Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Sep. 28, 2017 | Dec. 31, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Modular Medical, Inc. | ||
Entity Central Index Key | 1,074,871 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 149,213 | ||
Entity Common Stock, Shares Outstanding | 15,983,273 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Current Assets | ||
Cash and Cash Equivalents | $ 1,372,400 | $ 0 |
Total Assets | 1,372,400 | 0 |
Current Liabilities | ||
Accrued Expenses | 74,420 | 0 |
Related Party Payable | 0 | 131,092 |
Accrued Interest - Related Parties | 0 | 62,671 |
Total Current Liabilities | 74,420 | 193,763 |
Stockholders' Equity (Deficit) | ||
Preferred Stock -- 5,000,000 shares authorized having a par value of $.001 per share; none issued and outstanding | 0 | 0 |
Common Stock -- 50,000,000 shares authorized having a par value of $.001 per share; 3,500,000 and 1,249,816 shares issued and outstanding as of June 30, 2017 and 2016 | 3,500 | 1,250 |
Additional Paid-in Capital | 306,480 | 82,828 |
Shares to be Issued | 1,372,400 | 0 |
Accumulated Deficit | (384,400) | (277,841) |
Total Stockholders' Equity (Deficit) | 1,297,980 | (193,763) |
Total Liabilities and Stockholders' Equity | $ 1,372,400 | $ 0 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 3,500,000 | 1,249,816 |
Common stock, shares outstanding | 3,500,000 | 1,249,816 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||
Revenues, Net | $ 0 | $ 0 |
Operating Expenses | ||
General and Administrative Expenses | 91,051 | 13,163 |
Net Loss from Operations | (91,051) | (13,163) |
Other Expenses | ||
Related Party Interest Expense | (15,508) | (17,921) |
Loss Before Income Taxes | (106,559) | (31,084) |
Provision for Income Taxes | 0 | 0 |
Net Loss | $ (106,559) | $ (31,084) |
Loss Per Share - Basic and Diluted | $ (.06) | $ (.02) |
Weighted Average Shares Outstanding - Basic and Diluted | 1,651,635 | 1,249,816 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Shares To Be Issued | Accumulated Deficit | Total |
Beginning Balance at Jun. 30, 2015 | $ 0 | $ 1,250 | $ 82,828 | $ 0 | $ (246,757) | $ (162,679) |
Beginning Balance, shares at Jun. 30, 2015 | 0 | 1,249,816 | ||||
Net loss | (31,084) | (31,084) | ||||
Ending Balance at Jun. 30, 2016 | $ 0 | $ 1,250 | 82,828 | 0 | (277,841) | (193,763) |
Ending Balance, shares at Jun. 30, 2016 | 0 | 1,249,816 | ||||
Shares cancelled pursuant to share purchase agreement | $ (650) | (13,449) | (14,098) | |||
Shares cancelled pursuant to share purchase agreement, shares | (649,816) | |||||
Shares issued pursuant to share purchase agreement | $ 2,900 | 237,100 | 240,000 | |||
Shares issued pursuant to share purchase agreement, shares | 2,900,000 | |||||
Shares to be issued pursuant to private purchase agreement | 1,372,400 | 1,372,400 | ||||
Net loss | (106,559) | (106,559) | ||||
Ending Balance at Jun. 30, 2017 | $ 0 | $ 3,500 | $ 306,480 | $ 1,372,400 | $ (384,400) | $ 1,297,980 |
Ending Balance, shares at Jun. 30, 2017 | 0 | 3,500,000 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows From Operating Activities | ||
Net Loss | $ (106,559) | $ (31,084) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Decrease in Prepaid Expense | 0 | 2,500 |
Increase in Accrued Expenses | 74,420 | 0 |
Increase (Decrease) in Related Party Accrued Interest | (62,671) | 17,921 |
Net Cash Used In Operating Activities | (94,810) | (10,663) |
Cash Flows From Investing Activities | ||
Net Cash From Investing Activities | 0 | 0 |
Cash Flows from Financing Activities | ||
Proceeds from stock purchase agreement | 240,000 | 0 |
Proceeds from shares to be issued under private placement | 1,372,400 | 0 |
Repurchase and cancellation of shares | (14,098) | 0 |
Proceeds from (repayments to) related party | (131,092) | 10,663 |
Net Cash From Financing Activities | 1,467,210 | 10,663 |
Net Change In Cash and Cash Equivalents | 1,372,400 | 0 |
Cash and Cash Equivalents, at the beginning of the period | 0 | 0 |
Cash and Cash Equivalents, at the end of the period | 1,372,400 | 0 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid during the year for: Income Tax Payments | 0 | 0 |
Cash paid during the year for: Interest Payments | 15,508 | 0 |
Supplemental Schedule of Non-Cash Financing Activities: | ||
Cancellation of shares pursuant to share purchase agreement | $ (14,098) | $ 0 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Modular Medical, Inc. (the Company) was organized under the laws of the State of Nevada on October 22, 1998, to engage in any lawful purpose. The Company has at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. Through the year ended June 30, 2001 the Company was seeking to rent out snowmobiles and all-terrain vehicles (ATV’s). In June of 2000, the Company also purchased the rights to manufacture, use, market, and sell the Net Caddy, a backpack style bag used to transport fishing gear. The Company abandoned both the snowmobile and ATV’s plans, and the Net Caddy plans. Subsequent to the year end, on July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among, the Company and Quasuras, Inc., a Delaware company (“Quasuras”), the Company acquired 100% of the issued and outstanding shares of Quasuras for 7,582,000 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was accounted for as a reverse merger. No adjustments have been made to the accompanying financials for the reverse merger. The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. The following summarizes the more significant of such policies: Basis of Presentation The accompanying financial statements were prepared in conformity with generally accepted accounting principles in the United States of America ("US GAAP"). Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, accounts payable, sales returns and recoverability of long-term assets. Reportable Segment The Company has one reportable segment. The Company's activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. Cost of Sales Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties, and product sampling. Operating Overhead Expense Operating overhead expense consists primarily of payroll and benefit related costs, rent, depreciation and amortization, professional services, and meetings and travel. Income Taxes The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. At June 30, 2017 and 2016, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended June 30, 2016 and prior years or in computing its tax provision for 2016. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended June 30, 2016 to the present, generally for three years after they are filed. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. Risks and Uncertainties The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets. Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. Cash and Cash Equivalents Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At June 30, 2017 and 2016, the Company had $1,372,400 and $0 in cash, respectively. Deposits at the bank is insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $1,122,400 and $0, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents. Fair Value of Financial Instruments For certain of the Company's financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815. As of June 30, 2017 and 2016, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value. Earnings Per Share (EPS) Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). The following table sets for the computation of basic and diluted earnings per share for the years ended June 30, 2017 and 2016: 2017 2016 Net Loss $ (106,559 ) $ (31,084 ) Net Loss Per Share Basic and Diluted: $ (0.06 ) $ (0.02 ) Weighted average number of shares used in computing basic and diluted net loss per share: Basic 1,651,635 1,249,816 Diluted 1,651,635 1,249,816 Recently Issued Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses a diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We adopted this ASU in 2016 and the implementation did not have a material impact on our financial position or statement of operations. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “ Presentation of Financial Statements – Going Concern” Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” substantial doubt, Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow. |
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT | 12 Months Ended |
Jun. 30, 2017 | |
Stock Purchase Agreement | |
STOCK PURCHASE AGREEMENT | On April 26, 2017, pursuant to a Common Stock Purchase Agreement (the “SPA”), dated April 5, 2017 by and among Manchester Explorer, L.P. (the “Purchaser”), the Company and certain of our then officers, directors and one related party, the Purchaser acquired 2,900,000 shares of our restricted common stock for a purchase price of $375,000. Pursuant to the SPA and contemporaneously with the closing of the agreement, new directors and officers were appointed and the then directors and officers resigned from the board. In connection therewith such Former Directors (i) cancelled 544,900 shares of our common stock owned by them in consideration for the payment by us of $12,000, and (ii) sold 247,248 of their shares for an aggregate purchase price of $4,944.96 or $0.02 per share, to Kelly Trimble, who may be deemed a related party to the Company; and 20,000 shares to our former legal counsel as part of his engagement in connection with the Share Acquisition and related transactions for an aggregate purchase price of $400 or $0.02 per share. Contemporaneously with the closing, a shareholder of the Company canceled all 104,916 shares of our common stock owned by him in consideration of the payment by us of $2,098, and for an additional payment of $128,000, such person released the Company for advances made by him to or for our benefit, and we paid various of our lenders an aggregate of $92,170 in exchange for their releases. The 247,248 shares purchased by Mr. Trimble, and the remaining 45,000 shares owned by the Former Directors, is being held in escrow to indemnify the Purchaser and the Company in the event of, among other items, various breaches of the SPA during the 12 month period following the closing date of the Share Acquisition. An additional sum of $62,500 was paid by the Company to Mr. Trimble for his agreement to place into escrow such 247,248 shares for indemnification purposes. Separately, Mr. Trimble paid $25,000 to a person who introduced him to the Share Acquisition. Legal and other expenses paid by the Company relating to the Share Acquisition and related transactions amounted to approximately $78,000. As a result of such transactions, after the closing of the Share Acquisition, we had (i) 3,500,000 shares of our common stock issued and outstanding, of which the Purchaser owned 2,900,000 such shares and (ii) no outstanding indebtedness and nominal assets. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Jun. 30, 2017 | |
Common Stock Abstract | |
COMMON STOCK | During the year ended June 30, 2016, the Company cancelled 544,900 shares of common stock in consideration for the payment by us of $12,000. The Company also cancelled another 104,916 shares of our common stock in consideration of the payment by us of $2,098. These cancellations were pursuant to the Stock Purchase Agreement entered into by the Company in April 2016 (See Note 3). The Company issued 2,900,000 shares of common stock of the Company pursuant to the stock purchase agreement entered into by the Company in April 2016. The Company used the proceeds to pay off the related party debt owed to the shareholders and directors amounting to $220,168, pursuant to the provisions of the stock purchase agreement. The Company also paid $137,500 in legal and professional fee, pursuant to the provisions of the agreement which were all netted against the proceeds of $377,500 from the issuance of 2,900,000 shares of common stock. |
SHARES TO BE ISSUED
SHARES TO BE ISSUED | 12 Months Ended |
Jun. 30, 2017 | |
Shares To Be Issued Abstract | |
SHARES TO BE ISSUED | The Company sold in a private placement, an aggregate of 7,801,212 shares of our common, at a purchase price of $0.66 per share resulting in gross proceeds to us of approximately $5,100,000. The private placement was closed on July 24, 2017, subsequent to the year ended June 30, 2017. As of June 30, 2017, the Company collected $1,372,400 for 2,079,394 shares of common stock to be issued to the investors. This money has been recorded as shares to be issued in the accompanying financials. |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 12 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | The Company had expenses and payables paid on its behalf by shareholders in the amount of $10,897 and $10,663 for the years ended June 30, 2017 and 2016. The balance due to shareholders was $0 and $131,092 as of June 30, 2017, and 2016, respectively. The aggregate amount of related party loans was non-interest bearing, unsecured and payable on demand. However, the Company imputed interest on the loan at 10% per annum. Imputed interest expense on related party loans for the years ended June 30, 2017, and 2016 totaled $15,508 and $17,921, respectively. In April 2017, the shareholders of the Company sold off their shares and forgave all the debts owed to them. The forgiveness of their loans was recorded as a capital contribution in the accompanying financial statements. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Based on the available information and other factors, management believes it is more likely than not that the net deferred tax assets at, June 30, 2017 and 2016, will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at, June 30, 2017 and 2016. At June 30, 2017 and 2016, the Company had federal net operating loss carry-forwards of approximately $384,400 and $277,800, respectively, expiring beginning in 2036. Deferred tax assets consist of the following components: 2017 2016 Net loss carryforward $ 115,320 $ 83,350 Valuation allowance (115,320 ) (83,350 ) Total deferred tax assets $ — $ — |
OFFICE LEASE
OFFICE LEASE | 12 Months Ended |
Jun. 30, 2017 | |
Leases [Abstract] | |
OFFICE LEASE | The Company used the office of one of the stockholder at no extra cost for the year ended June 30, 2016. The stockholder incurred no incremental costs in providing this office space to the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among, the Company and Quasuras Inc., a Delaware company (“Quasuras”), the Company acquired 100% of the issued and outstanding shares of Quasuras for 7,582,000 shares of the Company, resulting in the Quasuras becoming a wholly-owned subsidiary of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was accounted for as a reverse merger. Simultaneously with the closing of the Acquisition and as a condition thereto, we sold (the “Private Placement”), in a private placement an aggregate of 7,801,212 shares of our common stock pursuant to one or more exemptions from the registration requirements of the Securities Act, at a purchase price of $0.66 per share resulting in gross proceeds to us of approximately $5,100,000. Simultaneously with the Acquisition and Private Placement, the Company cancelled all 2,900,000 Control Block shares it acquired pursuant to the Stock Purchase Agreement (See Note 2. In connection with the Private Placement, we paid $41,928 as compensation in connection with sales of our shares therein. |
ORGANIZATION AND SUMMARY OF S15
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying financial statements were prepared in conformity with generally accepted accounting principles in the United States of America ("US GAAP"). |
Use of Estimates | The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, accounts payable, sales returns and recoverability of long-term assets. |
Reportable Segment | The Company has one reportable segment. The Company's activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. |
Revenue Recognition | Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. |
Cost of Sales | Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties, and product sampling. |
Operating Overhead Expense | Operating overhead expense consists primarily of payroll and benefit related costs, rent, depreciation and amortization, professional services, and meetings and travel. |
Income Taxes | The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. At June 30, 2017 and 2016, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended June 30, 2016 and prior years or in computing its tax provision for 2016. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended June 30, 2016 to the present, generally for three years after they are filed. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. |
Risks and Uncertainties | The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets. |
Contingencies | Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. |
Cash and Cash Equivalents | Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At June 30, 2017 and 2016, the Company had $1,372,400 and $0 in cash, respectively. Deposits at the bank is insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $1,122,400 and $0, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents. |
Fair Value of Financial Instruments | For certain of the Company's financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815. As of June 30, 2017 and 2016, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value. |
Earnings Per Share (EPS) | Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). The following table sets for the computation of basic and diluted earnings per share for the years ended June 30, 2017 and 2016: 2017 2016 Net Loss $ (106,559 ) $ (31,084 ) Net Loss Per Share Basic and Diluted: $ (0.06 ) $ (0.02 ) Weighted average number of shares used in computing basic and diluted net loss per share: Basic 1,651,635 1,249,816 Diluted 1,651,635 1,249,816 |
Recently Issued Accounting Pronouncements | In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses a diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We adopted this ASU in 2016 and the implementation did not have a material impact on our financial position or statement of operations. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “ Presentation of Financial Statements – Going Concern” Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” substantial doubt, |
Reclassification | Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow. |
ORGANIZATION AND SUMMARY OF S16
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Organization And Summary Of Significant Accounting Policies Tables | |
Earnings Per Share | 2017 2016 Net Loss $ (106,559 ) $ (31,084 ) Net Loss Per Share Basic and Diluted: $ (0.06 ) $ (0.02 ) Weighted average number of shares used in computing basic and diluted net loss per share: Basic 1,651,635 1,249,816 Diluted 1,651,635 1,249,816 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | 2017 2016 Net loss carryforward $ 115,320 $ 83,350 Valuation allowance (115,320 ) (83,350 ) Total deferred tax assets $ — $ — |
ORGANIZATION AND SUMMARY OF S18
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Organization And Summary Of Significant Accounting Policies Details | ||
Net Loss | $ (106,559) | $ (31,084) |
Net Loss Per Share - Basic and Diluted | $ (.06) | $ (.02) |
Weighted Average Shares Outstanding - Basic | 1,651,635 | 1,249,816 |
Weighted Average Shares Outstanding - Diluted | 1,651,635 | 1,249,816 |
ORGANIZATION AND SUMMARY OF S19
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Organization And Summary Of Significant Accounting Policies Details Narrative | |||
Cash and Cash Equivalents | $ 1,372,400 | $ 0 | $ 0 |
Insured Amount | 250,000 | 250,000 | |
Uninsured Amount | $ 1,122,400 | $ 0 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transactions [Abstract] | ||
Expenses and Payables Paid by Shareholders | $ 10,897 | $ 10,663 |
Balance due to Shareholders | 0 | 131,092 |
Related Party Interest Expense | $ 15,508 | $ 17,921 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Income Tax Disclosure [Abstract] | ||
Net Loss Carryforward | $ 115,320 | $ 83,350 |
Valuation Allowance | (115,320) | (83,350) |
Total Deferred Tax Assets | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss Carry-Forwards | $ 384,400 | $ 277,800 |
Net Operating Loss Carry-Forwards Expiration Date | Jun. 30, 2036 |