Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Sep. 28, 2014 | |
Document and Entity Information: | ' | ' |
Entity Registrant Name | 'AccelPath, Inc. | ' |
Document Type | '10-K | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001077800 | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Entity Common Stock, Shares Outstanding | ' | 22,140,166 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'FY | ' |
Entity Public Float | ' | $100,000 |
BALANCE_SHEETS_Audited
BALANCE SHEETS (Audited) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $26,640 | $1,201 |
Deferred Financing costs | 1,470 | ' |
Total current assets | 28,110 | 1,201 |
Property and equipment - net | 59,598 | 78,719 |
Investment in Unconsolidated Subsidiary | 1,039,074 | ' |
Total non-Current assets | 1,098,672 | 78,719 |
Total assets | 1,126,782 | 79,920 |
Current Liabilities | ' | ' |
Accounts payable | 1,261,579 | 1,261,579 |
Accrued expenses and other current liabilities | 406,592 | 759,702 |
Accrued compensation | 371,556 | 306,555 |
Derivative Liability | 66,962 | ' |
Current portion of notes payable- net of discounts of $126,722 and $12,219 at June 30, 2014 and June 30, 2013, respectively | 647,448 | 384,785 |
Total current liabilities | 2,754,137 | 2,712,621 |
Long-term portion of notes payable- net of discounts of $-0- and $31,400 at March 31, 2014 and June 30, 2012, respectively | ' | 116,954 |
Total Liabilities | 2,754,137 | 2,829,575 |
Stockholders' (Deficit) | ' | ' |
Preferred stock- Series E 5% Convertible; stated value $1,000 per share; -0- and 100 shares issued and outstanding at June 30, 2014 and June 2013, respectively (preference in liquidation at March 31, 2014 and June 30, 2013 of $-0- and $115,239 respectively | ' | 100,000 |
Preferred stock- Series F Convertible; stated value $1,000 per share; 90 shares issued and outstanding at June 30, 2014 and June 30, 2013 | 90,000 | 90,000 |
Preferred stock- Series G Convertible; stated value $1,000 per share; No shares issued and outstanding at June 30, 2014 and June 30, 2013 | ' | 0 |
Preferred stock- Series H Convertible; stated value $1,000 per share; 51 shares issued and outstanding at June 30, 2014 and June 30, 2013 | ' | 0 |
Preferred stock- Series I Convertible; stated value $1,000 per share; 3,500 and 0 shares issued and outstanding at June 30, 2014 and June 30, 2013, respectively. Par value $.001, 3,500 shares authorized | 4 | ' |
Common stock, $0.001 par value, 9,950,000,000 shares authorized; 16,485,064 and 1,458,302 issued and outstanding at June 30, 2014 and June 30, 2013, respectively | 16,485 | 1,442 |
Additional paid-in capital | 8,447,315 | 4,731,112 |
Accumulated Deficit | -9,979,082 | -7,470,132 |
Total stockholders' (deficit) of AccelPath, Inc. | -1,425,279 | -2,547,579 |
Non-Controlling interest | -202,077 | -202,077 |
Total stockholders' (deficit) | -1,627,356 | -2,749,656 |
Total liabilities and stockholders' (deficit) | $1,126,781 | $79,919 |
BALANCE_SHEETS_PARENTHETICALS_
BALANCE SHEETS PARENTHETICALS (Audited) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Parentheticals | ' | ' |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 9,950,000,000 | 9,950,000,000 |
Common Stock, Shares Issued | 16,485,064 | 1,458,302 |
Common Stock, Shares Outstanding | 16,485,064 | 1,458,302 |
Preferred stock- Series E 5% Convertible stated value per share | $1,000 | $1,000 |
Preferred stock- Series E 5% Convertible shares issued | 0 | 100 |
Preferred stock- Series E 5% Convertible shares outstanding | 0 | 100 |
Preference in liquidation shares amounted | $0 | $115,239 |
Preferred stock- Series F Convertible; stated value per share | $1,000 | $1,000 |
Preferred stock- Series F Convertible; shares issued | 90 | 90 |
Preferred stock- Series F Convertible; shares outstanding | 90 | 90 |
Preferred stock- Series G Convertible; stated value per share | $1,000 | $1,000 |
Preferred stock- Series G Convertible; shares issued | ' | 0 |
Preferred stock- Series G Convertible; shares outstanding | ' | 0 |
Preferred stock- Series H Convertible; stated value per share | $1,000 | $1,000 |
Preferred stock- Series H Convertible; shares issued | 51 | 51 |
Preferred stock- Series H Convertible; shares outstanding | 51 | 51 |
Preferred stock- Series I Convertible; stated value per share | 1,000 | 1,000 |
Preferred stock- Series I Convertible; shares issued | 3,500 | 0 |
Preferred stock- Series I Convertible; shares outstanding | 3,500 | 0 |
Net discount of Current notes payable | 126,722 | 12,219 |
Net discount of long term notes payable | $0 | $31,400 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Audited) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Revenues {1} | ' | ' |
Revenues | $216,000 | $334,616 |
Cost of Revenues | ' | 0 |
Gross Profits | 216,000 | 334,616 |
Operating Expenses | ' | ' |
Selling General and Administrative Expenses | 855,338 | 2,024,945 |
Total Operating Expenses | 855,338 | 2,024,945 |
Operating Loss | -639,338 | -1,690,329 |
Other Income (Expense) | ' | ' |
Interest expense | -480,864 | -178,386 |
Loss on Conversion of Debt | -1,334,291 | -138,390 |
Derivative Liability Expense | -245,663 | ' |
Adjustment to Fair Value of Derivative Liability | 178,701 | ' |
Loss on terminated acquisition | ' | -30,648 |
Technology licensing Income | 12,505 | 43,586 |
Total Other (Expense) - net | -1,869,612 | -303,838 |
Net Income (Loss) | -2,508,950 | -1,994,167 |
Net income (Loss) attributable to non-controlling interest | ' | 17,475 |
Net Income (Loss) Accelpath, Inc. | -2,508,950 | -1,976,692 |
Deemed and cash dividends to Preferred Stockholders | -1,139 | -365,617 |
Net loss applicable to Common shareholders | ($2,510,089) | ($2,342,309) |
Net loss per common share - basic and diluted | ($0.60) | ($2.15) |
Weighted average number of common shares outstanding during the period/year - basic and diluted | 4,149,495 | 926,238 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders Equity (Deficit) (USD $) | Series E Preferred stock | Series F Preferred stock | Series G Preferred stock | Series H Preferred stock | Series I Preferred stock | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Non-Controlling Interest in Subsidiary | Total Stockholders' Equity (Deficit) |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||
Balance at Jun. 30, 2011 | 300,000 | 0 | 0 | 0 | 0 | 481,117 | 481 | 3,037,750 | ' | -187,291 | -286,190 |
Sale of Common stock | ' | ' | ' | ' | ' | 4,191 | 4 | 34,635 | ' | ' | 34,640 |
Deferred stock issuance costs | ' | ' | ' | ' | ' | ' | ' | ($36,000) | ' | ' | ($36,000) |
Warrants issued with convertible notes payable | ' | ' | ' | ' | ' | ' | ' | 49,005 | ' | ' | 49,005 |
Conversion of 100 shares of preferred stock- Series E to common stock | -100,000 | ' | ' | ' | ' | 9,006 | 9 | 99,991 | ' | ' | ' |
Cash dividends accrued on preferred stock - Series E | ' | ' | ' | ' | ' | ' | ' | -13,360 | ' | ' | -13,360 |
Stock based Compensation | ' | ' | ' | ' | ' | ' | ' | 494,989 | ' | ' | 494,989 |
Restricted stock award | ' | ' | ' | ' | ' | ' | ' | 29,167 | ' | ' | 29,167 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -2,056,310 | 2,689 | -2,053,621 |
Restricted stock award | ' | ' | ' | ' | ' | ' | ' | 29,167 | ' | ' | 29,167 |
Balance at Jun. 30, 2012 | 200,000 | ' | ' | ' | ' | 494,313 | 494 | 3,696,178 | -5,493,440 | -184,602 | -1,781,370 |
Restricted stock award | ' | ' | ' | ' | ' | 10,000 | 10 | 20,833 | ' | ' | 20,833 |
Sale of Common stock | ' | ' | ' | ' | ' | 2,807 | 3 | 5,997 | ' | ' | 6,000 |
Sale of 90 shares of Series F Preferred Stock | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 |
Warrants issued for Convertible notes payable | ' | ' | ' | ' | ' | ' | ' | 5,410 | ' | ' | 5,410 |
Beneficial conversion feature on notes payable | ' | ' | ' | ' | ' | ' | ' | 133,222 | ' | ' | 133,222 |
Conversion of notes payable to common stock | ' | ' | ' | ' | ' | 947,238 | 947 | 288,973 | ' | ' | 289,920 |
Rescission of common shares issued at par | ' | ' | ' | ' | ' | -12,818 | -13 | 13 | ' | ' | ' |
Conversion of 100 shares of Series E Preferred Stock to note payable | -100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -100,000 |
Cash dividends accrued on Series E Preferred stock | ' | ' | ' | ' | ' | ' | ' | -5,617 | ' | ' | -5,617 |
Issuance Of Series H PreferredStock | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | 60,000 |
Stock-based compensation | ' | ' | ' | ' | ' | ' | ' | 526,113 | ' | ' | 526,113 |
Restricted stock award | ' | ' | ' | ' | ' | 10,000 | 10 | 20,833 | ' | ' | 20,833 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -1,976,692 | -17,475 | -1,994,167 |
Balance at Jun. 30, 2013 | 100,000 | 90,000 | ' | ' | ' | 1,441,540 | 1,442 | 4,731,112 | -7,470,132 | -202,077 | -2,749,656 |
Stock-based compensation | ' | ' | ' | ' | ' | ' | ' | 433,190 | ' | ' | 433,190 |
Shares issued for debt converted in prior quarter | ' | ' | ' | ' | ' | 15,043,524 | 15,044 | 1,747,581 | ' | ' | 1,762,624 |
Beneficial conversion feature on notes payable | ' | ' | ' | ' | ' | ' | ' | 497,500 | ' | ' | 497,500 |
Conversion of 100 shares of Series E Preferred Stock to note payable | -100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -100,000 |
Cash dividends accrued on Series E Preferred stock | ' | ' | ' | ' | ' | ' | ' | -1,139 | ' | ' | -1,139 |
Issuance of Series I Preferred stock | ' | ' | ' | ' | 4 | ' | ' | 1,039,070 | ' | ' | 1,039,074 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | ($2,508,950) | ' | ($2,508,950) |
Balance at Jun. 30, 2014 | ' | 90,000 | ' | ' | 4 | 16,485,064 | 16,485 | 8,447,315 | -9,979,082 | -202,077 | -1,627,356 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Audited) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($2,508,950) | ($1,994,167) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Loss from Conversion of debt | 1,334,291 | 138,390 |
Stock based compensation | 433,190 | 526,113 |
Depreciation and amortization of property and equipment | 19,120 | 14,956 |
Amortization of Deferred Financing Costs | 1,030 | ' |
Amortization of note payable discount | 417,893 | 119,590 |
Warrants issued for notes payable extension | ' | 13,990 |
Compensation for Issuance of Series H Preferred stock | ' | 60,000 |
Interest expense converted into common stock | ' | 1,692 |
Liability for common stock to be issued | ' | -12,091 |
Derivative Liability Expense | -245,663 | ' |
Adjustment to Fair Value of Derivative Liability. | -178,701 | ' |
Restricted Stock Award Expense | ' | 20,833 |
Amortization of Original Issue Discount | 12,366 | ' |
Accrued interest and legal fees issued for notes | 17,412 | ' |
Previously Accrued dividends converted to notes payable | 13,143 | ' |
Reduction in liabilities for issuance of common stock | 12,091 | ' |
Changes in operating assets and liabilities: | ' | ' |
(Increase) decrease in accounts receivables | ' | 40,942 |
Decrease (Increase) in Deposits, prepaid expenses and other assets | ' | 2,000 |
Increase (decrease) in accounts payable | ' | -10,311 |
Increase (decrease) in Accrued Expenses and other liabilities | -353,109 | 543,158 |
Increase in Accrued compensation | 65,000 | 140,207 |
Liabilities related to discontinued operations | ' | -638,308 |
Net cash provided by (used in) operating activities | -469,561 | -1,033,007 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Elimination of Restricted cash | ' | 638,304 |
Purchase of property and equipment | ' | -28,200 |
Net cash used in investing activities | ' | 610,104 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of notes payable and common stock warrants | 497,500 | 311,700 |
Deferred Financing Costs paid | -2,500 | ' |
Proceeds from issuance of Series F Preferred stock | ' | 90,000 |
Proceeds from issuance of common stock | ' | 6,000 |
Net cash provided by financing activities | 495,000 | 407,700 |
Net (Decrease) in Cash | 25,439 | -15,203 |
Cash - Beginning of Period/Year | 1,201 | 16,404 |
Cash - End of Period/Year | 26,640 | 1,201 |
Cash paid during the period/year for: | ' | ' |
Interest | ' | 0 |
Income Taxes | ' | 0 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Fair value of common stock warrants issued with convertible notes payable | ' | 15,000 |
Fair value of beneficial conversion feature on notes payable | 365,000 | 311,700 |
Notes payable, accrued interest and other fees converted to common stock | 428,333 | 173,310 |
Preferred Stock- Series E converted to Notes payable, including accrued dividends of $14,282 and $5,834, respectively for September 30, 2013 and September 30, 2012 | 114,282 | 105,834 |
Cash dividend accrued on Preferred Stock-Series E | $1,138 | $4,218 |
NATURE_OF_OPERATIONS_AND_BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 12 Months Ended | |||
Jun. 30, 2014 | ||||
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | ' | |||
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | ' | |||
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION | ||||
Business | ||||
AccelPath, Inc. (formerly - Technest Holdings, Inc.) (the “Company”) includes its wholly-owned subsidiaries AccelPath, LLC (“AccelPath”) and Genex Technologies, Inc., and its 49% owned subsidiary Technest, Inc. (“Technest”). See Basis of Presentation below. The Company has two primary businesses: AccelPath, which is in the business of enabling pathology diagnostics and Technest, which is in the business of the design, research and development, integration, sales and support of three-dimensional imaging devices and systems. | ||||
Name Change and Domicile Change | ||||
On February 7, 2012, the Board of Directors approved and recommended a change in the Company’s name from Technest Holdings, Inc. to AccelPath, Inc. and a change in the domicile of the Company from Nevada to Delaware. On February 17, 2012, the stockholders approved the name change and the domicile change. The name change and domicile change became effective on May 2, 2012. | ||||
Reverse Acquisition | ||||
On March 4, 2011, the Company acquired its wholly-owned subsidiary, AccelPath. The former members of AccelPath received an aggregate of 86,151,240 (344,605, post 1:250 reverse split) shares of the Company’s common stock and, immediately after the transaction, owned 72.5% of the Company’s issued and outstanding common stock. Immediately prior to the merger, the Company had 32,678,056 (130,712 post 1:250 reverse split) shares of common stock outstanding. Following the acquisition, AccelPath began operating as a wholly-owned subsidiary of the Company. | ||||
Accounting principles generally accepted in the United States generally require that a company whose security holders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. The acquisition was accounted for as a reverse acquisition whereby AccelPath was deemed to be the accounting acquirer. Accordingly, the results of operations of the Company have been included in the consolidated financial statements since the date of the reverse acquisition. The historical financial statements of AccelPath are presented as the historical financial statements of the Company. | ||||
As the accounting acquirer, AccelPath acquired tangible assets consisting of cash of $93,416, accounts receivable of $32,307, inventory of $19,388, assets related to discontinued operations of $5,000,000, property and equipment of $3,707, and prepaid expenses and other assets of $61,644 and identifiable intangible assets of $350,000 related to existing customer contracts. AccelPath assumed accounts payable of $336,467, accrued expenses of $141,870, accrued income taxes of $369,816, contingent value rights payable of $3,194,247 and liabilities related to discontinued operations of $1,045,374. The fair value of the Company’s net assets acquired on the date of the acquisition, based on management’s analysis of the fair value of the Company’s stock transferred, was $1,633,904. AccelPath recorded goodwill of $1,161,215 for the excess of purchase price over the net assets acquired. | ||||
Unaudited pro forma operating results for the year ended June 30, 2011, assuming the reverse acquisition had been made as of July 1, 2010, are as follows: | ||||
Revenues | $ | 1,862,667 | ||
Net loss applicable to common shareholders | $ | (3,103,629 | ||
Net loss per share – basic and diluted | $ | -0.026 | ||
All share and per share amounts presented in these consolidated financial statements have been retroactively restated to reflect the 33.327365 exchange ratio of AccelPath member interests to the Company’s common shares in the merger. | ||||
Basis of Presentation | ||||
As a result of the reverse acquisition, the accompanying consolidated financial statements include the operations of AccelPath (the accounting acquirer) and its former affiliate. AccelPath provided management services to a professional limited liability company (“PLLC”) in states where laws prohibit business corporations from providing pathology interpretations through the direct employment of pathologists. AccelPath had a long term professional service and administrative support agreements with such PLLC and a nominee shareholder owns all the equity of the PLLC. On March 2, 2012, the PLLC was dissolved. | ||||
AccelPath followed the accounting guidance concerning certain matters related to physician practice management entities (“PPMs”) with contractual management arrangements. The accounting guidance provides a listing of criteria which, when applied to the contractual arrangements between PPMs and the medical practice company, indicate whether or not they should be consolidated. In accordance with the criteria outlined, AccelPath had consolidated the accounts and operations of the PLLC until it was dissolved on March 2, 2012. | ||||
The accompanying consolidated financial statements also include the operations of the Company’s inactive wholly-owned subsidiary, Genex Technologies, Inc. and its 49% owned subsidiary Technest, Inc. (see Note 5) since the date of the reverse acquisition. Technest, Inc. conducts research and development in the field of computer vision technology and the Company has the right of first refusal to commercialize products resulting from this research and development. The Company’s former Chief Executive Officer beneficially owns 23% of Technest, Inc., an employee owns 23% and an unrelated third party owns 5%. Technest, Inc. is considered a variable interest entity (VIE) for which the Company is the primary beneficiary. | ||||
The Company consolidates all entities in which the Company holds a “controlling financial interest.” For voting interest entities, the Company is considered to hold a controlling financial interest when the Company is able to exercise control over the investees’ operating and financial decisions. For variable interest entities (“VIEs”), the Company is considered to hold a controlling financial interest when it is determined to be the primary beneficiary. For VIEs, a primary beneficiary is a party that has both: (1) the power to direct the activities of a VIE that most significantly impact that entity's economic performance, and (2) the obligation to absorb losses, or the right to receive benefits, from the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE is based on the amount and characteristics of the entity's equity. | ||||
All significant inter-company balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified in the prior year financial statements to conform to the current year presentation. | ||||
Settlement Agreement Related to the Sale of EOIR Technologies, Inc. | ||||
On October 26, 2009, the Company entered into a Settlement Agreement with EOIR Holdings, LLC (“LLC”) and EOIR Technologies, Inc. (“EOIR”), settling all claims related to the Stock Purchase Agreement (see Note 4). | ||||
Under the terms of the Settlement Agreement, LLC agreed to pay the Company $18,000,000 no later than December 25, 2009 and an additional $5,000,000 within sixty days of EOIR being awarded a contract under the Warrior Enabling Broad Sensor Services (WEBSS) Indefinite Delivery Indefinite Quantity contract or any contract generally recognized to be a successor contract to its current STES contract. The additional $5,000,000 was also payable to the Company in the event that EOIR was awarded task orders under its current STES contract totaling $495,000,000. | ||||
On December 24, 2009, LLC paid the Company $18,000,000 and the actions pending between the parties were dismissed in accordance with the Settlement Agreement. The Company paid out of the proceeds received $3,621,687 of previously recorded liabilities related to the sale of EOIR and related litigation and $13,134,741 as a return of capital dividend to our shareholders. The Company recorded a $154,000 discount on the $5 million contingent receivable. The financial statements for the year ended June 30, 2011 include interest income of $5,305 related to this discount. The release of the WEBSS contract fell behind original expectations and was finally awarded in March 1812. The $5 million contingent receivable, which was acquired by AccelPath in the reverse acquisition, was collected on April 24, 2012. |
GOING_CONCERN_UNCERTAINTY_AND_
GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN | 12 Months Ended |
Jun. 30, 2014 | |
GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN: | ' |
GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN | ' |
2. GOING CONCERN UNCERTAINTY AND MANAGEMENT’S PLAN | |
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate the continuation of the Company as a going concern. The Company has incurred net losses applicable to common stockholders of $2,510,089 and $2,342,309 for the years ended June 30, 2014 and 2013, respectively, and has experienced an operating cash flow deficit in both 2014 and 2013. Further, the Company has a working capital deficit of $2,726,027 and a stockholders’ deficit of $1,627,356 at June 30, 2014. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | |
There is no assurance that the Company can reverse its net losses, or that the Company will be able to raise additional capital. These financial statements do not include any adjustments that might result from the outcome of the above uncertainty. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||
Use of Estimates | |||||||
The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||
Concentrations and Risks | |||||||
Substantially all of Technest, Inc.’s revenues were currently generated from individual customers within the Department of Defense and the National Institute for Health under Small Business Innovative Research contracts. These contracts do not contain extension or renewal terms and there was no remaining backlog at June 30, 2014.and June 30, 2013 | |||||||
During the year ended June 30, 2014, all of AccelPath’s revenues were generated from one contract. During the year ended June 30, 2013, all of AccelPath’s revenues were generated from two laboratories and one hospital. | |||||||
Risks associated to companies in the homeland defense technology industry and the anatomic pathology market, include, but are not limited to, the development by its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology and loss of significant customers. | |||||||
Cash and Cash Equivalents | |||||||
The Company considers all highly liquid investments with maturities of ninety days or less to be cash equivalents. | |||||||
Restricted Cash | |||||||
Restricted cash represents cash held in escrow pending final settlement of certain liabilities related to discontinued operations. The Company had no restrictions on cash at June 30, 2014 or June 30, 2013. | |||||||
Accounts Receivable | |||||||
At June 30, 2014 and June 30, 2013, all invoiced receivables had been received. | |||||||
Historically, an allowance for doubtful accounts is determined based on management's best estimate of probable losses inherent in the accounts receivable balance. Management will assesses the allowance based on known troubled accounts, historical experience and other currently available evidence. | |||||||
There were no unbilled receivables at June 30, 2014 and 2013. | |||||||
During the years ended June 2014 and June 2013, there were no charges for allowances for doubtful accounts. | |||||||
Inventory and Work in Process | |||||||
Inventories, if any, are stated at the lower of cost or market. Cost is determined by the first-in, first-out method and market represents the lower of replacement costs or estimated net realizable value. Work in process represents allowable costs incurred but not billed related to time and material contracts. Costs incurred on firm fixed price contracts with milestone payments are recorded as work in process until all milestone requirements have been achieved. | |||||||
Property and Equipment, | |||||||
Property and equipment are valued at cost and are being depreciated over their useful lives using the straight-line method for financial reporting purposes. Routine maintenance and repairs are charged to expense as incurred. Expenditures which materially increase the value or extend useful lives are capitalized. | |||||||
The Company accounts for internally developed software by capitalizing development costs incurred during the application development stage until the software is ready for its intended use. Capitalized internal use software development costs are amortized on a straight line basis over the estimated useful life of the software, beginning on the date the software is completed and available for use. Development costs of minor upgrades and enhancements are expensed as incurred. Net capitalized development costs are reviewed for impairment annually by management. | |||||||
Property and equipment are depreciated over the estimated useful lives of assets as follows: | |||||||
Software | 5 years | ||||||
Computer equipment | 3 years | ||||||
Furniture and fixtures | 5 years | ||||||
Laboratory equipment | 5 years | ||||||
Property and equipment consisted of the following at June 30, 2014 and 2013: | |||||||
2014 | 2013 | ||||||
Software | $ | 89,450 | $ | 61,250 | |||
Computer equipment | 3,466 | 3,466 | |||||
Furniture and fixtures | 239 | 239 | |||||
Laboratory equipment | 6,193 | 6,193 | |||||
99,348 | 71,148 | ||||||
Less accumulated depreciation | -39,750 | -20,629 | |||||
$ | 59,598 | $ | 78,719 | ||||
Depreciation and amortization expense for the years ended June 30, 2014 and 2013 was $19,120 and $4,424, respectively. | |||||||
Customer Contracts | |||||||
In the reverse acquisition, the Company acquired Technest, Inc.’s existing customer contracts with the National Institute of Health and the Department of Defense. The amounts assigned to these definite-lived intangible assets were determined by management based on a discounted cash flow of existing backlog and a projection of existing customer revenue. | |||||||
The customer contracts had a cost basis of $350,000 and were fully amortized as of June 30, 2012. Amortization expense was $-0- and for the years ended June 30, 2014 and 2013 | |||||||
Fair Value Measurements | |||||||
Financial instruments are recorded at fair value in accordance with the standard for “Fair Value Measurements codified within ASC 820.” Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: | |||||||
Level 1-Valuations based on quoted prices for identical assets and liabilities in active markets. | |||||||
Level 2-Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. | |||||||
Level 3-Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. | |||||||
Unless otherwise indicated, the fair values of financial instruments approximate their carrying amounts. By their nature, all financial instruments involve risk, including credit risk for non-performance by counterparties. The fair value of cash, accounts receivable, accounts payable, notes payable, discontinued operating assets and liabilities and the contingent value rights payable approximate their recorded amounts because of their relatively short settlement terms. | |||||||
The Company also applies fair value accounting guidance to measure non-financial assets and liabilities such as business acquisitions and asset impairments. These assets and liabilities are subject to fair value adjustments only in certain circumstances and are not subject to recurring revaluations. These items are primarily valued using the present value of estimated future cash inflows and/or outflows. Given the unobservable nature of these inputs, they are deemed to be Level 3. During the year ended June 30, 2012, the Company recognized impairment on its long-lived assets (see below). | |||||||
Operating Segments | |||||||
The Company operates in two operating segments which are consistent with its internal organization. The major segments are medical diagnostic services, and government contracting in the business of research and development, design and fabrication of 3D imaging and of intelligent surveillance products. | |||||||
Revenue Recognition | |||||||
Revenues from medical diagnostic services are recognized upon completion of the services and the billing to customers. Billings for services expected to be reimbursed by third party payers are recorded as revenues net of allowances for differences between amounts billed and the estimated receipts from such payers and are based on management’s assessment of collection. Billings for services directly to hospitals are fixed in advance and are considered collectible by management. | |||||||
Government contracting revenues from time and materials contracts are recognized as costs are incurred and billed. Allowable costs incurred but not billed as of a period end are recorded as work in process. | |||||||
Government contracting revenues from firm fixed price contracts, if any, are recognized on the percentage-of-completion method, either measured based on the proportion of costs recorded to date on the contract to total estimated contract costs or measured based on the proportion of labor hours expended to date on the contract to total estimated contract labor hours, as specified in the contract. Revenues from firm fixed price contracts with payments tied to milestones are recognized when all milestone requirements have been achieved and all other revenue recognition criteria have been met. Costs incurred on firm fixed price contracts with milestone payments are recorded as work in process until all milestone requirements have been achieved. | |||||||
Provisions for estimated losses on all contracts are made in the period in which such losses become known. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. | |||||||
Technology Licensing Income | |||||||
Technology licensing income consists of income related to the licensing of certain intellectual property under a settlement agreement with a former employee. The Company has collected and recognized the entire $120,000 licensing fee in the settlement agreement and is entitled to additional licensing fees based on future events. | |||||||
Research and Development | |||||||
The Company charges unfunded research and development costs to expense as incurred. Funded research and development is part of the Company’s revenue base and the associated costs are included in cost of revenues. The Company capitalizes costs related to acquired technologies that have achieved technological feasibility and have alternative uses. Acquired technologies which do not meet these criteria are expensed as in-process research and development costs. | |||||||
Income Taxes | |||||||
The Company allocates current and deferred taxes to its subsidiaries as if each were a separate tax payer. The Company has no unrecognized tax benefits or uncertainties requiring additional disclosures. | |||||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. A deferred tax asset is recorded for net operating loss and tax credit carry forwards to the extent that their realization is more likely than not. The deferred tax benefit or expense for the period represents the change in the deferred tax asset or liability from the beginning to the end of the period. | |||||||
When tax returns are filed, it is highly certain 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 sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||
The Company is primarily subject to U.S. federal income tax, and Maryland and Massachusetts state income taxes. | |||||||
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. | |||||||
Loss Per Share | |||||||
Basic and diluted net loss per common share available to common shareholders has been computed based on the weighted average number of shares of common stock outstanding during the periods presented. Basic and diluted net loss per common share is computed by dividing net loss by the weighted-average common shares outstanding during the year. | |||||||
Common stock equivalents, consisting of Series E 5% Convertible Preferred Stock, stock options, restricted stock, and warrants were not included in the calculation of the diluted loss per share for the years ended June 30, 2014 and 2013 because their inclusion would have been antidilutive and had the effect of decreasing the net loss per share (see Note 12). | |||||||
Goodwill and Impairment | |||||||
Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in business combinations. Goodwill will not be amortized but will be tested at least annually for impairment. The purchase price allocation (See Note 1) was preliminary and was subject to change as the contingent value rights payable were subject to adjustment for certain future events as defined in the contingent value rights agreement. | |||||||
The Company is required to test goodwill for impairment at least annually at the reporting unit level in lieu of being amortized. A two-step impairment test for goodwill and intangible assets with indefinite lives is required. The first step is to compare the carrying amount of the reporting unit's net assets to the fair value of the reporting unit. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying amount exceeds the fair value, then the second step is required to be completed, which involves allocating the fair value of the reporting unit to each asset and liability, with the excess being implied goodwill. An impairment loss occurs if the amount of the recorded goodwill exceeds the implied goodwill. There was no goodwill at June 30, 2014 and no test for impairment was done. | |||||||
Historically, the Company utilized a discounted cash flow model on the Technest government contracting operating segment. In estimating fair value, management relied on and considered a number of factors, including but not limited to, future revenue growth by product/service line, operating profit margins and overhead expenses. Subsequent to the reverse acquisition management reassessed the potential for new government contracts and due to employee turnover and other factors management expected limited future revenues beyond the current backlog. | |||||||
Impairment of Long-Lived Assets | |||||||
The Company amortizes intangible assets over the shorter of the contractual/legal life or the estimated economic life. | |||||||
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset's carrying value. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of such assets in relation to the operating performance and future undiscounted cash flows of the underlying assets. The Company’s policy is to record an impairment loss when it is determined that the carrying amount of the asset may not be recoverable. No impairment charges were recorded in the year ended June 30, 2013. At June 30, 2012, the Company tested its long-lived assets for impairment and recorded an impairment charge of $116,668 on its customer contracts intangible asset. | |||||||
Stock-Based Compensation | |||||||
The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees and directors as an expense in the statement of operations over the requisite service period based on the fair value for each stock award on the grant date. | |||||||
Beneficial Conversion Feature and Derivative Liabilities | |||||||
Prior to the fourth quarter of the current fiscal year, for conventional convertible debt where the rate of conversion is based on a discount to the prevailing market value, the Company recorded a “beneficial conversion feature” (“BCF”) and related debt discount. | |||||||
The BCF was recorded as a debt discount against the face amount of the respective debt instrument. There would be an offsetting increase to Additional paid in capital as the BCF is deemed to be an increase to equity. The discount would be amortized to interest expense over the life of the debt. | |||||||
Commencing with the fourth quarter of the current fiscal year, the Company reconsidered the requirements of the Financial Accounting Standards Board Accounting Standards Classification 820 (‘FASB ASC 820” or “ASC 820”) and determined that newly issued debt were derivative financial instruments. | |||||||
Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair values reported as charges or credits to income. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | |||||||
The Company values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). | |||||||
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. | |||||||
Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as an adjustment to fair value of derivatives. | |||||||
Debt Issue Costs and Debt Discount | |||||||
The Company paid debt issue costs, and recorded debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt to interest expense. | |||||||
Original Issue Discount | |||||||
For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. | |||||||
Recent Accounting Pronouncements | |||||||
The Company has reviewed recent accounting pronouncements and other recently issued, but not yet effective accounting standards and believes that these will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows. | |||||||
TECHNEST_INC
TECHNEST, INC. | 12 Months Ended |
Jun. 30, 2014 | |
Reverse Acquisition | ' |
TECHNEST, INC. | ' |
4. TECHNEST, INC. | |
The Company owns a 49% interest in Technest, Inc., a company that conducts research and development in the field of computer vision technology. The Company has the right of first refusal to commercialize products resulting from this research and development. The Company’s former Chief Executive Officer beneficially owns 23% of Technest, Inc., a current employee of Technest owns 23% and an unrelated third party owns 5%. The Company has certain rights of first refusal and repurchase rights at fair market value, as defined in certain restricted stock agreements, with respect to the shares of Technest, Inc. that it does not own. Technest, Inc. is considered a variable interest entity (VIE) for which the Company is the primary beneficiary. |
CONTINGENT_VALUE_RIGHTS_PAYABL
CONTINGENT VALUE RIGHTS PAYABLE | 12 Months Ended |
Jun. 30, 2014 | |
CONTINGENT VALUE RIGHTS PAYABLE: | ' |
CONTINGENT VALUE RIGHTS PAYABLE | ' |
5. CONTINGENT VALUE RIGHTS PAYABLE | |
On January 13, 2011, the Company entered into a Contingent Value Rights Agreement (the “CVR Agreement”) pursuant to which common stockholders of record as of March 18, 2011 received one contingent value right (a “CVR”) for each share of Company common stock held by them. Each CVR entitled the holder thereof to its pro rata portion of a payment to be received by the Company pursuant to a Settlement Agreement and Mutual Release with EOIR Holdings LLC and EOIR Technologies, Inc. (the “Settlement Agreement”), less certain expenses (subject to adjustments for future events) that will be deducted from such payment. The contingent value rights payable was acquired by AccelPath in the reverse acquisition. During the three months ended September 30, 2011, the Company adjusted the contingent value rights payable which resulted in an additional goodwill impairment loss of $48,158. At March 31, 2012, management increased the contingent value rights payable by $147,595, decreased accrued income taxes by $113,106 and decreased accounts payable by $34,489 to reflect the amounts to be paid out of the Settlement Agreement. The payment under the Settlement Agreement was received by the Company on April 24, 2012 and the CVR payment of $3,390,000, or approximately $0.103739 per CVR, was made on May 8, 2012. |
ACCOUNTS_PAYABLE_AND_LIABILITI
ACCOUNTS PAYABLE AND LIABILITIES PURCHASE AGREEMENT | 12 Months Ended |
Jun. 30, 2014 | |
ACCOUNTS PAYABLE AND LIABILITIES PURCHASE AGREEMENT | ' |
Accounts Payable and Accrued Liabilities Disclosure | ' |
6. ACCOUNTS PAYABLE AND LIABILITIES PURCHASE AGREEMENT | |
On October 7, 2013, the Circuit Court in the Second Judicial District for Leon County, Florida entered an order approving the stipulation of the parties (the "Stipulation") in the matter of ASC Recap LLC ("ASC") v. Accelpath, Inc. (the "Company"). Under the terms of the Stipulation, the Company agreed to issue to ASC, as settlement of certain liabilities owed by the Company in the aggregate amount of $1,537,455 (the "Claim Amount"), shares of common stock (the "Settlement Shares") as well as a promissory note in the principal amount of the $75,000.00 maturing six months from the date of issuance, as a fee to ASC (‘Fee Note”). ASC had purchased the liabilities from the Company’s creditors (both affiliated and non-affiliated) with a face amount of $1,537,455. The total amount of liabilities, as reported by the Company in its Form 10-Q for the quarter ended June 30, 2014, was $2,622,175, inclusive of the $1,612,455 representing the Claim Amount and the Fee Note. | |
Pursuant to the Stipulation entered into by the parties, the Company agreed to issue to ASC, in one or more tranches as necessary, that number of shares of common stock sufficient to generate net proceeds (less a discount of twenty five percent (25%)) equal to the Claim Amount, as defined in the Stipulation. The parties reasonably estimated that, should the Company issue Settlement Shares sufficient to satisfy the entire Claim Amount, the fair market value of such Settlement Shares and all other amounts to be received by ASC would equal approximately $2,145,000. Notwithstanding anything to the contrary in the Stipulation, the number of shares beneficially owned by ASC shall not exceed 9.99% of the Company's outstanding common stock at any one time. | |
In connection with the issuance of the Settlement Shares, the Company may rely on the exemption from registration provided by Section 3(a)(10) under the Securities Act. To date, the Company has not issued any Settlement Shares to ASC. As such, the full Claim Amount remains outstanding and payable to ASC. Based upon the reported closing trading price of the Company’s common stock on September ____, 2014 of $____ per share, if all $2,145,000 worth of liabilities were satisfied pursuant to the Stipulation through the issuance of common stock, the Company would issue an aggregate of 2,680,000,000 shares. | |
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
NOTES PAYABLE | ' | ||||||
NOTES PAYABLE | ' | ||||||
7. NOTES PAYABLE | |||||||
Notes payable consist of the following at June 30, 2014 and 2013: | |||||||
2014 | 2013 | ||||||
Note payable – former Managing Member (see Note 9) | 27,750 | 27,750 | |||||
Note payable – related party | 4,300 | 4,300 | |||||
Note payable – stockholder | 13,000 | 13,000 | |||||
Note payable – Investor | -0- | 40,000 | |||||
Convertible notes payable | 729.12 | 464,369 | |||||
Total | 774,170 | 550,319 | |||||
Convertible notes payable, discount | -126,722 | -43,819 | |||||
647,448 | 6 | 501,739 | |||||
Total, net of discount | -0- | 384,785 | |||||
Less current portion | |||||||
Current debt | -0- | 116,954 | |||||
On August 18, 2011, the Company borrowed $3,300 from a corporation controlled by our Chief Executive Officer. The Company borrowed an additional $1,000 on January 12, 2012. The note is payable on demand and accrues interest at a rate of 0.32% per annum. | |||||||
During the three months ended December 31, 2011, the Company borrowed $15,000 from a stockholder and $5,000 from our Chief Executive Officer. On February 27, 2012, the Company repaid $2,000 of the note payable to the stockholder. The balance of these notes are payable on demand and accrue interest at 0.19% per annum. | |||||||
On February 10, 2012, the Company borrowed $40,000 from Investor under a promissory note which matured on August 31, 2012. The note bears interest at 8% per annum and includes a redemption premium of $6,000 due on the maturity date. The redemption premium is being accrued over the term of the note as additional interest. | |||||||
On February 10, 2012, the Company borrowed $50,000 from a third party. The Company repaid $5,000 of the note on March 12, 2012. The convertible promissory note bears interest at 5% per annum and matures on August 10, 2012. The Company has the option to pay the interest with its common stock at the closing bid price immediately prior to the due date and the investor has the option to convert the promissory note into shares of common stock at the closing bid price (but not less than $0.01 per share) immediately prior to the conversion date. The Company also issued the investor a five-year warrant to purchase 500,000 shares of common stock at an exercise price of $0.01 per share. The warrant includes a cashless net exercise provision and the investor has piggyback registration rights for the shares of common stock underlying the warrant and the shares of common stock issuable pursuant to the note. The Company allocated $8,037 of the proceeds to the warrant and $41,963 of the proceeds to the discounted value of the note based on their relative fair values. | |||||||
On February 17, 2012, the Company borrowed $100,000 from a third party. The convertible promissory note bears interest at 5% per annum and matures on August 16, 2013. The Company has the option to pay the interest with its common stock at the closing bid price immediately prior to the due date. The investor has the option to convert the promissory note into shares of common stock at the closing bid price (but not less than $0.01 per share) immediately prior to the conversion date. In addition, the Company has the option to convert the promissory note into shares of common stock at the closing bid price 30 days prior to the maturity date if the price per share is at least $0.01. The Company also issued the investor a five-year warrant to purchase 1,000,000 shares of common stock at an exercise price of $0.01 per share. The warrant includes a cashless net exercise provision and the investor has piggyback registration rights for the shares of common stock underlying the warrant and the shares of common stock issuable pursuant to the note. The Company allocated $32,743 of the proceeds to the warrant and $67,257 of the proceeds to the discounted value of the note based on their relative fair values. | |||||||
On April 18, 2012, the Company borrowed $50,000. The convertible promissory note bears interest at 5% per annum and matures on October 17, 2013. The Company has the option to pay the interest with its common stock at the closing bid price immediately prior to the due date. The investor has the option to convert the promissory note into shares of common stock at the closing bid price (but not less than $0.01 per share) immediately prior to the conversion date. In addition, the Company has the option to convert the promissory note into shares of common stock at the closing bid price 30 days prior to the maturity date if the price per share is at least $0.01. The Company also issued the investor a five-year warrant to purchase 500,000 shares of common stock at an exercise price of $0.01 per share. The warrant includes a cashless net exercise provision and the investor has piggyback registration rights for the shares of common stock underlying the warrant and the shares of common stock issuable pursuant to the note. The Company allocated $8,225 of the proceeds to the warrant and $41,775 of the proceeds to the discounted value of the note based on their relative fair values. | |||||||
On July 18, 2012, the Company entered into a subscription agreement with a third party Partners II, LP ("a third party") for the purchase of a convertible promissory note in the aggregate principal amount of $100,000. The note accrues interest at a rate of 5% per annum and became due on January 31, 2013. The Company is in default of this note. a third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price of $0.0075 per share. The Company recorded a beneficial conversion discount of $29,333 based on the fair value of the common stock into which the note was convertible to on the commitment date and allocated $70,667 of the proceeds to the discounted value of the note. | |||||||
On July 31, 2012, the Company borrowed a total of $7,000 from two individuals. The convertible promissory notes bear interest at 5% per annum and mature on January 31, 2014. The Company has the option to pay the interest with its common stock at the closing bid price immediately prior to the due date. The investors have the option to convert the promissory note into shares of common stock at the closing bid price (but not less than $0.01 per share) immediately prior to the conversion date. In addition, the Company has the option to convert the promissory notes into shares of common stock at the closing bid price 30 days prior to the maturity date if the price per share is at least $0.01. The Company also issued the investors a five-year warrant to purchase a total of 70,000 shares of common stock at an exercise price of $0.01 per share. The warrants include a cashless net exercise provision and the investors have piggyback registration rights for the shares of common stock underlying the warrant and the shares of common stock issuable pursuant to the notes. The Company allocated $443 of the proceeds to the warrants and $6,557 of the proceeds to the discounted value of the note based on their relative fair values. In August 2012, the investors converted their notes into a total of 700,000 shares of common stock. | |||||||
On September 14, 2012, the Company borrowed $25,000 from a stockholder. The convertible promissory note bears interest at 5% per annum and matures on March 14, 2014. The Company has the option to pay the interest with its common stock at the closing bid price immediately prior to the due date. The investor has the option to convert the promissory note into shares of common stock at the closing bid price (but not less than $0.01 per share) immediately prior to the conversion date. In addition, the Company has the option to convert the promissory notes into shares of common stock at the closing bid price 30 days prior to the maturity date if the price per share is at least $0.01. The Company also issued the investor a five-year warrant to purchase a total of 250,000 shares of common stock at an exercise price of $0.01 per share. The warrant includes a cashless net exercise provision and the investor has piggyback registration rights for the shares of common stock underlying the warrant and the shares of common stock issuable pursuant to the note. The Company allocated $1,536 of the proceeds to the warrants and $23,464 of the proceeds to the discounted value of the note based on their relative fair values. | |||||||
On March 22, 2013, the Company borrowed $35,000 from a third party. The convertible promissory note bears interest at 5% per annum and matures on December 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the ten days prior to the conversion. The Company recorded a beneficial conversion discount of $23,333 based on the fair value of the common stock into which the note is convertible to and allocated $11,667 of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On May 13, 2013, the Company borrowed $10,000 from a third party. The convertible promissory note bears interest at 5% per annum and matures on December 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the ten days prior to the conversion. The Company recorded a beneficial conversion discount of $10,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On July 1, 2013, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on January 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On August 1, 2013, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on February 28, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On September 1, 2013, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on March 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On September 5, 2013, an Investor advanced the Company $15,000 in a Promissory Note. The Promissory Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The Promissory Note has a face value of $17,500, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the lowest closing bid price for the thirty (30) days immediately preceding the conversion date. | |||||||
On September 20, 2013, an Investor exchanged its remaining interest, $100,000, in the Series E 5% convertible Preferred stock plus accrued dividends of $14,282 into a new Secured Note for $114,282. The Secured Note matures on September 30, 2014 and has an interest rate of five percent. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the lowest closing bid price for the thirty (30) days immediately preceding the conversion date. | |||||||
On October 1, 2013, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on April 30, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On October 9, 2013, the Company issued a note for $75,000 for fees. The Promissory Note matures on July 9, 2014, has an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The Promissory Note has a face value of $82,500, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the lowest closing bid price for the thirty (30) days immediately preceding the conversion date. The Note was originally reported as $79,000 in error. | |||||||
On November 1, 2013, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on May 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On December 1, 2013, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on June 30, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On January 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on July 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On February 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on August 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On February 28, 2014, an Investor advanced the Company $5,000 in a Promissory Note. The Promissory Note matures on March 31, 2015, an interest rate of ten percent Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the lowest closing bid price for the thirty (30) days immediately preceding the conversion date. | |||||||
On March 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on September 30, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On April 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on September 30, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On April 16, 2014, an Investor advanced the Company $42,500 in a Promissory Note. The Promissory Note has a six-month term, an interest rate of ten percent. Net proceeds to the Company were $40,000. $2,500 was recorded as a Deferred financing cost and will be amortized over the life of the Note Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 58% of the average of the three lowest closing bid prices for the ten (10) days immediately preceding the conversion date. | |||||||
On May 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on October 31, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
On June 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on November 30, 2014. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |||||||
Interest expense on notes payable, including amortization of the discount on the convertible notes and the accrual of the redemption premium, was $480,864 for the year ended June 30, 2014. | |||||||
The Company evaluated whether the convertible promissory notes contain a beneficial conversion feature (BCF) or require bifurcation. See Note 3. Summary of Significant Accounting Policies, for the Company’s accounting treatment of these issuances. | |||||||
PREFERRED_STOCK
PREFERRED STOCK | 12 Months Ended |
Jun. 30, 2014 | |
PREFERRED STOCK | ' |
PREFERRED STOCK | ' |
8. PREFERRED STOCK | |
Series E Preferred Stock | |
On January 11, 2011, the Company entered into a Securities Purchase Agreement with An Institutional Investor (“Investor”) to issue 300 shares of its Series E 5% Convertible Preferred Stock, with a stated value of $1,000 per share, for a purchase price of $300,000. The shares of Series E 5% Convertible Preferred Stock were issued in three tranches over a 90-day period beginning on the closing of the reverse acquisition. Upon any liquidation or dissolution of the Company, the holders of the Series E 5% Convertible Preferred Stock are entitled to receive the stated value of $1,000 per share plus all accrued unpaid dividends per share. | |
The number of shares of common stock into which each share of Series E Preferred is convertible is determined by dividing $1,000 (the stated value) by $0.044416985 per share. The 300 shares of Series E Preferred issued to Investor convert into 6,754,173 shares of common stock. Prior to the closing of the reverse acquisition, InvestorPartners, LP and its affiliates were the holders of a majority of the Company’s shares of common stock. The Series E Preferred accrues cash dividends at 5% per annum and is convertible to common stock at any time. | |
The Company determined that there was a beneficial conversion feature of $37,709 for the issuance of the 300 shares of Series E Preferred Stock. The beneficial conversion feature was calculated based on the effective conversion price per share compared to the fair value per share of common stock on the commitment date. This resulted in a deemed dividend in the amount of $37,709 for the year ended June 30, 2011. The Company also accrued cash dividends payable of $3,511 for the year ended June 30, 2011. | |
The Company accrued cash dividends payable of $13,360 for the year ended June 30, 2012. At June 30, 2012, accrued dividends payable of $16,871 is included in accrued expenses and other current liabilities. | |
On February 15, 2012, Investor converted 100 shares of Series E Preferred into 2,251,390 shares of common stock. | |
On July 18, 2012, the Company entered into an agreement with a third party to exchange 100 shares of Series E Preferred Stock and accrued dividends of $5,834 into a convertible promissory note in the principal amount of $105,834. The note accrues interest at a rate of 5% per annum and is due on September 1, 2013. a third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 60% of the current market price. The Company recorded a beneficial conversion discount of $70,556 based on the fair value of the common stock into which the note is convertible to and allocated $35,278 of the proceeds to the discounted value of the note. During the three months ended September 30, 2013, a third party converted the entire principal value of the note plus $1,692 of accrued interest into 48,770,841 shares of common stock. | |
On September 20, 2013, an Investor exchanged its remaining interest, $100,000, in the Series E 5% convertible Preferred stock plus accrued dividends of $14,282 into a new Secured Note for $114,282. The Secured Note matures on September 30, 2014 and has an interest rate of five percent. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the lowest closing bid price for the thirty (30) days immediately preceding the conversion date. | |
At June 30, 2014, there was no outstanding Series E Preferred | |
Series F Preferred Stock | |
On September 7, 2012, the Company authorized 100 shares of Series F Convertible Preferred Stock, with a stated value of $1,000. The Series F Preferred is convertible into common stock at any time at the option of the holder. The number of shares of common stock into which one share of Series F Preferred is convertible is determined by (i) dividing $1,000 (the stated value) outstanding by the closing bid price on the trading day immediately prior to the date of the conversion notice (the “Conversion Price”), and (ii) multiplying by ten; provided that if the closing bid price on such trading day is less than $0.02 per share, then the Conversion Price shall be $0.02. Accordingly, the authorized 100 shares of Series F Preferred are currently convertible into 50,000,000 shares of common stock using a Conversion Price of $0.02. | |
On September 10, 2012, the Company issued 90 shares of its Series F Preferred Stock for the purchase price of $90,000 to certain existing investors of the Company. The 90 shares of Series F Preferred are currently convertible into 45,000,000 shares of common stock. The Company determined that there was a beneficial conversion feature of $360,000 for the issuance of the 90 shares of Series F Preferred Stock. The beneficial conversion feature was calculated based on the effective conversion price per share compared to the fair value per share of common stock on the commitment date. This resulted in a deemed dividend in the amount of $360,000 for the nine months ended March 31, 2013. | |
Series G Preferred Stock | |
On September 18, 2012, the Company authorized 1,250 shares of Series G Convertible Preferred Stock, with a stated value of $1,000. The Series G Preferred is convertible into common stock at any time at the option of the holder nine months after the date of issuance. After five years from the date of issuance or upon a change of control, the Series G Preferred is automatically converted into shares of common stock. The number of shares of common stock into which one share of Series G Preferred is convertible is determined by dividing $1,000 (the stated value) outstanding by the closing bid price on the trading day immediately prior to the date of the conversion notice (the “Conversion Price”); provided that if the closing bid price on such trading day is less than $0.02 per share, then the Conversion Price shall be $0.02. Accordingly, the authorized 1,250 shares of Series G Preferred are convertible into 62,500,000 shares of common stock at an assumed Conversion Price of $0.02. | |
The Company also evaluated the terms of the convertible preferred stock under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 815-15 and determined that these instruments do not require derivative accounting treatment and do not qualify for mezzanine presentation in the consolidated balance sheets. | |
Series H Preferred Stock | |
The number, designation, rights, preferences and privileges of the Series H Preferred were established by the Board at a meeting on April 2, 2013. The designation, rights, preferences and privileges that the Board established for the Series H Preferred is set forth in a Certificate of Designation that was filed with the Secretary of State of the State of Delaware on April 3, 2013. Among other things, the Certificate of Designation provides that each one share of Series H Preferred has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding Common Stock eligible to vote at the time of the respective vote (the "Numerator"), divided by (y) 0.49, minus (z) the Numerator. | |
At a meeting of the Board, the Board issued an aggregate of fifty one (51) shares of Series H Preferred to one individual, Shekhar Wadekar, Chief Executive Officer of the Company. As a result of the voting rights granted to the Series H Preferred, the Series H Stockholder holds in the aggregate approximately 50.9989% of the total voting power of all issued and outstanding voting capital of the Company | |
On March 21, 2014, ownership of the Series H Preferred was transferred to Mr. Steedley, our Chief Executive Officer. | |
Series I | |
The number, designation, rights, preferences and privileges of the Series I Preferred were established by the Board. The designation, rights, preferences and privileges that the Board established for the Series I Preferred is set forth in a Certificate of Designation that was filed with the Secretary of State of the State of Delaware on October 30, 2013. Among other things, the Certificate of Designation provides that the Series I may be convertible into 14% of the outstanding shares of the Company on a fully diluted basis. | |
As of the filing date of this report, there are 3,500 shares issued and outstanding of the Series I Preferred. | |
See Footnote 1 under Energy Innovative Products for more detail. |
COMMON_STOCK
COMMON STOCK | 12 Months Ended |
Jun. 30, 2014 | |
COMMON STOCK: | ' |
COMMON STOCK | ' |
9. COMMON STOCK ISSUANCES AND REPURCHASES | |
During the current fiscal year, the Company issued 15,043,524 shares on a split-adjusted basis for the repurchase of approximately $400,000 in debt. | |
On March 7, 2011, the Company entered into an Equity Purchase Agreement with Southridge Partners II, LP (the “Equity Purchase Agreement”). Pursuant to the Equity Purchase Agreement, Southridge shall commit to purchase up to $5,000,000 of common stock over the course of 24 months commencing on the effective date of the registration statement pursuant to the registration rights agreement. The registration statement was declared effective on February 9, 2012. | |
On April 4, 2014, the Company filed a Certificate of Amendment to its Certificate of Incorporation, with the Delaware Secretary of State. The Amendment was duly adopted in accordance with the applicable provisions of Section 242 and 228 of the General Corporation Law of the State of Delaware as set forth in the Schedule 14C filed with the Securities and Exchange Commission on May 13, 2013. | |
Pursuant to the Certificate of Amendment (as corrected) , the total number of shares of all classes which the Corporation shall have the authority to issue 10,000,000,000 shares , of which 9,995,000,000 shares shall be designated as “Common Shares”, $0.001 par value per share and 5,000,000 shares shall be designated “Preferred Shares” , $0.001 par value per share. | |
OPTIONS_WARRANTS_AND_STOCKBASE
OPTIONS, WARRANTS AND STOCK-BASED COMPENSATION | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
OPTIONS, WARRANTS AND STOCK-BASED COMPENSATION: | ' | ||||||||||
OPTIONS, WARRANTS AND STOCK-BASED COMPENSATION | ' | ||||||||||
10. OPTIONS, WARRANTS AND STOCK-BASED COMPENSATION | |||||||||||
2011 Equity Incentive Plan | |||||||||||
On March 4, 2011, the Board of Directors adopted the 2011 Equity Incentive Plan and reserved 50,000,000 shares of common stock for issuance to employees, directors and consultants, subject to stockholder approval by March 4, 2012. On February 17, 2012, the stockholders approved the plan. The plan provides for automatic annual increases, subject to Board approval, on January 1st of each year (commencing on January 1, 2012 and ending on January 1, 2021), in the aggregate number of shares reserved equal to the lesser of (a) five percent of the total number of shares outstanding on December 31st of the preceding year or (b) 3,000,000 shares. Under the plan, the Board may grant stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards. | |||||||||||
Valuation and amortization method. The fair value of each stock award is estimated on the grant date using the Black-Scholes option-pricing model. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the vesting period. | |||||||||||
Volatility. The Company estimates volatility based on the Company’s historical volatility. | |||||||||||
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. | |||||||||||
Expected term. The expected term of stock options granted is based on an estimate of when options will be exercised in the future. The Company applied the simplified method of estimating the expected term of the options, as described in the SEC’s Staff Accounting Bulletins 107 and 110, as the Company has had a significant change in its business operations as result of the reverse acquisition and the historical experience is not indicative of the expected behavior in the future. The expected term, calculated under the simplified method, is applied to groups of stock options that have similar contractual terms. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted. | |||||||||||
Forfeitures. Stock-based compensation expense is recorded only for those awards that are expected to vest. FASB ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered option. An annual forfeiture rate of 0% was applied to all unvested options as of June 30, 2012 which was management’s best estimate. This analysis will be re-evaluated semi-annually and the forfeiture rate will be adjusted as necessary. Ultimately, the actual expense recognized over the vesting period will be for only those shares that vest. | |||||||||||
The following weighted average assumptions were used for grants during the years ended June 30, 2012 and 2011: | |||||||||||
2012 | 2011 | ||||||||||
Risk-free interest rate | 0.62% - 1.04% | 1.76% - 2.28% | |||||||||
Expected dividend yield | — | — | |||||||||
Expected term | 4.75 – 6 years | 6 years | |||||||||
Forfeiture rate | —% | —% | |||||||||
Expected volatility | 122.20% - 254.99% | 128.99% - 136.20% | |||||||||
See reports of independent registered public accounting firms. | |||||||||||
A summary of option activity under the Company’s stock plans as of June 30, 2014 and 2013 and the changes during the years then ended is presented below: | |||||||||||
Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||
Outstanding at June 30, 2012 | 186,760 | $ | 15 | 8.84 years | $ | — | |||||
Granted | — | — | — | — | |||||||
Exercised | — | — | — | — | |||||||
Forfeited or expired | — | — | — | — | |||||||
Outstanding at June 30, 2013 | 186,760 | $ | 15 | 7.84 years | $ | - | |||||
Granted | - | - | - | - | |||||||
Exercised | - | - | - | - | |||||||
Forfeited | - | - | - | - | |||||||
Exercisable at June 30, 2014 | 186,760 | $ | $15.00 | 6.84 years | $ | — | |||||
On April 6, 2011, the Board of Directors granted stock options to purchase 42,350,000 shares of common stock at an exercise price of $0.065 per share. On May 13, 2011, the Board of Directors granted stock options to purchase 750,000 shares of common stock at an exercise price of $0.06 per share. The weighted average fair value of the options granted was estimated at $0.057 per share. These options vest over three years and have a term of 10 years. | |||||||||||
On August 12, 2011, the Board of Directors granted stock options to purchase 120,000 shares of common stock at an exercise price of $0.05 per share. The weighted average fair value of the options on the date of the grant was estimated at $0.043 per share. These options vest over one year and have a term of 10 years. | |||||||||||
On December 14, 2011, the Board of Directors granted stock options to purchase 2,500,000 shares of common stock at an exercise price of $0.015 per share. The weighted average fair value of the options on the date of the grant was estimated at $0.008 per share. These options vest monthly over 10 months and have a term of 10 years. | |||||||||||
On January 12, 2012, the Board of Directors granted stock options to purchase 120,000 shares of common stock at an exercise price of $0.0051 per share. The weighted average fair value of the options on the date of the grant was estimated at $0.004 per share. These options vest over one year and have a term of 10 years. | |||||||||||
On June 3, 2012, the Board of Directors granted stock options to purchase 850,000 shares of common stock at an exercise price of $0.054 per share. The weighted average fair value of the options on the date of the grant was estimated at $0.0537 per share. These options vest over three year and have a term of 10 years. | |||||||||||
Stock-based compensation expense for the years ended June 30, 2012 and 2011 was $494,989 and $202,244, respectively. | |||||||||||
On March 15, 2012, the Company agreed to issue a restricted stock award of 2,500,000 shares of common stock to a consultant for services to be rendered with 1,250,000 shares vesting on June 15, 2012 and 1,250,000 shares vesting on September 15, 2012. As of June 30, 2012, the shares had not been issued. Consulting expense recorded for the restricted stock award was $29,167 for the year ended June 30, 2012. | |||||||||||
At June 30, 2013, unrecognized total compensation cost related to unvested awards of $1,002,649 is expected to be recognized over a weighted average period of 1.79 years. At June 30, 2014 there were 3,810,000 shares reserved for future grants. | |||||||||||
Warrants | |||||||||||
The Company’s outstanding warrants remained in place subsequent to the reverse acquisition. No warrants were exercised during the year ended June 30, 2014. On July 17, 2011, warrants to purchase 200,000 shares at $1.89 per share expired. During the year ended June 30, 2012, the Company issued 2,000,000 warrants in connection with convertible notes payable (see Note 8). The warrants have an exercise price of $2.50 per share, are immediately exercisable and expire in five years from issuance. No warrants were issued, exercised or expired in the year ended June 30, 2014. The Company has reserved 2,075,000 shares of common stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at June 30, 2014 adjusted for the 1:250 stock split which took effect on September 4, 2014: | |||||||||||
Exercise price | Number | Expiration Date | |||||||||
$ | 2.5 | 2,000 | 2/10/17 | ||||||||
$ | 2.5 | 4,000 | 2/17/17 | ||||||||
$ | 2.5 | 1,250 | 4/18/17 | ||||||||
$ | 2.5 | 800 | 8/15/17 | ||||||||
$ | 2.5 | 200 | 8/20/17 | ||||||||
$ | 2.5 | 1,000 | 9/14/17 | ||||||||
$ | 2.5 | 1,000 | 10/2/17 | ||||||||
10,250 | |||||||||||
The weighted average grant date fair value of the warrants granted during the year ended June 30, 2012 was $0.0245 per share. The warrants were valued using the Black-Scholes option pricing model. The following assumptions were used for warrants issued during the year ended June 30, 2012; risk free interest rates of 0.86% - 0.88%; expected dividend yield of 0%; expected term of 5 years and expected volatility of 165.24% - 203.80%. The weighted average remaining life of the warrants at June 30, 2012 was 4.6 years. At June 30, 2013, all warrants are exercisable and there is no aggregate intrinsic value for the warrants outstanding. | |||||||||||
Stock Award Plan | |||||||||||
The 2006 Stock Award Plan, pursuant to which the Company may award shares of its common stock to employees, officers, directors, consultants and advisors, remains in place subsequent to the reverse acquisition. The Company has broad discretion in making grants under the Stock Award Plan and may make grants subject to such terms and conditions as determined by the Board of Directors. | |||||||||||
There was no activity under the Stock Award Plan during the years ended June 30, 2012 and 2011, and there was no unrecognized compensation cost related to the plan. As of June 30, 2012 and 2011, the Company has 111,845 shares available for future grant under the plan. |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
NET LOSS PER SHARE. | ' | ||||||
NET LOSS PER SHARE | ' | ||||||
11. NET LOSS PER SHARE | |||||||
Securities that could potentially dilute basic earnings per share ("EPS") and that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the years ended June 30, 2014 and 2013 consist of the following: | |||||||
Shares Potentially Issuable | |||||||
2014 | 2013 | ||||||
Series E 5% convertible preferred stock | 0 | 9,006 | |||||
Series F Convertible Preferred stock | 180,000 | 180,000 | |||||
Series G Convertible Preferred stock | 0 | 0 | |||||
Series H Convertible Preferred stock | 1 | 1 | |||||
Series I Convertible Preferred stock | 1,194,412 | 0 | |||||
Convertible Notes Payable | 36,212,654 | 4,901,670 | |||||
Stock options | 186,760 | 186,760 | |||||
Restricted stock award | 10,000 | 10,000 | |||||
Warrants | 10,250 | 10,250 | |||||
37,794,078 | 5,297,687 | ||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
11. COMMITMENTS AND CONTINGENCIES | |
Facility Rental | |
On December 7, 2011, the Company entered into a one-year lease for 1,957 square feet in Gaithersburg, Maryland which expires on December 31, 2012. The lease required the payment of a refundable security deposit of $4,000 which is included in prepaid expenses and other current assets at June 30, 2012. Monthly lease amounts for this facility total approximately $2,000 including monthly operating expense charges of $763. | |
As of December 31, 2013, the Lease has expired and the company is now looking for space on a month-to-month basis. | |
Operating Lease | |
In May 2010, AccelPath entered into a non-cancelable operating lease for certain equipment. The lease required monthly rental payments of $3,698 and expired in May 2015. The lease terms required payment of a refundable security deposit of $18,000 which was included in deposits on the Company’s consolidated balance sheet at June 30, 2011. On April 9, 2012, AccelPath entered into a general release and covenant not to sue with the lessor. Under the terms of the release, AccelPath returned the equipment to the lessor, the lessor returned AccelPath’s security deposit, and the parties released each other from any and all claims. | |
Consulting Agreements | |
Effective July 1, 2013, the Company entered into a consulting agreement at a rate of $30,000 per month for strategic and financial assistance. See Note 7 for details | |
Government Contracts | |
Technest, Inc.’s billings related to certain U.S. Government contracts are based on provisional general and administrative and overhead rates which are subject to audit by the contracting government agency. Provisional rates are based on the annual budget submitted to and approved by the government. | |
Employment Agreements | |
At June 30, 2014, the Company was not obligated under any employment agreements. | |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
INCOME TAXES | ' | |||||||
INCOME TAXES | ' | |||||||
12. INCOME TAXES | ||||||||
There was no provision for federal or state income taxes for the years ended June 30, 2014 and 2013 due to the Company’s operating losses and a full valuation reserve on deferred tax assets. In addition, AccelPath, LLC (the accounting acquirer) was treated as a partnership for federal and state income taxes from inception until the reverse acquisition was completed. A partnership’s income or loss is allocated directly to the partners for income tax purposes. | ||||||||
The income tax benefit differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended June 30, 2013 and 2012 due to the following: | ||||||||
2014 | 2013 | |||||||
Computed “expected” tax benefit | -35% | -35% | ||||||
Increase (decrease) in income taxes resulting from: | ||||||||
State taxes, net of federal benefit | -3% | (3% | ||||||
Tax reporting differences due to the reverse acquisition | — | 8% | ||||||
Goodwill impairment and other permanent differences | -9% | 15% | ||||||
Increase in the valuation reserve | 47 | 15% | ||||||
0% | 0% | |||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities at June 30, 2013 and 2012 are as follows: | ||||||||
2014 | 2013 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforward | $ | 5,304,000 | $ | 4,602,000 | ||||
Stock-based compensation | 734,000 | 582,000 | ||||||
Intangibles | 344,000 | 344,000 | ||||||
Miscellaneous accruals | 53,000 | 53,000 | ||||||
Property and equipment | 8,000 | 8,000 | ||||||
Valuation allowance | -6,443,000 | (4,917,000 | ) | |||||
Deferred tax asset (liability) | $ | — | $ | — | ||||
At June 30, 2014 and 2013, the Company had valuation allowances of $6,443,000 and $4,917,000, respectively. The Company has recorded a valuation allowance against deferred tax assets as management has determined certain net operating loss carryforwards will not be available due to Internal Revenue Code Section 382 ownership changes and the utilization of other net operating loss carryforwards is uncertain. The Company carried forward its deferred tax assets, liabilities and valuation reserve after the reverse acquisition because for tax purposes the Company acquired AccelPath, LLC as a subsidiary. At June 30, 2014, the Company has net operating loss carryforwards not subject to IRC Section 382 limitations of approximately $4,600,000 which begin to expire in 2024. | ||||||||
During the years ended June 30, 2014 and 2013, the Company did not recognize any interest and penalties. Tax years subsequent to 2004 are subject to examination by federal and state authorities. |
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Jun. 30, 2014 | |
EMPLOYEE BENEFIT PLAN: | ' |
EMPLOYEE BENEFIT PLAN | ' |
13. EMPLOYEE BENEFIT PLAN | |
The Company has adopted a 401(k) plan for the benefit of employees. Essentially all employees are eligible to participate. The Company also contributes to the plan under a safe harbor plan requiring a 3% contribution for all eligible participants. In addition, the Company may contribute a 3% elective match. Contributions and other costs of the plan included in the accompanying financial statements for the years ended June 30, 2014 and 2013 were $5,000 and $-0-, respectively. | |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2014 | |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | ' |
14. RELATED PARTY TRANSACTIONS | |
Compensation | |
Mr. Steedley is to be paid $5,000 per month. He received $125,000 in Fiscal 2014and no payments during 2013. $65,000 of his 2014 compensation was accrued for Mr. Steedley and is included as accrued compensation at June 30, 2014. The Company issued a note to him subsequent to that date. See subsequent Events Note 16.Mr. Wadekar received $60,000 in payments in Fiscal 2014 and $10,000 in payments during fiscal year 2013. |
OPERATING_SEGMENTS
OPERATING SEGMENTS | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
OPERATING SEGMENTS | ' | |||||
OPERATING SEGMENTS | ' | |||||
15. OPERATING SEGMENTS | ||||||
The Company operates in two operating segments which are consistent with its internal organization. The major segments are medical diagnostic services and government contracting. Where applicable, “Unallocated” represents items necessary to reconcile to the consolidated financial statements, which generally include corporate activity at the parent level and eliminations. | ||||||
The Company evaluates performance of individual operating segments based on operating income (loss). On a consolidated basis, this amount represents total net loss as shown in the consolidated statement of operations. Reconciling items represent costs associated with the financings, including interest expense (including amortization of debt discounts), loss on conversion of debt and incursion of derivative liabilities and the resultant mark to mark activity. Executive compensation costs have been assigned to the medical diagnostic segment. Such costs have not been allocated from the parent to the subsidiaries. | ||||||
Twelve Months Ended June 30, 2014 | ||||||
Medical Diagnostics | Government Contracting | |||||
Energy | Unallocated | Total | ||||
Revenues | $ 216,000 | $ - | $ - | $ - | $ 216,000 | |
Total Operating Expenses | 211,421 | 1,434 | - | 642,484 | 855,338 | |
Operating Income (Loss) | 4,579 | (1,434) | - | (642,484) | (639,338) | |
Other Income (Expense) | 12,505 | - | - | (1,882,117) | (1,869,612) | |
Interest expense | - | - | - | (480,864) | (480,864) | |
Depreciation and Amortization | 17,686 | 1,434 | - | - | 19,120 | |
Expenditure for long-lived assets, including intangible assets | - | - | - | - | - | |
Total Assets at June 30, 2014 | $ 82,270 | $ 5,438 | $ 1,039,074 | $ - | $ 1,126,782 | |
Twelve Months Ended June 30, 2013 | ||||||
Medical Diagnostics | Government Contracting | |||||
Energy | Unallocated | Total | ||||
Revenues | $ 315,054 | $ - | $ - | $ - | $ 315,054 | |
Total Operating Expenses | 577,297 | 1,434 | - | 595,092 | 1,172,389 | |
Operating Income (Loss) | (262,243) | (1,434) | - | (595,092) | (857,335) | |
Other Income (Expense) | 43,586 | - | - | (347,424) | (303,838) | |
Interest expense | - | - | - | ($178,386) | ($178,386) | |
Depreciation and Amortization | 10,176 | - | - | - | 10,176 | |
Expenditure for long-lived assets, including intangible assets | - | - | - | - | - | |
Total Assets at June 30, 2013 | $ 73,048 | $ 6,872 | $ - | $ - | $ 79,920 | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2014 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
16. SUBSEQUENT EVENTS | |
2014 Reverse Stock Split (“the Reverse”): | |
On July 19, 2014The Board approved a reverse stock split of all the outstanding shares of the Company’s Common Stock at an exchange ratio of 1 post-split share for 250 pre-split shares (1:250) and an amendment to the Company’s certificate of incorporation to effect such Reverse Stock Split. As part of the Reverse Stock Split, the Board will have the discretion to maintain or reduce its authorized common stock in any proportion it deems appropriate. As stated above, the holders of shares representing a majority of the voting securities of the Company have given their written consent to the Reverse Stock Split. The Reverse was effective as of the close of business on September 3, 2014. The Reverse did not reduce the amount of authorized shares of our common stock, which remained at 9,950,000,000. | |
Issuance of Debt | |
On July 1, 2014, the Company issued to Gilbert Steedley, CEO, a note for $65,000 for back pay. | |
On July 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on January 1, 2015. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |
On August 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on February 1, 2015. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |
On September 1, 2014, the Company issued a note for $30,000 for consulting services. The convertible promissory note bears no interest and matures on March 1, 2015. The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to 50% of the lowest closing bid price for the twenty days prior to the conversion. The Company recorded a beneficial conversion discount of $30,000 based on the fair value of the common stock into which the note is convertible to and allocated $-0- of the proceeds to the discounted value of the note. As of the date of this filing, there have been no conversions of this Note and the entire amount is outstanding. | |
Conversion of debt: | |
The Company issued 5,654,781 shares for the conversion of approximately $54,450 of debt, $195 of accrued interest and $925 of fees associated with conversion from the balance sheet date until the date of this report. | |
Issuance of Common stock: | |
The Company issued 5,655,102 shares from the balance sheet date until the date of this report. Besides share issuances for the conversion of debt listed above, the Company issued 321 additional fractional shares associated with the Reverse. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES (POLICIES) | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
SIGNIFICANT ACCOUNTING POLICIES: | ' | ||||||
Use of Estimates, Policy | ' | ||||||
Use of Estimates | |||||||
The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||
Concentrations and Risks, Policy | ' | ||||||
Concentrations and Risks | |||||||
Substantially all of Technest, Inc.’s revenues were currently generated from individual customers within the Department of Defense and the National Institute for Health under Small Business Innovative Research contracts. These contracts do not contain extension or renewal terms and there was no remaining backlog at June 30, 2014.amnd June 30, 2013 | |||||||
During the year ended June 30, 2014, all of AccelPath’s revenues were generated from one contract. During the year ended June 30, 2013, all of AccelPath’s revenues were generated from two laboratories and one hospital. | |||||||
Risks associated to companies in the homeland defense technology industry and the anatomic pathology market, include, but are not limited to, the development by its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology and loss of significant customers. | |||||||
Cash and Cash Equivalents, Policy | ' | ||||||
Cash and Cash Equivalents | |||||||
The Company considers all highly liquid investments with maturities of ninety days or less to be cash equivalents. | |||||||
Restricted Cash, Policy | ' | ||||||
Restricted Cash | |||||||
Restricted cash represents cash held in escrow pending final settlement of certain liabilities related to discontinued operations. The Company had no restrictions on cash at June 30, 2014 or June 30, 2013. | |||||||
Accounts Receivable, Policy | ' | ||||||
Accounts Receivable | |||||||
At June 30, 2014 and June 30, 2013, all invoiced receivables had been received. | |||||||
Historically, an allowance for doubtful accounts is determined based on management's best estimate of probable losses inherent in the accounts receivable balance. Management will assesses the allowance based on known troubled accounts, historical experience and other currently available evidence. | |||||||
There were no unbilled receivables at June 30, 2104 and 2013. | |||||||
During the years ended June 2014 and June 2013, there were no charges for allowances for doubtful accounts. | |||||||
Inventory Work in Process, Policy | ' | ||||||
Inventory and Work in Process | |||||||
Inventories, if any, are stated at the lower of cost or market. Cost is determined by the first-in, first-out method and market represents the lower of replacement costs or estimated net realizable value. Work in process represents allowable costs incurred but not billed related to time and material contracts. Costs incurred on firm fixed price contracts with milestone payments are recorded as work in process until all milestone requirements have been achieved. | |||||||
Property, Plant and Equipment, Policy | ' | ||||||
Property and Equipment, | |||||||
Property and equipment are valued at cost and are being depreciated over their useful lives using the straight-line method for financial reporting purposes. Routine maintenance and repairs are charged to expense as incurred. Expenditures which materially increase the value or extend useful lives are capitalized. | |||||||
The Company accounts for internally developed software by capitalizing development costs incurred during the application development stage until the software is ready for its intended use. Capitalized internal use software development costs are amortized on a straight line basis over the estimated useful life of the software, beginning on the date the software is completed and available for use. Development costs of minor upgrades and enhancements are expensed as incurred. Net capitalized development costs are reviewed for impairment annually by management. | |||||||
Property and equipment are depreciated over the estimated useful lives of assets as follows: | |||||||
Software | 5 years | ||||||
Computer equipment | 3 years | ||||||
Furniture and fixtures | 5 years | ||||||
Laboratory equipment | 5 years | ||||||
Property and equipment consisted of the following at June 30, 2014 and 2013: | |||||||
2014 | 2013 | ||||||
Software | $ | 89,450 | $ | 61,250 | |||
Computer equipment | 3,466 | 3,466 | |||||
Furniture and fixtures | 239 | 239 | |||||
Laboratory equipment | 6,193 | 6,193 | |||||
99,348 | 71,148 | ||||||
Less accumulated depreciation | -39,750 | -20,629 | |||||
$ | 59,598 | $ | 78,719 | ||||
Depreciation and amortization expense for the years ended June 30, 2014 and 2013 was $19,120 and $4,424, respectively. | |||||||
Customer Contracts, Policy | ' | ||||||
Customer Contracts | |||||||
In the reverse acquisition, the Company acquired Technest, Inc.’s existing customer contracts with the National Institute of Health and the Department of Defense. The amounts assigned to these definite-lived intangible assets were determined by management based on a discounted cash flow of existing backlog and a projection of existing customer revenue. | |||||||
The customer contracts had a cost basis of $350,000 and were fully amortized as of June 30, 2012. Amortization expense was $-0- and for the years ended June 30, 2014 and 2013 | |||||||
Fair Value Measurement, Policy | ' | ||||||
Fair Value Measurements | |||||||
Financial instruments are recorded at fair value in accordance with the standard for “Fair Value Measurements codified within ASC 820.” Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: | |||||||
Level 1-Valuations based on quoted prices for identical assets and liabilities in active markets. | |||||||
Level 2-Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. | |||||||
Level 3-Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. | |||||||
Unless otherwise indicated, the fair values of financial instruments approximate their carrying amounts. By their nature, all financial instruments involve risk, including credit risk for non-performance by counterparties. The fair value of cash, accounts receivable, accounts payable, notes payable, discontinued operating assets and liabilities and the contingent value rights payable approximate their recorded amounts because of their relatively short settlement terms. | |||||||
The Company also applies fair value accounting guidance to measure non-financial assets and liabilities such as business acquisitions and asset impairments. These assets and liabilities are subject to fair value adjustments only in certain circumstances and are not subject to recurring revaluations. These items are primarily valued using the present value of estimated future cash inflows and/or outflows. Given the unobservable nature of these inputs, they are deemed to be Level 3. During the year ended June 30, 2012, the Company recognized impairment on its long-lived assets (see below). | |||||||
Operating Segments, Policy | ' | ||||||
Operating Segments | |||||||
The Company operates in two operating segments which are consistent with its internal organization. The major segments are medical diagnostic services, and government contracting in the business of research and development, design and fabrication of 3D imaging and of intelligent surveillance products. | |||||||
Revenue Recognition, Policy | ' | ||||||
Revenue Recognition | |||||||
Revenues from medical diagnostic services are recognized upon completion of the services and the billing to customers. Billings for services expected to be reimbursed by third party payers are recorded as revenues net of allowances for differences between amounts billed and the estimated receipts from such payers and are based on management’s assessment of collection. Billings for services directly to hospitals are fixed in advance and are considered collectible by management. | |||||||
Government contracting revenues from time and materials contracts are recognized as costs are incurred and billed. Allowable costs incurred but not billed as of a period end are recorded as work in process. | |||||||
Government contracting revenues from firm fixed price contracts, if any, are recognized on the percentage-of-completion method, either measured based on the proportion of costs recorded to date on the contract to total estimated contract costs or measured based on the proportion of labor hours expended to date on the contract to total estimated contract labor hours, as specified in the contract. Revenues from firm fixed price contracts with payments tied to milestones are recognized when all milestone requirements have been achieved and all other revenue recognition criteria have been met. Costs incurred on firm fixed price contracts with milestone payments are recorded as work in process until all milestone requirements have been achieved. | |||||||
Provisions for estimated losses on all contracts are made in the period in which such losses become known. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. | |||||||
Technology Licensing Income , Policy | ' | ||||||
Technology Licensing Income | |||||||
Technology licensing income consists of income related to the licensing of certain intellectual property under a settlement agreement with a former employee. The Company has collected and recognized the entire $120,000 licensing fee in the settlement agreement and is entitled to additional licensing fees based on future events. | |||||||
Research and Development , Policy | ' | ||||||
Research and Development | |||||||
The Company charges unfunded research and development costs to expense as incurred. Funded research and development is part of the Company’s revenue base and the associated costs are included in cost of revenues. The Company capitalizes costs related to acquired technologies that have achieved technological feasibility and have alternative uses. Acquired technologies which do not meet these criteria are expensed as in-process research and development costs. | |||||||
Income Tax, Policy | ' | ||||||
Income Taxes | |||||||
The Company allocates current and deferred taxes to its subsidiaries as if each were a separate tax payer. The Company has no unrecognized tax benefits or uncertainties requiring additional disclosures. | |||||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. A deferred tax asset is recorded for net operating loss and tax credit carry forwards to the extent that their realization is more likely than not. The deferred tax benefit or expense for the period represents the change in the deferred tax asset or liability from the beginning to the end of the period. | |||||||
When tax returns are filed, it is highly certain 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 sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||
The Company is primarily subject to U.S. federal income tax, and Maryland and Massachusetts state income taxes. | |||||||
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. | |||||||
Loss Per Share, Policy | ' | ||||||
Loss Per Share | |||||||
Basic and diluted net loss per common share available to common shareholders has been computed based on the weighted average number of shares of common stock outstanding during the periods presented. Basic and diluted net loss per common share is computed by dividing net loss by the weighted-average common shares outstanding during the year. | |||||||
Common stock equivalents, consisting of Series E 5% Convertible Preferred Stock, stock options, restricted stock, and warrants were not included in the calculation of the diluted loss per share for the years ended June 30, 2014 and 2013 because their inclusion would have been antidilutive and had the effect of decreasing the net loss per share (see Note 12). | |||||||
Goodwill and Impairment, Policy | ' | ||||||
Goodwill and Impairment | |||||||
Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in business combinations. Goodwill will not be amortized but will be tested at least annually for impairment. The purchase price allocation (See Note 1) was preliminary and was subject to change as the contingent value rights payable were subject to adjustment for certain future events as defined in the contingent value rights agreement. | |||||||
The Company is required to test goodwill for impairment at least annually at the reporting unit level in lieu of being amortized. A two-step impairment test for goodwill and intangible assets with indefinite lives is required. The first step is to compare the carrying amount of the reporting unit's net assets to the fair value of the reporting unit. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying amount exceeds the fair value, then the second step is required to be completed, which involves allocating the fair value of the reporting unit to each asset and liability, with the excess being implied goodwill. An impairment loss occurs if the amount of the recorded goodwill exceeds the implied goodwill. There was no goodwill at June 30, 2014 and no test for impairment was done. | |||||||
Historically, the Company utilized a discounted cash flow model on the Technest government contracting operating segment. In estimating fair value, management relied on and considered a number of factors, including but not limited to, future revenue growth by product/service line, operating profit margins and overhead expenses. Subsequent to the reverse acquisition management reassessed the potential for new government contracts and due to employee turnover and other factors management expected limited future revenues beyond the current backlog. | |||||||
Impairment of Long-Lived Assets, Policy | ' | ||||||
Impairment of Long-Lived Assets | |||||||
The Company amortizes intangible assets over the shorter of the contractual/legal life or the estimated economic life. | |||||||
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset's carrying value. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of such assets in relation to the operating performance and future undiscounted cash flows of the underlying assets. The Company’s policy is to record an impairment loss when it is determined that the carrying amount of the asset may not be recoverable. No impairment charges were recorded in the year ended June 30, 2013. At June 30, 2012, the Company tested its long-lived assets for impairment and recorded an impairment charge of $116,668 on its customer contracts intangible asset. | |||||||
Stock-Based Compensation, Policy | ' | ||||||
Stock-Based Compensation | |||||||
The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees and directors as an expense in the statement of operations over the requisite service period based on the fair value for each stock award on the grant date. | |||||||
Beneficial Conversion Feature and Derivative Liabilities, Policy | ' | ||||||
Beneficial Conversion Feature and Derivative Liabilities | |||||||
Prior to the fourth quarter of the current fiscal year, for conventional convertible debt where the rate of conversion is based on a discount to the prevailing market value, the Company recorded a “beneficial conversion feature” (“BCF”) and related debt discount. | |||||||
The BCF was recorded as a debt discount against the face amount of the respective debt instrument. There would be an offsetting increase to Additional paid in capital as the BCF is deemed to be an increase to equity. The discount would be amortized to interest expense over the life of the debt. | |||||||
Commencing with the fourth quarter of the current fiscal year, the Company reconsidered the requirements of the Financial Accounting Standards Board Accounting Standards Classification 820 (‘FASB ASC 820” or “ASC 820”) and determined that newly issued debt were derivative financial instruments. | |||||||
Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair values reported as charges or credits to income. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | |||||||
The Company values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). | |||||||
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. | |||||||
Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as an adjustment to fair value of derivatives. | |||||||
Debt Issue Costs and Debt Discount, Policy | ' | ||||||
Debt Issue Costs and Debt Discount | |||||||
The Company paid debt issue costs, and recorded debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt to interest expense. | |||||||
Original Issue Discount, Policy | ' | ||||||
Original Issue Discount | |||||||
For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. | |||||||
Recent Accounting Pronouncements, Policy | ' | ||||||
Recent Accounting Pronouncements | |||||||
The Company has reviewed recent accounting pronouncements and other recently issued, but not yet effective accounting standards and believes that these will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows. |
Reverse_Acquisition_TABLES
Reverse Acquisition (TABLES) | 12 Months Ended | |||
Jun. 30, 2014 | ||||
Reverse Acquisition | ' | |||
Reverse Acquisition | ' | |||
Unaudited pro forma operating results for the year ended June 30, 2011, assuming the reverse acquisition had been made as of July 1, 2010, are as follows: | ||||
Revenues | $ | 1,862,667 | ||
Net loss applicable to common shareholders | $ | (3,103,629 | ||
Net loss per share – basic and diluted | $ | -0.026 | ||
Schedule_of_Property_and_equip
Schedule of Property and equipment (TABLES) | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Schedule of Property and equipment: | ' | ||||||
Schedule of Property and equipment | ' | ||||||
Property and equipment are depreciated over the estimated useful lives of assets as follows: | |||||||
Software | 5 years | ||||||
Computer equipment | 3 years | ||||||
Furniture and fixtures | 5 years | ||||||
Laboratory equipment | 5 years | ||||||
Property, Plant and Equipment | ' | ||||||
Property and equipment consisted of the following at June 30, 2014 and 2013: | |||||||
2014 | 2013 | ||||||
Software | $ | 89,450 | $ | 61,250 | |||
Computer equipment | 3,466 | 3,466 | |||||
Furniture and fixtures | 239 | 239 | |||||
Laboratory equipment | 6,193 | 6,193 | |||||
99,348 | 71,148 | ||||||
Less accumulated depreciation | -39,750 | -20,629 | |||||
$ | 59,598 | $ | 78,719 | ||||
Notes_payable_Related_parties_
Notes payable Related parties and a Third parties (TABLE) | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Notes payable Related parties and a Third parties (TABLE): | ' | ||||||
Notes payable Related parties and a Third parties (TABLE) | ' | ||||||
Notes payable consist of the following at June 30, 2014 and 2013: | |||||||
2014 | 2013 | ||||||
Note payable – former Managing Member (see Note 9) | 27,750 | 27,750 | |||||
Note payable – related party | 4,300 | 4,300 | |||||
Note payable – stockholder | 13,000 | 13,000 | |||||
Note payable – Investor | -0- | 40,000 | |||||
Convertible notes payable | 729.12 | 464,369 | |||||
Total | 774,170 | 550,319 | |||||
Convertible notes payable, discount | -126,722 | -43,819 | |||||
647,448 | 6 | 501,739 | |||||
Total, net of discount | -0- | 384,785 | |||||
Less current portion | |||||||
Current debt | -0- | 116,954 | |||||
Recovered_Sheet1
Options, Warrants And Stockbased Compensation (TABLE) | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
OPTIONS, WARRANTS AND STOCK-BASED COMPENSATION(TABLE): | ' | ||||||||||
Fair value of Stock Options Using the Black-Scholes Option Pricing Model (TABLE) | ' | ||||||||||
A summary of option activity under the Company’s stock plans as of June 30, 2014 and 2013 and the changes during the years then ended is presented below: | |||||||||||
Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||
Outstanding at June 30, 2012 | 186,760 | $ | 15 | 8.84 years | $ | — | |||||
Granted | — | — | — | — | |||||||
Exercised | — | — | — | — | |||||||
Forfeited or expired | — | — | — | — | |||||||
Outstanding at June 30, 2013 | 186,760 | $ | 15 | 7.84 years | $ | - | |||||
Granted | - | - | - | - | |||||||
Exercised | - | - | - | - | |||||||
Forfeited | - | - | - | - | |||||||
Exercisable at June 30, 2014 | 186,760 | $ | $15.00 | 6.84 years | $ | — | |||||
Summary of Warrants Outstanding (TABLE) | ' | ||||||||||
The following table summarizes the warrants outstanding at June 30, 2014 adjusted for the 1:250 stock split which took effect on September 4, 2014: | |||||||||||
Exercise price | Number | Expiration Date | |||||||||
$ | 2.5 | 2,000 | 2/10/17 | ||||||||
$ | 2.5 | 4,000 | 2/17/17 | ||||||||
$ | 2.5 | 1,250 | 4/18/17 | ||||||||
$ | 2.5 | 800 | 8/15/17 | ||||||||
$ | 2.5 | 200 | 8/20/17 | ||||||||
$ | 2.5 | 1,000 | 9/14/17 | ||||||||
$ | 2.5 | 1,000 | 10/2/17 | ||||||||
10,250 | |||||||||||
Schedule of Weighted Average Number of Shares | ' | ||||||||||
The following weighted average assumptions were used for grants during the years ended June 30, 2012 and 2011: | |||||||||||
2012 | 2011 | ||||||||||
Risk-free interest rate | 0.62% - 1.04% | 1.76% - 2.28% | |||||||||
Expected dividend yield | — | — | |||||||||
Expected term | 4.75 – 6 years | 6 years | |||||||||
Forfeiture rate | —% | —% | |||||||||
Expected volatility | 122.20% - 254.99% | 128.99% - 136.20% | |||||||||
Computation_of_Diluted_EPS_TAB
Computation of Diluted EPS (TABLE) | 12 Months Ended | ||||||
Jun. 30, 2014 | |||||||
COMPUTATION OF DILUTED EPS (TABLE): | ' | ||||||
COMPUTATION OF DILUTED EPS (TABLE) | ' | ||||||
Securities that could potentially dilute basic earnings per share ("EPS") and that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the years ended June 30, 2014 and 2013 consist of the following: | |||||||
Shares Potentially Issuable | |||||||
2014 | 2013 | ||||||
Series E 5% convertible preferred stock | 0 | 9,006 | |||||
Series F Convertible Preferred stock | 180,000 | 180,000 | |||||
Series G Convertible Preferred stock | 0 | 0 | |||||
Series H Convertible Preferred stock | 1 | 1 | |||||
Series I Convertible Preferred stock | 1,194,412 | 0 | |||||
Convertible Notes Payable | 36,212,654 | 4,901,670 | |||||
Stock options | 186,760 | 186,760 | |||||
Restricted stock award | 10,000 | 10,000 | |||||
Warrants | 10,250 | 10,250 | |||||
37,794,078 | 5,297,687 | ||||||
Schedule_of_Income_taxes_TABLE
Schedule of Income taxes (TABLES) | 12 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
SCHEDULE OF INCOME TAXES: | ' | |||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | |||||||
The income tax benefit differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended June 30, 2013 and 2012 due to the following: | ||||||||
2014 | 2013 | |||||||
Computed “expected” tax benefit | -35% | -35% | ||||||
Increase (decrease) in income taxes resulting from: | ||||||||
State taxes, net of federal benefit | -3% | (3% | ||||||
Tax reporting differences due to the reverse acquisition | — | 8% | ||||||
Goodwill impairment and other permanent differences | -9% | 15% | ||||||
Increase in the valuation reserve | 47 | 15% | ||||||
0% | 0% | |||||||
Schedule of Deferred Tax Assets and Liabilities | ' | |||||||
. Significant components of the Company's deferred tax assets and liabilities at June 30, 2013 and 2012 are as follows: | ||||||||
2014 | 2013 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforward | $ | 5,304,000 | $ | 4,602,000 | ||||
Stock-based compensation | 734,000 | 582,000 | ||||||
Intangibles | 344,000 | 344,000 | ||||||
Miscellaneous accruals | 53,000 | 53,000 | ||||||
Property and equipment | 8,000 | 8,000 | ||||||
Valuation allowance | -6,443,000 | (4,917,000 | ) | |||||
Deferred tax asset (liability) | $ | — | $ | — | ||||
Evaluating_Performanc_of_Indiv
Evaluating Performanc of Individual Operating Segments (TABLE) | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Evaluating Performanc of Individual Operating Segments (TABLE): | ' | |||||
Evaluating Performanc of Individual Operating Segments (TABLE) | ' | |||||
Executive compensation costs have been assigned to the medical diagnostic segment. Such costs have not been allocated from the parent to the subsidiaries. | ||||||
Twelve Months Ended June 30, 2014 | ||||||
Medical Diagnostics | Government Contracting | |||||
Energy | Unallocated | Total | ||||
Revenues | $ 216,000 | $ - | $ - | $ - | $ 216,000 | |
Total Operating Expenses | 211,421 | 1,434 | - | 642,484 | 855,338 | |
Operating Income (Loss) | 4,579 | (1,434) | - | (642,484) | (639,338) | |
Other Income (Expense) | 12,505 | - | - | (1,882,117) | (1,869,612) | |
Interest expense | - | - | - | (480,864) | (480,864) | |
Depreciation and Amortization | 17,686 | 1,434 | - | - | 19,120 | |
Expenditure for long-lived assets, including intangible assets | - | - | - | - | - | |
Total Assets at June 30, 2014 | $ 82,270 | $ 5,438 | $ 1,039,074 | $ - | $ 1,126,782 | |
Twelve Months Ended June 30, 2013 | ||||||
Medical Diagnostics | Government Contracting | |||||
Energy | Unallocated | Total | ||||
Revenues | $ 315,054 | $ - | $ - | $ - | $ 315,054 | |
Total Operating Expenses | 577,297 | 1,434 | - | 595,092 | 1,172,389 | |
Operating Income (Loss) | (262,243) | (1,434) | - | (595,092) | (857,335) | |
Other Income (Expense) | 43,586 | - | - | (347,424) | (303,838) | |
Interest expense | - | - | - | ($178,386) | ($178,386) | |
Depreciation and Amortization | 10,176 | - | - | - | 10,176 | |
Expenditure for long-lived assets, including intangible assets | - | - | - | - | - | |
Total Assets at June 30, 2013 | $ 73,048 | $ 6,872 | $ - | $ - | $ 79,920 | |
Recovered_Sheet2
Nature of Operations And Basis Of Presentation (Details) (USD $) | Mar. 02, 2012 | Mar. 04, 2011 | Dec. 24, 2009 | Oct. 26, 2009 |
Basis Of Presentation | ' | ' | ' | ' |
The former members of AccelPath received an aggregate of shares of the Company's common stock | ' | 86,151,240 | ' | ' |
Company's issued and outstanding common stock percentage owned after the transaction | ' | 72.50% | ' | ' |
Shares of common stock outstanding prior to the merger | ' | 32,678,056 | ' | ' |
Owned subsidiary Technest, Inc. since the date of the reverse acquisition | 49.00% | ' | ' | ' |
Percentage owned by Company's former Chief Executive Officer | 23.00% | ' | ' | ' |
Percentage owned by an employee | 23.00% | ' | ' | ' |
Percentage owned by an unrelated third party | 5.00% | ' | ' | ' |
Under the terms of the Settlement Agreement, LLC agreed to pay the Company | ' | ' | ' | $18,000,000 |
Additional paymentpayable to the company | ' | ' | ' | 5,000,000 |
The additional amount payable to the Company in the event that EOIR was awarded task orders | ' | ' | ' | 5,000,000 |
Total payments for EOIR under its current STES contract | ' | ' | ' | 495,000,000 |
Amount paid by LLC to the Company | ' | ' | 18,000,000 | ' |
Company paid out of the proceeds received for previously recorded liabilities related to the sale of EOIR | ' | ' | 3,621,687 | ' |
Company paid as a return of capital dividend to our shareholders | ' | ' | 13,134,741 | ' |
The Company recorded discount on the $5 million contingent receivable | ' | ' | 154,000 | ' |
Interest income related to the discount on the $5 million contingent receivable recoreded | ' | ' | $5,305 | ' |
Unaudited_pro_forma_operating_
Unaudited pro forma operating results for the year ended June 30, 2011 (Details) (USD $) | 12 Months Ended |
Jun. 30, 2011 | |
Unaudited pro forma operating results for the year ended June 30, 2011 | ' |
Revenues for the year ended June 30, 2011 | $1,862,667 |
Net loss applicable to common shareholders for the year ended June 30, 2011 | ($3,103,629) |
Net loss per share - basic and diluted for the year ended June 30, 2011 | ($0.03) |
AccelPath_acquisition_Details
AccelPath acquisition (Details) (USD $) | Mar. 04, 2011 |
AccelPath acquisition | ' |
Cash acquired | $93,416 |
Accounts receivable acquired | 32,307 |
Inventory acquired | 19,388 |
Assets related to discontinued operations acquired | 5,000,000 |
Property and equipment acquired | 3,707 |
Prepaid expenses and other assets acquired | 61,644 |
Identifiable intangible assets acquired | 350,000 |
Accounts payable assumed | 336,467 |
Accrued expenses assumed | 141,870 |
Accrued income taxes assumed | 369,816 |
Contingent value rights payable assumed | 3,194,247 |
Liabilities related to discontinued operations assumed | 1,045,374 |
The fair value of the Company's net assets acquired | 1,633,904 |
AccelPath recorded goodwill acquired | $1,161,215 |
Going_Concern_Uncertainity_and
Going Concern Uncertainity and management's Plan Text (DETAILS) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN TEXT | ' | ' |
Net Loss Applicable to Common Shareholders. | $2,127 | $2,342,309 |
Working Capital Deficit | 2,594,065 | ' |
Total Stockholders' Deficit. | $1,495,394 | ' |
Property_and_equipment_consist
Property and equipment consisted of the following (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Property and equipment consisted of the following | ' | ' |
Software estimated useful life 5 years | $89,450 | $61,250 |
Computer equipment estimated useful life 3 years | 3,466 | 3,466 |
Furniture and fixtures estimated useful life 5 years | 239 | 239 |
Laboratory equipment estimated useful life 5 years | 6,193 | 6,193 |
Property and equipment cost | 99,348 | 71,148 |
Less accumulated depreciation | -39,750 | -20,629 |
Net Property and equipment | $59,598 | $78,719 |
Contingent_Value_Rights_Agreem
Contingent Value Rights Agreement (Details) (USD $) | 8-May-12 | Apr. 24, 2012 | Mar. 31, 2012 | Jun. 30, 2011 |
Contingent Value Rights Agreement | ' | ' | ' | ' |
Company adjusted the contingent value rights payable which resulted in an additional goodwill impairment loss | ' | ' | ' | $48,158 |
Management increased the contingent value rights payable by an amount | ' | ' | 147,595 | ' |
Decreased accrued income taxes by an amount | ' | ' | 113,106 | ' |
Decreased accounts payable by an amount | ' | ' | 34,489 | ' |
The payment under the Settlement Agreement was received by the Company | ' | $3,390,000 | ' | ' |
Payment made per CVR | $0.10 | ' | ' | ' |
Liabilities_purchase_agreement
Liabilities purchase agreement (Details) (USD $) | Jun. 30, 2014 | Oct. 07, 2013 |
Liabilities purchase agreement | ' | ' |
Settlement of certain liabilities owed by the Company in the aggregate amount | ' | $1,537,455 |
Promissory note in the principal amountmaturing six months from the date of issuance, as a fee to ASC issued | ' | 75,000 |
ASC had purchased the liabilities from the Company's creditors (both affiliated and non-affiliated) with a face amount | ' | 1,537,455 |
The total amount of liabilities, as reported by the Company in its Form 10-Q | 2,622,175 | ' |
Claim Amount and the Fee Note represented in total liabilities | 1,612,455 | ' |
The fair market value of such Settlement Shares and all other amounts to be received by ASC would equal approximately to an amount | $2,145,000 | ' |
Company would issue an aggregate number of shares | 2,680,000,000 | ' |
Recovered_Sheet3
Notes payable - related parties and a third parties consist of the following: (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Notes payable - related parties and a third parties consist of | ' | ' |
Note payable - former Managing Member | $27,750 | $27,750 |
Note payable - related party | 4,300 | 4,300 |
Notes payable - stockholders | 13,000 | 13,000 |
Note payable - Investor | 0 | 40,000 |
Convertible notes payable. | 729 | 464,369 |
Total convertible notes payable. | 774,170 | 550,319 |
Convertible notes payable, discount | -126,722 | -43,819 |
Total, net of discount | 647,448 | 501,739 |
Less current portion | 0 | 384,785 |
Long-term debt. | $0 | $116,954 |
Notes_payables_texuals_DETAILS
Notes payables texuals (DETAILS) (USD $) | 13-May-13 | Mar. 22, 2013 | Jul. 18, 2012 | Apr. 18, 2012 | Mar. 12, 2012 | Feb. 17, 2012 | Feb. 10, 2012 | Aug. 18, 2011 |
NOTES PAYABLE TEXTUALS | ' | ' | ' | ' | ' | ' | ' | ' |
Company borrowed from a corporation controlled by our Chief Executive Officer | ' | ' | ' | ' | ' | ' | $3,300 | $3,300 |
The Company borrowed an additional amount from corporation | ' | ' | ' | ' | ' | ' | 1,000 | 1,000 |
The note is payable on demand and accrues interest at a rate | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | 8.00% | 0.32% |
Company borrowed from Investor under a promissory note | ' | ' | ' | ' | ' | ' | 40,000 | ' |
Redemption premium due on the maturity date of note | ' | ' | ' | ' | ' | ' | 6,000 | ' |
Company borrowed from a third party | 10,000 | 35,000 | 100,000 | 50,000 | ' | 100,000 | 50,000 | ' |
Repayment of the note borrowed from a third party | ' | ' | ' | ' | 5,000 | ' | ' | ' |
Company issued the investor a five-year warrant to purchase shares of common stock | ' | ' | ' | ' | 500,000 | ' | ' | ' |
Common stock exercise price per share | ' | ' | ' | $0.01 | $0.01 | $0.01 | ' | ' |
Proceeds of common stock issued allocated to the warrant | ' | ' | ' | 8,225 | 8,037 | 32,743 | ' | ' |
Proceeds of common stock issued allocated to discounted value of the note based on their relative fair values. | 0 | 11,667 | 70,667 | 41,775 | 41,963 | 67,257 | ' | ' |
Company recorded a beneficial conversion discount based on the fair value of the common stock | $10,000 | $23,333 | $29,333 | ' | ' | ' | ' | ' |
Notes_payables_from_Related_pa
Notes payables from Related parties and others (DETAILS) (USD $) | Sep. 14, 2012 | Jul. 31, 2012 |
NOTES PAYABLE FROM RELATED PARTIES AND OTHERS | ' | ' |
Company borrowed a total of amount from two individuals | ' | $7,000 |
The convertible promissory notes bear interest per annum | 5.00% | 5.00% |
The Company also issued the investors a five-year warrant to purchase a total shares of common stock | 250,000 | 70,000 |
Exercise price of per share of common stock | $0.01 | $0.01 |
The Company allocated an amount of the proceeds to the warrants | 1,536 | 443 |
The Company allocated an amount of the proceeds to the discounted value of the note based on their relative fair values | 23,464 | 6,557 |
The investors converted their notes into a total of shares of common stock | ' | 700,000 |
Company borrowed from a stockholder | $25,000 | ' |
Notes_payables_for_consulting_
Notes payables for consulting services (Details) (USD $) | Jun. 01, 2014 | 1-May-14 | Apr. 01, 2014 | Mar. 01, 2014 | Feb. 01, 2014 | Jan. 01, 2014 | Dec. 01, 2013 | Nov. 01, 2013 | Oct. 09, 2013 | Oct. 02, 2013 | Sep. 05, 2013 | Sep. 01, 2013 | Aug. 01, 2013 | Jul. 02, 2013 |
Notes payables for consulting services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company issued a note for consulting services / for fees. | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $75,000 | $30,000 | $15,000 | $30,000 | $30,000 | $30,000 |
Amount of the balance of the note with the OID accrued was | ' | ' | ' | ' | ' | ' | ' | ' | 82,500 | ' | 17,500 | ' | ' | ' |
The Company recorded a beneficial conversion discount of based on the fair value of the common stock into which the note is convertible | 30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 30,000 | ' | 30,000 | 30,000 | 30,000 | 30,000 | 30,000 |
Discounted value of the promissory note | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
The third party has the option to convert all or a portion of the note plus accrued interest into common stock at a conversion price equal to % of the lowest closing bid price for the ten days prior to the conversion | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% |
Notes_payables_with_Investors_
Notes payables with Investors (Details) (USD $) | Jun. 30, 2014 | Apr. 16, 2014 | Feb. 28, 2014 | Sep. 20, 2013 | Sep. 05, 2013 |
Notes payables with Investors | ' | ' | ' | ' | ' |
Investor exchanged its remaining interest,in the Series E 5% convertible Preferred stock | ' | ' | ' | $100,000 | ' |
Amount of accrued dividends on note | ' | ' | ' | 14,282 | ' |
Value of a new Secured Note | ' | ' | ' | 114,282 | ' |
Investor advanced the company a promissory note | ' | 42,500 | 5,000 | ' | 15,000 |
The Promissory Note has a face value | ' | ' | ' | ' | 17,500 |
Net proceeds of the company received by the company | ' | 40,000 | ' | ' | ' |
Amount recorded as a Deferred financing cost and will be amortized over the life of the Note Shares of Common Stock | ' | 2,500 | ' | ' | ' |
Interest expense on notes payable, including amortization of the discount on the convertible notes and the accrual of the redemption premium | $480,864 | ' | ' | ' | ' |
Common_Stock_issuances_Details
Common Stock issuances (Details) (USD $) | Jun. 30, 2014 | Mar. 07, 2011 |
COMMON STOCK ISSUANCES | ' | ' |
Issuance of common stock (in shares) pursuant to Equity Purchase Agreement with a third party | ' | 5,000,000 |
Company issued shares on a split-adjusted basis for the repurchase of debt. | 15,043,524 | ' |
Approximate amount adjusted in debt | $400,000 | ' |
Total number of shares company is authorized to issue | 10,000,000,000 | ' |
Number of shares designated as common stock | 9,995,000,000 | ' |
Number of shares designated as preferred stock | 5,000,000 | ' |
Value per share of preferred stock | $0.00 | ' |
Value per share of common stock | $0.00 | ' |
Series_E_Preferred_Stock_Issua
Series E Preferred Stock Issuances (Details) (USD $) | Sep. 20, 2013 | Jul. 18, 2012 | Jun. 30, 2012 | Feb. 15, 2012 | Jan. 11, 2011 |
Series E Preferred Stock Issuances | ' | ' | ' | ' | ' |
Company entered into a Securities Purchase Agreement to issue preferred shares | ' | 100 | ' | ' | 300 |
Stated value per share of Series E Preferred Stock | ' | ' | ' | ' | $1,000 |
Purchase price of Series E Preferred Stock | ' | ' | ' | ' | $300,000 |
Convertible price of Series E Preferred Stock share | ' | ' | ' | ' | $0.04 |
Shares of Series E Preferred issued to Investor convert into shares of common stock | ' | ' | ' | ' | 6,754,173 |
The Series E Preferred Stock accrues cash dividends at a rate per annum | 5.00% | 5.00% | ' | ' | 5.00% |
The Company determined beneficial conversion feature of Series E Preferred Stock | ' | 70,556 | ' | ' | 37,709 |
Deemed dividend in the amount for Series E Preferred Stock | ' | 35,278 | ' | ' | 37,709 |
The Company also accrued cash dividends payable | 14,282 | 5,834 | 13,360 | ' | 3,511 |
Accrued dividends payable included in accrued expenses and other current liabilities | ' | ' | 16,871 | ' | ' |
Investor converted 100 shares of Series E Preferred into shares of common stock | ' | 48,770,841 | ' | 2,251,390 | ' |
New secured promissory note issued to investor | 114,282 | 105,834 | ' | ' | ' |
Investor exchanged its remaining interest in the Series E 5% convertible Preferred stock | $100,000 | ' | ' | ' | ' |
Series_F_Preferred_Stock_Issua
Series F Preferred Stock Issuances (Details) (USD $) | Sep. 10, 2012 | Sep. 07, 2012 |
Series F Preferred Stock Issuances | ' | ' |
Company authorized shares of Series F Convertible Preferred Stock | ' | 100 |
Stated value per share of Series F Preferred Stock | ' | $1,000 |
Series F Convertible Preferred Stock are currently convertible into shares of common stock | 45,000,000 | 50,000,000 |
Conversion price per share of Series F Preferred Stock | ' | $0.02 |
Company issued shares of Series F Preferred Stock | 90 | ' |
Purchase price of shares of Series F Preferred Stock | $90,000 | ' |
The Company determined beneficial conversion feature of Series F Preferred Stock | 360,000 | ' |
Deemed dividend in the amount for Series F Preferred Stock | $360,000 | ' |
Series_G_H_and_I_Preferred_Sto
Series G H and I Preferred Stock Issuances (Details) (USD $) | Jun. 30, 2014 | Apr. 02, 2013 | Sep. 18, 2012 |
Series G H and I Preferred Stock Issuances | ' | ' | ' |
Company authorized shares of Series G Convertible Preferred Stock | ' | ' | 1,250 |
Stated value per share of Series G Preferred Stock | ' | ' | $1,000 |
Series G Convertible Preferred Stock are currently convertible into shares of common stock | ' | ' | 62,500,000 |
Conversion price per share of Series G Preferred Stock | ' | ' | $0.02 |
Shares of Series H Preferred issued to one individual | ' | 51 | ' |
Percentage of the total voting power of all issued and outstanding voting capital of the Companyheld by one individual | ' | 51.00% | ' |
Shares of Series I Preferred issued and outstanding | 3,500 | ' | ' |
Weighted_average_assumptions_w
Weighted average assumptions were used to estimate the fair value of stock options using the Black-Scholes option pricing model: (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Weighted average assumptions were used to estimate the fair value of stock options using the Black-Scholes option pricing model: | ' | ' |
Risk-free interest rate Minimum | 0.62% | 1.76% |
Risk-free interest rate Maximum | 1.04% | 2.28% |
Expected dividend yield | 0 | 0 |
Expected term minimum in years | 4.75 | 6 |
Expected term maximum in years | 6 | 6 |
Forfeiture rate | 0.00% | 0.00% |
Expected volatility Minimum | 122.20% | 128.99% |
Expected volatility maximum | 254.99% | 136.20% |
The_following_table_summarizes
The following table summarizes the warrants outstanding (Details) (Number of warrants) | Jun. 30, 2014 |
Number of warrants | ' |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Feb.10, 2017 | 2,000 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Feb.17, 2017 | 4,000 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on April.18, 2017 | 1,250 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on August.15, 2017 | 800 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on August.20, 2017 | 200 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Sep.14, 2017 | 1,000 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Oct.02, 2017 | 1,000 |
Total warrants outstanding | 10,250 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Feb.10, 2017 | 2,000 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Feb.17, 2017 | 4,000 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on April.18, 2017 | 1,250 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on August.15, 2017 | 800 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on August.20, 2017 | 200 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Sep.14, 2017 | 1,000 |
Warrants outstanding with exercise price range of $2.50 per share, expiring on Oct.02, 2017 | 1,000 |
Total warrants outstanding | 10,250 |
A_summary_of_option_activity_D
A summary of option activity (Details) | Shares | Weighted Average Exercise price | Weighted Average Remaining contract term years | Aggregate Intrinsic value |
Outstanding options at Jun. 30, 2012 | 186,760 | 15 | 8.84 | 0 |
Granted | ' | ' | ' | 0 |
Exercised | ' | ' | ' | 0 |
Forfeited or expired | ' | ' | ' | 0 |
Outstanding options at Jun. 30, 2013 | 186,760 | 15 | 7.84 | 0 |
Granted | ' | ' | ' | 0 |
Exercised | ' | ' | ' | 0 |
Forfeited | ' | ' | ' | 0 |
Exercisable at Jun. 30, 2014 | 186,760 | 15 | 6.84 | 0 |
Options_warrants_and_stock_bas
Options, warrants and stock based compensation Text (Details) (USD $) | Jun. 30, 2013 | Jan. 02, 2013 | Sep. 14, 2012 | Jul. 31, 2012 | Jun. 03, 2012 | Mar. 15, 2012 | Jan. 12, 2012 | Dec. 14, 2011 | Aug. 12, 2011 | Apr. 06, 2011 | Mar. 04, 2011 |
Options, warrants and stock based compensation text | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Board of directors adopted Equity Incentive plan and reserved shares of common stock for issuance to employees, directors and consultants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 |
The plan also provides for automatic annual increases on January 1st of each year five percent of the total number of shares outstanding on Dec.31st of preceding year or | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 |
The number of shares reserved under the plan automatically increased to | ' | 56,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Board of Directors granted stock options to purchase shares of common stock | ' | ' | ' | ' | 850,000 | ' | 120,000 | 2,500,000 | 120,000 | 42,350,000 | ' |
Exercise price per share common stock | ' | $0.05 | $0.01 | $0.01 | ' | ' | ' | $0.05 | $0.01 | $0.02 | $0.07 |
The weighted average fair value of the options on the grant date was estimated at per share. | ' | ' | ' | ' | $0.05 | ' | $0 | $0.01 | $0.04 | $0.06 | ' |
These options vest over one year and have a contractual term of years. | ' | ' | ' | ' | 10 | ' | 10 | 10 | 10 | 10 | ' |
Company agreed to issue a restricted stock award of shares of common stock to a consultant for services to be rendered | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' |
Number of shares vesting on June 15, 2012 | ' | ' | ' | ' | ' | 1,250,000 | ' | ' | ' | ' | ' |
Number of shares vesting on September 15, 2012 | ' | ' | ' | ' | ' | 1,250,000 | ' | ' | ' | ' | ' |
Unrecognized total compensation cost related to unvested awards | $1,002,649 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares reserved for future grants | 3,810,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net_Loss_Per_Share_Text_Detail
Net Loss Per Share Text (Details) | Jun. 30, 2014 | Jun. 30, 2013 |
Shares Potentially Issuable | ' | ' |
Series E Convertible Preferred Stock | 0 | 9,006 |
Series F Convertible Preferred Stock | 180,000 | 180,000 |
Series G Convertible Preferred Stock | 0 | 0 |
Series H Convertible Preferred Stock | 1 | 1 |
Series I Convertible Preferred Stock | 1,194,412 | 0 |
Convertible notes payable | 36,212,654 | 4,901,670 |
Stock options | 186,760 | 186,760 |
Restricted stock award | 10,000 | 10,000 |
Warrants | 10,250 | 10,250 |
Total shares potentially diluted | 37,794,078 | 5,297,687 |
Commitments_and_Contingencies_
Commitments and Contingencies Text (Details) (USD $) | Jun. 30, 2014 |
Operating Lease: | ' |
Monthly rent approximates | $2,000 |
Monthly lease amounts for this facility in 2013 | 763 |
Future minimum rental payments required under the current operating lease through expiration | 2,000 |
The lease terms required payment of a refundable security deposit | 18,000 |
Monthly payments for the remainder of agreement. | $30,000 |
Effective_Income_Tax_reconcili
Effective Income Tax reconciliation (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Effective Income Tax reconciliation | ' | ' |
Computed "expected" tax benefit | -35.00% | -35.00% |
State taxes, net of federal benefit | -3.00% | -3.00% |
Tax reporting differences due to the reverse acquisition | ' | 8.00% |
Goodwill impairment and other permanent differences | -9.00% | 15.00% |
Increase in the valuation reserve | 47.00% | 47.00% |
Net income tax benefit | 0.00% | 0.00% |
Deferred_tax_assets_and_liabil
Deferred tax assets and liabilities (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Deferred tax assets and liabilities | ' | ' |
Net operating loss carryforward | $5,304,000 | $4,602,000 |
Stock-based compensation deferred tax asset | 734,000 | 582,000 |
Intangibles | 344,000 | 344,000 |
Miscellaneous accruals | 53,000 | 53,000 |
Property and equipment | 8,000 | 8,000 |
Valuation allowance | -6,443,000 | -5,589,000 |
Deferred tax asset (liability) | $0 | $0 |
Employee_Benefit_PlanTextual_D
Employee Benefit PlanTextual (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
EMPLOYEE BENEFIT PLAN Textual | ' | ' |
Defined Contribution Plan, Employer Matching Contribution, Percent | 3.00% | 3.00% |
Defined Contribution Plan Employer Matching Contribution Additional Percent | 3.00% | 3.00% |
Contributions and other costs of the plan | $5,000 | $0 |
Reconciling_items_represent_ex
Reconciling items represent executive compensation costs that are not allocated to the operating segments (Details) (USD $) | Medical Diagnostics | Government Contracting | Energy | Unallocated | Total |
Total Segment Assets at Jun. 30, 2012 | $0 | ' | ' | ' | ' |
Segment Revenues | 315,054 | ' | ' | ' | 315,054 |
Segment Total Operating Expenses | 577,297 | 1,434 | ' | 595,092 | 1,172,389 |
Segment Operating loss | -262,243 | -1,434 | ' | -595,092 | -857,335 |
Segment Other income | 43,586 | ' | ' | -347,424 | -303,838 |
Segment Interest expense | ' | ' | ' | -178,386 | -178,386 |
Segment Depreciation and amortization | 10,176 | ' | ' | ' | 10,176 |
Segment Expenditure for long-lived assets, including intangibles | 0 | ' | ' | ' | ' |
Total Segment Assets at Jun. 30, 2013 | 73,048 | 6,872 | ' | ' | 79,920 |
Segment Revenues | 216,000 | ' | ' | ' | 216,000 |
Segment Total Operating Expenses | 211,421 | 1,434 | ' | 642,484 | 855,338 |
Segment Operating loss | 4,579 | -1,434 | ' | -642,484 | -639,338 |
Segment Other income | 12,505 | ' | ' | -1,882,117 | -1,869,612 |
Segment Interest expense | ' | ' | ' | -480,864 | -480,864 |
Segment Depreciation and amortization | 17,686 | 1,434 | ' | ' | 19,120 |
Segment Expenditure for long-lived assets, including intangibles | 0 | ' | ' | ' | ' |
Total Segment Assets at Jun. 30, 2014 | $82,270 | $5,438 | $1,039,074 | ' | $1,126,782 |
Subsequent_transactions_Detail
Subsequent transactions (Details) (USD $) | Sep. 01, 2014 | Aug. 01, 2014 | Jul. 19, 2014 | Jul. 01, 2014 |
Subsequent transactions | ' | ' | ' | ' |
Reverse did not reduce the amount of authorized shares of common stock and remained at a number | ' | ' | 9,950,000,000 | ' |
The Company issued to Gilbert Steedley, CEO, a note for for back pay | ' | ' | ' | $65,000 |
The Company issued a note for for consulting services | 30,000 | 30,000 | ' | 30,000 |
The Company recorded a beneficial conversion discount of based on the fair value of the common stock. | 30,000 | 30,000 | ' | 30,000 |
Discounted value of the promissory note | 0 | 0 | ' | 0 |
Conversion price equal to percentage of the lowest closing bid price for the twenty days prior to the conversion | 50.00% | 50.00% | ' | 50.00% |
The Company issued shares for the conversion of debt | ' | ' | 5,654,781 | ' |
Approximate amount of debt converted in to stock | ' | ' | 54,450 | ' |
Accrued interest amount of debt converted in to stock | ' | ' | 195 | ' |
Amount of fees associated of debt converted in to stock | ' | ' | $925 | ' |
Additional shares from the balance sheet date until the date of this report issued | 5,655,102 | ' | ' | ' |
Additional fractional shares associated with the Reverse. | 321 | ' | ' | ' |