate plus 6.5% per annum, and has a term of 54 months from each loan funding date. The Horizon Loan payment terms require repayment of accrued interest only on the outstanding principal amount over the first 24 payment dates and an equal payment of principal plus accrued interest on the next 30 payment dates identified in the notes applicable to the loan. The Company pledged certain assets against the Horizon Loan. The Horizon Loan contains financial covenants that require the maintenance of an unrestricted cash plus accounts receivable balance and achievement of quarterly bookings targets. On March 11, 2022, the Company amended the Horizon Loan to shorten the total term to 24 months.

In connection with the entry into the Credit Agreement (described above), on September 21, 2022 the Company repaid the Horizon Loan making a cash disbursement of $17.0 million, of which $15.0 million was repayment of principal and $0.6 million was payment of interest expense and accrued interest. Further on the date of the Merger, $1.7 million was recorded as a loss on extinguishment of debt and financial obligations on the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended March 31, 2023.

Lago Term Loans

On March 11, 2022, the Company entered into a loan agreement (the “Lago Loan”) with Lago Innovation Fund I & II, LLC, which provided the Company with $12.6 million, bears interest at the greater of 12% plus the greater of 1% or 30 day LIBOR, bears 2% payable in kind interest, and matures on April 1, 2023. The Company pledged certain assets against the Lago Loan. The Lago Loan payment terms require repayment of accrued interest only on the outstanding principal over the first 12 payment dates and payment of principal plus remaining accrued interest on the last payment date identified in the notes applicable to the loan. The Company may prepay at any time for a fee, dependent on the time of prepayment. The Lago Loan contains financial covenants that require the maintenance of unrestricted cash plus accounts receivable balance and achievement of quarterly bookings targets. The Company issued 205,602 warrants to purchase common stock with the Lago Loan. Refer to Note 10 for further details.

On August 4, 2022, the Company amended the Lago Loan which provided the Company with $5.3 million. Further, as part of the amendment to the Lago Loan, the Company issued an additional 169,310 warrants to purchase common stock with the additional tranche. The Company determined that the amendment with the lender should be accounted for as an extinguishment and recorded as a loss on extinguishment of debt and financial obligations of $6.0 million on its condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended March 31, 2023.

In connection with the entry into the Credit Agreement (described above) on September 21, 2022, the Company repaid all outstanding loans by making a cash disbursement of $22.4 million, of which $17.9 million was repayment of principal and $0.1 million was payment of payable in kind interest. Further $4.4 million of cash was paid related to prepayment and other penalties.

Paycheck Protection Program Loans

In April 2020, we obtained a Paycheck Protection Program (“PPP”) loan for $2.6 million through the U.S. Small Business Administration. In March 2021, a second PPP loan was obtained in the amount of $2.0 million, for a total of $4.6 million received in PPP loans. The loans were to be fully forgiven if the funds received were used for payroll costs, interest on mortgages, rent, and utilities, with at least 60% being used for payroll. The Company utilized the funds for these purposes and applied for loan forgiveness of the PPP funds. The Company’s accounting policy provides that if the loans are forgiven, the forgiven loan balance will be recognized as income in the period of forgiveness. During the nine months ended March 31, 2022, the Company received forgiveness of the first PPP loan of $2.6 million and recognized income on forgiveness within other income, net. During the nine months ended

March 31, 2023, the Company received forgiveness of the second PPP loan of $2.0 million and recognized income on forgiveness within other income, net.

Future principal payments on debt for the Company’s fiscal years were as follows:


	As of March 31,
	2023
2023 (remaining)	$	—
2024		—
2025		55,000
Total future payments on debt obligations	$	55,000

- Definition

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.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Debt Arrangements - Convertible Promissory Notes (Details) - USD ($)	3 Months Ended	9 Months Ended
	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Debt Instrument [Line Items]
Fair value of convertible promissory note		$ 0
Convertible promissory notes
Debt Instrument [Line Items]
Fair value of convertible promissory note		$ 41,400,000		$ 89,700,000
Debt conversion, shares issued		8,147,938
Gain (loss) on remeasurement	$ 19,200,000	$ 48,300,000	$ (10,600,000)
Adjustment to Additional Paid in Capital, Reclassification on Conversion of Convertible Debt		$ 41,400,000
July 2021 Notes
Debt Instrument [Line Items]
Proceeds from issuance of promissory notes			500,000
Repayment of notes			20,000,000.0
February 2022 Notes
Debt Instrument [Line Items]
Proceeds from issuance of promissory notes			$ 25,700,000

Debt Arrangements (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Financing Obligations
Total debt	$ 53,979	$ 117,106
Less: debt, current	(53,979)	(115,106)
Total debt, noncurrent		2,000
Convertible promissory notes
Financing Obligations
Total debt		89,663
Term loans
Financing Obligations
Total debt	$ 53,979	25,443
PPP Loan
Financing Obligations
Total debt		$ 2,000

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Net Income (Loss) Per Share (Tables)

9 Months Ended

Mar. 31, 2023

Net Income (Loss) Per Share

Schedule of computation of basic and diluted net income (loss) per share attributable to common stockholders


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Numerator:
Net income (loss) attributable to common stockholders, basic and diluted	$	(15,680)	$	8,954	$	2,080	$	(34,062)

Less: Change in fair value of convertible promissory notes		—		(16,307)		—		—
Net income (loss) attributable to common stockholders, diluted	$	(15,680)	$	(7,353)	$	2,080	$	(34,062)

Denominator:
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic		51,453,368		27,316,602		44,173,570		27,213,403
Add: Weighted average dilutive effect of stock options, RSUs and warrants		—		—		10,366,225		—
Add: Weighted average dilutive effect of convertible promissory notes		—		4,522,105		—		—
Weighted average shares outstanding - diluted		51,453,368		31,838,707		54,539,795		27,213,403
Net income (loss) per share attributable to common stockholders, basic	$	(0.30)	$	0.33	$	0.05	$	(1.25)
Net income (loss) per share attributable to common stockholders, diluted	$	(0.30)	$	(0.23)	$	0.04	$	(1.25)

Schedule of potential weighted average shares of common stock excluded from computation of diluted net loss per share


	Three months ended March 31,		Nine Months Ended March 31,
	2023	2022	2023	2022
Stock options and RSUs	13,856,065	11,848,316	356,342	11,903,763
Convertible notes	—	-	—	4,535,520
Common stock warrants	18,154,571	4,582,204	12,509,788	4,372,633
Non-voting common stock warrants	—	—	—	—
Total potential shares of common stock excluded from the computation of diluted net income (loss) per share	32,010,636	16,430,520	12,866,130	20,811,916

Revenue

9 Months Ended

Mar. 31, 2023

Revenue

Revenue

2. Revenue

Contract Balances

The Company receives payments from customers based on a billing schedule as established in its customer contracts. Accounts receivable is recorded when the Company contractually has the right to consideration. In some arrangements, a right to consideration for its performance under the customer contract may occur before invoicing to the customer, resulting in contract assets. The amount of contract assets included within accounts receivable before allowances, in the condensed consolidated balance sheets was $0.7 million and $0.5 million as of March 31, 2023 and June 30, 2022, respectively.

Contract liabilities consist of deferred revenue. Deferred revenue represents amounts that have been invoiced in advance of revenue recognition, and the balance is recognized as revenue when transfer of control to customers has occurred or services have been provided. The current portion of deferred revenue balances are recognized during the following twelve-month period.

The following table summarizes the activity in deferred revenue:


	Deferred
	Revenue
Balance as of June 30, 2021	$	25,623
Additions		2,355
Revenue recognized		(13,271)
Balance as of March 31, 2022	$	14,707


	Deferred
	Revenue
Balance as of June 30, 2022	$	10,769
Additions		2,060
Revenue recognized		(11,014)
Balance as of March 31, 2023	$	1,815

As of March 31, 2023, approximately $2.8 million of revenue is expected to be recognized from remaining performance obligations for customer contracts. The Company expects to recognize revenue on approximately $2.5 million of these remaining performance obligations over the next 12 months with the balance recognized thereafter.

On July 29, 2019, the Company entered into an arrangement with Customer A whereby it agreed to provide a $5.0 million marketing development payment once the roll out phase was completed, which occurred on June 4, 2020, with the payment coming due on July 4, 2020. This payment is treated as an offset to revenue recognized under the contract over 4 years and interest accrues on the unpaid balance at a rate of 12% per annum. The payment due on July 4, 2020 was not paid by the Company. As of March 31, 2023 and June 30, 2022, the Company had incurred $0 and $0.2 million of accrued interest expense, respectively.

On September 29, 2021, the Company entered into a settlement agreement with Customer A regarding the payment of a $5.0 million marketing development payment and related accrued interest to be made to the customer and $2.0 million in handheld services to be provided to the customer under a previous contract. Through the settlement agreement, the Company agreed to provide certain alternative installation and replacement services with a value of $2.0 million and cover expenses on behalf of the customer related to a liquid ingress issue resulting from COVID-19 of $3.3 million. The liquid ingress issue was a result of the Company’s devices failure primarily due to the use of extremely strong commercial disinfectant solutions by the Company’s customers to clean the hardware devices as a mandatory precaution protocol due to COVID-19. In return, the customer agreed to reduce the payment to be made from $5.0 million to $3.2 million, waive the related accrued interest of $0.8 million and no longer request a refund on a $2.0 million payment it had previously made for handheld services. Of the amounts, $2.9 million was accounted for as contra-loss on infrequent product repairs, $2.4 million as a reduction to accounts payable for the principal and accrued interest owed, $0.3 million as a reduction to deferred revenue, and $0.2 million as prepaid interest as of and for the fiscal year ended June 30, 2021. Subsequently, $0.2 million interest expense was recognized against the prepaid interest balance, $3.2 million was recognized as a reduction to accounts payable for the payment of the outstanding marketing development amount in October 2021. Revenue relating to the installation and replacement services provided as a part of the contract modification was $0.1 million and $0.5 million for the three and nine months ended March 31, 2023, respectively, and $0.1 million and $0.5 million was recognized as revenue relating to the installation and replacement services provided as part of the contract modification for the three and nine months ended March 31, 2022. The Company will continue to offset revenue recognized based on the original $5.0 million marketing development fund.

On October 29, 2021, the Company entered into an arrangement with a customer whereby it issued a warrant to purchase 404,961 shares of common stock. Refer to Note 10 for further details. The fair value of the warrant is treated as a reduction to the transaction price of the customer contract and will be recorded as contra-revenue. Contra-revenue recognized related to the warrant was $0.5 million and $1.1 million for the three and nine months ended March 31, 2023, respectively. There was no contra-revenue recognized during the three and nine months ended March 31, 2022.

AI Platform

The Company remits a share of the gross billings from its arrangement with Customer D to its hardware and software vendor. The Company determined it is the agent in the relationship as it does not control the AI Platform hardware, software, and certain services, and is not primarily responsible for fulfilling the promise to Customer D.

The revenue share paid to the Company’s hardware and software vendor under the Company’s AI Platform revenue share agreement ranged from 64% - 68% of the gross billings to the customer for the three and nine months ended March 31, 2023.

Transaction Revenue

The commissions paid to restaurants under the Company’s gaming revenue share agreements ranged between 84% - 90% and 83% - 90% of premium content revenue by customer logo for the three and nine months ended March 31, 2023, respectively, while the commissions paid to restaurants under the Company’s gaming revenue share agreements ranged between 82% - 90% and 81% - 90% of premium content revenue by customer logo for the three and nine months ended March 31, 2022, respectively.

Disaggregation of Revenue

No single country other than the United States represented 10% or more of the Company’s revenue during three and nine months ended March 31, 2023 and 2022.

For the three and nine months ended March 31, 2023, $0.6 million and $1.5 million of revenue was from leasing arrangements or with predominant leasing components, respectively, while for the three and nine months ended March 31, 2022, $0.5 million and $1.8 million of revenue was from leasing arrangements, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=49130388

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+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Summary of the equity incentive plan activity


	Number of	Weighted-		Weighted-	Aggregate
	Options	Average		Average Remaining	Intrinsic
	Outstanding	Exercise Price		Contractual Life (years)	Value
Balance – June 30, 2022	13,845,291	$	0.59	6.66
Retrospective application of recapitalization	(2,631,676)		0.14
Adjusted Balance – beginning of period	11,213,615		0.73	6.66
Exercised	(511,670)		0.54
Forfeited and expired	(253,625)		1.07
Balance –March 31, 2023	10,448,320		0.73	4.57
Vested and expected to vest at March 31, 2023	10,448,320		0.73	4.57	$	8,842
Exercisable at March 31, 2023	9,512,184		0.57	4.24		9,591

Summary of the equity incentive plan RSU activity


	Number of	Weighted- Average
	Awards Outstanding	Grant Date Fair Value
Unvested Balance – June 30, 2022	432,666	$	6.46
Retrospective application of recapitalization	(82,240)		1.52
Adjusted, unvested balance – beginning of period	350,426		7.98
Granted	4,758,115		4.80
Vested	(798,239)		4.28
Forfeited	(372,215)		4.32
Unvested Balance - March 31, 2023	3,938,087		5.24

Summary of stock-based compensation expense excluding stock-based compensation in capitalized software


	Three months ended March 31,				Nine months ended March 31,
	2023		2022		2023		2022
Research and development	$	682	$	99	$	959	$	349
Sales and marketing		177		110		361		323
General and administrative		1,933		221		4,474		706
	$	2,792	$	430	$	5,794	$	1,378

Leases - Supplemental information (Details) - USD ($)	9 Months Ended
Leases - Supplemental information (Details) - USD ($)	Mar. 31, 2023	Jul. 01, 2022	Jun. 30, 2022
Leases
Operating cash flows used for operating lease	$ 332,000
Operating lease liability arising from obtaining ROU asset (1)	570,000		$ 0
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 308,000
Weighted average remaining lease term	1 year 1 month 6 days
Weighted average discount rate	15.00%
New non-cancelable operating lease
Leases
Operating lease liability arising from obtaining ROU asset (1)	$ 300,000
ASU 2016-02
Leases
Operating lease liability arising from obtaining ROU asset (1)		$ 500,000

Subsequent Events

9 Months Ended

Mar. 31, 2023

Subsequent Events

Subsequent Events

15. Subsequent Events

Receivable Financing Facility

As noted in Note 6, on April 15, 2023, the Company entered into an amended and restated investment arrangement to amend the payment due dates and periodic payment amounts to be made under the investment agreement. The agreement calls for payments of principal and interest of $0.7 million, $3.5 million and $0.9 million in fiscal years 2023, 2024 and 2025, respectively.

Extended Term of Consulting Agreement

On May 3, 2023, the Company entered into an Amendment to the Consulting Agreement with Ashish Gupta (the “Amendment”). The Amendment extends the term of the Consulting Agreement dated March 4, 2023 that provides for Mr. Gupta to continue his advisory to the Company, from May 1, 2023 until July 31, 2023 (the “Extended Term”). In consideration, he will be compensated at a rate of $50,000 per month during the Extended Term. The Amendment also provides for a grant to Mr. Gupta of 250,000 restricted stock units, one half of which will vest in monthly increments during the Extended Term and the remaining half of which will vest upon the achievement of certain targets agreed to by the Company and Mr. Gupta.

Fair Value Measurements

9 Months Ended

Mar. 31, 2023

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

The following table provides a summary of all financial instruments measured at fair value:


	As of March 31, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents:
Money market funds	$	2,042	$	—	$	—	$	2,042
Total financial assets	$	2,042	$	—	$	—	$	2,042

Financial liabilities:
Unvested founder shares liability	$	—	$	—	$	196		196
Warrant liabilities		—		—		1,623		1,623
Total financial liabilities	$	—	$	—	$	1,819	$	1,819


	As of June 30, 2022
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Convertible promissory notes and embedded warrants	$	—	$	—	$	89,663	$	89,663
Warrant liabilities		—		—		4,149		4,149
Total financial liabilities	$	—	$	—	$	93,812	$	93,812

Valuation Assumptions Related to Unvested Founder Share Liability

The fair value of the unvested founder shares liability was determined by the Company using a Monte Carlo valuation model, which requires significant estimates including the expected volatility of our common stock based on the historical volatility of comparable publicly traded companies and the risk-free rate.

The Company estimated the fair value of the unvested founder share liability using the following weighted average assumptions:


	As of March 31, 2023		As of Merger Date
Expected volatility	71.9	%	76.2	%
Expected term (in years)	4.5		5.0
Risk-free interest rate	3.6	%	3.7	%

Valuation Assumptions and Other Information Related to Convertible Promissory Notes and Embedded Warrants

The fair value of the convertible promissory notes and embedded warrants is determined based on “Level 3” inputs, due to a lack of market data over inputs such as the probability weighting of the various scenarios that can impact the settlement. The principal amount of the convertible promissory notes, embedded warrants and accrued interest is measured at fair value using the Monte Carlo valuation model. The valuation model utilized various key assumptions, such as enterprise value and management assessments of the probability of expected future events, including conversion upon next financing of private preferred stock, conversion upon a next financing in a public liquidity event, conversion upon a change in control, conversion upon maturity and default. A public liquidity event is defined as the issuance and sale of shares in an initial public offering or a deSPAC. As part of the convertible promissory notes and embedded warrants valuation at each reporting date, the Company determined that credit risk associated with the convertible notes was immaterial.

The Company elected the fair value option to account for the convertible promissory notes and embedded warrants because the Company believes it more accurately reflects the value of the debt in the financial statements. Changes in the fair value of the convertible promissory notes and embedded warrants were included in change in fair value of warrants and convertible promissory notes in the condensed consolidated statement of operations and comprehensive income (loss).

The Company estimated the fair value of the convertible promissory notes, embedded warrants and accrued interest using the following weighted average assumptions:


	As of June 30, 2022
	Next		Next		Change in		Maturity
	Financing - Private		Financing - Public		Control		Date		Default
Probability of conversion	10.0	%	80.0	%	5.0	%	5.0	%	—
Expected term (in years)	0.3		0.2		0.2		0.3		—
Discount rate	16.5	%	16.5	%	16.5	%	—	%	—

The following table sets forth a summary of the difference between the carrying amount and the fair value of Level 3 convertible promissory notes and embedded warrants for which the fair value option was elected:


	As of June 30, 2022
	Carrying		Amount
	Amount		Charged to Earnings		Fair Value
Convertible promissory notes and embedded warrants	$	51,816	$	37,847	$	89,663
Total	$	51,816	$	37,847	$	89,663

The Company had no outstanding convertible promissory notes and embedded warrants as of March 31, 2023.

Valuation Assumptions Related to Warrants

The fair value of the warrant liabilities are determined based on “Level 3” inputs, due to the lack of relevant observable market data over fair value inputs (volatility, stock price, risk-free rate, expected term, and dividend yield), used in the Black-Scholes-Merton model. The following table indicates the weighted-average assumptions made in estimating the fair value:


	As of			As of
	March 31,			June 30,
	2023			2022
Risk-free interest rate		3.64	%		3.00	%
Expected term (in years)		4.93			5.93
Expected volatility		59.07	%		65.72	%
Expected dividend yield		—			—
Exercise price	$	6.15		$	7.48

Level 3 Rollforward

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities:


	Convertible
	Promissory				Unvested
	Notes and				Founder
	Embedded		Warrant		Shares
	Warrants		Liabilities		Liability
Balance at June 30, 2021	$	62,581	$	1,434	$	—
Issuance of convertible promissory notes		5,500		—		—
Issuance of warrants		—		1,118
Change in fair value of warrants and convertible promissory notes		10,602		1,066		—
Balance at March 31, 2022	$	78,683	$	3,618	$	—


	Convertible
	Promissory				Unvested
	Notes and				Founder
	Embedded		Warrant		Shares
	Warrants		Liabilities		Liability
Balance at June 30, 2022	$	89,663	$	4,149	$	—
Reclassification of liability classified warrants to equity		—		(830)		—
Issuance of warrants		—		1,471		—
Recognition of warrants and unvested founder shares liabilities assumed upon Merger		—		9,388		1,588
Change in fair value		(48,271)		(12,555)		(1,392)
Conversion of warrant liabilities and convertible promissory notes		(41,392)		—		—
Balance at March 31, 2023	$	—	$	1,623	$	196

For the Company’s investments without readily determinable fair values, the investment is adjusted if any impairments or observable price changes are identified, which is considered fair value.

The Company measures certain non-financial assets and liabilities, including property and equipment, intangible assets, and inventory, at fair value on a non-recurring basis. Fair value measurements of non-financial assets and non-financial liabilities are used primarily in the impairment analyses of property and equipment, intangible assets and inventory.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Fair Value Measurements - Fair Value of Warrant Liabilities (Details) - Level 3	Mar. 31, 2023 Y $ / shares	Jun. 30, 2022 Y $ / shares
Risk-free interest rate
Fair Value Measurements
Warrants, measurement inputs	0.0364	0.0300
Expected term (in years)
Fair Value Measurements
Warrants, measurement inputs \| Y	4.93	5.93
Expected volatility
Fair Value Measurements
Warrants, measurement inputs	0.5907	0.6572
Exercise price
Fair Value Measurements
Warrants, measurement inputs \| $ / shares	6.15	7.48

Revenue (Details) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
Revenue (Details) - USD ($) $ in Thousands	Sep. 29, 2021	Jul. 29, 2019	Oct. 31, 2021	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2021	Jun. 30, 2022	Oct. 29, 2021
Revenue
Contract assets				$ 700		$ 700			$ 500
Interest expense				2,991	$ 1,162	9,397	$ 3,418
Accrued interest				$ 371		371			$ 402
Value of alternative installation and replacement services					100		500
Loss on infrequent product repairs					119		582
Accounts payable						$ 1,480	(4,297)
Warrants to purchase shares of common stock				18,815,453		18,815,453			4,713,303	404,961
Contra-revenue recognized related to the warrant				$ (500)	0	$ (1,073)	0
Revenue from leasing arrangements				600	$ 500	1,500	$ 1,800
AI Platform
Revenue
Contra-revenue recognized related to the warrant				$ 500		$ 1,100
Maximum
Revenue
Premium content revenue (as a percent)						90.00%	90.00%
Maximum \| AI Platform
Revenue
Percent of revenue paid to vendor (as percent)				68.00%		68.00%
Maximum \| Gaming
Revenue
Commission paid to restaurants (as a percent)				90.00%	90.00%
Minimum
Revenue
Premium content revenue (as a percent)						83.00%	81.00%
Minimum \| AI Platform
Revenue
Percent of revenue paid to vendor (as percent)				64.00%		64.00%
Minimum \| Gaming
Revenue
Commission paid to restaurants (as a percent)				84.00%	82.00%
Customer A
Revenue
Marketing development expense	$ 3,200	$ 5,000
Percentage of interest accrued on unpaid balance		12.00%
Interest expense			$ 200
Accrued interest				$ 0		$ 0			$ 200
Handheld services payable	2,000
Value of alternative installation and replacement services	2,000			$ 100		$ 500
Cover expenses	3,300
Accrued interest waived	800
Cancellation of refund request	$ 2,000
Loss on infrequent product repairs								$ 2,900
Accounts payable			$ (3,200)					(2,400)
Reduction to deferred revenue								(300)
Prepaid interest								$ 200

Income Taxes

9 Months Ended

Mar. 31, 2023

Income Taxes

Income Taxes

12. Income Taxes

The Company is subject to U.S. federal, state, and local corporate income taxes. The Company’s income tax expense was not material for the three and nine months ended March 31, 2023 and 2022. The Company does not expect any material changes in tax position for the remainder of the fiscal year.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Summary of Business and Significant Accounting Policies - Unvested Founder Shares (Details) $ / shares in Units, $ in Thousands			3 Months Ended	6 Months Ended	9 Months Ended
	Sep. 22, 2022 USD ($) $ / shares shares	Sep. 21, 2022 USD ($) D $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($) $ / shares shares	Oct. 29, 2021 shares
Summary of Business and Significant Accounting Policies
Founders shares held by sponsors \| shares		444,500
Stock based compensation expiration period		5 years
Number of consecutive trading days \| D		40
Number of Trading days \| D		60
Liability for the unvested founder shares		$ 1,600
Change in fair value of unvested founder shares liability					$ (1,392)
Total shares authorized \| shares	181,500,000
Common stock shares authorized \| shares	180,000,000	180,000,000	180,000,000	180,000,000	180,000,000	180,000,000
Common stock par value \| $ / shares	$ 0.0001		$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock shares authorized \| shares	1,500,000	1,500,000	1,500,000	1,500,000	1,500,000	1,500,000
Preferred stock par value (in dollars per share) \| $ / shares	$ 0.0001		$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares issued \| shares	50,639,837		51,921,941	51,921,941	51,921,941	27,974,439
Common stock, shares outstanding \| shares	50,639,837		51,921,941	51,921,941	51,921,941	27,974,439
Number of shares warrants can be converted to \| shares	18,415,453
Warrants to purchase shares of common stock \| shares			18,815,453	18,815,453	18,815,453	4,713,303	404,961
Exchange ratio	0.8099%
Total net liabilities	$ 9,800
Gain on remeasurement of unvested founder shares				$ 1,400
Loss on remeasurement of unvested founder shares			$ (200)
Warrant liabilities	9,400		$ 1,623	$ 1,623	$ 1,623	$ 4,149
Cash-PIPE investment	$ 55,400
Maximum
Summary of Business and Significant Accounting Policies
Stock based compensation expiration period					10 years
Selling and Marketing Expense [Member]
Summary of Business and Significant Accounting Policies
Bonus and deferred consideration expense					$ 100
Research and Development Expense [Member]
Summary of Business and Significant Accounting Policies
Bonus and deferred consideration expense					1,800
Legacy Presto
Summary of Business and Significant Accounting Policies
Exchange ratio		0.8099%
CyborgOps
Summary of Business and Significant Accounting Policies
Bonus and deferred consideration expense					$ 1,900
First specified vesting period
Summary of Business and Significant Accounting Policies
Percentage of shares vested		25.00%
Stock price \| $ / shares		$ 12.00
Stock based compensation expiration period		5 years
Second specified vesting period
Summary of Business and Significant Accounting Policies
Percentage of shares vested		25.00%
Stock price \| $ / shares		$ 15.00
Stock based compensation expiration period		5 years
Third specified vesting period
Summary of Business and Significant Accounting Policies
Percentage of shares vested		25.00%
Stock price \| $ / shares		$ 20.00
Stock based compensation expiration period		5 years
Remaining 25%
Summary of Business and Significant Accounting Policies
Percentage of shares vested		25.00%
Stock price \| $ / shares		$ 25.00
Stock based compensation expiration period		5 years

Financing Obligations - Schedule of Financing Obligations Net of Discounts (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Financing Obligations
Total financing obligations	$ 5,580	$ 8,840
Less: financing obligations, current	(3,720)	(8,840)
Total financing obligations, noncurrent	1,860
Receivable financing facility
Financing Obligations
Total financing obligations	4,314	5,911
Equipment financing facility
Financing Obligations
Total financing obligations	$ 1,266	$ 2,929

Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2023

Fair Value Measurements

Schedule of fair value of financial instruments


	As of March 31, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents:
Money market funds	$	2,042	$	—	$	—	$	2,042
Total financial assets	$	2,042	$	—	$	—	$	2,042

Financial liabilities:
Unvested founder shares liability	$	—	$	—	$	196		196
Warrant liabilities		—		—		1,623		1,623
Total financial liabilities	$	—	$	—	$	1,819	$	1,819


	As of June 30, 2022
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Convertible promissory notes and embedded warrants	$	—	$	—	$	89,663	$	89,663
Warrant liabilities		—		—		4,149		4,149
Total financial liabilities	$	—	$	—	$	93,812	$	93,812

Schedule of weighted-average assumptions made in estimating the fair value


	As of June 30, 2022
	Next		Next		Change in		Maturity
	Financing - Private		Financing - Public		Control		Date		Default
Probability of conversion	10.0	%	80.0	%	5.0	%	5.0	%	—
Expected term (in years)	0.3		0.2		0.2		0.3		—
Discount rate	16.5	%	16.5	%	16.5	%	—	%	—


	As of			As of
	March 31,			June 30,
	2023			2022
Risk-free interest rate		3.64	%		3.00	%
Expected term (in years)		4.93			5.93
Expected volatility		59.07	%		65.72	%
Expected dividend yield		—			—
Exercise price	$	6.15		$	7.48

Schedule of difference between carrying amount and the fair value


	As of June 30, 2022
	Carrying		Amount
	Amount		Charged to Earnings		Fair Value
Convertible promissory notes and embedded warrants	$	51,816	$	37,847	$	89,663
Total	$	51,816	$	37,847	$	89,663

Schedule of changes in fair value of level 3


	Convertible
	Promissory				Unvested
	Notes and				Founder
	Embedded		Warrant		Shares
	Warrants		Liabilities		Liability
Balance at June 30, 2021	$	62,581	$	1,434	$	—
Issuance of convertible promissory notes		5,500		—		—
Issuance of warrants		—		1,118
Change in fair value of warrants and convertible promissory notes		10,602		1,066		—
Balance at March 31, 2022	$	78,683	$	3,618	$	—


	Convertible
	Promissory				Unvested
	Notes and				Founder
	Embedded		Warrant		Shares
	Warrants		Liabilities		Liability
Balance at June 30, 2022	$	89,663	$	4,149	$	—
Reclassification of liability classified warrants to equity		—		(830)		—
Issuance of warrants		—		1,471		—
Recognition of warrants and unvested founder shares liabilities assumed upon Merger		—		9,388		1,588
Change in fair value		(48,271)		(12,555)		(1,392)
Conversion of warrant liabilities and convertible promissory notes		(41,392)		—		—
Balance at March 31, 2023	$	—	$	1,623	$	196

Unvested founder shares liability

Fair Value Measurements

Schedule of weighted-average assumptions made in estimating the fair value


	As of March 31, 2023		As of Merger Date
Expected volatility	71.9	%	76.2	%
Expected term (in years)	4.5		5.0
Risk-free interest rate	3.6	%	3.7	%

Summary of Business and Significant Accounting Policies - Leases (Details)	Mar. 31, 2023
Maximum
Leases
Remaining lease term	3 years
Minimum
Leases
Remaining lease term	6 months