Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Sep. 29, 2014 | Dec. 31, 2013 | |
Document and Entity Information: | ' | ' | ' |
Entity Registrant Name | 'eCareer Holdings, Inc. | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0001332572 | ' | ' |
Current Fiscal Year End Date | '--06-30 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 18,861,698 | ' |
Public Float | ' | ' | $55,786,760 |
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 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $8,303 | $214,483 |
Prepaid expenses and other current assets | 0 | 189,289 |
Total current assets | 8,303 | 403,772 |
Property and equipment, net | 223,405 | 271,321 |
Other assets | ' | ' |
Intangible assets | 430,510 | 440,749 |
Total assets | 662,218 | 1,115,842 |
Current liabilities | ' | ' |
Accounts payable | 331,919 | 124,958 |
Accrued liabilities | 302,657 | 296,730 |
Loan Payable - shareholder | 152,565 | 0 |
Convertible notes, net of discounts | 79,543 | 0 |
Derivative liabilities | 26,011 | 0 |
Third party notes, net of discount | 328,588 | 0 |
Total current liabilities | 1,221,283 | 421,688 |
Commitments and contingencies | ' | ' |
Stockholders' equity | ' | ' |
Common stock, $0.001 par value, 50,000,000 shares authorized, 15,666,038 and 364,006 shares issued and 15,575,112 and 363,117 shares outstanding, respectively | 15,574 | 362 |
Additional paid-in capital | 12,085,682 | 6,505,602 |
Accumulated deficit | -12,653,577 | -5,854,847 |
Non-controlling interest | -7,029 | 43,012 |
Total stockholders' equity (deficit) | -559,065 | 694,154 |
Total liabilities and stockholders' equity | 662,218 | 1,115,842 |
Series A preferred stock | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock: Series A, $0.001 par value, 1,000,000 shares authorized, 25,013 shares issued and outstanding; Series B, $0.001 par value, 1,000,000 shares authorized, 260,308 and 0 shares issued and outstanding, respectively | 25 | 25 |
Series B preferred stock | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock: Series A, $0.001 par value, 1,000,000 shares authorized, 25,013 shares issued and outstanding; Series B, $0.001 par value, 1,000,000 shares authorized, 260,308 and 0 shares issued and outstanding, respectively | $260 | $0 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 15,666,038 | 364,006 |
Common Stock, shares outstanding | 15,575,112 | 363,117 |
Series A preferred stock | ' | ' |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 25,013 | 25,013 |
Preferred Stock, shares outstanding | 25,013 | 25,013 |
Series B preferred stock | ' | ' |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 260,308 | 0 |
Preferred Stock, shares outstanding | 260,308 | 0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest [Abstract] | ' | ' |
Revenue | $70,116 | $9,092 |
Operating expenses | ' | ' |
Advertising and marketing | 543,518 | 522,799 |
Salaries and benefits | 1,334,803 | 1,104,938 |
Professional and consulting fees | 532,009 | 1,619,038 |
Shareholder relations | 596,998 | 647,629 |
General and administrative | 647,607 | 545,540 |
General and administrative expenses - related parties | 0 | 80,000 |
Total operating expenses | 3,654,935 | 3,872,315 |
Loss from operations | -3,584,819 | -3,863,223 |
Loss on change in fair value of derivatives | -15,099 | 0 |
Interest Expense | -231,236 | 0 |
Total other expense | -246,335 | 0 |
Net loss | -3,831,154 | -3,863,223 |
Less: Net loss attributable to non-controlling interest | 50,041 | 200,064 |
Net loss attributable to eCareer Holdings, Inc. | ($3,781,113) | ($3,663,159) |
Net loss per share - basic and fully diluted | ($0.48) | ($11.12) |
Weighted average number of common shares outstanding during the period - basic and fully diluted | 7,872,349 | 329,329 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Preferred Stock A | Preferred Stock B | Common Stock Amount | Additional Paid-in Capital | Deficit Accumulated During Development Stage | Subscriptions Receivable | Non- controlling Interest | Total |
Balance at Jun. 30, 2012 | $100 | ' | $283 | $3,715,024 | ($2,191,688) | ($354,000) | ' | $1,169,719 |
Balance (in shares) at Jun. 30, 2012 | 100,000 | ' | 283,818 | ' | ' | ' | ' | ' |
Issuance of common stock for cash and subscriptions receivable | ' | ' | 41 | 1,286,509 | ' | -50,300 | ' | 1,236,250 |
Issuance of common stock for cash and subscriptions receivable (in shares) | ' | ' | 40,601 | ' | ' | ' | ' | ' |
Issuance of common stock and warrants for cash and subscriptions receivable | ' | ' | 56 | 2,079,821 | ' | -666,000 | ' | 1,413,877 |
Issuance of common stock and warrants for cash and subscriptions receivable (in shares) | ' | ' | 55,757 | ' | ' | ' | ' | ' |
Receipt of cash for subscriptions receivable | ' | ' | ' | ' | ' | 892,800 | ' | 892,800 |
Direct offering costs | ' | ' | ' | -435,041 | ' | ' | ' | -435,041 |
Issuance of common stock for services | ' | ' | 1 | 37,020 | ' | ' | ' | 37,021 |
Issuance of common stock for services (in shares) | ' | ' | 1,107 | ' | ' | ' | ' | ' |
Net loss - July 1, 2012 to April 11, 2013 | ' | ' | ' | ' | -2,736,880 | ' | ' | -2,736,880 |
Segregation of non-controlling interest in subsidiary on reverse capitalization | ' | ' | -58 | -243,018 | ' | ' | 243,076 | 0 |
Segregation of non-controlling interest in subsidiary on reverse capitalization (in shares) | ' | ' | -57,878 | ' | ' | ' | ' | ' |
Issuance of common stock in reverse recapitalization | ' | ' | 39 | -459,531 | ' | 177,500 | ' | -281,992 |
Issuance of common stock in reverse recapitalization (in shares) | ' | ' | 39,451 | ' | ' | ' | ' | ' |
Exchange of subsidiary preferred stock for ECHI preferred stock, amount | -75 | ' | ' | 75 | ' | ' | ' | ' |
Exchange of subsidiary preferred stock for ECHI preferred stock (in shares) | -74,987 | ' | ' | ' | ' | ' | ' | ' |
Direct offering cost | ' | ' | ' | -83,776 | ' | ' | ' | -83,776 |
Issuance of subsidiary common stock for cash and subscriptions receivable | ' | ' | ' | 8,000 | ' | ' | ' | 8,000 |
Issuance of subsidiary common stock and warrants for cash and subscriptions receivable | ' | ' | ' | 449,500 | ' | ' | ' | 449,500 |
Receipt of cash for subsidiary's subscriptions receivable | ' | ' | ' | 145,500 | ' | ' | ' | 145,500 |
Issuance of common stock for services, amount | ' | ' | 0 | 1,665 | ' | ' | ' | 1,665 |
Issuance of common stock for services, shares | ' | ' | 261 | ' | ' | ' | ' | ' |
Issuance of subsidiary common stock for services | ' | ' | ' | 3,854 | ' | ' | ' | 3,854 |
Net loss | ' | ' | ' | ' | -926,279 | 0 | -200,064 | -1,126,343 |
Balance at Jun. 30, 2013 | 25 | ' | 362 | 6,505,602 | -5,854,847 | ' | 43,012 | 694,154 |
Balance (in shares) at Jun. 30, 2013 | 25,013 | ' | 363,117 | ' | ' | ' | ' | ' |
Issuance of common stock and warrants for cash and subscriptions receivable | ' | ' | 2,317 | 1,411,434 | ' | -15,001 | ' | 1,398,750 |
Issuance of common stock and warrants for cash and subscriptions receivable (in shares) | ' | ' | 2,316,748 | ' | ' | ' | ' | ' |
Receipt of cash for subscriptions receivable | ' | ' | ' | ' | ' | 105,501 | ' | 105,501 |
Direct offering costs | ' | ' | ' | -223,190 | ' | ' | ' | -223,190 |
Issuance of common stock for services | ' | ' | 118 | 86,155 | ' | ' | ' | 86,273 |
Issuance of common stock for services (in shares) | ' | ' | 118,152 | ' | ' | ' | ' | 118,152 |
Exchange of subsidiary preferred stock for ECHI preferred stock, amount | ' | ' | ' | ' | ' | ' | ' | 0 |
Issuance of subsidiary common stock and warrants for cash and subscriptions receivable | ' | ' | ' | 278,351 | ' | ' | ' | 278,351 |
Issuance of subsidiary common stock on exercise of warrants | ' | ' | ' | 353,750 | ' | ' | ' | 353,750 |
Issuance of common stock upon exercise of warrants | ' | ' | 511 | 440,489 | ' | -90,500 | ' | 350,500 |
Issuance of common stock upon exercise of warrants (in shares) | ' | ' | 510,585 | ' | ' | ' | ' | ' |
Issuance of common stock in exchange for subsidiary common stock | ' | ' | 3,125 | -3,125 | ' | ' | ' | 0 |
Issuance of common stock in exchange for subsidiary common stock (in shares) | ' | ' | 3,125,103 | ' | ' | ' | ' | ' |
Issuance of convertible series B preferred stock as a dividend | ' | 434 | ' | 2,994,654 | -2,995,088 | ' | ' | ' |
Issuance of convertible series B preferred stock as a dividend (in shares) | ' | 434,554 | ' | ' | ' | ' | ' | ' |
Issuance of common stock dividend | ' | ' | 126 | 22,403 | -22,529 | ' | ' | ' |
Issuance of common stock dividend (in shares) | ' | ' | 126,007 | ' | ' | ' | ' | ' |
Issuance of common stock upon conversion of series B preferred stock | ' | -174 | 8,615 | -8,441 | ' | ' | ' | 0 |
Issuance of common stock upon conversion of series B preferred stock (in shares) | ' | -174,246 | 8,615,400 | ' | ' | ' | ' | ' |
Issuance of common stock with note payable | ' | ' | 400 | 227,600 | ' | ' | ' | 228,000 |
Issuance of common stock with note payable (in shares) | ' | ' | 400,000 | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | -3,781,113 | ' | -50,041 | -3,831,154 |
Balance at Jun. 30, 2014 | $25 | $260 | $15,574 | $12,085,682 | ($12,653,577) | ' | ($7,029) | ($559,065) |
Balance (in shares) at Jun. 30, 2014 | 25,013 | 260,308 | 15,575,112 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($3,831,154) | ($3,863,223) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation | 65,628 | 49,680 |
Amortization of intangible assets | 36,093 | 15,453 |
Amortization of note discounts | 159,119 | 0 |
Common stock issued for services | 86,273 | 42,540 |
Change in fair value of derivative liabilities | 15,099 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expense and other current assets | 189,289 | 78,481 |
Accounts payables and accrued liabilities | 212,888 | 103,834 |
Net cash used in operating activities | -3,066,765 | -3,573,235 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of intangible assets | -25,854 | -371,418 |
Purchases of property and equipment | -17,712 | -269,553 |
Net cash used in investing activities | -43,566 | -640,971 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from shareholder notes payable | 295,065 | 0 |
Repayment of shareholder loan payable | -17,500 | 0 |
Proceeds from convertible notes payable | 126,000 | 0 |
Repayment of convertible notes payable | -43,076 | 0 |
Proceeds for exercise of warrants | 441,000 | 0 |
Proceeds from third party notes payable | 500,000 | 0 |
Proceeds from third party notes payable | -220,000 | 0 |
Proceeds from sale of subscription units | 1,413,751 | 4,145,927 |
Cash consideration for reverse recapitalization | 0 | -281,992 |
Proceeds from sale of subsidiary common stock and warrants | 632,101 | 0 |
Payment of offering costs | -223,190 | -518,817 |
Net cash provided by financing activities | 2,904,150 | 3,345,118 |
Net (decrease) increase in cash and cash equivalents | -206,180 | -869,088 |
Cash and cash equivalents - beginning of year/period | 214,483 | 1,083,571 |
Cash and cash equivalents - end of period | 8,303 | 214,483 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ' | ' |
Payment of taxes | 0 | 0 |
Payment of interest | 1,667 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Exchange of subsidiary preferred stock for ECHI preferred stock | 0 | 75 |
Creation of non-controlling interest in reverse capitalization | 0 | 243,076 |
Common stock issued for services | 86,273 | 42,540 |
Amortization of loan discounts | 7,532 | 0 |
Change in fair value of derivative liabilities | 15,099 | 0 |
Professional fees deducted from convertible notes | 6,000 | 0 |
Exchange of subsidiary stock for ECHI common stock | 3,125 | 0 |
Issuance of common stock with note payable | 228,000 | 0 |
Issuance of common stock dividend | 22,529 | 0 |
Issuance of series B preferred stock as a dividend | 2,995,088 | 0 |
Conversion of series B preferred stock for common stock | $8,615 | $0 |
1_Organization_and_Nature_of_O
1. Organization and Nature of Operations | 12 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements: | ' |
Organization and Nature of Operations | ' |
eCareer Holdings Inc., (“the Company”) (“ECHI”) was incorporated under the laws of the State of Nevada on March 24, 2005 as Barossa Coffee Company, Inc. The Company changed its name form Barossa Coffee Company, Inc. to eCareer Holdings, Inc. upon the reverse acquisition on April 11, 2013, and is headquartered in Boca Raton, Florida. | |
The Company’s fiscal year end is June 30. | |
Acquisition of Barossa Coffee Company, Inc. as a Reverse Recapitalization | |
As initially reported in our report on Form 8-K filed on August 30, 2012, on that date, Barossa Coffee Company, Inc., a shell company, a Nevada corporation (“BCCI”), entered into an Agreement and Plan of Reorganization (the “Exchange Agreement”) with certain principal stockholders of BCCI, including Thomas G. Kimble, Lynn Dixon and Adam Gatto (collectively, the “Principal BCCI Stockholders”), eCareer, Inc., a Florida corporation (“ECI”), and the consenting owners of the outstanding shares of common stock of ECI. | |
The agreement provided for BCCI to acquire all of the issued and outstanding shares of common stock of ECI in exchange for a total of 4,260,690 shares of common stock of BCCI. After the parties agreed to extend the date of closing, the transactions contemplated by the Exchange Agreement closed on April 11, 2013, whereupon BCCI acquired 15,570,077 shares of ECI, representing 84.73% of ECI’s issued and outstanding common stock, in exchange for 3,894,668 restricted shares of newly issued common stock of BCCI—an exchange ratio of 0.250138 newly issued shares of BCCI common stock for every one share of ECI common stock. The 3,894,668 restricted shares of BCCI common stock issued to former ECI stockholders at closing represented 89.2% of the issued and outstanding common stock of BCCI. When the remaining ECI stockholders elected to exchange all of the remaining ECI common shares into shares of BCCI, former ECI stockholders hold a total of 90% of BCCI’s common stock. | |
Pursuant to the Exchange Agreement, as extended, ECI paid a total of $245,000 cash to BCCI in seven scheduled payments, including a final payment of $165,000 which was made at closing. Contemporaneously, BCCI used $215,000 of the $245,000 to redeem and cancel 4,260,690 shares of its pre-exchange common stock from the Principal BCCI Stockholders. BCCI used the remaining $30,000 to pay certain consultants for services rendered. In connection with the parties’ agreement to extend the closing date of the Exchange Agreement, ECI also paid total extension penalties to BCCI as of closing of $37,539. | |
As a result of the transactions effected by the Exchange Agreement, for financial statement reporting purposes, the exchange has been treated as a reverse acquisition with ECI deemed the accounting acquirer and BCCI deemed the accounting acquiree. The reverse acquisition is deemed a capital transaction and the assets and liabilities of ECI are carried forward to the Company at their carrying value before the acquisition. The equity of the Company is the historical equity of ECI retroactively restated to reflect the number of shares issued by ECI using the capital structure of BCCI. Accordingly, ECI became the operating company and BCCI abandoned all of its previous business plans, with the business of ECI now being the Company’s sole business. | |
The Company is a provider of niche industry websites designed to brand client companies to active and passive companies within each niche. Site features include: industry news, social media groups, niche-specific content, webinars, events, training programs and industry statistics. Access to the sites is free to users, and revenue is intended to be generated through advertising, resume searches, and job board functions. The Company’s first site, openreq.com, was publically launched January 1, 2013. | |
Reverse Stock Split | |
On June 3, 2013, the Company filed a Certificate of Amendment to its Articles of Incorporation, as amended, to effect a one-for-twelve (1:12) reverse split of its issued and outstanding shares of common stock (the “Reverse Stock Split”). The Reverse Stock Split was effective in the market on June 25, 2013. Every 12 shares of common stock outstanding were combined, converted and changed into one share of common stock. All share and per share amounts in these financial statements have been restated to give effect to the reverse stock split. |
2_Going_Concern
2. Going Concern | 12 Months Ended |
Jun. 30, 2014 | |
Going Concern: | ' |
Going Concern | ' |
As reflected in the accompanying consolidated financial statements, since inception the Company has incurred a net loss of approximately $12.7. As of June 30, 2014, the Company has a working capital deficit of approximately $1.2 million. | |
The Company does not yet have a history of financial stability. Historically, the principal source of liquidity has been the issuance of equity securities and outside funding sources. In addition, the Company has generated insignificant revenue since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | |
The ability of the Company to continue operations is dependent on the success of Management’s plans, which include the raising of capital through the issuance of equity and debt securities, until such time that funds provided by operations are sufficient to fund working capital requirements. | |
The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control. Our current negative cash flow is approximately $175,000 per month. The Company believes its current available cash along with anticipated revenue may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. | |
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
3_Summary_of_Significant_Accou
3. Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Accounting Policies: | ' | ||||||||
Summary of Significant Accounting Policies | ' | ||||||||
New Accounting Pronouncements | |||||||||
Except as set forth below, management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. | |||||||||
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods within that reporting period. The Company has elected to adopt the provisions of this ASU early, accordingly all of the past disclosures and presentations on development stage accounting have been eliminated. | |||||||||
Principles of Consolidation | |||||||||
The financial statements are presented on a consolidated basis for ECHI and ECI, and the resulting non-controlling interest in ECI. All intra-company transactions have been eliminated on consolidation. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. | |||||||||
Such estimates and assumptions impact, among others, the following: valuation and potential impairment associated with intangible assets and estimates pertaining to the valuation allowance for deferred tax assets due to continuing, and expected future operating losses. | |||||||||
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates, and those differences could be material. | |||||||||
Risks and Uncertainties | |||||||||
The Company’s operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure. | |||||||||
Concentration of Credit Risk | |||||||||
The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in noninterest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. | |||||||||
Cash and Cash Equivalents | |||||||||
The Company maintains cash balances at a single financial institution. The Company considers all highly liquid instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents. Cash equivalents consisted of money market funds totaling $8,303 and $214,483 at June 30, 2014 and 2013, respectively. | |||||||||
Property and Equipment | |||||||||
Property and equipment is stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. | |||||||||
Depreciation is provided utilizing the straight-line method over the estimated useful lives of the respective assets as follows: | |||||||||
Asset | Life / Years | ||||||||
Equipment | 7-May | ||||||||
Furniture and fixtures | 7 | ||||||||
Computer equipment and software | 3 | ||||||||
Leasehold improvements | Lesser of 15 years or the term of the lease | ||||||||
Intangible Assets | |||||||||
The Company’s intangible assets consist of website development costs and domain names. | |||||||||
The Company accounts for website development costs in accordance with Accounting for Website Development Costs, wherein website development costs are segregated into three activities: | |||||||||
1) | Initial stage (planning), whereby the related costs are expensed. | ||||||||
2) | Development (web application, infrastructure, graphics), whereby the related costs are capitalized and amortized once the website is ready for use. Costs for development content of the website may be expensed or capitalized depending on the circumstances of the expenditures. | ||||||||
3) | Post-implementation (after site is up and running: security, training, admin), whereby the related costs are expensed as incurred. Upgrades are usually expensed, unless they add additional functionality. | ||||||||
Amortization is provided utilizing the straight-line method over the three year estimated useful lives of these assets. | |||||||||
Domain names are not being amortized as they are determined to have indefinite lives. | |||||||||
Intangible assets are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no impairment charges taken during the years ended June 30, 2014 and 2013, respectively. | |||||||||
Derivative Instruments | |||||||||
The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification and paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. As of June 30, 2014 the derivative liabilities were $26,011. | |||||||||
Revenue Recognition – The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery of service has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Revenue is recognized net of customer discounts and allowances ratably over the service period. Payments received in advance of services being rendered are recorded as deferred revenue and recognized over the service period. The Company generates revenue from the following sources: | |||||||||
Talent acquisition package revenues are derived from the sale, to recruiters and employers, a combination of talent packages and access to a searchable database of candidates on the Openreq.com website. Certain of the Company’s arrangements include multiple deliverables, which consist of the ability to post jobs and access to a searchable database of candidates. The Company determines the units of accounting for multiple element arrangements in accordance with the Multiple-Deliverable Revenue Arrangements subtopic of the FASB ASC. Specifically, the Company will consider a delivered item as a separate unit of accounting if it has value to the customer on a standalone basis. The Company’s arrangements do not include a general right of return. Services to customers buying a package of available talent packages and access to the database are delivered over the same period and revenue is recognized ratably over the length of the underlying contract, typically from one to 12 months. The separation of the package into two deliverables results in no change in revenue recognition since delivery of the two services occurs over the same time period. | |||||||||
Advertising revenue is recognized over the period in which the advertisements are displayed on the websites or at the time an e-mail is sent to registered members. | |||||||||
Advertising and Marketing Expense | |||||||||
The Company’s policy is to expense advertising and marketing costs as incurred, which included consulting expenses and expenses relating to participation at trade shows. Advertising and marketing expense was as follows: | |||||||||
Year Ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Advertising | $ | 59,465 | $ | 55,110 | |||||
Marketing | 484,053 | 467, 689 | |||||||
$ | 543,518 | $ | 522,799 | ||||||
Income Taxes | |||||||||
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary. | |||||||||
Assessing whether deferred tax assets are realizable requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company’s deferred tax assets, which increase income tax expense in the period when such a determination is made. | |||||||||
Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the statements of operations. There were no unrecognized tax benefits for the years ended June 30, 2014 and June 30, 2013. | |||||||||
Share Based Payment Arrangements | |||||||||
Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. As shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum or monthly price observations have been utilized, as the use of daily price observations could be artificially inflated because of a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |||||||||
Net Loss Per Share | |||||||||
Basic earnings per share (“EPS”) is computed by dividing the net loss attributable to the Company that is available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of warrants) and convertible debt or convertible preferred stock using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. | |||||||||
The Company had the following potential common stock equivalents at June 30, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Common stock warrants - ECI | 10,000 | 2,480,500 | |||||||
Common stock warrants - ECHI | 5,061,976 | 790,377 | |||||||
Unvested stock grants - ECI | 0 | 478 | |||||||
Unvested stock grants - ECHI | 87,499 | 890 | |||||||
Total common stock equivalents | 5,159,475 | 3,272,245 | |||||||
Fair Market Value of Financial Instruments | |||||||||
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. | |||||||||
The following are the hierarchical levels of inputs to measure fair value: | |||||||||
Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. | |||||||||
Level 2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||||||
Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | |||||||||
The Company’s financial instruments consist primarily of prepaid expenses, accounts payable, accrued liabilities, loans payable and convertible debt. The carrying amounts of the Company’s financial instruments generally approximated their fair values as of June 30, 2014 and 2013, respectively, due to the short-term nature of these instruments and the Company’s borrowing rate. | |||||||||
Reclassifications | |||||||||
Certain items have been reclassified to conform to the current year’s presentation |
4_Prepaid_Expenses
4. Prepaid Expenses | 12 Months Ended |
Jun. 30, 2014 | |
Prepaid Expenses and Other Current Assets | ' |
Prepaid Expenses and Other Current Assets | ' |
Prepaid expenses consist of professional fees and subscription fees. Prepaid expenses are being amortized over the expected period of benefit, which range from one to two years. |
5_Property_and_Equipment
5. Property and Equipment | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Property and Equipment | ' | ||||||||
Property and Equipment | ' | ||||||||
Property and equipment consist of the following at June 30: | |||||||||
2014 | 2013 | ||||||||
Equipment | $ | 111,647 | $ | 111,647 | |||||
Furniture and fixtures | 72,118 | 72,118 | |||||||
Leasehold improvements | 82,710 | 68,142 | |||||||
Computer equipment & software | 63,701 | 60,557 | |||||||
330,176 | 312,464 | ||||||||
Less: accumulated depreciation | (106,771 | ) | (41,143 | ) | |||||
$ | 223,405 | $ | 271,321 | ||||||
Depreciation expense for the years ended June 30, 2014 and 2013 was $65,628 and $49,680, respectively. |
6_Intangible_Assets
6. Intangible Assets | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Intangible Assets | ' | ||||||||
Intangible Assets | ' | ||||||||
Intangible assets consist of the following at June 30: | |||||||||
2014 | 2013 | ||||||||
Domain names | $ | 298,389 | $ | 298,389 | |||||
Website development costs | 183,667 | 157,813 | |||||||
Accumulated amortization | (51,546 | ) | (15,453 | ) | |||||
$ | 430,510 | $ | 440,749 | ||||||
Amortization expense for website development costs for the years ended June 30, 2014 and 2013 amounted to $36,093 and $15,453. Certain of the intangible assets were placed in service during the current fiscal year. Others will be placed in service in future years. | |||||||||
The estimated future amortization expense of website development costs for the years ended June 30 is as follows: | |||||||||
Amount | |||||||||
2015 | $ | 44,835 | |||||||
2016 | 37,576 | ||||||||
2017 | 25,129 | ||||||||
2018 | 16,388 | ||||||||
2019 | 8,193 | ||||||||
Total | $ | 132,121 | |||||||
7_Notes_Payable_and_Derivative
7. Notes Payable and Derivative Liabilities | 12 Months Ended |
Jun. 30, 2014 | |
Notes Payable and Derivative Liabilities | ' |
Notes Payable and Derivative Liabilities | ' |
Third party promissory notes | |
As of June 30, 2014, the Company had entered into 6 notes from third parties for a total amount of $500,000. The notes bear interest at a rate of 10%. Principal is to be paid upon maturity, which range from August 2014 to January 2015. At June 30, 2014 accrued interest amounted to $29,839. Certain of the notes are collateralized by the Company’s common stock and, upon default, would subject the Company to issuing common shares equivalent to $499,000, resulting in dilution of ownership of current stockholders. | |
Interest expense on the third parties notes for the year ended June 30, 2014 was $54,136. | |
In March 2014, the Company entered into a promissory note for $125,000 with a shareholder. The note bears a 10% interest rate, is secured with the Company's common stock and is due on December 31, 2014. At June 30, 2014 accrued interest amounted to $4,163. | |
Interest expense on the third party note for the year ended June 30, 2014 was $151,588, including $48,588 of discount amortization. | |
Convertible promissory notes | |
On December 17, 2013 and January 28, 2014 the Company entered into securities purchase agreements (the “Purchase Agreement”) with an investor and issued convertible promissory notes in the amount of $83,500 and $42,500, respectively (the “Notes”). The Notes bear interest at 8% per annum and mature on December 19, 2014 and October 30, 2014, respectively. The Notes may be converted into unregistered shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the issuance of the note. The Conversion Price of both Notes shall be equal to 58% multiplied by the Variable Conversion Rate that is equal to the average of the three (3) lowest closing bid prices of the Common Stock during the ten (10) trading day period prior to the date of conversion. The Notes also contain prepayment options whereby the Company may make payments to the holder based on the length of time the Notes have been outstanding, upon three (3) trading days’ prior written notice to the holder. During the first 60 days, the Company may make a payment to the holder equal to 130% of the then outstanding unpaid principal and interest, from days 61 until 120 days, the Company may make a payment to the holder equal to 135% of the then outstanding unpaid principal and interest, from days 121 until 180, days the Company may make a payment to the holder equal to 140% of the then outstanding unpaid principal and interest, after 180 days, the Company has no right of prepay. In the event of default before the maturity dates, the payment is immediately due, in the amount of 150% of the outstanding unpaid principal, along with interest and any penalties. | |
Interest expense on the convertible notes for the year ended June 30, 2014 was $20,455, including $7,532 of discount amortization. | |
Derivative analysis | |
The Notes are convertible into common stock of the Company at variable conversion rates that provides a fixed return to the note-holder. Under the terms of the notes, the Company could be required to issue additional shares in the event of a default. Due to these provisions, the conversion feature is subject to derivative liability treatment under Section 815-40-15 of the FASB Accounting Standard Codification (“Section 815-40-15”) (formerly FASB Emerging Issues Task Force (“EITF”) 07-5). The Notes have been measured at fair value using the Black-Scholes model at each reporting period with gains and losses from the change in fair value of derivative liabilities recognized in the consolidated statement of operations. The conversion feature was recorded as a discount to the notes due to the beneficial conversion feature upon origination. | |
The embedded derivatives of the remaining Notes were re-measured at June 30, 2014 yielding an aggregate loss on change in fair value of the derivatives of $15,099. The fair value of the derivative liability of the remaining notes at June 30, 2014 aggregated $26,011. | |
The Company is required to reserve shares of common stock, free of preemptive rights, at 5 times the number of shares actually issuable upon full conversion of the Note at the conversion price then in effect. The number of common shares issued upon conversion may not result in beneficial ownership by Asher in excess of 9.99% of the outstanding common shares of the Company, unless waived by Asher with 61 days notice to the Company. | |
Notes payable – shareholders | |
The Company has a loan payable to a shareholder totaling $152,565 as of June 30, 2014. This loan is unsecured and non-interest bearing. | |
In March 2014, the Company entered into a promissory note for $125,000 with a third party. The note bears a 10% interest rate and is due on December 31, 2014. At June 30, 2014 accrued interest amounted to $4,163. The note is collateralized with $137,500 worth of the Company’s common stock that, upon default, would result in dilution of ownership of current stockholders. | |
The note also required the Company to issue 400,000 shares of common stock to the note holder. Using Black-Scholes, the share issuance was valued at $280,000 and recorded as a discount against the note for $125,000 and an immediate additional interest expense of $103,000. Therefore, interest expense on the note for the year ended June 30, 2014 was $155,751, including $48,588 of discount amortization. |
8_Stockholders_Equity
8. Stockholders Equity | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Stockholders Equity | ' | ||||||||||||
Stockholders Equity | ' | ||||||||||||
Preferred Stock - ECI | |||||||||||||
As of June 30, 2014, ECHI has 1,000,000 shares of Preferred Stock authorized, $0.001 par value per share. In May 2012, 25,013 shares were designated as series A and were issued to Mr. Azzata. The ECI Preferred Shares were valued at $71,600 ($0.72/share) for the fair value of services rendered. | |||||||||||||
Each of the Preferred Shares entitles Mr. Azzata to 500 votes on any matter brought to a vote of the holders of the Company’s common stock, giving him 12,506,500 votes, not including additional votes he has through his ownership of shares of the Company’s common stock. Accordingly, Mr. Azzata has voting control of the Company. | |||||||||||||
Series A Preferred Stock has the following provisions: | |||||||||||||
● | Voting rights entitling the holder to 500 votes per share, which gave the Chief Executive Officer voting control of the Company as of June 30, 2014 and as of the date of the accompanying report, | ||||||||||||
● | Non-convertible, | ||||||||||||
● | No rights to dividends, | ||||||||||||
● | No liquidation value, | ||||||||||||
● | Non-participating | ||||||||||||
● | Non-cumulative, | ||||||||||||
● | No put option; and | ||||||||||||
● | Non-redeemable. | ||||||||||||
Series B Convertible Preferred Stock | |||||||||||||
On July 26, 2013, the Company distributed a stock dividend to its common stockholders, whereby one restricted share of Series B Convertible Preferred Stock was issued for every one share of common stock held by ECHI stockholders, a total of 434,554 Series B Convertible Preferred shares. Each share of Series B Convertible Preferred Stock is convertible by the shareholder into 50 shares of common stock, will participate in any dividends declared by the Company for common stock on an as-if-converted-to-common stock basis, and may only vote on matters with respect to the Series B Convertible Preferred Stock on a non-cumulative basis, and subject to applicable restrictions. The fair value of these shares was determined to be $6.92 per share resulting in a dividend amounting to $2,995,088. As of June 30, 2014, 174,246 Series B Preferred Shares were converted into 8,615,400 shares of Common Stock. | |||||||||||||
Common Stock | |||||||||||||
ECI and the Company issued the following shares of common stock for the period July 1, 2012 to April 11, 2013: | |||||||||||||
Transaction Type | Quantity | Quantity Warrants | Valuation | ||||||||||
Stock | |||||||||||||
Cash third parties (1) | 96,358 | 55,757 | $ | 3,366,427 | |||||||||
Services – third parties (2) | 1,107 | — | $ | 37,021 | |||||||||
97,725 | 55,757 | $ | 3,403,448 | ||||||||||
-1 | Commencing in December 2012, ECI issued shares and warrants as a unit under a private placement memorandum. Each unit had a $1 price and was comprised of 1 common share and 1 warrant to purchase 1 common share at $1. The purchase price was recorded at par for the common stock and additional paid-in capital was allocated between the prorated fair value of the common stock and the warrant. The warrants are exercisable through December 31, 2015. | ||||||||||||
-2 | Valuation was based upon the average cash price paid by third parties for common stock during the 30-day period preceding the service performance, since the Company was not yet traded publicly; this represented the best evidence of fair value. | ||||||||||||
From April 12, 2013 through June 30, 2013, ECI issued common stock for cash in the amount of $457,500, and $3,854 for services from third parties. | |||||||||||||
On April 11, 2013 the Company issued 324,556 shares of its common stock to the majority of the shareholders of ECI in connection with the reverse capitalization and cancelled and retired 4,260,690 pre-split shares owned by certain Barossa shareholders. The non-consenting shareholders of ECI that did not convert their shares to ECHI shares became non-controlling interests of ECI and their 57,878 shares were removed from the Company’s outstanding stock. This resulted in an increase of 39,451 post split shares of ECHI. | |||||||||||||
From April 12, 2013 through June 30, 2013, 261 Company common shares for services vested with a value of $1,665. | |||||||||||||
From July 1, 2013 through June 30, 2014, ECI issued common stock for cash and exercise of warrants in the amount of $632,101. | |||||||||||||
From July 1, 2013 through June 30, 2014 the Company issued the following common stock: | |||||||||||||
Transaction Type | Quantity | Valuation | |||||||||||
Exercise of warrants | 510,585 | $ | 441,000 | ||||||||||
Exchange for ECI common stock | 3,125,103 | 0 | |||||||||||
Issued for cash and subscription receivable | 2,316,748 | 1,413,751 | |||||||||||
Issuance of common stock dividend | 126,007 | 0 | |||||||||||
Conversion of Series B Preferred stock | 8,615,400 | 0 | |||||||||||
Issued with note payable | 400,000 | 228,000 | |||||||||||
Services - third parties | 118,152 | 86,273 | |||||||||||
15,211,995 | $ | 2,169,024 | |||||||||||
In November 2013, the Board of Directors determined that all outstanding warrants held by ECI shareholders that consent to conversion into ECHI stock and warrants would convert into warrants of ECHI, retroactive to October 1, 2013. | |||||||||||||
In November 2013, the Company issued a common stock dividend to the ECI shareholders in an amount equivalent to the number of shares of ECHI that these shareholders would have received had they been shareholders of ECHI on April 11, 2013 (the “Record Date”). | |||||||||||||
Effective April 1, 2014, the Company entered into an agreement with an individual to provide advisory services to the Company’s Board of Directors. The agreement provides for the immediate issuance of 100,000 restricted shares of the Company’s common stock that will vest ratably over 2 years. Accordingly, these shares will be shown as issued but not outstanding until earned. | |||||||||||||
ECI and the Company paid direct offering costs in the aggregate of $223,190 and $518,817 for the years ended June 30, 2014 and 2013, respectively, associated with capital raising activities. |
9_Warrants
9. Warrants | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 9. Warrants | ' | ||||||||
The following is a summary of the Company’s and its subsidiary’s warrant activity: | |||||||||
ECHI | ECI | ||||||||
Beginning Balance, July 1, 2012 | 0 | 0 | |||||||
Purchases | 0 | 3,338,877 | |||||||
Exchanges | 810,377 | (810,377 | ) | ||||||
Exercised | 0 | 0 | |||||||
Ending Balance, June 30, 2013 | 810,377 | 2,528,500 | |||||||
Purchases | 2,341,498 | 305,600 | |||||||
Exchanges | 2,446,434 | (2,446,434 | ) | ||||||
Exercised | (536,333 | ) | (377,666 | ) | |||||
Ending Balance, June 30, 2014 | 5,061,976 | 10,000 | |||||||
10_Income_Taxes
10. Income Taxes | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
As a result of the reverse acquisition, the net operating loss carry forwards for Barossa were suspended. | |||||||||
The Company has net operating loss carry-forwards totaling approximately $12,000,000 and $6,000,000 at June 30, 2014 and 2013, respectively, expiring through 2034. Utilization of these net operating losses may be limited due to potential ownership changes under the Internal Revenue Code. | |||||||||
Significant deferred tax assets at June 30, 2014 and 2013 are approximately as follows: | |||||||||
2014 | 2013 | ||||||||
Gross deferred tax assets: | |||||||||
Net operating loss carry forward | $ | 4,400,000 | $ | 2,200,000 | |||||
Total deferred tax assets | 4,400,000 | 2,200,000 | |||||||
Less: valuation allowance | (4,400,000 | ) | (2,200,000 | ) | |||||
Net deferred tax assets recorded | $ | — | $ | — | |||||
The valuation allowance at June 30, 2013 was approximately $2,200,000. The increase in valuation allowance during the year ended June 30, 2014 was approximately $2,200,000. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. | |||||||||
Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of June 30, 2014. | |||||||||
The Company has not filed its Federal or State income tax returns for the years ended June 30, 2014 and 2013. Management plans to file the current tax return as soon as possible. | |||||||||
The income tax returns filed for the tax years from inception would be subject to examination by the relevant taxing authorities. | |||||||||
There was no income tax expense for the years ended June 30, 2014 and 2013 due to the Company’s net losses. | |||||||||
The actual tax benefit differs from the expected tax benefit for the years ended June 30, 2014 and 2013, respectively, (computed by applying the U.S. Federal Corporate tax rate of 34% to income before taxes and a state rate of 5.5%, for a blended rate of 37.63%) as follows: | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Expected tax expense (benefit) – Federal | $ | (1,260,000 | ) | $ | (1,313,000 | ) | |||
Expected tax expense (benefit) – State | (68,000 | ) | (73,000 | ) | |||||
Permanent differences | 3,000 | 6,000 | |||||||
Change in valuation allowance | 1,325,000 | 1,380,000 | |||||||
Actual tax expense (benefit) | $ | — | $ | — | |||||
11_Commitment_and_Contingencie
11. Commitment and Contingencies | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitment and Contingencies | ' | ||||
Commitment and Contingencies | ' | ||||
The Company has an operating lease expiring in October 2019. | |||||
At June 30, 2014, the future rental commitments are approximately as follows: | |||||
Amount | |||||
2015 | $ | 51,000 | |||
2016 | 53,000 | ||||
2017 | 55,000 | ||||
2018 | 56,000 | ||||
Thereafter | 78, 000 | ||||
Total | $ | 293,000 | |||
Rent expense for the years ended June 30, 2014 and 2013 was $71,100 and $23,421, respectively. The increase in expense is the result of the Company amending its lease for additional office space. |
12_Related_Party_Transaction
12. Related Party Transaction | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Related Party Transaction | ' | ||||||||
Related Party Transaction | ' | ||||||||
Effective April 1, 2011, the Chief Executive Officer appointed two new Directors. On May 31, 2011, each of the directors resigned. These individuals are referenced to as “former related parties”. | |||||||||
During the years ended June 30, 2014 and 2013 the Company paid fees to former related parties as well as unrelated third parties associated with capital raising activities and related consulting fees, as follows: | |||||||||
Year Ended June 30, | |||||||||
Direct Offering Cost | 2014 | 2013 | |||||||
Amounts Paid in Cash: | |||||||||
Finder fees – former related parties | $ | 131,056 | $ | 282,562 | |||||
During the years ended June 30, 2014 and 2013, the Company paid consulting fees to former related parties under agreements with the following provisions: | |||||||||
● | One year term, | ||||||||
● | Flat fee retainer, | ||||||||
● | Additional fees based on expanded services, | ||||||||
● | Services include shareholder relations and business strategy | ||||||||
The consulting fees paid to related party and former related parties are as follows: | |||||||||
Year Ended June 30, | |||||||||
Consulting Fees: | 2014 | 2013 | |||||||
Amounts Paid in Cash: | |||||||||
Former related parties | $ | 128,472 | $ | 546,837 | |||||
Consulting fees are reflected in the statements of operations as a component of shareholder relations. | |||||||||
A director was paid management-consulting fees of $7,000 and $80,000 for the years ended June 30, 2014 and June 30, 2013, respectively. | |||||||||
Effective January 7, 2013, ECI entered into an employment agreement with the CEO. The agreement has a term of three years and provides compensation that includes an annual salary of $225,000, health insurance at no cost and a monthly car allowance. The agreement also contains a non-compete covenant. In addition to the CEO’s annual salary, the Company also has the right to pay him a discretionary monthly bonus. | |||||||||
The Company has a loan payable to the CEO amounting to $152,565 (Note 7). | |||||||||
Effective January 7, 2013, ECI entered into an employment agreement with the President and Chief Financial Officer. The agreement has a term of two years and provides compensation that includes an annual salary of $200,000, health insurance at no cost and a monthly car allowance. The agreement also contains a non-compete covenant. In addition to the President’s annual salary, the Company also has the right to pay him a discretionary monthly bonus. Effective May 23, 2014, the President resigned from ECHI but continues as an active member on the Board of Directors. | |||||||||
The exchange agreement provides that each of the CEO and CFO/President of ECI become the CEO and President of ECHI. |
13_Subsequent_Events
13. Subsequent Events | 12 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Subsequent Events | ' | ||||||||||||||||
Subsequent Events | ' | ||||||||||||||||
(A) Common Stock | |||||||||||||||||
Subsequent to June 30, 2014, the Company issued the following shares of common stock and warrants: | |||||||||||||||||
Transaction Type | Quantity of | Quantity of | Valuation | Ranges of Value | |||||||||||||
Common | Warrants | per Share | |||||||||||||||
Stock | |||||||||||||||||
Cash with warrants – third parties (1) | 2,517,715 | 2,517,715 | $ | 431,761 | $ | 0.10 - 0.60 | |||||||||||
Conversion of series B preferred stock | 760,450 | 0 | 0 | 0 | |||||||||||||
Services – third party (2) | 8,421 | 0 | 1,287 | 0.15 | |||||||||||||
3,286,586 | 2,517,715 | $ | 433,048 | $ | 0.10 - 0.60 | ||||||||||||
-1 | The Company issued units containing common stock and warrants for $1.00. The warrants have a $1.00 exercise price and expire on December 31, 2015. The Company has reserved shares to cover the possible exercise of the warrants. There are no embedded features in the warrants that would require treatment as a derivative liability. | ||||||||||||||||
-2 | Valuation is based upon the average cash price paid by third parties for common stock during the 30-day period preceding the service performance, since the Company was not yet traded publicly; this represented the best evidence of fair value. | ||||||||||||||||
From July 1, 2014 through September 29, 2013, ECI did not issue common stock for cash or for services from third parties. | |||||||||||||||||
(B) Option to Rescind ECI Stock Subscriptions | |||||||||||||||||
The Board of Directors is offering the remaining stockholders of ECI to exchange their shares of ECI for shares of ECHI on a one-for-one basis or rescind their subscription agreement. As of September 29, 2014, the maximum amount of shares of ECI that may be rescinded is approximately 355,000, which could require the Company to pay approximately $206,000. Management believes that the probability of the shareholders rescinding their subscriptions is remote. | |||||||||||||||||
(C) Convertible Notes Payable and Derivative Liabilities | |||||||||||||||||
Through July 28, 2014, the Company paid $56,050, including interest of $3,500 and prepayment fees of $12,127, to Asher, which satisfied the $83,500 Note. | |||||||||||||||||
Through September 26, 2014 the Company paid $23,000 as a prepayment fee to Asher on the $42,500 note. | |||||||||||||||||
(D) Vendor Settlement Agreement | |||||||||||||||||
In August 2014, the Company entered into 2 settlement agreements with two vendors for a total amount of $79,588. This balance has been accrued at June 30, 2014. |
3_Significant_Accounting_Polic
3. Significant Accounting Policies (POLICIES) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Significant Accounting Policies: | ' | ||||||||
New Accounting Pronouncements | ' | ||||||||
New Accounting Pronouncements | |||||||||
Except as set forth below, management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. | |||||||||
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods within that reporting period. The Company has elected to adopt the provisions of this ASU early, accordingly all of the past disclosures and presentations on development stage accounting have been eliminated. | |||||||||
Principles of Consolidation | ' | ||||||||
The financial statements are presented on a consolidated basis for ECHI and ECI, and the resulting non-controlling interest in ECI. All intra-company transactions have been eliminated on consolidation. | |||||||||
Use of Estimates, Policy | ' | ||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. | |||||||||
Such estimates and assumptions impact, among others, the following: valuation and potential impairment associated with intangible assets and estimates pertaining to the valuation allowance for deferred tax assets due to continuing, and expected future operating losses. | |||||||||
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates, and those differences could be material. | |||||||||
Risks and Uncertainties, Policy | ' | ||||||||
Risks and Uncertainties | |||||||||
The Company’s operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure. | |||||||||
Concentration of Credit Risk | ' | ||||||||
Concentration of Credit Risk | |||||||||
The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in noninterest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. | |||||||||
Cash and Cash Equivalents, Policy | ' | ||||||||
Cash and Cash Equivalents | |||||||||
The Company maintains cash balances at a single financial institution. The Company considers all highly liquid instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents. Cash equivalents consisted of money market funds totaling $8,303 and $214,483 at June 30, 2014 and 2013, respectively. | |||||||||
Property and Equipment,Policy | ' | ||||||||
Property and Equipment | |||||||||
Property and equipment is stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. | |||||||||
Depreciation is provided utilizing the straight-line method over the estimated useful lives of the respective assets as follows: | |||||||||
Asset | Life / Years | ||||||||
Equipment | 7-May | ||||||||
Furniture and fixtures | 7 | ||||||||
Computer equipment and software | 3 | ||||||||
Leasehold improvements | Lesser of 15 years or the term of the lease | ||||||||
Intangible Assets, Policy | ' | ||||||||
Intangible Assets | |||||||||
The Company’s intangible assets consist of website development costs and domain names. | |||||||||
The Company accounts for website development costs in accordance with Accounting for Website Development Costs, wherein website development costs are segregated into three activities: | |||||||||
1) | Initial stage (planning), whereby the related costs are expensed. | ||||||||
2) | Development (web application, infrastructure, graphics), whereby the related costs are capitalized and amortized once the website is ready for use. Costs for development content of the website may be expensed or capitalized depending on the circumstances of the expenditures. | ||||||||
3) | Post-implementation (after site is up and running: security, training, admin), whereby the related costs are expensed as incurred. Upgrades are usually expensed, unless they add additional functionality. | ||||||||
Amortization is provided utilizing the straight-line method over the three year estimated useful lives of these assets. | |||||||||
Domain names are not being amortized as they are determined to have indefinite lives. | |||||||||
Intangible assets are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no impairment charges taken during the years ended June 30, 2014 and 2013, and since inception. | |||||||||
Derivative Instruments | ' | ||||||||
Derivative Instruments | |||||||||
The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification and paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. As of June 30, 2014 the derivative liabilities were $26,011. | |||||||||
Revenue Recognition, Policy | ' | ||||||||
Revenue Recognition—The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery of service has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Revenue is recognized net of customer discounts and allowances ratably over the service period. Payments received in advance of services being rendered are recorded as deferred revenue and recognized over the service period. The Company generates revenue from the following sources: | |||||||||
Talent acquisition package revenues are derived from the sale, to recruiters and employers, a combination of talent packages and access to a searchable database of candidates on the Openreq.com website. Certain of the Company’s arrangements include multiple deliverables, which consist of the ability to post jobs and access to a searchable database of candidates. The Company determines the units of accounting for multiple element arrangements in accordance with the Multiple-Deliverable Revenue Arrangements subtopic of the FASB ASC. Specifically, the Company will consider a delivered item as a separate unit of accounting if it has value to the customer on a standalone basis. The Company’s arrangements do not include a general right of return. Services to customers buying a package of available talent packages and access to the database are delivered over the same period and revenue is recognized ratably over the length of the underlying contract, typically from one to 12 months. The separation of the package into two deliverables results in no change in revenue recognition since delivery of the two services occurs over the same time period. | |||||||||
Advertising revenue is recognized over the period in which the advertisements are displayed on the websites or at the time an e-mail is sent to registered members. | |||||||||
Advertising and Marketing Expense, Policy | ' | ||||||||
Advertising and Marketing Expense | |||||||||
The Company’s policy is to expense advertising and marketing costs as incurred, which included consulting expenses and expenses relating to participation at trade shows. Advertising and marketing expense was as follows: | |||||||||
Year Ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Advertising | $ | 59,465 | $ | 55,110 | |||||
Marketing | 484,053 | 467, 689 | |||||||
$ | 543,518 | $ | 522,799 | ||||||
Income Tax, Policy | ' | ||||||||
Income Taxes | |||||||||
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary. | |||||||||
Assessing whether deferred tax assets are realizable requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company’s deferred tax assets, which increase income tax expense in the period when such a determination is made. | |||||||||
Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the statements of operations. There were no unrecognized tax benefits for the years ended June 30, 2014 and June 30, 2013. | |||||||||
Share Based Payment Arrangements, Policy | ' | ||||||||
Share Based Payment Arrangements | |||||||||
Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. As shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum or monthly price observations have been utilized, as the use of daily price observations could be artificially inflated because of a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |||||||||
Net Loss Per Share, Policy | ' | ||||||||
Net Loss Per Share | |||||||||
Basic earnings per share (“EPS”) is computed by dividing the net loss attributable to the Company that is available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of warrants) and convertible debt or convertible preferred stock using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. | |||||||||
The Company had the following potential common stock equivalents at June 30, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Common stock warrants - ECI | 10,000 | 2,480,500 | |||||||
Common stock warrants - ECHI | 5,061,976 | 790,377 | |||||||
Unvested stock grants - ECI | 0 | 478 | |||||||
Unvested stock grants - ECHI | 87,499 | 890 | |||||||
Total common stock equivalents | 5,159,475 | 3,272,245 | |||||||
Fair Market Value of Financial Instruments, Policy | ' | ||||||||
Fair Market Value of Financial Instruments | |||||||||
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. | |||||||||
The following are the hierarchical levels of inputs to measure fair value: | |||||||||
Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. | |||||||||
Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||||||
Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | |||||||||
The Company's financial instruments consist primarily of prepaid expenses, accounts payable, accrued liabilities, loans payable and convertible debt. The carrying amounts of the Company's financial instruments generally approximated their fair values as of June 30, 2014 and 2013, respectively, due to the short-term nature of these instruments and the Company’s borrowing rate. |
3_Schedule_of_Accounting_Polic
3. Schedule of Accounting Policies (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Schedule of Accounting Policies: | ' | ||||||||
Schedule of property lives | ' | ||||||||
Asset | Life / Years | ||||||||
Equipment | 7-May | ||||||||
Furniture and fixtures | 7 | ||||||||
Computer equipment and software | 3 | ||||||||
Leasehold improvements | Lesser of 15 years or the term of the lease | ||||||||
Schedule of Advertising expense | ' | ||||||||
Year Ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Advertising | $ | 59,465 | $ | 55,110 | |||||
Marketing | 484,053 | 467, 689 | |||||||
$ | 543,518 | $ | 522,799 | ||||||
Schedule of Earnings Per Share | ' | ||||||||
The Company had the following potential common stock equivalents at June 30, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Common stock warrants - ECI | 10,000 | 2,480,500 | |||||||
Common stock warrants - ECHI | 5,061,976 | 790,377 | |||||||
Unvested stock grants - ECI | 0 | 478 | |||||||
Unvested stock grants - ECHI | 87,499 | 890 | |||||||
Total common stock equivalents | 5,159,475 | 3,272,245 | |||||||
5_Schedule_of_Property_and_Equ
5. Schedule of Property and Equipment (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Schedule of Property and Equipment: | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
2014 | 2013 | ||||||||
Equipment | $ | 111,647 | $ | 111,647 | |||||
Furniture and fixtures | 72,118 | 72,118 | |||||||
Leasehold improvements | 82,710 | 68,142 | |||||||
Computer equipment & software | 63,701 | 60,557 | |||||||
330,176 | 312,464 | ||||||||
Less: accumulated depreciation | (106,771 | ) | (41,143 | ) | |||||
$ | 223,405 | $ | 271,321 |
6_Schedule_of_Intangible_Asset
6. Schedule of Intangible Assets (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Schedule of Intangible Assets: | ' | ||||||||
Schedule of Intangible Assets | ' | ||||||||
2014 | 2013 | ||||||||
Domain names | $ | 298,389 | $ | 298,389 | |||||
Website development costs | 183,667 | 157,813 | |||||||
Accumulated amortization | (51,546 | ) | (15,453 | ) | |||||
$ | 430,510 | $ | 440,749 | ||||||
Schedule of future amortization expense | ' | ||||||||
Amount | |||||||||
2015 | 44,835 | ||||||||
2016 | 37,576 | ||||||||
2017 | 25,129 | ||||||||
2018 | 16,388 | ||||||||
2019 | 8,193 | ||||||||
Total | $ | 132,121 |
8_Stockholders_Equity_Tables
8. Stockholders Equity (Tables) | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Schedule of common stock issues: | ' | ||||||||||||
Schedule of common stock issues | ' | ||||||||||||
Transaction Type | Quantity | Quantity Warrants | Valuation | ||||||||||
Stock | |||||||||||||
Cash third parties (1) | 96,358 | 55,757 | $ | 3,366,427 | |||||||||
Services – third parties (2) | 1,107 | — | $ | 37,021 | |||||||||
97,725 | 55,757 | $ | 3,403,448 | ||||||||||
-1 | Commencing in December 2012, ECI issued shares and warrants as a unit under a private placement memorandum. Each unit had a $1 price and was comprised of 1 common share and 1 warrant to purchase 1 common share at $1. The purchase price was recorded at par for the common stock and additional paid-in capital was allocated between the prorated fair value of the common stock and the warrant. The warrants are exercisable through December 31, 2015. | ||||||||||||
-2 | Valuation was based upon the average cash price paid by third parties for common stock during the 30-day period preceding the service performance, since the Company was not yet traded publicly; this represented the best evidence of fair value. | ||||||||||||
From July 1, 2013 through June 30, 2014 the Company issued the following common stock: | |||||||||||||
Transaction Type | Quantity | Valuation | |||||||||||
Exercise of warrants | 510,585 | $ | 441,000 | ||||||||||
Exchange for ECI common stock | 3,125,103 | 0 | |||||||||||
Issued for cash and subscription receivable | 2,316,748 | 1,413,751 | |||||||||||
Issuance of common stock dividend | 126,007 | 0 | |||||||||||
Conversion of Series B Preferred stock | 8,615,400 | 0 | |||||||||||
Issued with note payable | 400,000 | 228,000 | |||||||||||
Services - third parties | 118,152 | 86,273 | |||||||||||
15,211,995 | $ | 2,169,024 | |||||||||||
9_Warrants_Tables
9. Warrants (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Warrants Tables | ' | ||||||||
Summary of warrant activity | ' | ||||||||
The following is a summary of the Company’s and its subsidiary’s warrant activity: | |||||||||
ECHI | ECI | ||||||||
Beginning Balance, July 1, 2012 | 0 | 0 | |||||||
Purchases | 0 | 3,338,877 | |||||||
Exchanges | 810,377 | (810,377 | ) | ||||||
Exercised | 0 | 0 | |||||||
Ending Balance, June 30, 2013 | 810,377 | 2,528,500 | |||||||
Purchases | 2,341,498 | 305,600 | |||||||
Exchanges | 2,446,434 | (2,446,434 | ) | ||||||
Exercised | (536,333 | ) | (377,666 | ) | |||||
Ending Balance, June 30, 2014 | 5,061,976 | 10,000 | |||||||
10_Income_Taxes_Tables
10. Income Taxes (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of significant deferred tax assets | ' | ||||||||
2014 | 2013 | ||||||||
Gross deferred tax assets: | |||||||||
Net operating loss carry forward | $ | 4,400,000 | $ | 2,200,000 | |||||
Total deferred tax assets | 4,400,000 | 2,200,000 | |||||||
Less: valuation allowance | (4,400,000 | ) | (2,200,000 | ) | |||||
Net deferred tax assets recorded | $ | — | $ | — | |||||
Schedule of difference of actual tax benefit and expected tax benefit | ' | ||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Expected tax expense (benefit) – Federal | $ | (1,260,000 | ) | $ | (1,313,000 | ) | |||
Expected tax expense (benefit) – State | (68,000 | ) | (73,000 | ) | |||||
Permanent differences | 3,000 | 6,000 | |||||||
Change in valuation allowance | 1,325,000 | 1,380,000 | |||||||
Actual tax expense (benefit) | $ | — | $ | — |
11_Schedule_of_Future_Minimum_
11. Schedule of Future Minimum Rental Payments (Tables) | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Schedule of Future Minimum Rental Payments: | ' | ||||
Schedule of Future Minimum Rental Payments | ' | ||||
Amount | |||||
2015 | $ | 51,000 | |||
2016 | 53,000 | ||||
2017 | 55,000 | ||||
2018 | 56,000 | ||||
Thereafter | 78, 000 | ||||
Total | $ | 293,000 |
12_Related_Party_Transactions_
12. Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Schedule of related party transactions | ' | ||||||||
Year Ended June 30, | |||||||||
Direct Offering Cost | 2014 | 2013 | |||||||
Amounts Paid in Cash: | |||||||||
Finder fees – former related parties | $ | 131,056 | $ | 282,562 | |||||
Schedule of consulting fees paid to related party | ' | ||||||||
Year Ended June 30, | |||||||||
Consulting Fees: | 2014 | 2013 | |||||||
Amounts Paid in Cash: | |||||||||
Former related parties | $ | 128,472 | $ | 546,837 |
13_Subsequent_Events_Tables
13. Subsequent Events (Tables) | 12 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Subsequent Events Tables | ' | ||||||||||||||||
Subsequent Events | ' | ||||||||||||||||
Subsequent to June 30, 2014, the Company issued the following shares of common stock and warrants: | |||||||||||||||||
Transaction Type | Quantity of | Quantity of | Valuation | Ranges of Value | |||||||||||||
Common | Warrants | per Share | |||||||||||||||
Stock | |||||||||||||||||
Cash with warrants – third parties (1) | 2,517,715 | 2,517,715 | $ | 431,761 | $ | 0.10 - 0.60 | |||||||||||
Conversion of series B preferred stock | 760,450 | 0 | 0 | 0 | |||||||||||||
Services – third party (2) | 8,421 | 0 | 1,287 | 0.15 | |||||||||||||
3,286,586 | 2,517,715 | $ | 433,048 | $ | 0.10 - 0.60 | ||||||||||||
-1 | The Company issued units containing common stock and warrants for $1.00. The warrants have a $1.00 exercise price and expire on December 31, 2015. The Company has reserved shares to cover the possible exercise of the warrants. There are no embedded features in the warrants that would require treatment as a derivative liability. | ||||||||||||||||
-2 | Valuation is based upon the average cash price paid by third parties for common stock during the 30-day period preceding the service performance, since the Company was not yet traded publicly; this represented the best evidence of fair value. | ||||||||||||||||
2_Going_Concern_Details_Narrat
2. Going Concern (Details Narrative) (USD $) | Jun. 30, 2014 |
History of financial stability | ' |
Working capital deficit of approximately | $1,200,000 |
3_Summary_of_Significant_Accou1
3. Summary of Significant Accounting Policies - Estimated useful lives (Details) | 12 Months Ended |
Jun. 30, 2014 | |
Furniture and Fixtures [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '7 years |
Computer Software, Intangible Asset [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '3 years |
Leasehold Improvements [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | 'Lesser of 15 years or the term of the lease |
Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '5 - 7 years |
3_Summary_of_Significant_Accou2
3. Summary of Significant Accounting Policies - Advertising and marketing expenses (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Advertising and marketing expenses | ' | ' |
Advertising | $59,465 | $55,110 |
Marketing | 470,796 | 467,689 |
Total Advertising and marketing expenses | $530,261 | $522,799 |
3_Summary_of_Significant_Accou3
3. Summary of Significant Accounting Policies- Potential common stock equivalents (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Total common stock equivalents | 5,159,475 | 3,272,245 |
Common stock warrants - ECI | ' | ' |
Common stock warrants | 10,000 | 2,480,500 |
Common stock warrants - ECHI | ' | ' |
Common stock warrants | 5,061,976 | 790,377 |
Unvested stock grants - ECI | ' | ' |
Unvested stock grants | 0 | 478 |
Unvested stock grants - ECHI | ' | ' |
Unvested stock grants | 87,499 | 890 |
5_Property_and_equipment_Compo
5. Property and equipment - Components (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Property and equipment consist of the following | ' | ' |
Equipment | $111,647 | $111,647 |
Furniture & Fixtures | 72,118 | 72,118 |
Leasehold Improvements | 82,710 | 68,142 |
Computer equipment & software | 63,701 | 60,557 |
Less: Accumulated Depreciation | -106,771 | -41,143 |
Total Property and equipment | $223,405 | $271,321 |
5_Property_and_Equipment_Depre
5. Property and Equipment - Depreciation (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Property And Equipment - Depreciation Details Narrative | ' | ' |
Depreciation expenses | $65,628 | $49,680 |
6_Intangible_Assets_Amortizati
6. Intangible Assets - Amortization (Details) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Less: Accumulated amortization | ($51,546) | ($15,453) | ' |
Net | 430,510 | 440,749 | 132,121 |
Amortization expense | 36,093 | 15,453 | ' |
Domain names | ' | ' | ' |
Intangible Assets | 298,389 | 298,389 | ' |
Website development costs | ' | ' | ' |
Intangible Assets | $183,667 | $157,813 | ' |
6_Intangible_Assets_Estimated_
6. Intangible Assets - Estimated future amortization expense (Details) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ' | ' | ' |
2015 | ' | $44,835 | ' |
2016 | ' | 37,576 | ' |
2017 | ' | 25,129 | ' |
2018 | ' | 16,388 | ' |
2019 | ' | 8,193 | ' |
Total estimated future amortization expense | $430,510 | $132,121 | $440,749 |
8_Stockholders_Equity_Transact
8. Stockholders Equity - Transactions with stock and warrants (Details) (USD $) | 9 Months Ended |
Apr. 11, 2013 | |
Stockholders Equity - Transactions With Stock And Warrants Details | ' |
Stock issued for cash to third parties | 96,358 |
Warrants issued for cash to third parties | 55,757 |
Valuation of stock and warrants issued for cash to third parties | $3,366,427 |
Stock issued for services to third parties | 1,107 |
Warrants issued for services to third parties | 0 |
Valuation of stock and warrants issued for services to third parties | 37,021 |
Stock issued for cash and services to third parties | 97,725 |
Warrants issued for cash and services to third parties | 55,757 |
Valuation of stock and warrants issued for cash and services to third parties | $3,403,448 |
8_Stockholders_Equity_Common_s
8. Stockholders Equity - Common stock (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Stockholders Equity - Common Stock Details | ' | ' |
Issuance of common stock Exercise of warrants | $441,000 | ' |
Issuance of common stock Exercise of warrants (in shares) | 510,585 | ' |
Issuance of common stock Exchange for ECI common stock | 0 | ' |
Issuance of common stock Exchange for ECI common stock (in shares) | 3,125,103 | ' |
Issuance of common stock Issued for cash and subscription receivable | 1,413,751 | ' |
Issuance of common stock Issued for cash and subscription receivable (in shares) | 2,316,748 | ' |
Issuance of common stock dividend | 0 | ' |
Issuance of common stock dividend (in shares) | 126,007 | ' |
Issuance of common stock Conversion of Series B Preferred stock | 0 | ' |
Issuance of common stock Conversion of Series B Preferred stock (in shares) | 8,615,400 | ' |
Issuance of common stock Interest Expense | 228,000 | ' |
Issuance of common stock Interest Expense (in shares) | 400,000 | ' |
Issuance of common stock for services | 86,273 | 37,021 |
Issuance of common stock for services (in shares) | 118,152 | ' |
Value of total stock issued during period | $2,169,024 | ' |
Total common stock issued during period | 15,211,995 | ' |
10_Income_Taxes_Details
10. Income Taxes (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Gross deferred tax assets: | ' | ' |
Net operating loss carryforward | $4,400,000 | $2,200,000 |
Total deferred tax assets | 4,400,000 | 2,200,000 |
Less: valuation allowance | -4,400,000 | -2,200,000 |
Net deferred tax assets recorded | $0 | $0 |
10_Income_Taxes_Details_1
10. Income Taxes (Details 1) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Expected tax expense (benefit) - Federal | ($1,260,000) | ($1,313,000) |
Expected tax expense (benefit) - State | -68,000 | -73,000 |
Permanent differences | 3,000 | 6,000 |
Change in valuation allowance | 1,325,000 | 1,380,000 |
Actual tax expense (benefit) | $0 | $0 |
11_Commitment_and_Contingencie1
11. Commitment and Contingencies (Details) (USD $) | Jun. 30, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ' |
2015 | $51,000 |
2016 | 53,000 |
2017 | 55,000 |
2018 | 56,000 |
Thereafter | 78,000 |
Total | $293,000 |
11_Commitment_and_Contingencie2
11. Commitment and Contingencies (Detail Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Rent expense | $71,100 | $23,421 |
12_Related_Party_Transactions_1
12. Related Party Transactions - Finders fees (Details) (Former Related Parties [Member], USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Former Related Parties [Member] | ' | ' |
Amounts Paid in Cash: | ' | ' |
Finder fees paid in cash | $131,056 | $282,562 |
12_Related_Party_Transactions_2
12. Related Party Transactions - Consulting fees (Detail) (Former Related Parties [Member], USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Former Related Parties [Member] | ' | ' |
Consulting Fees Amounts Paid In Cash [Abstract] | ' | ' |
Consulting fees | $128,472 | $546,837 |