Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2015 | |
Details | |||
Registrant Name | MV PORTFOLIOS, INC. | ||
Registrant CIK | 1,363,573 | ||
SEC Form | 10-K | ||
Period End date | Jun. 30, 2016 | ||
Fiscal Year End | --06-30 | ||
Trading Symbol | mvp | ||
Tax Identification Number (TIN) | 830,483,725 | ||
Number of common stock shares outstanding | 84,230,628 | ||
Public Float | $ 1,664,825 | ||
Filer Category | Smaller Reporting Company | ||
Current with reporting | No | ||
Voluntary filer | No | ||
Well-known Seasoned Issuer | No | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | Nevada | ||
Entity Address, Address Line One | 2850 Isabella boulevard | ||
Entity Address, Address Line Two | Suite 50 | ||
Entity Address, City or Town | Jacksonville Beach | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32,250 | ||
City Area Code | 904 | ||
Local Phone Number | 903-4504 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash | $ 2,640 | $ 8,508 |
Assets | 2,640 | 8,508 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,345,811 | 1,364,426 |
Derivative liabilities | 0 | 11,700 |
Total liabilities | 1,356,394 | 1,376,126 |
Stockholders' deficit: | ||
Common stock, par value $0.001 per share, 300,000,000 shares authorized; 11,026,013 shares issued and outstanding | 44,978 | 24,872 |
Additional paid-in capital | 24,410,394 | 20,906,276 |
Retained Earnings (Accumulated Deficit) | (25,526,018) | (22,298,998) |
Total stockholders' deficit | (1,353,754) | (1,367,618) |
Total liabilities and stockholders' deficit | 2,640 | 8,508 |
Short term loan - related party | 5,000 | 0 |
Short term loan | 5,583 | 0 |
Total stockholders' deficit attributable to MV Portfolios, Inc. | (1,057,949) | (1,355,047) |
Stockholders' Equity Attributable to Noncontrolling Interest | (295,805) | (12,571) |
Series A Preferred Stock | ||
Stockholders' deficit: | ||
Preferred Stock, Value, Issued | 8,000 | 8,000 |
Series B Preferred Stock | ||
Stockholders' deficit: | ||
Preferred Stock, Value, Issued | 749 | 749 |
Series C Preferred Stock | ||
Stockholders' deficit: | ||
Preferred Stock, Value, Issued | 3,928 | 4,034 |
Series D Preferred Stock | ||
Stockholders' deficit: | ||
Preferred Stock, Value, Issued | $ 20 | $ 20 |
Consolidated Balance Sheets - P
Consolidated Balance Sheets - Parenthetical - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Discount on Short term loan | $ 19,417 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares, Issued | 44,977,822 | 24,872,211 |
Common Stock, Shares, Outstanding | 44,977,822 | 24,872,211 |
Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 8,000,000 | 8,000,000 |
Preferred Stock, Shares Outstanding | 8,000,000 | 8,000,000 |
Series B Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 3,592,238 | 3,592,238 |
Preferred Stock, Shares Issued | 749,740 | 749,740 |
Preferred Stock, Shares Outstanding | 749,740 | 749,740 |
Series C Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 3,927,466 | 4,033,077 |
Preferred Stock, Shares Outstanding | 3,927,466 | 4,033,077 |
Series D Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 20,000 | 20,000 |
Preferred Stock, Shares Outstanding | 20,000 | 20,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Expenses: | ||
General and administrative | $ 3,450,337 | $ 15,446,459 |
Loss from operations | 3,450,337 | 15,446,459 |
Other income (expenses): | ||
Interest expense | (1,522) | (4,629,943) |
Gain on change in fair value of derivative liabilities | 11,700 | 2,353,615 |
Total other expenses, net | 10,178 | (2,276,328) |
Loss from continuing operations | (3,440,159) | (17,722,787) |
Loss from discontinued operations | 0 | (3,608) |
Net loss | (3,440,159) | (17,726,395) |
Net loss attributable to noncontrolling interest | (213,139) | (6,895) |
Net loss attributable to MV Portfolios, Inc. | $ (3,227,020) | $ (17,719,500) |
Basic and diluted net loss per share: | ||
Loss from continuing operations per share | $ (0.08) | $ (0.85) |
Loss from discontinued operations per share | 0 | 0 |
Net loss per share | $ (0.08) | $ (0.85) |
Weighted average number of common shares outstanding - basic and diluted | 38,767,293 | 20,955,822 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Member Units | Retained Earnings | Noncontrolling Interest | Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Series D Preferred Stock |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Jun. 30, 2014 | $ (4,636,686) | $ 11,026 | $ (76,214) | $ 0 | $ (4,579,498) | $ 0 | $ 8,000 | $ 0 | $ 0 | |
Shares, Outstanding, Beginning Balance at Jun. 30, 2014 | 11,026,013 | 8,000,000 | 0 | 0 | 0 | |||||
Conversion of notes to Series C preferred stock | 3,858,578 | $ 0 | 3,850,861 | 0 | 0 | 0 | $ 0 | $ 0 | $ 7,718 | $ 0 |
Contribution by noncontrolling interest, Shares | 7,717,170 | |||||||||
Conversion of notes to Series B preferred stock | 351,271 | 0 | 347,758 | 0 | 0 | 0 | 0 | 3,512 | $ 0 | 0 |
Series B preferred stock issued for liabilities | 300,000 | 0 | 299,920 | 0 | 0 | 0 | 0 | 80 | 0 | 0 |
Series D preferred stock issued for services | 40,000 | 0 | 39,980 | 0 | 0 | 0 | 0 | 0 | 0 | $ 20 |
Series D preferred stock issued for services, Shares | 20,000 | |||||||||
Common stock issued for exchange of warrants | 0 | $ 4,000 | (4,000) | 0 | 0 | 0 | 0 | 0 | 0 | $ 0 |
Common stock issued for exchange of warrants, shares | 4,000,000 | |||||||||
Conversion of Series C preferred stock to common stock | 0 | $ 3,684 | 0 | 0 | 0 | 0 | 0 | 0 | (3,684) | 0 |
Common stock issued for liabilities | 339,009 | $ 9,500,000 | 338,840 | 0 | 0 | 0 | 0 | 0 | (3,684,193) | 0 |
Conversion of Series C preferred stock to common stock, shares | 3,684,193 | |||||||||
Common stock issued for services | 4,022,000 | $ 2,850 | 4,019,150 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Common stock issued for services, shares | 2,850,000 | |||||||||
Conversion of Series B preferred stock to common stock | 0 | $ 2,843 | 0 | 0 | 0 | 0 | 0 | (2,843) | 0 | 0 |
Conversion of Series B preferred stock to common stock, shares | 2,842,500 | |||||||||
Common stock issued to related party for mining rights | 450,000 | $ 300 | 449,700 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
For mining rights, shares | 300,000 | |||||||||
Common stock issued for liabilities, shares | 169,505 | |||||||||
Warrants issued for services | 305,837 | $ 0 | 305,837 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Beneficial conversion feature | 3,660,000 | 0 | 3,660,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Options expense | 7,518,768 | 0 | 7,518,768 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Contribution by noncontrolling interest | 150,000 | 0 | 155,676 | 0 | 0 | (5,676) | 0 | 0 | 0 | 0 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (17,726,395) | 0 | 0 | 0 | (17,719,500) | (6,895) | 0 | 0 | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2015 | (1,367,618) | $ 24,872 | 20,906,276 | 0 | (22,298,998) | (12,571) | $ 8,000 | $ 749 | $ 4,034 | $ 20 |
Shares, Outstanding, Ending Balance at Jun. 30, 2015 | 24,872,211 | 8,000,000 | 749,740 | 4,032,977 | 20,000 | |||||
Common stock issued for cash | 420,000 | $ 10,500 | 409,500 | 0 | 0 | 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Common stock issued for liabilities | 485,000 | 9,500 | 475,500 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (3,440,159) | 0 | 0 | 0 | (3,227,020) | (213,139) | 0 | 0 | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2016 | (1,353,754) | $ 44,978 | 24,410,394 | 0 | (25,526,018) | (295,805) | $ 8,000 | $ 749 | $ 3,928 | $ 20 |
Shares, Outstanding, Ending Balance at Jun. 30, 2016 | 44,977,822 | 8,000,000 | 749,740 | 3,927,366 | 20,000 | |||||
Common stock issued for cash, shares | 10,500,000 | |||||||||
Conversion of Series C preferred stock to common stock | 0 | $ 106 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | $ (106) | $ 0 |
Conversion of Series C preferred stock to common stock, shares | (105,611) | |||||||||
Conversion of Series C preferred stock to common stock, shares | 105,611 | |||||||||
Debt discount on warrants | 19,938 | $ 0 | 19,938 | 0 | 0 | 0 | 0 | 0 | $ 0 | 0 |
Warrants expense | 152,167 | 0 | 152,167 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Options expense | 1,894,994 | 0 | 1,894,994 | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Contribution by noncontrolling interest | $ 481,924 | $ 0 | $ 552,019 | $ 0 | $ (70,095) | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (3,440,159) | $ (17,726,395) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation | 0 | 441 |
Impairment of mining rights | 0 | 450,000 |
Loss on disposal of assets held for sale | 0 | 3,167 |
Amortization of debt discounts and deferred financing | (521) | 561,099 |
Gain on change in fair value of derivative liabilities | (11,700) | (2,353,615) |
Options expense | 1,849,994 | 7,518,768 |
Common stock issued for services | 0 | 4,062,000 |
Warrants issued for services | 152,167 | 305,837 |
Loss on common stock issued for liabilities | 105,000 | 229,850 |
Loss on Series B preferred stock issued for liabilities | 0 | 220,470 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 0 | 280,880 |
Accounts payable and accrued expenses | 361,385 | 1,137,605 |
Net cash used in operating activities | (937,792) | (1,309,893) |
Cash flows from financing activities: | ||
Repayment of convertible notes | 0 | (300,000) |
Proceeds from participation notes | 0 | 0 |
Net cash (used) provided by financing activities | 931,924 | (150,000) |
Contribution by noncontrolling interest | 481,924 | 150,000 |
Stockholder contributions | 420,000 | 0 |
Proceeds from related party debt | 5,000 | 0 |
Proceeds from issuing debt | 25,000 | 0 |
Proceeds from demand note | 0 | 0 |
Net increase (decrease) in cash | (5,868) | (1,459,893) |
Cash, beginning of period | 8,508 | 1,468,401 |
Cash, end of period | 2,640 | 8,508 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 0 | 15,000 |
Income taxes paid | 0 | 0 |
Non-cash investing and financing activities: | ||
Conversion of convertible notes to Series C preferred stock | 0 | 3,660,000 |
Beneficial conversion feature | 0 | 3,660,000 |
Common stock issued to related party for mining rights | 0 | 450,000 |
Common stock issued for exchange of warrants | 0 | 4,000 |
Conversion of Series C preferred stock to common stock | 161 | 3,684 |
Conversion of convertible notes to Series B | 0 | 325,000 |
Common stock issued for liabilities | (485,000) | 339,009 |
Series B preferred stock issued for liabilities | 0 | 300,000 |
Conversion of accrued interest to Series C preferred stock | 0 | 198,578 |
Conversion of Series B preferred stock to common stock | 0 | 2,843 |
Conversion of accrued interest to Series B preferred stock | 0 | 26,271 |
Debt discount on warrants | $ 19,938 | $ 0 |
1. General Organization and Bus
1. General Organization and Business | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
1. General Organization and Business | 1. General Organization and Business MV Portfolios, Inc. and subsidiaries (collectively the Company) is a Nevada corporation. The Company was an exploration stage mining company with a focus on the identification, acquisition and development of rare and precious metals mining properties in the Americas. On February 7, 2014, the Company entered into a securities exchange agreement (the Securities Exchange) with MVP Portfolio, LLC (MVP Portfolio), a Florida limited liability company, MV Patents, LLC (MV Patents), a Florida limited liability company and majority member of MVP Portfolio, and other members of MVP Portfolio (all such members collectively, the Members). Pursuant to the Securities Exchange, the Members sold all of their membership interests in MVP Portfolio to the Company in exchange for an aggregate of 9,385,000 shares of common stock, $0.10 par value per share, after taking into account the 1 for 100 reverse stock split (the Reverse Split) of the Companys issued and outstanding common stock. Following the Securities Exchange, the Company assumed the additional line of business of MVP Portfolio. The Securities Exchange was consummated in anticipation of a 1 for 100 Reverse Split. As the share exchange is dependent upon the Reverse Split, all share and per share amounts herein have been retroactively restated to reflect the 1 for 100 Reverse Split as if it has been effected during all periods presented. MV Patents, formed on July 11, 2011 has limited operations. MVP Portfolio was formed on July 26, 2013 as a wholly owned subsidiary of MV Patents. On August 30, 2013, MV Patents transferred a portion of its patents without recourse to MVP Portfolio. Pursuant to the Securities Exchange on February 7, 2014, MVP Portfolio ceased to be a subsidiary of MV Patents and became a wholly owned subsidiary of the Company. MV Patents is deemed to be the predecessor entity to MVP Portfolio. On March 6, 2014, MVP Portfolio changed its form of organization to a Florida corporation from a Florida limited liability company, and changed its name to Visual Real Estate, Inc. (VRE). VRE has historically maintained a June 30 fiscal year, through MV Patents, the predecessor business to MVP Portfolio. VRE has not commenced its planned principal operations, the business of patent licensing and assertion of rights under patents against parties believed to be selling goods or services that rely upon VREs patented technology. VRE owns a patent portfolio it refers to as Video Drive-by and online mapping, which has previously been used by its predecessors and licensees commercially. VRE currently owns a patent portfolio consisting of eight (8) issued and sixteen (16) pending patents. The patents disclose systems and methods for providing video drive-by data to enable a street level view of a neighborhood surrounding a geographic location. The systems include, generally, a video and data server farm incorporating at least one (1) video storage server that stores video image files containing video drive-by data corresponding to a geographic location, a data base server that processes a data query received from a user over the internet and an image processing server. VREs activities since inception have consisted principally of acquiring additional technology patents and raising capital. Subsequent to the Securities Exchange, the Company changed its fiscal year end to June 30, which is VREs year end. On November 20, 2014, the Company formed a wholly owned subsidiary, Flexine, Inc., which will explore productization potential from a patent from Harvard University for a novel material that may be used to create a unique variable focus lens for SmartPhone cameras. On November 20, 2014, the Company formed a wholly owned subsidiary, ResoCator, Inc.(which name was changed to LocatorX, Inc. in March 2016), which will explore productization potential from a patent from the University of Oxford for a Miniature Atomic Clock (MAC). MV Portfolios, Inc. has signed an option agreement for US Patent 82217724 with ISIS Innovations (University of Oxfords patent licensing company). On September 1, 2016, the Company formed a wholly owned subsidiary, Rabbit Drones, Inc. (which name was changed to 1 st |
2. Summary of Significant Accou
2. Summary of Significant Accounting Principles | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
2. Summary of Significant Accounting Principles | 2. Summary of Significant Accounting Principles Principles of Consolidation The results of operations and cash flows for the year ended June 30, 2016 include the consolidated results of operations and changes in cash flows of MV Portfolios, Inc. and Subsidiaries which includes Flexine, Inc., Visual Real Estate Inc. and LocatorX, Inc. (formerly named ResoCator, Inc.). LocatorX, Inc. was formed as a wholly-owned subsidiary and has subsequently added additional investors. As of June 30, 2016, the Company owns 73.0% of LocatorX, Inc. All material intercompany balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of June 30, 2016 and 2015, and the reported revenues and expenses for the years then ended. Actual results could differ from those estimates made by management. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all instruments with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Property and Equipment The Companys property and equipment is stated at cost less accumulated depreciation and consists of a vehicle. The vehicle was used in the mining operations and is classified as assets held for sale from discontinued operations. Expenditures for property acquisitions, development, construction, improvements and major renewals are capitalized. The cost of repairs and maintenance is expensed as incurred. Depreciation is provided principally on the straight-line method over the estimated useful life of the vehicle, which is 5 years. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation will be removed from the accounts and any gain or loss will be reflected in the gain or loss from operations. Deferred Offering and Financing Costs The Company incurred direct incremental costs associated with procuring financing. These costs are deferred and recorded as an asset, and will be amortized over the life of the debt. Intangible Assets The Company has several patent portfolios. As of June 30, 2016 and 2015, no value has been assigned to the patents. The main patents in the portfolio were transferred to MV Patents, the predecessor business to VRE, by a member on July 25, 2011, for the consideration of $1 without recourse. The patents were transferred to VRE on August 30, 2013 without recourse. As such, the patents are recorded at historical cost, which was deemed to be zero at the time of transfer. Derivative Financial Instruments For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For warrants and convertible derivative financial instruments, the Company used a probability-weighted scenario analysis model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period, in accordance with Financial Accounting Services Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging Fair Value Measurements The Company measures fair value in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures Stock-Based Compensation The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under FASB ASC Topic 718 , Compensation - Stock Compensation Equity-Based Payments to Non-Employees Net (Loss) per Common Share Basic net earnings (loss) per common share are computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net earnings (loss) per common share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the diluted weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. For the years ended June 30, 2016 and June 30, 2015, a net loss was reported and the Company excluded options and outstanding warrants to purchase shares of common stock, as the effect would be anti-dilutive. Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Companys financial position and results of operations for the current period. Future realization of the deferred tax asset depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. Management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, including federal and certain state taxing authorities. At June 30, 2015, the Company is subject to U.S. federal examinations by taxing authorities for all tax years from inception (July 11, 2011). At June 30, 2016 and June 30, 2015, the Company did not have a liability for any unrecognized taxes. The Company has no examinations in progress and is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax liabilities will significantly change in the next twelve months. Reclassifications Certain amounts in the prior period have been reclassified to conform to the current periods financial statement presentation. These reclassifications have no effect on previously reported net income. New Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements. |
3. Going Concern
3. Going Concern | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
3. Going Concern | 3. Going Concern The Company is engaged in limited operations. The ongoing business plan of the Company is to assert its intellectual property rights to monetize its patents through net recoveries. Net recoveries relate to monetary payments received by the Company in respect to its patents through judgments, settlements, royalty agreements, or other disposition of the patents or cash proceeds of any equity actually received as consideration for any such disposition, including those received in connection with litigation. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As shown in the accompanying consolidated financial statements, the Company has incurred losses for all periods presented, as the ongoing business has not yet commenced. The Company has not established an ongoing source of revenues and has funded activities to date primarily from convertible notes and common stock offerings. In addition, the Company had a working capital deficit as of June 30, 2016. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The Company is subject to a number of risks including, but not limited to, the need to obtain adequate funding and possible risk of failure to monetize its patents. If the Company does not successfully monetize its patents, it will be unable to generate revenues or achieve profitability. Managements plan with respect to funding the ongoing operations is to secure equity financing through access to U.S. capital markets as a registrant of the U.S. Securities and Exchange Commission. While the Company believes it will be successful in obtaining the necessary financing to (i) fund its operations, (ii) monetize its patents and meet revenue projections and (iii) manage costs, it does not currently have any financing plans in place and there are no assurances that such additional funding will be achieved and that it will succeed in its future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should the Company be unable to continue as a going concern. |
4. Discontinued Operations
4. Discontinued Operations | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
4. Discontinued Operations | 4. Discontinued Operations Pursuant to the Securities Exchange, the pre-existing mining business was discontinued. On April 28, 2014 the Company notified Mexivada Mining Corp. and Compania Minera Mexivada S.A de C.V., of termination of the Mexivada Property Option Agreement dated as of February 11, 2011, as amended October 24, 2011, and that the Company would not pay any further fees or expenses associated with the Agreement. The remaining interests were sold on July 24, 2014. The following table presents summarized operating results for these discontinued operations. Year Ended June 30, 2016 Year Ended June 30, 2015 Loss from discontinued operations $ - $ (3,608) |
5. Related Party Transactions
5. Related Party Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
5. Related Party Transactions | 5. Related Party Transactions Officer and director fees totaled $381,196 and $448,490 for the years ended June 30, 2016 and 2015, respectively. The total compensation of officers and directors was recorded as a component of general and administrative expenses. In September 2014 the Company granted 5,140,339 common stock options to its officers (see Note 10). The total fair value of the award was estimated to be $9,605,675. Share-based compensation expense is recognized ratably over the vesting periods. For the year ended June 30, 2015, the Company recognized share-based compensation expense as a component of general and administrative expenses of $7,511,461. As of June 30, 2016 and June 30, 2015, the Company owed its officers and directors $314,198 and $138,750, respectively for compensation which was recorded as accounts payable and accrued liabilities in its consolidated balance sheets. In July 2015, the Company had borrowed $5,000 from their officer. The note is due on demand, and bears no interest. |
6. Derivative Liabilities
6. Derivative Liabilities | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
6. Derivative Liabilities | 6. Derivative Liabilities As of June 30, 2016 and June 30, 2015, there were 0 and 2,965,705 outstanding derivative warrants, respectively, with 0 and 1,475,043 common shares issuable upon exercise, respectively. The warrants qualify as derivative liabilities due to the existence of reset provisions which cause the instruments to no longer be indexed to the Companys own stock under FASB ASC 815. The Company estimated the fair value of the outstanding derivative warrants using a probability-weighted scenario analysis model. As of June 30, 2016 and June 30, 2015, the fair value of the derivative warrants was determined to be $0 and $11,700 respectively. The following is a summary of the key assumptions used in the probability-weighted scenario analysis model to estimate the fair value of the warrants as of June 30, 2016 and June 30, 2015: June 30, 2016 June 30, 2015 Common stock issuable upon exercise of warrants 1,475,043 Exercise price $1.06 and $1.35 Market price of the Companys common stock $0.12 Risk free interest rate 0.11% Dividend yield 0.00% Volatility 211.00% Expected term 0.48 - 1.04 years See Note 7 for fair value hierarchy of the derivative liabilities. |
7. Fair Value Measurements
7. Fair Value Measurements | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
7. Fair Value Measurements | 7. Fair Value Measurements As defined in FASB ASC Topic 820, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Topic requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities or default rates observable at commonly quoted intervals or inputs derived from observable market data by correlation or other means. Level 3: Pricing inputs that are unobservable or less observable from objective sources. Unobservable inputs should only be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Certain assets and liabilities are reported at fair value on a recurring or non-recurring basis in the Companys consolidated balance sheets. The following methods and assumptions were used to estimate the fair values: Cash, Prepaid expenses, Accounts payable, Accrued liabilities The carrying amounts approximate fair value because of the short-term nature or maturity of the instruments. Derivative liabilities The Companys determination of fair value of its derivative instruments incorporates various factors required under FASB Topic ASC 815. See Note 6 for the fair value calculations. The fair values of the Companys derivatives are valued using less observable data from objective sources as inputs into internal valuation models. Therefore, the Company considers the fair value of its derivatives to be Level 3 hierarchy. The following table sets forth the fair value hierarchy within our financial assets and liabilities by level that they were accounted for at fair value on a recurring basis as of June 30, 2016 and June 30, 2015: Fair Value Measurement at June 30, 2016 Level 1 Level 2 Level 3 Liabilities: Warrant derivative liabilities $ - $ - $ - Total $ - $ - $ - Fair Value Measurement at June 30, 2015 Level 1 Level 2 Level 3 Liabilities: Warrant derivative liabilities $ - $ - $ 11,700 Total $ - $ - $ 11,700 The following table sets forth the changes in the fair value of derivative liabilities for the period from June 30, 2014 through year ended June 30, 2015: Balance, June 30, 2014 $ 2,365,315 Change in fair value of derivative liabilities (2,353,615) Balance, June 30, 2015 $ 11,700 Change in fair value of derivative liabilities (11,700) Balance, June 30, 2016 $ - |
8. Convertible Notes
8. Convertible Notes | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
8. Convertible Notes | 8. Convertible Notes and Short Term Loan On September 2, 2014, the Company converted $351,271 of convertible notes, including accrued interest of $26,271, into 3,512,710 shares of the Companys Series B convertible preferred stock, par value $0.001 (the Series B Preferred Stock), at a post-Reverse Split conversion price of $0.10 and subject to a 9.99% conversion blocker. Each share of Series B Preferred Stock will participate in dividends and other distributions on an equivalent basis with common stock. Holders of Series B Preferred Stock shall vote together with the holders of common stock as a single class, and each holder of outstanding shares of Series B Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series B Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on a particular matter. On August 26, 2014, the Company converted $3,858,578 of convertible notes, including accrued interest of $198,578, into 7,717,170 shares of the Companys Series C convertible preferred stock, par value $0.001 (the Series C Preferred Stock), at a post-Reverse Split conversion price of $0.50 and subject to a 9.99% conversion blocker. Each share of Series C Preferred Stock will be entitled to a liquidation preference equal to $0.001 per share. Otherwise, the Series C Preferred Stock will be equivalent in all respects to the Common Stock, with each share of Series C Preferred stock entitled to one vote and the holders of the Series C Preferred Stock voting together with the holders of the Common Stock. The Series C Preferred Stock is convertible into common stock at a ratio of 1 to 1. Pursuant to the conversion of convertible notes into Series C Preferred Stock, the Company incurred interest expense of $3,660,000 related to a beneficial conversion feature that existed within the underlying transactions. During the year ended June 30, 2015, additional amortization expense of $211,543 and $689,556 was recognized associated with the debt discounts and deferred financing costs, respectively, related to the notes originally issued in November 2013, February 2014 and March 2014. The discounts and deferred financing costs associated with these notes were completely amortized at June 30, 2015. In addition, $300,000 of convertible note was paid off in cash. In May 2016, the Company issued a note for $25,000 with an annual rate of interest of 4.0%. Along with the debt offering, the Company also issued 1,666,667 warrants. The warrants were exercisable immediately with an exercise price of $0.06 per share and has an expiration date of May 26, 2019. The Company used the Black-Scholes option pricing model to determine the relative fair value of the warrant and a debt discount of $19,938 was recorded. During the year ended, the Company recognized amortization expense of $521 and the note balance as of June 30, 2016 was $25,000 net of discount of $19,417. |
9. Stockholders' Equity
9. Stockholders' Equity | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
9. Stockholders' Equity | 9. Stockholders Equity In August 2014, the Company issued 1,000,000 common shares to an unrelated party in exchange for financial advisory and investment banking services valued at $2,000,000. Additionally, 400,000 shares were issued for services with a fair value of $800,000. The expense was recognized in full during the six months ended December 31, 2014. In August 2014, the Company issued 300,000 shares of common stock for certain unpatented mining claims valued at $450,000 on the date of the acquisition. The mining claims were owned by a company whose sole owner is a related party. In September 2014, the Company issued 79,530 shares of Series B Preferred Stock as settlement of an outstanding payable of $79,530 for legal fees owed to an unrelated party. The fair value of the shares was determined to be $300,000 resulting in an additional expense of $220,470 recognized during the six months ended December 31, 2014. All shares of Series B Preferred Stock is convertible into common stock at a ratio of 1 to 1. In September 2014, the Company issued an aggregate of 169,505 common shares to two unrelated parties as settlement of outstanding payables of $109,159 owed for professional services. The fair value of the shares was determined to be $339,009 resulting in an additional expense of $229,850 recognized during the six months ended December 31, 2014. In September 2014, the Company issued 20,000 shares of Series D convertible preferred stock (the Series D Preferred Stock), to officers and Directors for compensation valued at $40,000. The Series D Preferred Stock will be equivalent in all respects to the Companys common stock, except that each share of Series D Preferred Stock will be entitled to cast 1,000 votes per share and contain liquidation preference. All shares of Series D Convertible Preferred Stock is convertible into common stock at a ratio of 1 to 1. In October 2014, the Company issued a total of 1,250,000 common shares and warrants to purchase 900,000 common shares to a third party for consulting services valued at 1,501,837. There are 3 tranches of warrants, each comprising of warrants to purchase 300,000 shares, at exercise prices of $0.50, $1,00 and $2.00 per share. The warrants are exercisable immediately and expire on October 27, 2019. During the year ended June 30, 2015, the Company issued 2,842,500 common shares upon the conversion of 2,842,500 shares of Series B preferred stock. In October 2014, the Company issued an aggregate of 3,684,193 common shares upon the conversion of 3,684,193 shares of Series C preferred stock. As a result of the effectuation of the Reverse Split on September 8, 2014, the Company issued 4,000,000 common shares under an exchange agreement for warrants originally issued in November 2013. From February through June 2015, the Companys subsidiary LocatorX, Inc. issued 130,000 shares for proceeds of $150,000. The issuance of the subsidiary shares resulted in an adjustment to noncontrolling interest of $5,676. During the period from September to November 2015, the Company issued 10,500,000 common shares for a total cash consideration of $420,000 and 5,250,000 warrants to purchase up to an additional 2,625,000 common shares at $0.06 per share through a private placement of securities. During the period from September to November 2015, the Company issued 9,500,000 common shares for a total fair value of $485,000 to settle $380,000 liabilities, and recognized a loss of $105,000. In addition, the Company also issued 4,750,000 warrants to purchase up to an additional 2,375,000 common shares at $0.06 per share. During the year ended June 30, 2016, LocatorX issued 240,962 shares of common stock for $481,924. The issuance of the subsidiary shares resulted in an adjustment to noncontrolling interest of $70,095. In June 2016, the Company issued 105,611 common shares upon the conversion of 105,611 shares of Series C preferred stock. Outstanding shares of Series A convertible preferred stock are convertible into common shares at a ratio of 100 to 1. |
10. Stock Options and Warrants
10. Stock Options and Warrants | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
10. Stock Options and Warrants | 10. Stock Options and Warrants Options On February 7, 2014, the Companys Board of Directors voted to terminate the 2007 Stock Option Plan and adopted the 2014 Equity Incentive Plan (the 2014 Plan), which provides for the issuance of incentive awards of up to 6,150,564 shares of the Companys Common Stock to officers, key employees, consultants and directors. The options exercise price will be no less than the closing price of the Companys shares on the day of issuance. When incentive stock options are granted to an employee who, at the time the incentive stock option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company, the per share exercise price will be no less than 110% of the closing price of the Companys shares on the day of issuance. On September 8, 2014, the Company granted an aggregate of 4,690,339 common stock options to certain officers and advisors of the Company. The stock options were granted upon the effectuation of the Reverse Split on September 8, 2014. The options are exercisable at $0.50 per share and expire on February 7, 2024. 3,690,339 of the option vest in twelve quarterly installments beginning February 7, 2014 and 1,000,000 of the options vest in twelve monthly installments beginning February 7, 2014. The total fair value of the award was estimated to be $9,380,675.. On October 21, 2014, the Company granted an aggregate of 450,000 common stock options to certain officers and advisors of the Company. The options are exercisable at $0.50 per share and expire on October 21, 2024. The options vest in four annual installments beginning October 21, 2014. The estimated fair value of each option award granted was determined on the date of effectiveness of the grant using the Black-Scholes option valuation model. The following assumptions were used for the options granted during the year ended June 30, 2015: 2015 Risk-free interest rate 1.44% - 2.48% Expected volatility 312.48% - 321.74% Dividend yield 0.00% Expected option term 2.5 5.9 years Due to timing of the vesting, option amortization expense in the amount of $1,766,833 for options issued in the prior year was recognized for the year ended June 30, 2016. A summary of the status of the Companys stock option plan as of June 30, 2016 and 2015 are as follows: Options Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at June 30, 2014 - $ - Granted 5,140,339 0.500 Outstanding at June 30, 2015 5,140,339 0.500 8.675 $ - Exercisable at June 30, 2015 2,650,145 $ 0.500 8.652 $ - Granted - - Outstanding at June 30, 2016 5,140,339 0.500 7.673 $ - Exercisable at June 30, 2016 3,742,754 $ 0.500 7.653 $ - LocatorX Options From January through June 2015, LocatorX granted an aggregate of 300,000 common stock options to certain consultants of the Company and are exercisable at $0.10 per share and expire on December 31, 2020. During the year ended June 30, 2016, LocatorX granted an additional 3,790,000 options to certain consultants and officers and are exercisable at $0.20 per share and expire on December 31, 2020. Options totaling 667,500 shares were forfeited when consultant that had vesting options did not have their contracts renewed. The options vest in twelve quarterly installments. The estimated fair value of each option award granted was determined on the date of effectiveness of the grant using the Black-Scholes option valuation model and the fair value of the options is $16,370 for June 30, 2015 and $387,661 for June 30, 2016. The following assumptions were used for the options granted during the years ended June 30, 2016 and 2015: 2016 2015 Risk-free interest rate 0.45% - 1.07% 0.86% - 1.07% Expected volatility 73.58% - 93.57% 73.58% - 93.57% Dividend yield 0.00% 0.00% Expected option term 1.3 4.4 years 2.9 - 4.4 years Options amortization expense of the LocatorX stock options was $128,161 and $7,307 for the year ended June 30, 2016 and 2015, respectively. A summary of the status of LocatorXs stock options as of June 30, 2016 and 2015 are as follows: Options Weighted Average Exercise Price Weighted Average Remaining Term \(Years) Aggregate Intrinsic Value Outstanding at June 30, 2014 - $ - Granted 300,000 0.100 Outstanding at June 30, 2015 300,000 0.100 5.512 $ - Exercisable at June 30, 2015 45,833 $ 0.100 5.512 $ - Forfeited 667,500 0.170 Granted 3,790,000 0.200 Outstanding at June 30, 2016 3,422,500 0.186 2.557 $ - Exercisable at June 30, 2016 663,333 $ 0.349 2.745 $ - Options totaling 667,500 shares were forfeited when consultant that had vesting options did not have their contracts renewed. Warrants The estimated fair value of the warrants issued was determined on the date of effectiveness of the grant using the Black-Scholes option valuation model. Warrants expense was $152,167 for the year ended June 30, 2016. The following table presents the warrant activity during the years ended June 30, 2016 and 2016 presented on a post 1 for 100 Reverse Split basis: Common Shares Covered by Warrants Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at June 30, 2014 1,995,599 $ 0.894 1.879 $ 1,907,927 Granted 900,000 1.167 Expired 69,744 1.334 Outstanding at June 30, 2015 2,965,343 $ 1.118 1.919 $ - Granted 11,666,667 0.060 Expired (1,418,534) 1.352 Outstanding at June 30, 2016 13,213476 $ 0.159 1.813 $ - Exercisable at June 30, 2016 13,213,476 $ 0.159 1.813 $ - The estimated fair value of $152,167 for the warrants was determined on the date of effectiveness of the grant using the Black-Scholes option valuation model. The total warrant expenses were expense immediately during the year ended June 30, 2016. The following assumptions were used for the warrants for the years ended June 30, 2016 and 2015: 2015-2016 Risk-free interest rate 0.99% Expected volatility 186% - 207% Dividend yield 0.00% Expected option term 1 years |
11. Income Taxes
11. Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
11. Income Taxes | 11. Income Taxes No provision for federal and state income taxes has been recognized for the years ended June 30, 2016 and 2015, as the Company incurred a net operating loss for income tax purposes in each period and has no carryback potential. The Company had net operating loss carry-forwards for income tax reporting purposes of approximately $8.5 million as of June 30, 2016, which may be offset against future taxable income. These net operating loss carry-forwards may be carried forward in varying amounts until the time when they expire in 2034. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs or a change in the nature of the business, both of which occurred on February 7, 2014. Therefore, the amount available to offset future taxable income has been limited. Deferred tax assets consisted of the following as of June 30, 2016 and 2015: June 30, 2016 June 30, 2015 Net operating loss carry-forwards $ 2,873,323 $ 2,504,070 Valuation allowance (2,873,323) (2504,070) Net deferred tax asset $ - $ - |
11. Retirement Plan
11. Retirement Plan | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
11. Retirement Plan | 12. Retirement Plan Effective January 1, 2014, the Company adopted a qualified 401(k) deferred compensation plan, with deferrals beginning in June 2014. All employees who are eighteen years or older and have worked for at least three consecutive months are eligible to participate in the plan. The plan provides for mandatory safe-harbor matching contributions and discretionary non-elective contributions as determined by management. The Company did not elect to make any contributions for the year ended June 30, 2016 and 2015. |
12. Commitments and Contingenci
12. Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
12. Commitments and Contingencies | 13. Commitments and Contingencies Concentration of Credit Risk The Company maintains its cash in a restricted escrow account in an institution insured by the Federal Deposit Insurance Corporation and, at times, balances may exceed government insured limits. The Company has never experienced any losses related to these balances. Employment Agreements The Company has employment agreements with two of the Companys executive officers. The aggregate future commitment under these agreements is as follows: Twelve Months ending December 31, 2016 $ 215,000 2017 44,767 $ 259,767 These agreements provide for additional bonus payments that are calculated as defined. Other On November 16, 2015 SiberLaw LLP filed for a default judgement against Visual Real Estate, Inc. for a liquidated amount of $146,736.43 . The Duval county Florida court ruled in SiberLaws favor, and the amount recorded as a liability on the balance sheet. SiberLaw registered a lien at the US Patent Trademark Office for all patents owned by the Companys subsidiary Visual Real Estate Inc. These patents relate to Video Drive By family of patents including US Patents ResoCator, Inc.,(renamed LocatorX, Inc.) the Company's majority-owned subsidiary, has a royalty fee agreement whereby it pays a royalty fee equal to 10% of the net royalties in connection with the assignment of the ResoCator Patent and ResoCator, Inc. owes a licensing fee of $0 and $33,000 as of June 30, 2015 and June 30, 2016 respectively. The Company is involved in various legal proceedings and litigation arising in the ordinary course of business. In the opinion of management and legal counsel, the outcome of such proceedings and litigation will not have a material adverse effect on the Company's consolidated financial statements. Pursuant to the Securities Exchange the Company agreed to pay the members of MV Patents ten (10%) percent of the net proceeds to be received from any enforcement activities or sales transactions related to the patents owned or applications pending as of the closing of the Securities Exchange. |
13. Subsequent Events
13. Subsequent Events | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
13. Subsequent Events | 14. Subsequent Events On September 1, 2016, the Company formed a wholly owned subsidiary, Rabbit Drones, Inc. (which name was changed to 1 st In October, 2016, the Company issued 52,806 common shares upon the conversion of 52,806 shares of Series C preferred stock. In the period from November to December 2016, the Company issued 15,475,000 common shares for a consideration of $309,500 and 15,475,000 warrants to purchase up to an additional 7,737,500 common shares with an exercise price of $0.06/share through a private placement of securities. In addition, 11,225,000 additional common shares are to be deferred and issued at a later date. In total 26,700,000 were sold for cash. In connection with this private placement of securities, the Company agreed to become current with the reporting obligations under Section 12(g) of the Exchange Act and file all reports due thereunder. In January 2017, the Company entered into employment agreements with the Chief Executive Officer and Chief Financial Officer. In connection with the employment agreements, options to purchase up to 10,000,000 common shares at $0.06 per share were issued. In January 2017, the subsidiary LocatorX entered into royalty fee agreement that replaced the prior royalty fee agreement. The royalty fee agreement has a variable royalty fee based on the annual earned royalty ranging from 10.0% to 5.0%, with a minimum annual royalty fee of $60,000, and options to purchase 2,000,000 shares at an exercise price of $1.20/share. In March 2017, the Subsidiary LocatorX issued 580,000 options with exercise price of $0.4/share to $1.2/share, and vesting term from fully vested immediately to 8 installments over 2 years. In March 2017, the Company issued 4,400,000 common shares through a private placement of securities for a total consideration of $88,000, and issued warrants to purchase up to an additional 2,200,000 shares at $0.06 per share. In March 2017, the Company issued 5,600,000 common shares to its officer to settle accrued salary for the amount of $112,000. In March 2017, the Company issued 2,500,000 common shares to a third party for consulting services valued at $50,000. In March 2017, the Company issued 85,000 Series E shares with 1000 to 1 voting rights pursuant to the November 2016 private placement of securities. |
2. Summary of Significant Acc21
2. Summary of Significant Accounting Principles: Principles of Consolidation (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The results of operations and cash flows for the year ended June 30, 2016 include the consolidated results of operations and changes in cash flows of MV Portfolios, Inc. and Subsidiaries which includes Flexine, Inc., Visual Real Estate Inc. and LocatorX, Inc. (formerly named ResoCator, Inc.). LocatorX, Inc. was formed as a wholly-owned subsidiary and has subsequently added additional investors. As of June 30, 2016, the Company owns 73.0% of LocatorX, Inc. All material intercompany balances and transactions have been eliminated. |
2. Summary of Significant Acc22
2. Summary of Significant Accounting Principles: Use of Estimates (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of June 30, 2016 and 2015, and the reported revenues and expenses for the years then ended. Actual results could differ from those estimates made by management. |
2. Summary of Significant Acc23
2. Summary of Significant Accounting Principles: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all instruments with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. |
2. Summary of Significant Acc24
2. Summary of Significant Accounting Principles: Property and Equipment (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Property and Equipment | Property and Equipment The Companys property and equipment is stated at cost less accumulated depreciation and consists of a vehicle. The vehicle was used in the mining operations and is classified as assets held for sale from discontinued operations. Expenditures for property acquisitions, development, construction, improvements and major renewals are capitalized. The cost of repairs and maintenance is expensed as incurred. Depreciation is provided principally on the straight-line method over the estimated useful life of the vehicle, which is 5 years. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation will be removed from the accounts and any gain or loss will be reflected in the gain or loss from operations. |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Principles: Deferred Offering and Financing Costs (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Deferred Offering and Financing Costs | Deferred Offering and Financing Costs The Company incurred direct incremental costs associated with procuring financing. These costs are deferred and recorded as an asset, and will be amortized over the life of the debt. |
2. Summary of Significant Acc26
2. Summary of Significant Accounting Principles: Intangible Assets (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Intangible Assets | Intangible Assets The Company has several patent portfolios. As of June 30, 2016 and 2015, no value has been assigned to the patents. The main patents in the portfolio were transferred to MV Patents, the predecessor business to VRE, by a member on July 25, 2011, for the consideration of $1 without recourse. The patents were transferred to VRE on August 30, 2013 without recourse. As such, the patents are recorded at historical cost, which was deemed to be zero at the time of transfer. |
2. Summary of Significant Acc27
2. Summary of Significant Accounting Principles: Derivative Financial Instruments (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Derivative Financial Instruments | Derivative Financial Instruments For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For warrants and convertible derivative financial instruments, the Company used a probability-weighted scenario analysis model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period, in accordance with Financial Accounting Services Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging |
2. Summary of Significant Acc28
2. Summary of Significant Accounting Principles: Fair Value Measurements (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Fair Value Measurements | Fair Value Measurements The Company measures fair value in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures |
2. Summary of Significant Acc29
2. Summary of Significant Accounting Principles: Stock-Based Compensation (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under FASB ASC Topic 718 , Compensation - Stock Compensation Equity-Based Payments to Non-Employees |
2. Summary of Significant Acc30
2. Summary of Significant Accounting Principles: Net Earnings (Loss) per Common Share (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Net Earnings (Loss) per Common Share | Net (Loss) per Common Share Basic net earnings (loss) per common share are computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net earnings (loss) per common share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the diluted weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. For the years ended June 30, 2016 and June 30, 2015, a net loss was reported and the Company excluded options and outstanding warrants to purchase shares of common stock, as the effect would be anti-dilutive. |
2. Summary of Significant Acc31
2. Summary of Significant Accounting Principles: Income Taxes (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Companys financial position and results of operations for the current period. Future realization of the deferred tax asset depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. Management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, including federal and certain state taxing authorities. At June 30, 2015, the Company is subject to U.S. federal examinations by taxing authorities for all tax years from inception (July 11, 2011). At June 30, 2016 and June 30, 2015, the Company did not have a liability for any unrecognized taxes. The Company has no examinations in progress and is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax liabilities will significantly change in the next twelve months. |
2. Summary of Significant Acc32
2. Summary of Significant Accounting Principles: Reclassifications (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Reclassifications | Reclassifications Certain amounts in the prior period have been reclassified to conform to the current periods financial statement presentation. These reclassifications have no effect on previously reported net income. |
2. Summary of Significant Acc33
2. Summary of Significant Accounting Principles: New Accounting Pronouncements (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
New Accounting Pronouncements | New Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements. |
4. Discontinued Operations_ Sch
4. Discontinued Operations: Schedule of Gain/Loss from Discontinued Operations (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Schedule of Gain/Loss from Discontinued Operations | Year Ended June 30, 2016 Year Ended June 30, 2015 Loss from discontinued operations $ - $ (3,608) |
6. Derivative Liabilities_ Sche
6. Derivative Liabilities: Schedule of Assumptions Used (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Schedule of Assumptions Used | June 30, 2016 June 30, 2015 Common stock issuable upon exercise of warrants 1,475,043 Exercise price $1.06 and $1.35 Market price of the Companys common stock $0.12 Risk free interest rate 0.11% Dividend yield 0.00% Volatility 211.00% Expected term 0.48 - 1.04 years |
7. Fair Value Measurements_ Sch
7. Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value Measurement at June 30, 2016 Level 1 Level 2 Level 3 Liabilities: Warrant derivative liabilities $ - $ - $ - Total $ - $ - $ - Fair Value Measurement at June 30, 2015 Level 1 Level 2 Level 3 Liabilities: Warrant derivative liabilities $ - $ - $ 11,700 Total $ - $ - $ 11,700 |
7. Fair Value Measurements_ Fai
7. Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | Balance, June 30, 2014 $ 2,365,315 Change in fair value of derivative liabilities (2,353,615) Balance, June 30, 2015 $ 11,700 Change in fair value of derivative liabilities (11,700) Balance, June 30, 2016 $ - |
10. Stock Options and Warrants_
10. Stock Options and Warrants: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 2015 Risk-free interest rate 1.44% - 2.48% Expected volatility 312.48% - 321.74% Dividend yield 0.00% Expected option term 2.5 5.9 years |
10. Stock Options and Warrant39
10. Stock Options and Warrants: Share-based Compensation, Stock Options, Activity (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Share-based Compensation, Stock Options, Activity | Options Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at June 30, 2014 - $ - Granted 5,140,339 0.500 Outstanding at June 30, 2015 5,140,339 0.500 8.675 $ - Exercisable at June 30, 2015 2,650,145 $ 0.500 8.652 $ - Granted - - Outstanding at June 30, 2016 5,140,339 0.500 7.673 $ - Exercisable at June 30, 2016 3,742,754 $ 0.500 7.653 $ - |
10. Stock Options and Warrant40
10. Stock Options and Warrants: Schedule of Other Share-based Compensation, Activity (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Schedule of Other Share-based Compensation, Activity | Common Shares Covered by Warrants Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at June 30, 2014 1,995,599 $ 0.894 1.879 $ 1,907,927 Granted 900,000 1.167 Expired 69,744 1.334 Outstanding at June 30, 2015 2,965,343 $ 1.118 1.919 $ - Granted 11,666,667 0.060 Expired (1,418,534) 1.352 Outstanding at June 30, 2016 13,213476 $ 0.159 1.813 $ - Exercisable at June 30, 2016 13,213,476 $ 0.159 1.813 $ - |
11. Income Taxes_ Schedule of D
11. Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | June 30, 2016 June 30, 2015 Net operating loss carry-forwards $ 2,873,323 $ 2,504,070 Valuation allowance (2,873,323) (2504,070) Net deferred tax asset $ - $ - |
12. Commitments and Contingen42
12. Commitments and Contingencies: Aggregate future commitment under employment agreements (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Tables/Schedules | |
Aggregate future commitment under employment agreements | Twelve Months ending December 31, 2016 $ 215,000 2017 44,767 $ 259,767 |
4. Discontinued Operations_ S43
4. Discontinued Operations: Schedule of Gain/Loss from Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Details | ||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 0 | $ (3,608) |
5. Related Party Transactions (
5. Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | ||
Officers' Compensation | $ 381,196 | $ 448,490 | |
Accrued Salaries, Current | 314,198 | $ 138,750 | |
Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | [1] | 5,140,339 | |
Allocated Share-based Compensation Expense | $ 7,511,461 | ||
[1] | See Note 10. |
6. Derivative Liabilities (Deta
6. Derivative Liabilities (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Details | ||
Class of Warrant or Right, Outstanding | 0 | 2,965,705 |
Common shares issuable upon exercise, derivative warrants | 0 | 1,475,043 |
Derivative, Fair Value, Net | $ 0 | $ 11,700 |
6. Derivative Liabilities_ Sc46
6. Derivative Liabilities: Schedule of Assumptions Used (Details) | Jun. 30, 2015$ / sharesshares |
Common stock issuable upon exercise of warrants | shares | 1,475,043 |
Fair Value Exercise Price 1 | $ 1.06 |
Fair Value Exercise Price 2 | 1.35 |
Market price of the Company's common stock | $ 0.12 |
Fair Value Assumptions, Risk Free Interest Rate | 0.11% |
Fair Value Assumptions, Expected Dividend Rate | 0.00% |
Fair Value Assumptions, Expected Volatility Rate | 211.00% |
Minimum | |
Fair Value Assumptions, Expected Term | 5 months 23 days |
Maximum | |
Fair Value Assumptions, Expected Term | 1 year 14 days |
7. Fair Value Measurements_ S47
7. Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Derivative liabilities | $ 0 | $ 11,700 |
Fair Value, Inputs, Level 1 | ||
Derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Derivative liabilities | $ 0 | $ 11,700 |
7. Fair Value Measurements_ F48
7. Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Details | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance | $ 11,700 | $ 2,365,315 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | (11,700) | (2,353,615) |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance | $ 0 | $ 11,700 |
8. Convertible Notes (Details)
8. Convertible Notes (Details) | 12 Months Ended |
Jun. 30, 2016USD ($)$ / shares | |
Interest Expense, Debt | $ 3,660,000 |
Amortization of Debt Discount (Premium) | 211,543 |
Debtor Reorganization Items, Write-off of Debt Issuance Costs and Debt Discounts | 689,556 |
Convertible Note paid off in cash | $ 300,000 |
Long-term Debt, Description | Company issued a note for $25,000 |
Convertible Note Payable 1 | |
Debt Conversion, Converted Instrument, Amount | $ 351,271 |
Debt Instrument, Convertible, If-converted Value in Excess of Principal | $ 26,271 |
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 |
Conversion Price | $ / shares | $ 0.10 |
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 9.99% |
Convertible Note Payable 2 | |
Debt Conversion, Converted Instrument, Amount | $ 3,858,578 |
Debt Instrument, Convertible, If-converted Value in Excess of Principal | $ 198,578 |
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 |
Conversion Price | $ / shares | $ 0.50 |
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 9.99% |
Liquidation Preference | $ / shares | $ 0.001 |
9. Stockholders' Equity (Detail
9. Stockholders' Equity (Details) | 12 Months Ended |
Jun. 30, 2016USD ($)shares | |
Unrelated party in exchange for financial advisory and investment banking services | |
Stock Issued During Period, Shares, New Issues | shares | 1,000,000 |
Stock Issued During Period, Value, New Issues | $ 2,000,000 |
Issued for services | |
Stock Issued During Period, Shares, New Issues | shares | 400,000 |
Stock Issued During Period, Value, New Issues | $ 800,000 |
Certain unpatented mining claims | |
Stock Issued During Period, Shares, New Issues | shares | 300,000 |
Stock Issued During Period, Value, New Issues | $ 450,000 |
Settlement of an outstanding payable | |
Stock Issued During Period, Value, New Issues | $ 300,000 |
Auction Market Preferred Securities, Shares, Issued | shares | 79,530 |
Repayments of Debt | $ 79,530 |
Allocated Share-based Compensation Expense | $ 220,470 |
Two unrelated parties as settlement of outstanding payables | |
Stock Issued During Period, Shares, New Issues | shares | 169,505 |
Stock Issued During Period, Value, New Issues | $ 339,009 |
Repayments of Debt | 109,159 |
Allocated Share-based Compensation Expense | 229,850 |
Officers and Directors for compensation | |
Stock Issued During Period, Value, New Issues | $ 40,000 |
Auction Market Preferred Securities, Shares, Issued | shares | 20,000 |
Third party for consulting services | |
Stock Issued During Period, Shares, New Issues | shares | 1,250,000 |
Stock Issued During Period, Value, New Issues | $ 1,501,837 |
10. Stock Options and Warrants
10. Stock Options and Warrants (Details) | 12 Months Ended |
Jun. 30, 2016$ / sharesshares | |
On September 8, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | shares | 4,690,339 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 0.50 |
On October 21, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | shares | 450,000 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 0.50 |
10. Stock Options and Warrant52
10. Stock Options and Warrants: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | Jun. 30, 2015 | Jun. 30, 2016 |
Fair Value Assumptions, Risk Free Interest Rate | 0.11% | |
Fair Value Assumptions, Expected Volatility Rate | 211.00% | |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | |
Minimum | ||
Fair Value Assumptions, Expected Term | 5 months 23 days | |
Maximum | ||
Fair Value Assumptions, Expected Term | 1 year 14 days | |
Options Held | ||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | |
Options Held | Minimum | ||
Fair Value Assumptions, Risk Free Interest Rate | 1.44% | |
Fair Value Assumptions, Expected Volatility Rate | 312.48% | |
Fair Value Assumptions, Expected Term | 2 years 6 months | |
Options Held | Maximum | ||
Fair Value Assumptions, Risk Free Interest Rate | 2.48% | |
Fair Value Assumptions, Expected Volatility Rate | 321.74% | |
Fair Value Assumptions, Expected Term | 5 years 10 months 24 days |
11. Income Taxes_ Schedule of53
11. Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 2,873,323 | $ 2,504,070 |
Deferred Tax Assets, Valuation Allowance | (2,873,323) | (2,504,070) |
Deferred Tax Assets, Net | $ 0 | $ 0 |
12. Commitments and Contingen54
12. Commitments and Contingencies: Aggregate future commitment under employment agreements (Details) | Jun. 30, 2016USD ($) |
Employment Agreement Commitment, 12 month ending June 30, | |
Other Commitment, Due in Next Twelve Months | $ 215,000 |
Other Commitment, Due in Second Year | 44,767 |
Employment agreement commitment | $ 259,767 |
12. Commitments and Contingen55
12. Commitments and Contingencies (Details) | 12 Months Ended |
Jun. 30, 2016USD ($) | |
Details | |
Loss Contingency, Lawsuit Filing Date | November 16, 2015 |
Loss Contingency, Name of Plaintiff | SiberLaw LLP |
Loss Contingency, Name of Defendant | Visual Real Estate, Inc. |
Loss Contingency, Damages Sought, Value | $ 146,736.43 |
13. Subsequent Events (Details)
13. Subsequent Events (Details) | 12 Months Ended |
Jun. 30, 2016shares | |
On September 1, 2016 | |
Subsequent Event, Description | the Company formed a wholly owned subsidiary, Rabbit Drones, Inc. |
In October, 2016 | |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 52,806 |
Conversion of Stock, Shares Converted | 52,806 |
In the period from November to December 2016 | |
Stock Issued During Period, Shares, Other | 15,475,000 |
Debt Conversion, Converted Instrument, Warrants or Options Issued | 15,475,000 |
In January 2017 (1) | |
Subsequent Event, Description | Company entered into employment agreements with the Chief Executive Officer and Chief Financial Officer |
In January 2017 (2) | |
Subsequent Event, Description | the subsidiary LocatorX entered into royalty fee agreement that replaced the prior royalty fee agreement |
In March 2017 (1) | |
Debt Conversion, Converted Instrument, Warrants or Options Issued | 580,000 |
In March 2017 (2) | |
Stock Issued During Period, Shares, Other | 4,400,000 |
In March 2017 (3) | |
Stock Issued During Period, Shares, Issued for Services | 5,600,000 |
In March 2017 (4) | |
Stock Issued During Period, Shares, Issued for Services | 2,500,000 |
In March 2017 (5) | |
Stock Issued During Period, Shares, Other | 85,000 |