Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Oct. 12, 2013 | |
Document And Entity Information | ||
Entity Registrant Name | INFRAX SYSTEMS, INC. | |
Entity Central Index Key | 1380277 | |
Document Type | 10-K | |
Document Period End Date | 30-Jun-13 | |
Amendment Flag | TRUE | |
Amendment Description | Filed amendment to update XBRL detail tagging | |
Current Fiscal Year End Date | -24 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $600,000 | |
Entity Common Stock, Shares Outstanding | 108,212,682 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2013 |
Balance_Sheets
Balance Sheets (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Current assets | ||
Cash | $300 | $2,072 |
Accounts receivable | 19,256 | 65,233 |
Inventory | 31,538 | 63,076 |
Loan receivable from affiliate | 2,221 | 1,943 |
Note receivable | 50,000 | |
Total current assets | 53,315 | 182,324 |
Property & equipment, net of accumulated depreciation of $106,345 and $72,199, respectively | 74,462 | 108,608 |
Intangible property, net of accumulated amortization of $4,572,532and $2,943,655, respectively | 3,442,842 | 5,071,719 |
Deposits | 4,500 | 7,000 |
Total Assets | 3,575,119 | 5,369,651 |
Current liabilities | ||
Accounts payable | 137,629 | 452,818 |
Accrued expenses | 1,091,589 | 1,040,287 |
Customer deposits and deferred revenue | 68,158 | |
Notes payable | 724,500 | 774,500 |
Loans and notes payable, related parties | 7,403 | |
Total current liabilities | 2,021,876 | 2,275,008 |
Notes payable to Shareholder | 762,588 | 468,769 |
Total liabilities | 2,784,464 | 2,743,777 |
Stockholders' Equity | ||
Common Stock, $.001 par value, 100,000,000 shares authorized; 103,212,682 and 98,580,428 shares issued and outstanding, respectively | 103,213 | 98,580 |
Additional paid-in capital | 13,680,620 | 13,099,847 |
Minority interest in subsidiary | -183,033 | -16,769 |
Accumulated deficit | -12,812,683 | -10,558,309 |
Total stockholders' equity | 790,655 | 2,625,874 |
Total Liabilities and Stockholders' Equity | 3,575,119 | 5,369,651 |
Series A Convertible | ||
Stockholders' Equity | ||
Preferred Stock, 50,000,000 authorized, $.001 par value, Series A Convertible: 5,000,000 shares designated; 2,523,624 and 2,523,624 issued and outstanding, Series B Convertible: 100,000,000 shares designated; 13,540 and 1,210 issued and outstanding | 2,525 | 2,525 |
Series B Convertible | ||
Stockholders' Equity | ||
Preferred Stock, 50,000,000 authorized, $.001 par value, Series A Convertible: 5,000,000 shares designated; 2,523,624 and 2,523,624 issued and outstanding, Series B Convertible: 100,000,000 shares designated; 13,540 and 1,210 issued and outstanding | $13 | $1 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Accumulated depreciation (in Dollars) | $106,345 | $72,199 |
Accumulated amortization (in Dollars) | $4,572,532 | $2,943,655 |
Preferred stock, shares outstanding (in Shares) | 2,537,164 | |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in Shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in Shares) | 103,212,682 | 103,212,682 |
Common stock, shares outstanding (in Shares) | 98,580,428 | 98,580,428 |
Series A Convertible | ||
Preferred Stock, shares authorized (in Shares) | 50,000,000 | 50,000,000 |
Preferred Stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred Stock Designated | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in Shares) | 2,523,624 | 2,523,624 |
Preferred stock, shares outstanding (in Shares) | 2,523,624 | 2,523,624 |
Series B Convertible | ||
Preferred Stock, shares authorized (in Shares) | 50,000,000 | 50,000,000 |
Preferred Stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred Stock Designated | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in Shares) | 13,540 | 1,210 |
Preferred stock, shares outstanding (in Shares) | 13,540 | 1,210 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Statement [Abstract] | ||
Revenues | $116,776 | $377,390 |
Direct costs | 11,913 | 47,865 |
Gross Profit | 104,863 | 329,525 |
Operating expenses: | ||
Salaries and benefits | 627,885 | 1,524,568 |
Consulting | 10,610 | |
Professional fees | 50,661 | 171,153 |
General and administrative | 140,102 | 366,793 |
Amortization and depreciation | 1,663,023 | 1,662,684 |
Total operating expenses | 2,481,671 | 3,735,808 |
Other income (expense): | ||
Interest expenses | -43,830 | -52,566 |
Equity losses of investee | -25,322 | |
Total other income (expense) | -43,830 | -77,888 |
Loss from operations before income taxes | -2,420,638 | -3,484,171 |
Provision for income taxes | ||
Loss of income after taxes | -2,420,638 | -3,484,171 |
Minority Interest | 166,264 | 22,216 |
Net loss | ($2,254,374) | ($3,461,955) |
Earnings (loss) per share: | ||
Basic and dilutive | ($0.02) | ($0.14) |
Weighted average shares outstanding | ||
Basic and dilutive | 102,053,173 | 24,885,619 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Cash Flows from Operating Activities: | ||
Net loss | ($2,254,374) | ($3,461,955) |
Adjustment to reconcile Net Income to net cash provided by operations: | ||
Depreciation and amortization | 1,663,023 | 1,662,684 |
Issuance of stock in settlement of services | 71,614 | 1,397,982 |
Amortization of deferred revenue | -64,821 | |
Loss on sale of assets | 25,322 | |
Impairment loss | 31,538 | |
Minority interest | -166,264 | -22,216 |
Changes in assets and liabilities: | ||
Accounts receivable | 45,977 | -43,183 |
Inventory | -7,626 | |
Due from affiliate | -1,943 | |
Prepaid and other | 2,222 | |
Accounts payable | -294,279 | 18,029 |
Accrued expenses | 544,197 | 151,179 |
Customer deposits and deferred revenue | 132,979 | |
Net Cash (Used) in Provided by Operating Activities | -288,188 | -281,727 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | -1,713 | |
Proceeds from sale of assets | 28,741 | |
Decrease (increase) in other assets | -4,500 | |
Net Cash (Used) in Investing Activities | 22,528 | |
Cash Flows from Financing Activities: | ||
Related party advances | 286,416 | 235,773 |
Net Cash (Used) Provided by Financing Activities | 286,416 | 235,773 |
Net increase/decrease in Cash | -1,772 | -23,426 |
Cash at beginning of period | 2,072 | 25,498 |
Cash at end of period | 300 | 2,072 |
Supplemental cash flow information: | ||
Interest paid | ||
Taxes paid | ||
Supplemental Schedule of Noncash Investing and Financing Activities | ||
Issuance of common stock in exchange of debt | 341,961 | |
Issuance of preferred stock in exchange for accrued salaries | 492,895 | |
Issuance of common stock in satisfaction of payables | $20,910 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders Equity (USD $) | Preferred Stock | Preferred A | Preferred A-1 | Preferred A-2 | Preferred B | Common | Common | Common | Common | Additional Paid-In Capital | Additional Paid-In Capital | Additional Paid-In Capital | Additional Paid-In Capital | Additional Paid-In Capital | Subscription | Minority Interest | Accumulated Deficit Development Stage | Total |
Common Stock from Conversion of Preferred A | Common Stock from Conversion of Preferred A1 | Common Stock from Conversion of Preferred A2 | Common Stock from Conversion of Preferred A | Common Stock from Conversion of Preferred A1 | Common Stock from Conversion of Preferred A2 | Common Stock from Conversion of Preferred B | ||||||||||||
Beginning Balance, Value at Jun. 30, 2011 | $643 | $6,283 | $11,451,683 | $408 | $5,447 | ($7,096,354) | $4,368,110 | |||||||||||
Beginning Balance, Shares at Jun. 30, 2011 | 643,466 | 6,282,275 | ||||||||||||||||
Stock for services, Shares | 10,099,612 | |||||||||||||||||
Stock for services, Value | 10,100 | 1,387,982 | 1,397,982 | |||||||||||||||
Conversion of preferred to common, Shares | -200,000 | -52,425 | -18,542 | -247,665 | 75,000,000 | 4,665,825 | 370,840 | |||||||||||
Conversion of preferred to common, Value | -200 | -52 | -18 | -248 | 75,000 | 4,665 | 370 | -74,800 | -4,614 | -352 | 248 | |||||||
Issuance of Preferred Shares, Shares | 2,400,000 | |||||||||||||||||
Issuance of Preferred Shares, Value | 2,400 | 2,400 | ||||||||||||||||
Notes Payable converted to common, Shares | 2,161,876 | |||||||||||||||||
Notes Payable converted to common, Value | 2,162 | 339,800 | 341,962 | |||||||||||||||
Cancellation of Subscription | -408 | |||||||||||||||||
Net loss | -22,216 | -3,461,955 | -3,484,171 | |||||||||||||||
Ending Balance, Value at Jun. 30, 2012 | 2,538 | 98,580 | 13,099,847 | -16,769 | -10,558,309 | 2,625,874 | ||||||||||||
Ending Balance, Shares at Jun. 30, 2012 | 2,537,164 | 98,580,428 | 2,013 | |||||||||||||||
Shares for accounts payable, Shares | 978,500 | |||||||||||||||||
Shares for accounts payable, Value | 979 | 19,931 | 20,910 | |||||||||||||||
Conversion of salaries payable, Shares | 12,330 | |||||||||||||||||
Conversion of salaries payable, Value | 13 | 492,882 | 492,895 | |||||||||||||||
Stock for services, Shares | 3,653,754 | |||||||||||||||||
Stock for services, Value | 3,654 | 67,960 | 71,614 | |||||||||||||||
Net loss | -166,264 | -2,254,374 | -2,437,408 | |||||||||||||||
Ending Balance, Value at Jun. 30, 2013 | $2,538 | $103,213 | $13,680,620 | ($183,033) | ($12,812,683) | $790,655 | ||||||||||||
Ending Balance, Shares at Jun. 30, 2013 | 2,537,164 | 103,212,682 | 30 |
1_History_of_the_Company_and_N
1. History of the Company and Nature of the Business | 12 Months Ended |
Jun. 30, 2013 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure | History of the Company |
Infrax Systems, Inc. (formerly OptiCon Systems, Inc.) (“ the Company ”, “Infrax” ) was formed as a Nevada corporation on October 22, 2004. On July 29, 2005, the stockholders of the Company entered into an agreement to exchange 100% of the outstanding common stock of the Company, for common and preferred stock of FutureWorld Energy, Inc. (formerly Isys Medical, Inc.), a publicly traded company, at which time, the Company became a wholly owned subsidiary of FutureWorld Energy, Inc.. | |
FutureWorld Energy, Inc. (“FutureWorld” ), Infrax’s parent company, announced its intention to spin off Infrax (formerly OptiCon Systems, Inc.) through by the payment of a stock dividend. In connection with the proposed spinoff, Infrax’s board of directors approved a stock dividend of 99,118 shares to FutureWorld, its sole shareholder. On August 31, 2007, FutureWorld paid a stock dividend to its stockholders, consisting of 100% of the outstanding common stock of the Company, at the rate of one share of Infrax’s stock for every two shares they own of FutureWorld. As of August 31, 2007, Infrax ceased being a subsidiary of FutureWorld. | |
Nature of Business | |
Since its inception, the Company has been dedicated to selling and/or licensing a fiber optic management software system under the name OptiCon Network Manager, originally developed, and acquired from Corning Cable System, Inc. through a related company, FutureTech Capital, LLC. In October 2009, the Company began developing smart grid energy related products. | |
While we continue to enhance the OptiCon Network Management platform, the Company has shifted its focus and energies towards the “Smart Grid” energy sector. The Company believes our secure integrated platform will hasten the deployment of all Smart Grid technology for resource constrained small and mid-sized utilities. Infrax’s advantage comes from our products ability to enable the creation of a secure platform scalable to deliver a broad set of intelligent Smart Grid initiatives across millions of endpoints for Utilities. | |
As of June 29, 2010, the Company acquired the assets and management of Trimax Wireless Systems, Inc. (“Trimax”), in exchange for equity and a note payable. The Trimax product line is expected to provide an operating platform and enhanced operating effectiveness to the OptiCon Network Manager. Furthering our development towards becoming a leader in the emerging smart-grid industry, on April 8, 2011 we acquired a 70% controlling interest in Lockwood Technology Corporation, to supply RFID and asset tracking, among other technology value to our product lines |
2_Summary_of_Significant_Accou
2. Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Summary Of Significant Accounting Policies | |||||||||
Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||
Basis of Accounting | |||||||||
The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates. | |||||||||
Use of Estimates | |||||||||
The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates. | |||||||||
Principles of Consolidation | |||||||||
The consolidated financial statements include the accounts and operations of Infrax Systems, Inc., and its subsidiaries, Infrax Systems SA (Pty) Ltd (100%). and Lockwood Technology Corporation (70%), net of minority interests (collectively referred to as the “Company”). Accordingly, the assets and liabilities, and expenses of this company have been included in the accompanying consolidated financial statements, and material intercompany transactions have been eliminated. | |||||||||
The Trimax Wireless, Inc. acquisition was effective June 29, 2010. The agreement acquired all the assets and certain liabilities of Trimax Wireless, Inc. As an asset purchase the acquired assets and liabilities are included in the accounts of Infrax Systems, Inc. | |||||||||
The Company acquired a controlling interest (70%) of Lockwood Technology Corporation (“LTC”) on May 8, 2011. LTC’s activities, during the period of ownership, have been included in the reported consolidated financial statements. | |||||||||
Development Stage Enterprise | |||||||||
The Company, in prior periods, presented financial statements as a development stage enterprise. In the initial years the Company, devoted substantially all of its efforts to raising capital, planning and implementing the principal operations. The Company may continue to incur significant operating losses and to generate negative cash flow from operating activities. The Company's ability to eliminate operating losses and to generate positive cash flow from operations in the future will depend upon a variety of factors, many of which it is unable to control. However, based on current and subsequent events, primarily the acquisitions of Trimax Wireless Systems, Inc. and Lockwood Technology Corporation, management believes that the Company has established the primary business development plan. | |||||||||
Variable Interest Entities | |||||||||
The Company considers the consolidation of entities to which the usual condition (ownership of a majority voting interest) of consolidation does not apply, focusing on controlling financial interests that may be achieved through arrangements that do not involve voting interest. If an enterprise holds a majority of the variable interests of an entity, it would be considered the primary beneficiary. The primary beneficiary is generally required to consolidate assets, liabilities and non-controlling interests at fair value (or at historical cost if the entity is a related party) and subsequently account for the variable interest as if it were consolidated based on a majority voting interest. The Company has evaluated all related parties, contracts, agreements and arrangements in which it may hold a variable interest. All companies identified have been included in the consolidated financial statements. | |||||||||
Financial Instruments | |||||||||
The Company’s balance sheets include the following financial instruments: cash, accounts receivable, notes receivable, inventory, accounts payable and note payable and notes payable to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the note payable to stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities. | |||||||||
In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||
· | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities | ||||||||
· | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||
· | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. | ||||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, accrued compensation and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. | |||||||||
The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements. | |||||||||
As of June 30, 2013 and 2012, the fair values of the Company’s financial instruments approximate their historical carrying amount. | |||||||||
Cash and Cash Equivalents | |||||||||
The majority of cash is maintained with major financial institutions in the United States. Deposits with these banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||
Accounts Receivable and Credit | |||||||||
Accounts receivable consist of amounts due for the delivery of sales or services to its customers. Prepayments on account are recorded as customer deposit, a current liability. An allowance for doubtful accounts is considered to be established for any amounts that may not be recoverable, which is based on an analysis of the Company’s customer credit worthiness, and current economic trends. Based on management’s review of accounts receivable, no allowance for doubtful accounts was considered necessary. Receivables are determined to be past due, based on payment terms of original invoices. The Company does not typically charge interest on past due receivables. | |||||||||
Inventories | |||||||||
Inventories are stated at the lower of standard cost or market, which approximates actual cost. Cost is determined using the first-in, first-out method. Inventory is comprised of component parts and accessories available for sale. Parts are generally purchased for projects, as minimal inventory is held to supply customers. | |||||||||
Property & Equipment | |||||||||
Property and equipment are recorded at historical cost or acquisition value. Depreciation is computed on the straight-line method over estimated useful lives of the respective assets, ranging from three to five years. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon the Company's most recent analysis, management believes that no impairment of property and equipment exists at June 30, 2013 and 2012. | |||||||||
Intangible Property | |||||||||
On June 29, 2010 the Company acquired the assets of Trimax Wireless Systems, Inc., including licenses and trademarks. The purchase price was allocated first to the identifiable assets received, allocating the remaining costs to the intellectual property. The valuation considered future cash flows of the operating intangible assets acquired. The valuation of the intellectual property was limited to the acquisition price, less the fair market value of identifiable assets. The acquisition carrying value of the intellectual property was $6,329,342. Intellectual property has an estimated useful life of 15 years. | |||||||||
On May, 2011 the Company completed the acquisition of controlling interest (70%) in Lockwood Technology Corporation, in exchange for stock and certain considerations (cash and warrants). The shares were issued at the fair market value at the date of the transaction ($1,650,000) and warrants were valued using an option price model ($477,900). The total purchase price, net of cash, notes receivable, and net assets acquired was $1,956,158. The Company recognized an immediate impairment in the amount of $641,008 in consideration of its analysis of future discounted cash flows and industry multiples of the acquired Company, resulting in a net intangible assets of $1,315,150. Management’s allocation of the purchase price was based on our assessment of the fair market value of the assets acquired, in accordance with Accounting Standard Codification, Topic 805. Fixed assets and other tangible assets were evaluated for market value. There were no identifiable assets that had any significant appreciation or impairment; therefore those assets have been brought over at the historical basis, net of depreciation. The analysis of the intangible values purchased were allocated to the Lockwood customer list (30% or $394,550) and the developed software and licensing technology (70% or $920,600). | |||||||||
Capitalized Software Development Costs | |||||||||
The Company capitalizes software development costs, under which certain software development costs incurred subsequent to the establishment of technological feasibility have been capitalized and are being amortized over the estimated lives of the related products. Capitalization of computer software costs is discontinued when the computer software product is available to be sold, leased, or otherwise marketed. | |||||||||
Amortization begins when the product is available for release and sold to customers. Software development costs will be amortized based on the estimated economic life of the product, anticipated to be 10 years. | |||||||||
Impairment of Long-Lived Assets | |||||||||
Periodically, the Company assesses the recoverability of the Company’s intangible assets, consisting of the Trimax acquired intellectual property, OptiCon Network Manager software and its trademark, and record an impairment loss to the extent that the carrying amounts of the assets exceed its fair value. Based upon management's most recent analysis, the Company believes that no impairment of the Company’s tangible or intangible assets exist at June 30, 2013 and 2012, as reported. Certain impairments have been recorded to reflect the net realizable value of the associated assets, based on fair value (inventory) or discounted cash flows (goodwill and intangibles). | |||||||||
Revenue Recognition | |||||||||
The Company is principally in the business of providing solutions for a secure intelligent energy platform that incorporates our secure wireless technology. Contracts include multiple revenue components, comprised of our software licensing, hardware platforms, installation, training and maintenance. In accordance with ASC 605-25 Multiple-Element Arrangements, revenue from licensing the software will be recognized upon installation and acceptance of the software by customers. When a software sales arrangement includes rights to customer support, the portion of the license fee allocated to such support is recognized ratably over the term of the arrangement, normally one year. Revenue from professional services arrangements will be recognized in the month in which services are rendered over the term of the arrangement. | |||||||||
Revenue associated with software sales to distributors is recognized, net of discounts, when the Company has performed substantially all its obligations under the arrangement. Until such time as substantially all obligations under the arrangement are met, software sales are recognized as deferred revenue. Costs and expenses associated with deferred revenue are also deferred. When a software sales arrangements include a commitment to provide training and/or other services or materials, the Company estimates and records the expected costs of these training and/or other services and/or materials. | |||||||||
Stock Based Compensation | |||||||||
The Company issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. Stock compensation for the periods presented were issued to consultants for past services provided, accordingly, all shares issued are fully vested, and there is no unrecognized compensation associated with these transactions. | |||||||||
Shipping Costs | |||||||||
The Company includes shipping costs and freight-in costs in cost of goods sold. | |||||||||
Advertising Costs | |||||||||
The costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. Advertising expense was $0 and $8,506 for the years ended June 30, 2013 and 2012, respectively | |||||||||
Research and Development | |||||||||
The Company expenses research and development costs when incurred. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. | |||||||||
Income Taxes | |||||||||
The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. | |||||||||
Earnings (Loss) Per Share | |||||||||
Basic EPS is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted EPS is similarly calculated, except that the denominator includes common shares that may be issued subject to existing rights with dilutive potential, except when their inclusion would be anti-dilutive. | |||||||||
Based on an estimated current value of the Company’s stock being equal to or less than the exercise price of the warrants, none of the shares assumed issued upon conversion of the warrants, nor any of the stock assumed issued under the Company's 2004 Non statutory Stock Option Plan, are included in the computation of fully diluted loss per share, since their inclusion would be anti-dilutive. Convertible preferred shares have been included in the dilutive computation, as if they would have been converted at the end of the period. | |||||||||
June 30, 2013 | 30-Jun-12 | ||||||||
Earnings (Loss) per share: | |||||||||
Net Loss | $ | -2,254,374 | $ | -3,461,955 | |||||
Common shares | 103,212,682 | 98,580,428 | |||||||
Common share equivalents | 907,044,437 | 903,345,437 | |||||||
Dilutive common shares | 1,010,257,119 | 1,001,925,865 | |||||||
Earnings (loss) per share, basic | $ | -0.02 | $ | (0.04 | ) | ||||
Earnings (loss) per share, dilutive | $ | 0 | $ | (0.00 | ) | ||||
Impact of Recently Issued Accounting Pronouncements | |||||||||
The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2013 through the date these financial statements were issued. |
3_Going_Concern
3. Going Concern | 12 Months Ended |
Jun. 30, 2013 | |
Going Concern | |
Going Concern | As of June 30, 2013, the Company has a working capital deficit and has incurred a loss from operations and recurring losses since its inception resulting in a significant accumulated deficit. As of June 30, 2013, the Company had negative working capital in excess of $1.9 million, and approximately $300 in cash with which to satisfy any future cash requirements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company depends upon capital to be derived from future financing activities such as loans from its officers and directors, subsequent offerings of its common stock or debt financing in order to operate and grow the business. There can be no assurance that the Company will be successful in raising such capital. The key factors that are not within the Company's control and that may have a direct bearing on operating results include, but are not limited to, acceptance of the Company’s business plan, the ability to raise capital in the future, to continue receiving funding from its officers, directors and shareholders, the ability to expand its customer base, and the ability to hire key employees to grow the business. There may be other risks and circumstances that management may be unable to predict. |
4_Property_and_Equipment
4. Property and Equipment | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
Disclosure - 4. Property and Equipment | 4. Property and Equipment | ||||||||
Property and equipment consists of the following: | |||||||||
June 30, 2013 | 30-Jun-12 | ||||||||
Office and computer equipment | $ | 120,636 | $ | 120,636 | |||||
Furniture and fixtures | 54,703 | 54,703 | |||||||
Computer software | 5,468 | 5,468 | |||||||
180,807 | 180,807 | ||||||||
Accumulated depreciation | 106,345 | 72,199 | |||||||
$ | 74,462 | $ | 108,608 | ||||||
For the years ended June 30, 2013 and 2012 the total depreciation expense charged to operations totaled $34,146 and 34,578, respectively |
5_Intangible_Assets_and_Goodwi
5. Intangible Assets and Goodwill | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
Disclosure - 5. Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill | ||||||||
Intangible assets consist of the following: | |||||||||
June 30, 2013 | 30-Jun-12 | ||||||||
Opticon fiber optic management software | $ | 189,862 | $ | 189,862 | |||||
Trademarks | 1,000 | 1,000 | |||||||
TriMax intellectual property | 6,329,342 | 6,329,342 | |||||||
TriMax software | 180,020 | 180,020 | |||||||
Lockwood customer list | 394,550 | 364,550 | |||||||
Lockwood licensing and technology | 920,600 | 920,600 | |||||||
8,015,374 | 8,015,374 | ||||||||
Accumulated amortization | 4,572,532 | 2,943,655 | |||||||
$ | 3,442,842 | $ | 5,071,719 | ||||||
For the years ended June 30, 2013 and 2012 the total amortization expense charged to operations totaled $1,628,877 and $1,313,241, respectively. | |||||||||
Future amortization of intangible property is expected as follows: | |||||||||
For the year ended June 30,: | |||||||||
2014 | 1,647,663 | ||||||||
2015 | 1,647,663 | ||||||||
2016 | 128,130 | ||||||||
thereafter | -- | ||||||||
$ | 3,423,456 | ||||||||
Opticon fiber optic management software | |||||||||
The Company purchased all rights, titles and interest in the Opticon fiber optic management software on July 26, 2005, from FutureTech, LLC. in exchange for common stock. The agreement became effective upon FutureTech purchasing the acquired assets from Corning Cable Systems, LLC in exchange for $100,000 in cash. The Company recorded the common stock at the transferor’s historical cost basis determined under generally accepted accounting principles. | |||||||||
On July 26, 2005, the Company purchased the OptiCon Network Manager software system which consisted of version R3 and R4. At the time of the purchase, the software system was out of date and had to be updated and integrated with other current business software systems, before it could be distributed to customers. The development of R3 software system was completed during the quarter ended December 31, 2006, and is available for distribution to customers. In September 2010 a transfer of 50% of the R3 license was returned to FutureTech, LLC at a carrying cost value of $22,250. | |||||||||
During the years ended June 30, 2013 and 2012, the Company did not allocate any direct labor costs, and indirect costs and expenses to this effort. The capitalized software costs are amortized when the software is actually sold to customers. Amortization is provided based on the number of software units sold relative to the number of expected to be sold during the software’s economic life. At June 30, 2013 and 2012 amortization expense was $0 and $200, respectively. | |||||||||
TriMax intellectual property | |||||||||
On June 29, 2010 the Company acquired the assets of Trimax Wireless Systems, Inc., including licenses and trademarks. The purchase price was allocated first to the identifiable assets received, allocating the remaining costs to the intellectual property. The valuation considered future cash flows of the operating intangible assets acquired. The valuation of the intellectual property was limited to the acquisition price (valuation of stock consideration and note payable), less the fair market value of identifiable assets. The shares issued in exchange for the acquired property were valued at the fair market value of the equivalent common stock as of the date of closing. The acquisition carrying value assigned to the intellectual property was $6,329,342. At June 30, 2013 and 2012 amortization expense was $1,628,877 and $1,313,241, respectively. | |||||||||
TriMax software | |||||||||
Software development costs, in the amount of $180,020, were acquired in the Trimax acquisition. The proprietary software was an identified asset of the acquisition and valued at cost. The capitalized software is available for sale and is to be amortized over a 5 year period. At June 30, 2013 and 2012 amortization expense was $25,717 and $36,004, respectively. | |||||||||
Lockwood Technology Corporation | |||||||||
On June 30, 2011 the Company completed the acquisition of controlling interest in Lockwood Technology Corporation, a leading RFID software and hardware solutions provider, from Daedalus Capital, LLC. Infrax Systems acquired 70% interest in exchange for stock and certain considerations, including a $50,000 note receivable (due in 180 days) from the sellers to Infrax and $112,000 in cash received by Infrax at closing. Additionally, warrants were issued for the purpose of possible future investment capital, to be received by Infrax. Shares were issued at the fair market value at the date of the transaction ($1,650,000). The agreement included warrants for the purchase of 660,000 (post reverse split) common shares at an exercise price of $5.00 (split adjusted, for a term of 3 years. The warrants are callable by Infrax at certain fair market values of the common stock. Warrants were valued at $477,900 using an option price model (assumptions used in calculation: volatility 400%; risk free rate 1.02%; dividend rate 0%). The total purchase price, net of cash, notes receivable, and net assets acquired was $1,956,158 and was allocated to goodwill. The Company recognized an immediate impairment in the amount of $641,008 in consideration of its analysis of future discounted cash flows and industry multiples of the acquired Company, resulting in a net intangible assets of $1,315,150. Infrax also plans to utilize their expertise in future smart grid deployment projects. Management’s allocation of the purchase price was based on our assessment of the fair market value of the assets acquired, in accordance with Accounting Standard Codification, Topic 805. Fixed assets and other tangible assets were evaluated for market value. There were no identifiable assets that had any significant appreciation or impairment; therefore those assets have been brought over at the historical basis, net of depreciation. The analysis of the intangible values purchased were allocated to the Lockwood customer list (30% or $394,550) and the developed software and licensing technology (70% or $920,600). |
6_Accrued_Expenses
6. Accrued Expenses | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
Disclosure - 6. Accrued Expenses | 6. Accrued Expenses | ||||||||
Accrued expenses at June 30, 2013 and 2012 were as follows: | |||||||||
June 30, 2013 | 30-Jun-12 | ||||||||
Accrued salaries | $ | 840,280 | $ | 687,656 | |||||
Accrued consulting | - | 137,118 | |||||||
Accrued professional | - | 95,176 | |||||||
Accrued interest | 159,212 | 115,382 | |||||||
Accrued expenses | 92,097 | 4,955 | |||||||
$ | 1,091,589 | $ | 1,040,287 |
7_Debt_Agreements
7. Debt Agreements | 12 Months Ended |
Jun. 30, 2013 | |
Notes to Financial Statements | |
Disclosure - 7. Debt Agreements | 7. Debt Agreements |
On June 29, 2010 the Company entered into an agreement with the shareholders of Trimax Wireless, Inc. (“Trimax”) for the purchase of their business assets and technology for preferred shares of the Company, the assumption of certain liabilities and a note payable, in the amount of $712,500. The note is interest bearing at 6% per annum until fully paid with a start period of 90 (September 29, 2010) days for the first payment. The Company shall make interest-only payments on the first day of each month from the date of this Note until the earlier of (a) receipt of Investment Funding as defined; or (b) 180 days from the date hereof ("Maturity Date") (December 29, 2010). Principal plus all accrued and unpaid interest on such principal shall be due and payable on the Maturity Date. As of the balance sheet date the Company is currently in default, as no payments have been made on this loan and is currently in negotiations to extend terms. See note 14, legal matters. | |
The Company has a Master Note Agreement, as an unsecured line of credit, from Mr. Sam Talari. The Master Note is for operational capital, in the amount of $350,000 and bears interest at 5% per annum. Mr. Talari has pledged additional funding for operating capital, up to $500,000 as evidenced by agreement. Subsequent to the year end, Mr. Talari has pledged a total of $1 million dollars, under the same terms as the original Master Note |
8_Related_Parties_Disclosures_
8. Related Parties Disclosures (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Notes to Financial Statements | |
Disclosure - 8. Related Parties Disclosures (USD $) | 8. Related Parties Disclosures |
Employment Agreements | |
The following agreements are with Shareholders, Directors and Members of the Board: | |
Sam Talari | |
Effective August 1, 2009, the Company entered into a three-year employment agreement with Sam Talari, one of the Company’s directors. The agreement was automatically renewed for an additional one-year period, and subsequently renewed by the Board for an additional one-year period through July 31, 2014. The Agreement provides for (a) a base salary of $15,000 per month, (b) a signing bonus equal to one month salary, (c) four weeks’ vacation within one year of the starting date, and (d) all group insurance plans and other benefit plans and programs made available to the Company’s management employees. | |
John Verghese | |
On October 19, 2010, as amended January 1, 2010, the Company entered into a three-year employment agreement with John Verghese as Director of Product Development, one of the Company’s directors. The Agreement provides for (a) a base salary of $6,500 per month, (b) a signing bonus of $10,000, (c) three weeks’ vacation within one year of the starting date, and (d) all group insurance plans and other benefit plans and programs made available to the Company’s management employees. Additionally Mr. Verghese has the option to purchase 360,000 shares of common stock at $.025 per share, ratably vesting at the employment anniversary date. | |
Terry Gardner | |
On April 2nd, 2012, the Company entered into a three-year employment agreement with Terry Gardner as VP of Professional Services. The Agreement provides for (a) a base salary of $10,000 per month, (b) a signing bonus of $30,000, (c) three weeks’ vacation within one year of the starting date, and (d) all group insurance plans and other benefit plans and programs made available to the Company’s management employees. Additionally Mr. Gardner has the option to purchase 300,000 shares of common stock at $.04 per share, ratably vesting at the employment anniversary date. | |
Malcolm F. Welch | |
On October 6, 2009, the Company entered into a one-year employment agreement with Malcolm F. Welch, one of the Company’s directors and Co-Chairman of the Board. The agreement is automatically extended for successive one one-year periods, unless previously terminated. The Agreement, as amended effective January 1, 2010 provides for (a) a base salary of $2,000 per month; (b) eligibility to receive 375,000 shares of the Company’s common stock based on the employee’s achievement of goals and objectives approved by the Board; (c) an option to purchase 375,000 shares of the Company common stock at $0.025 per share to be granted over a 3 years based on the achievement of goals and objectives established by the Board; (d) a bonus based on the level of funding the Company achieves through December 31, 2010 ; (e) two week vacation during first year of employment; and (f) all group insurance plans and other benefit plans and programs made available to the Company ’s management employees. | |
Other employment agreements exist with employees. As of June 30, 2013 and 2012, the accrued compensation under the employment agreements was $433,838 and $668,838, respectively. These amounts are included in the accrued expenses. | |
Line of Credit, Master Agreement | |
On September 1, 2005, Mr. Sam Talari, one of the Company’s directors, agreed to make advances to the Company as an interim unsecured loan for operational capital up to a maximum of $350,000, evidenced by a master promissory note, with interest at the rate of 5% per annum, based on amounts advanced from time to time, payable annually. Mr. Talari has pledged additional funding for operating capital, up to $500,000, under the same terms as the original Master Note. Mr. Talari, from time to time, has converted advances and accrued interest in exchange for equity shares. Mr. Talari continued making advances to the Company on the loan, of which $762,588 and $468,769 remains outstanding at June 30, 2013 and 2012, respectively. | |
Accounts Payable | |
The Company relies on advances from the majority shareholder and other key members. Advances are normally in the form of a loan. Payments are made on behalf of the Company by these individual and are treated as trade payables. These amounts are considered liquid and if payment is not made, may be formally converted in the form of a note. The Company currently has an aggregate of $56,185 and $56,185 due to two individuals as of June 30, 2013 and 2012. | |
Stock Transactions | |
N/A |
9_Stock_Options_and_Warrants
9. Stock Options and Warrants | 12 Months Ended | |||||||||||||||||
Jun. 30, 2013 | ||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||
Disclosure - 9. Stock Options and Warrants | 9. Stock Options and Warrants | |||||||||||||||||
On December 2, 2005, the Company granted two unrelated individuals Series A Warrants to purchase 4 shares, at an adjusted average exercise price of $17,300, as adjusted for the reverse split. All of the Warrants expired on November 11, 2011. All of the Warrants granted were non-qualified fixed price warrants. | ||||||||||||||||||
Weighted Average | Remaining | |||||||||||||||||
Options | Options | Intrinsic | Exercise | Contractual | ||||||||||||||
Outstanding | Vested | Value | Price | Term | ||||||||||||||
Options, June 30, 2011 | 4 | 4 | $ | 477,900 | $ | 0.5 | 3.0 years | |||||||||||
Granted | 660,000 | 660,000 | ||||||||||||||||
Exercised | 660,000 | 660,000 | ||||||||||||||||
Forfeited | 4 | 4 | ||||||||||||||||
Options, June 30, 2012 | 0 | 0 | ||||||||||||||||
Granted | 0 | 0 | 0 | 0 | 0.0 years | |||||||||||||
Exercised | 0 | 0 | ||||||||||||||||
Forfeited | - | - | ||||||||||||||||
Options, June 30, 2013 | - | - | ||||||||||||||||
The following are the weighted average assumptions for the options granted: | ||||||||||||||||||
Weighted Average: | ||||||||||||||||||
Dividend rate | 0 | % | ||||||||||||||||
Risk-free interest rate | 1.02 | % | ||||||||||||||||
Expected lives (years) | 5 | |||||||||||||||||
Expected price volatility | 400 | % | ||||||||||||||||
Forfeiture Rate | 0 | % |
10_Stock_Option_Plan_USD
10. Stock Option Plan (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Notes to Financial Statements | |
Disclosure - 10. Stock Option Plan (USD $) | 10. Stock Option Plan |
On October 22, 2004, the Company adopted a 2004 Non-statutory Stock Option Plan ( “Option Plan” ) for the benefit of its key employees (including officers and employee directors), consultants and affiliates. The Option Plan is intended to provide those persons who have substantial responsibility for the management and growth of the Company with additional incentives and an opportunity to obtain or increase their proprietary interest in the Company, encouraging them to continue in employment. | |
The Board of Directors authorized 120 shares of the Company's common stock to be set aside (adjusted for reverse split), which may be issued under the Option Plan. As of June 30, 2013 and 2012, no shares have yet been issued under the Option Plan. | |
On October 2, 2009, the Company adopted a 2009 Employees and Consultants Stock Compensation Plan (“Stock Plan”) for the benefit of employees and consultants (including officers and employee directors). The Stock Plan is intended to provide those persons who have substantial responsibility for the management and growth of the Company with additional incentives and an opportunity to obtain or increase their proprietary interest in the Company, encouraging them to continue in employment, and to pay independent consultants that perform services to the Company. The Board of Directors authorized 10,000 shares (adjusted for reverse split) of the Company's common stock to be set aside, which may be issued under the Stock Plan. | |
On July 2013, the Company adopted a 2013 Stock Incentive Plan and Management Incentive Bonus Plan (“The Plan”) to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to better align the interests of such persons with those of the Company’s stockholders. Management Incentive Bonus Plan (the "Plan") is to advance the interests of Infrax Systems, Inc. (the “Company”) by providing Participants (defined below) of the Company and its designated Subsidiaries (defined below) with additional incentive to promote the success of the business and to increase their vested interest in the success of the business and the Company, and to encourage them to remain employees, through the making of certain incentive cash bonus awards (the "Awards") linked to objectively determinable performance goals. The Awards granted under the Plan are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that any Award is subject to Section 409A, then the Plan as applied to that Award shall be interpreted and administered so that it is consistent with such Code section. The Board of Directors authorized 10,000,000 shares of the Company's common stock to be set aside, which may be issued under the Plan |
11_Income_Taxes
11. Income Taxes | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
Disclosure - 11. Income Taxes | 11. Income Taxes | ||||||||
Income tax benefit resulting from applying statutory rates in jurisdictions in which the Company is taxed (Federal and State of Florida) differs from the income tax provision (benefit) in our financial statements. The following table reflects the reconciliation for the years ended June 30, 2013 and 2012: | |||||||||
Year Ended June 30, | |||||||||
2013 | 2012 | ||||||||
Federal at federal statutory rate | -34 | % | -34 | % | |||||
State, net of federal deduction | -3.3 | % | -3.3 | % | |||||
Change in valuation allowance | 37.3 ‘ | % | 37.3 ‘ | % | |||||
Effective tax rate | 0.0 ’ | % | 0.0 ’ | % | |||||
There is no current or deferred income tax expense or benefit allocated to continuing operations for the years ended June 30, 2013 and 2012 or for the period October 22, 2004 (date of inception) through June 30, 2013. | |||||||||
The income tax provision differs from the amount of tax determined by applying the federal statutory rate as follows: | |||||||||
Year Ended | Year Ended | ||||||||
30-Jun-13 | June 30, 2012 | ||||||||
Income tax benefit at statutory rate | $ | -883,977 | $ | (1,308,200 | ) | ||||
Increase (decrease) in income taxes due to: | |||||||||
Change in valuation allowance | 883,977 | 1,308,200 | |||||||
$ | - | $ | - | ||||||
Net deferred tax assets and liabilities were comprised of the following: | |||||||||
For the Year Ended | |||||||||
30-Jun-13 | 30-Jun-12 | ||||||||
Deferred tax asset (liability), current: | |||||||||
Accounts receivable | 24,300 | 24,300 | |||||||
Accrued salaries | 256,500 | 256,500 | |||||||
Accrued consulting | 51,600 | 51,600 | |||||||
Accrued professional | 256,500 | 256,500 | |||||||
Accrued interest | 43,000 | 43,000 | |||||||
Accrued expenses | 1,800 | 1,800 | |||||||
Deferred revenue | - | - | |||||||
Valuation allowance | (421,200 | ) | (421,200 | ) | |||||
- | - | ||||||||
Deferred tax asset (liability), non-current | |||||||||
Net operating loss | 1,235,100 | 1,235,100 | |||||||
Property and equipment | (31,000 | ) | (31,000 | ) | |||||
Valuation allowance | (1,204,100 | ) | (1,204,100 | ) | |||||
- | - | ||||||||
The Company has not recognized an income tax benefit for its operating losses generated through June 30, 2013 or 2012 based on uncertainties concerning the Company’s ability to generate taxable income in future periods. The tax benefit is offset by a valuation allowance established against deferred tax assets arising from operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. | |||||||||
For income tax purposes the Company has available a net operating loss carry-forward of approximately $7,500,000 from inception to June 30, 2013, which will expire, unless used to offset future federal taxable income beginning in 2024. The tax years for June 2010, 2011 and 2012 are open for examination by state and federal agencies |
12_Capital_Equity
12. Capital Equity | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
Disclosure - 12. Capital Equity | |||||||||
12. Capital Equity | |||||||||
The Company has issued convertible preferred shares. Shares are convertible into the Company’s common stock, at the option of the holder, at the prescribed conversion rate. Conversions are as follows: | |||||||||
Shares | Conversion | ||||||||
Outstanding | Rate to Common | ||||||||
Preferred Series A | 2,400,000 | 375 | |||||||
Preferred Series A1 | 8,889 | 89 | |||||||
Preferred Series A2 | 88,889 | 20 | |||||||
Preferred Series A3 | 25,846 | 16 | |||||||
Preferred Series B1 | 12,330 | 300 | |||||||
Preferred Series B2 | 1,210 | 300 | |||||||
2,537,164 | |||||||||
The above conversion rates are reported retroactive to the reverse stock split. |
13_Commitments_and_Contingenci
13. Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2013 | |
Notes to Financial Statements | |
Disclosure - 13. Commitments and Contingencies | 13. Commitments and Contingencies |
Lease/Rental Agreements | |
Our executive office is now located in an office complex under annual five year lease, beginning June 1, 2012 at a rent starting at $3,315 per month and escalating to $4,765 per month. We entered into this 5-year commercial lease agreement in St. Petersburg, Florida with Kalyvas Group II, LLC. Our lease provides us with approximately 4,100 square feet of: reception area, nine offices, a lab/production area, inventory room, server room, kitchenette and one conference rooms. We believe the facilities are adequate for our operational needs. We may require additional offices in the event we obtain funding and acquire additional customers. | |
Rent expense for the years ended June 30, 2013 and 2012 amounted to $48,489 and $42,900, respectively. | |
Foreign Currency Translation | |
The balance sheets of the Company's foreign subsidiaries are translated at period-end rates of exchange, and the statements of earnings are translated at the weighted-average exchange rate for the period. Gains or losses resulting from translating foreign currency financial statements are included in accumulated other comprehensive income (loss) in the consolidated statements of stockholders' equity and comprehensive income. At June 30, 2013 and 2012 no foreign currency translation was conducted due to the immaterial nature of its subsidiary’s balance sheet. | |
Legal Matters | |
From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s consolidated financial position or results of operations as of June 30, 2013 and 2012. | |
During the year ended June 30, 2012, Trimax Wireless filed a complaint relating to the unpaid balance of the Promissory Note executed with the acquisition of Trimax Wireless. The Company has filed a motion to dismiss such action which is set for hearing. The note is unsecured, however, if holders prevail, they may be entitled to legal cost, in addition to payments per the term of the agreement. The Company believes that it has sufficient affirmative defenses to this complaint and does not believe that it will have a material effect on the Company. Currently the company is in the process of requesting dismissal of the suit. | |
During the year ended June 30, 2012, The Company filed a Federal lawsuit against Lockwood Worldwide and its owners, current and previous management in the UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA. We are requesting an award of compensatory damages, an award of treble damages pursuant to the provisions of RICO and other applicable federal and state statutes and an award of punitive damages in the full amount by the jury against each of the Defendants. As Plaintiff, we have suffered damages as a result thereof, an amount in excess of $4,350,000.00. We are asking for a total damages up to 4 times the amount of loss or close to $16M. As of the filing of this 10/K, we have had success in freezing their operational account and all funds associated with that account. We are in the process of mediation in October 2013 |
14_Subsequent_Events
14. Subsequent Events | 12 Months Ended |
Jun. 30, 2013 | |
Notes to Financial Statements | |
Disclosure - 14. Subsequent Events | 14. Subsequent Events |
The Company is currently in merger or acquisition negotiations with entities which management believes to be key components of the Smart Grid solutions we envision. Management believes that acquisitions will be a catalyst for advancing the Company’s existing technology to attain greater market share. We are currently in valuation negotiations with the targeted companies; acquisitions will be primarily share exchanges. Additionally, we are seeking capital financing for the purposes of furthering our plan of operations. These negotiations have not advanced, at this point, to an issuance of a letter of intent; however management believes this ongoing strategy will best serve existing shareholders. | |
Infrax Systems entered into a Technical Information License Agreement (TIL) with Itron, the leading manufacturer of smart meters. The license agreement allows Infrax to design its Secure Network Interface Card (SNIC) and communications module for inclusion in Itron Centron I & Centron II meters. We worked closely with Itron during this process to ensure that we are fully compliant and the results to date have all met Itron’s criteria. As of the filing of this 10/K, Infrax is in the process of certification of its flagship product with ANSI and Itron. We hope to start production and distribution of our flagship product shortly. | |
While we have also been in discussions with several other global meter manufacturers regarding the inclusion of the SNIC and GridMesh into their AMI meters, we believe that Itron’s dominant market position and the strength of our relationship will drive the results required to meet our business objectives. | |
We have issued 5,000,000 shares of Common stock to our VP of Development, Mr. John Verghese, in accordance to his employment agreement |
2_Summary_of_Significant_Accou1
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Summary Of Significant Accounting Policies Policies | |||||||||
Basis of Accounting, Policy | Basis of Accounting | ||||||||
The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates. | |||||||||
Use of Estimates, Policy | Use of Estimates | ||||||||
The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates. | |||||||||
Consolidation, Policy | Principles of Consolidation | ||||||||
The consolidated financial statements include the accounts and operations of Infrax Systems, Inc., and its subsidiaries, Infrax Systems SA (Pty) Ltd (100%). and Lockwood Technology Corporation (70%), net of minority interests (collectively referred to as the “Company”). Accordingly, the assets and liabilities, and expenses of this company have been included in the accompanying consolidated financial statements, and material intercompany transactions have been eliminated. | |||||||||
The Trimax Wireless, Inc. acquisition was effective June 29, 2010. The agreement acquired all the assets and certain liabilities of Trimax Wireless, Inc. As an asset purchase the acquired assets and liabilities are included in the accounts of Infrax Systems, Inc. | |||||||||
The Company acquired a controlling interest (70%) of Lockwood Technology Corporation (“LTC”) on May 8, 2011. LTC’s activities, during the period of ownership, have been included in the reported consolidated financial statements. | |||||||||
Development Stage Enterprise | Development Stage Enterprise | ||||||||
The Company, in prior periods, presented financial statements as a development stage enterprise. In the initial years the Company, devoted substantially all of its efforts to raising capital, planning and implementing the principal operations. The Company may continue to incur significant operating losses and to generate negative cash flow from operating activities. The Company's ability to eliminate operating losses and to generate positive cash flow from operations in the future will depend upon a variety of factors, many of which it is unable to control. However, based on current and subsequent events, primarily the acquisitions of Trimax Wireless Systems, Inc. and Lockwood Technology Corporation, management believes that the Company has established the primary business development plan. | |||||||||
Variable Interest Entity, Policy | Variable Interest Entities | ||||||||
The Company considers the consolidation of entities to which the usual condition (ownership of a majority voting interest) of consolidation does not apply, focusing on controlling financial interests that may be achieved through arrangements that do not involve voting interest. If an enterprise holds a majority of the variable interests of an entity, it would be considered the primary beneficiary. The primary beneficiary is generally required to consolidate assets, liabilities and non-controlling interests at fair value (or at historical cost if the entity is a related party) and subsequently account for the variable interest as if it were consolidated based on a majority voting interest. The Company has evaluated all related parties, contracts, agreements and arrangements in which it may hold a variable interest. All companies identified have been included in the consolidated financial statements. | |||||||||
Financial Instruments, Policy | Financial Instruments | ||||||||
The Company’s balance sheets include the following financial instruments: cash, accounts receivable, notes receivable, inventory, accounts payable and note payable and notes payable to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the note payable to stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities. | |||||||||
In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||
· | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities | ||||||||
· | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||
· | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. | ||||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, accrued compensation and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. | |||||||||
The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements. | |||||||||
As of June 30, 2013 and 2012, the fair values of the Company’s financial instruments approximate their historical carrying amount. | |||||||||
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents | ||||||||
The majority of cash is maintained with major financial institutions in the United States. Deposits with these banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||
Accounts Receivable, Policy | Accounts Receivable and Credit | ||||||||
Accounts receivable consist of amounts due for the delivery of sales or services to its customers. Prepayments on account are recorded as customer deposit, a current liability. An allowance for doubtful accounts is considered to be established for any amounts that may not be recoverable, which is based on an analysis of the Company’s customer credit worthiness, and current economic trends. Based on management’s review of accounts receivable, no allowance for doubtful accounts was considered necessary. Receivables are determined to be past due, based on payment terms of original invoices. The Company does not typically charge interest on past due receivables. | |||||||||
Inventory, Policy | Inventories | ||||||||
Inventories are stated at the lower of standard cost or market, which approximates actual cost. Cost is determined using the first-in, first-out method. Inventory is comprised of component parts and accessories available for sale. Parts are generally purchased for projects, as minimal inventory is held to supply customers. | |||||||||
Property, Plant and Equipment, Policy | Property & Equipment | ||||||||
Property and equipment are recorded at historical cost or acquisition value. Depreciation is computed on the straight-line method over estimated useful lives of the respective assets, ranging from three to five years. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon the Company's most recent analysis, management believes that no impairment of property and equipment exists at June 30, 2013 and 2012. | |||||||||
Intangible Assets, Finite-Lived, Policy | Intangible Property | ||||||||
On June 29, 2010 the Company acquired the assets of Trimax Wireless Systems, Inc., including licenses and trademarks. The purchase price was allocated first to the identifiable assets received, allocating the remaining costs to the intellectual property. The valuation considered future cash flows of the operating intangible assets acquired. The valuation of the intellectual property was limited to the acquisition price, less the fair market value of identifiable assets. The acquisition carrying value of the intellectual property was $6,329,342. Intellectual property has an estimated useful life of 15 years. | |||||||||
On May, 2011 the Company completed the acquisition of controlling interest (70%) in Lockwood Technology Corporation, in exchange for stock and certain considerations (cash and warrants). The shares were issued at the fair market value at the date of the transaction ($1,650,000) and warrants were valued using an option price model ($477,900). The total purchase price, net of cash, notes receivable, and net assets acquired was $1,956,158. The Company recognized an immediate impairment in the amount of $641,008 in consideration of its analysis of future discounted cash flows and industry multiples of the acquired Company, resulting in a net intangible assets of $1,315,150. Management’s allocation of the purchase price was based on our assessment of the fair market value of the assets acquired, in accordance with Accounting Standard Codification, Topic 805. Fixed assets and other tangible assets were evaluated for market value. There were no identifiable assets that had any significant appreciation or impairment; therefore those assets have been brought over at the historical basis, net of depreciation. The analysis of the intangible values purchased were allocated to the Lockwood customer list (30% or $394,550) and the developed software and licensing technology (70% or $920,600). | |||||||||
Internal Use Software, Policy | Capitalized Software Development Costs | ||||||||
The Company capitalizes software development costs, under which certain software development costs incurred subsequent to the establishment of technological feasibility have been capitalized and are being amortized over the estimated lives of the related products. Capitalization of computer software costs is discontinued when the computer software product is available to be sold, leased, or otherwise marketed. | |||||||||
Amortization begins when the product is available for release and sold to customers. Software development costs will be amortized based on the estimated economic life of the product, anticipated to be 10 years. | |||||||||
Impairment or Disposal of Long-Lived Assets, Policy | Impairment of Long-Lived Assets | ||||||||
Periodically, the Company assesses the recoverability of the Company’s intangible assets, consisting of the Trimax acquired intellectual property, OptiCon Network Manager software and its trademark, and record an impairment loss to the extent that the carrying amounts of the assets exceed its fair value. Based upon management's most recent analysis, the Company believes that no impairment of the Company’s tangible or intangible assets exist at June 30, 2013 and 2012, as reported. Certain impairments have been recorded to reflect the net realizable value of the associated assets, based on fair value (inventory) or discounted cash flows (goodwill and intangibles). | |||||||||
Revenue Recognition, Policy | Revenue Recognition | ||||||||
The Company is principally in the business of providing solutions for a secure intelligent energy platform that incorporates our secure wireless technology. Contracts include multiple revenue components, comprised of our software licensing, hardware platforms, installation, training and maintenance. In accordance with ASC 605-25 Multiple-Element Arrangements, revenue from licensing the software will be recognized upon installation and acceptance of the software by customers. When a software sales arrangement includes rights to customer support, the portion of the license fee allocated to such support is recognized ratably over the term of the arrangement, normally one year. Revenue from professional services arrangements will be recognized in the month in which services are rendered over the term of the arrangement. | |||||||||
Revenue associated with software sales to distributors is recognized, net of discounts, when the Company has performed substantially all its obligations under the arrangement. Until such time as substantially all obligations under the arrangement are met, software sales are recognized as deferred revenue. Costs and expenses associated with deferred revenue are also deferred. When a software sales arrangements include a commitment to provide training and/or other services or materials, the Company estimates and records the expected costs of these training and/or other services and/or materials. | |||||||||
Share-based Compensation, Option and Incentive Plans Policy | Stock Based Compensation | ||||||||
The Company issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. Stock compensation for the periods presented were issued to consultants for past services provided, accordingly, all shares issued are fully vested, and there is no unrecognized compensation associated with these transactions. | |||||||||
Shipping and Handling Cost, Policy | Shipping Costs | ||||||||
The Company includes shipping costs and freight-in costs in cost of goods sold. | |||||||||
Advertising Costs, Policy | Advertising Costs | ||||||||
The costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. Advertising expense was $0 and $8,506 for the years ended June 30, 2013 and 2012, respectively | |||||||||
Research and Development Expense, Policy | Research and Development | ||||||||
The Company expenses research and development costs when incurred. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. | |||||||||
Income Tax, Policy | Income Taxes | ||||||||
The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. | |||||||||
Earnings Per Share, Policy | Earnings (Loss) Per Share | ||||||||
Basic EPS is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted EPS is similarly calculated, except that the denominator includes common shares that may be issued subject to existing rights with dilutive potential, except when their inclusion would be anti-dilutive. | |||||||||
Based on an estimated current value of the Company’s stock being equal to or less than the exercise price of the warrants, none of the | |||||||||
shares assumed issued upon conversion of the warrants, nor any of the stock assumed issued under the Company's 2004 Non statutory Stock Option Plan, are included in the computation of fully diluted loss per share, since their inclusion would be anti-dilutive. Convertible preferred shares have been included in the dilutive computation, as if they would have been converted at the end of the period. | |||||||||
June 30, 2013 | 30-Jun-12 | ||||||||
Earnings (Loss) per share: | |||||||||
Net Loss | $ | -2,254,374 | $ | -3,461,955 | |||||
Common shares | 103,212,682 | 98,580,428 | |||||||
Common share equivalents | 907,044,437 | 903,345,437 | |||||||
Dilutive common shares | 1,010,257,119 | 1,001,925,865 | |||||||
Earnings (loss) per share, basic | $ | -0.02 | $ | (0.04 | ) | ||||
Earnings (loss) per share, dilutive | $ | 0 | $ | (0.00 | ) | ||||
New Accounting Pronouncements, Policy | Impact of Recently Issued Accounting Pronouncements | ||||||||
The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2013 through the date these financial statements were issued. |
2_Summary_of_Significant_Accou2
2. Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Summary Of Significant Accounting Policies | |||||||||
Schedule of Earnings Per Share, Basic and Diluted | June 30, 2013 | 30-Jun-12 | |||||||
Earnings (Loss) per share: | |||||||||
Net Loss | $ | -3,507,179 | $ | 3,461,955) | |||||
Common shares | 103,212,682 | 98,580,428 | |||||||
Common share equivalents | 903,345,437 | 903,345,437 | |||||||
Dilutive common shares | 1,001,925,865 | 1,001,925,865 | |||||||
Earnings (loss) per share, basic | $ | -0.04 | $ | (0.04 | ) | ||||
Earnings (loss) per share, dilutive | $ | 0 | $ | (0.00 | ) |
4_Property_and_Equipment_Table
4. Property and Equipment (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Property And Equipment Tables | |||||||||
Property, Plant and Equipment | June 30, 2013 | 30-Jun-12 | |||||||
Office and computer equipment | $ | 120,636 | $ | 120,636 | |||||
Furniture and fixtures | 54,703 | 54,703 | |||||||
Computer software | 5,468 | 5,468 | |||||||
180,807 | 180,807 | ||||||||
Accumulated depreciation | 106,345 | 72,199 | |||||||
$ | 74,462 | $ | 108,608 |
5_Intangible_Assets_and_Goodwi1
5. Intangible Assets and Goodwill (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Intangible Assets And Goodwill Tables | |||||||||
Schedule of Intangible Assets and Goodwill | June 30, 2013 | 30-Jun-12 | |||||||
Opticon fiber optic management software | $ | 189,862 | $ | 189,862 | |||||
Trademarks | 1,000 | 1,000 | |||||||
TriMax intellectual property | 6,329,342 | 6,329,342 | |||||||
TriMax software | 180,020 | 180,020 | |||||||
Lockwood customer list | 394,550 | 364,550 | |||||||
Lockwood licensing and technology | 920,600 | 920,600 | |||||||
8,015,374 | 8,015,374 | ||||||||
Accumulated amortization | 4,572,532 | 2,943,655 | |||||||
$ | 3,442,842 | $ | 5,071,719 | ||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | For the year ended June 30,: | ||||||||
2014 | 1,647,663 | ||||||||
2015 | 1,647,663 | ||||||||
2016 | 128,130 | ||||||||
thereafter | -- | ||||||||
$ | 3,423,456 |
6_Accrued_Expenses_Tables
6. Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Accrued Expenses Tables | |||||||||
Schedule of Accrued Liabilities | June 30, 2013 | 30-Jun-12 | |||||||
Accrued salaries | $ | 840,280 | $ | 687,656 | |||||
Accrued consulting | - | 137,118 | |||||||
Accrued professional | - | 95,176 | |||||||
Accrued interest | 159,212 | 115,382 | |||||||
Accrued expenses | 92,097 | 4,955 | |||||||
$ | 1,091,589 | $ | 1,040,287 |
9_Stock_Options_and_Warrants_T
9. Stock Options and Warrants (Tables) | 12 Months Ended | |||||||||||||||||
Jun. 30, 2013 | ||||||||||||||||||
Stock Options And Warrants Tables | ||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | Weighted Average | Remaining | ||||||||||||||||
Options | Options | Intrinsic | Exercise | Contractual | ||||||||||||||
Outstanding | Vested | Value | Price | Term | ||||||||||||||
Options, June 30, 2011 | 4 | 4 | $ | 477,900 | $ | 0.5 | 3.0 years | |||||||||||
Granted | 660,000 | 660,000 | ||||||||||||||||
Exercised | 660,000 | 660,000 | ||||||||||||||||
Forfeited | 4 | 4 | ||||||||||||||||
Options, June 30, 2012 | 0 | 0 | ||||||||||||||||
Granted | 0 | 0 | 0 | 0 | 0.0 years | |||||||||||||
Exercised | 0 | 0 | ||||||||||||||||
Forfeited | - | - | ||||||||||||||||
Options, June 30, 2013 | - | - | ||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Weighted Average: | |||||||||||||||||
Dividend rate | 0 | % | ||||||||||||||||
Risk-free interest rate | 1.02 | % | ||||||||||||||||
Expected lives (years) | 5 | |||||||||||||||||
Expected price volatility | 400 | % | ||||||||||||||||
Forfeiture Rate | 0 | % |
11_Income_Taxes_Tables
11. Income Taxes (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Income Taxes Tables | |||||||||
Schedule of Effective Income Tax Rate Reconciliation | Year Ended June 30, | ||||||||
2013 | 2012 | ||||||||
Federal at federal statutory rate | -34 | % | -34 | % | |||||
State, net of federal deduction | -3.3 | % | -3.3 | % | |||||
Change in valuation allowance | 37.3 ‘ | % | 37.3 ‘ | % | |||||
Effective tax rate | 0.0 ’ | % | 0.0 ’ | % | |||||
Schedule of Components of Income Tax Expense (Benefit)] | Year Ended | Year Ended | |||||||
30-Jun-13 | June 30, 2012 | ||||||||
Income tax benefit at statutory rate | $ | -883,977 | $ | (1,308,200 | ) | ||||
Increase (decrease) in income taxes due to: | |||||||||
Change in valuation allowance | 883,977 | 1,308,200 | |||||||
$ | - | $ | - | ||||||
Schedule of Deferred Tax Assets and Liabilities | For the Year Ended | ||||||||
30-Jun-13 | 30-Jun-12 | ||||||||
Deferred tax asset (liability), current: | |||||||||
Accounts receivable | 24,300 | 24,300 | |||||||
Accrued salaries | 256,500 | 256,500 | |||||||
Accrued consulting | 51,600 | 51,600 | |||||||
Accrued professional | 256,500 | 256,500 | |||||||
Accrued interest | 43,000 | 43,000 | |||||||
Accrued expenses | 1,800 | 1,800 | |||||||
Deferred revenue | - | - | |||||||
Valuation allowance | (421,200 | ) | (421,200 | ) | |||||
- | - | ||||||||
Deferred tax asset (liability), non-current | |||||||||
Net operating loss | 1,235,100 | 1,235,100 | |||||||
Property and equipment | (31,000 | ) | (31,000 | ) | |||||
Valuation allowance | (1,204,100 | ) | (1,204,100 | ) | |||||
- | - |
12_Capital_Equity_Tables
12. Capital Equity (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Capital Equity Tables | |||||||||
Schedule of Conversions of Stock [Table Text Block] | |||||||||
Shares | Conversion | ||||||||
Outstanding | Rate to Common | ||||||||
Preferred Series A | 2,400,000 | 375 | |||||||
Preferred Series A1 | 8,889 | 89 | |||||||
Preferred Series A2 | 88,889 | 20 | |||||||
Preferred Series A3 | 25,846 | 16 | |||||||
Preferred Series B1 | 12,330 | 300 | |||||||
Preferred Series B2 | 1,210 | 300 | |||||||
2,537,164 |
1_History_of_the_Company_and_N1
1. History of the Company and Nature of the Business (Details Narrative) | 12 Months Ended | |
Jun. 30, 2008 | Jul. 29, 2005 | |
History Of Company And Nature Of Business Details Narrative | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% |
Stock Dividends, Shares (in Shares) | 99,118 | |
Business Acquisition, Equity Interest Issued or Issuable, Description | one share of Infrax's stock for every two shares they own of FutureWorld |
2_Summary_of_Significant_Accou3
2. Summary of Significant Accounting Policies - Schedule of Earnings Per Share (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Earnings (Loss) per share: | ||
Net Loss | ($2,254,374) | ($3,461,955) |
Common shares | 103,212,682 | 98,580,428 |
Common share equivalents | 907,044,437 | 903,345,437 |
Dilutive common shares | 1,010,257,119 | 1,001,925,865 |
Earnings (loss) per share, basic | ($0.02) | ($0.04) |
Earnings (loss) per share, dilutive | $0 | $0 |
2_Summary_of_Significant_Accou4
2. Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2008 | Jul. 29, 2005 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2011 | 8-May-11 | 8-May-11 | 8-May-11 | Jun. 29, 2010 | |
Computer Software | Minimum | Maximum | Lockwood | Lockwood | Lockwood | Lockwood | Trimax | |||||
Customer List | Licensing and Technology | |||||||||||
Business Acquisition, Interest Acquired | 100.00% | 100.00% | -7000.00% | |||||||||
Maturity of investment to be considered cash equivalents | 3 months | |||||||||||
Property and Equipment useful life | 3 years | 5 years | ||||||||||
Intangible Asset Value | $1,315,150 | $1,315,150 | $394,550 | $920,600 | $6,329,342 | |||||||
IntangibleAssetEstimatedUsefulLife | 15 years | |||||||||||
Stock Issued for Acquisition | -1,650,000 | |||||||||||
Warrants issued for Acquisition | -477,900 | |||||||||||
Total price of Acquisition | 1,956,158 | 1,956,158 | ||||||||||
Impairment recognized from Acquisition | 641,008 | 641,008 | ||||||||||
Intangible assets allocation percentage | 30.00% | 70.00% | ||||||||||
Useful life of Intangible Asset | 10 years | |||||||||||
Advertising Expenses | $0 | $8,506 |
3_Going_Concern_Details_Narrat
3. Going Concern (Details Narrative) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2011 |
Going Concern | |||
Working Capital | ($1,900,000) | ||
Cash and Cash Equivalents, at Carrying Value | $300 | $2,072 | $25,498 |
4_Property_and_Equipment_Prope
4. Property and Equipment - Property, Plant and Equipment (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Property, plant, and equipment, gross | $180,807 | $180,807 |
Accumulated depreciation | 106,345 | 72,199 |
property, plant, and equipment net | 74,462 | 108,608 |
Office and Computer Equipment | ||
Property, plant, and equipment, gross | 120,636 | 120,636 |
Furniture and Fixtures | ||
Property, plant, and equipment, gross | 54,703 | 54,703 |
Computer Software | ||
Property, plant, and equipment, gross | $5,468 | $5,468 |
4_Property_and_Equipment_Detai
4. Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Property And Equipment Details Narrative | ||
Depreciation Expense | $34,146 | $34,578 |
5_Intangible_Assets_and_Goodwi2
5. Intangible Assets and Goodwill - Schedule of Intangible Assets and Goodwill (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Intangible asset, gross | $8,015,374 | $8,015,374 |
Accumulated amortization | 4,572,532 | 2,943,655 |
Intangible asset, net | 3,442,842 | 5,071,719 |
Opticon fiber optic management software | ||
Intangible asset, gross | 189,862 | 189,862 |
Trademarks | ||
Intangible asset, gross | 1,000 | 1,000 |
Intellectual Property | Trimax | ||
Intangible asset, gross | 6,329,342 | 6,329,342 |
Computer Software | Trimax | ||
Intangible asset, gross | 180,020 | 180,020 |
Customer List | Lockwood | ||
Intangible asset, gross | 394,550 | 364,550 |
Licensing and Technology | Lockwood | ||
Intangible asset, gross | $920,600 | $920,600 |
5_Intangible_Assets_and_Goodwi3
5. Intangible Assets and Goodwill - Schedule of Finite-Lived Intangible Assets (Details) (USD $) | Jun. 30, 2013 |
Intangible Assets And Goodwill Tables | |
2014 | $1,647,663 |
2015 | 1,647,663 |
2016 | 128,130 |
thereafter | |
Intangible Assets, net | $3,423,456 |
5_Intangible_Assets_and_Goodwi4
5. Intangible Assets and Goodwill (Details Narrative) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 29, 2010 | Sep. 30, 2010 | Jun. 30, 2013 | Jun. 30, 2012 | Jul. 26, 2005 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 29, 2010 | Jun. 30, 2011 | 8-May-11 | |
FutureTech | FutureTech | FutureTech | FutureTech | Trimax | Trimax | Trimax | Lockwood | Lockwood | ||||
Opticon fiber optic management software | Opticon fiber optic management software | Opticon fiber optic management software | Opticon fiber optic management software | |||||||||
Total amortization expense | $1,628,877 | $1,313,241 | $0 | $200 | $25,717 | $36,004 | ||||||
Purchase price of acquisition | 100,000 | 1,956,158 | 1,956,158 | |||||||||
Intangible asset, percentage transfered | 50.00% | |||||||||||
License transfer carrying cost | 22,250 | |||||||||||
Value of acquired intangible assets | 6,329,342 | |||||||||||
Software development costs assumed | 180,020 | |||||||||||
Amortization period of software development costs | 5 years | |||||||||||
Value of note receivable acquired | 50,000 | |||||||||||
Note receivable due | 180 days | |||||||||||
Cash received in acquisition | 112,000 | |||||||||||
Value of shares issued in business acquisition | 1,650,000 | |||||||||||
Acquisition agreement warrants included | 660,000 | |||||||||||
Acquisition agreement warrant exercise price | $5 | |||||||||||
Acquisition agreement warrants term | $3 | |||||||||||
Fair value of warrants issued in acquisition | 477,900 | |||||||||||
Expected volatility rate | 40000.00% | |||||||||||
Expected risk free rate | 102.00% | |||||||||||
Expected dividend rate | 0.00% | |||||||||||
Impairment recognized from business combination | 641,008 | 641,008 | ||||||||||
Fair value of intangible assets | $6,329,342 | $1,315,150 | $1,315,150 |
6_Accrued_Expenses_Schedule_of
6. Accrued Expenses - Schedule of Accrued Liabilities (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Accrued Expenses Tables | ||
Accrued salaries | $840,280 | $687,656 |
Accrued consulting | 137,118 | |
Accrued professional | 95,176 | |
Accrued interest | 159,212 | 115,382 |
Accrued expenses | 92,097 | 4,955 |
Total Accrued Expenses | $1,091,589 | $1,040,287 |
7_Debt_Agreements_Detail
7. Debt Agreements (Detail) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 29, 2010 | |
Line Of Credit | Note Payable Trimax Wireless Acquisition [Member] | |
Debt Instrument, Face Amount | $712,500 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |
Debt Instrument, Maturity Date, Description | until fully paid with a start period of 90 (September 29, 2010) days for the first payment | |
Debt Instrument, Payment Terms | interest-only payments on the first day of each month from the date of this Note until the earlier of (a) receipt of Investment Funding as defined; or (b) 180 days from the date hereof ("Maturity Date") (December 29, 2010) | |
Line of Credit Facility, Current Borrowing Capacity | 350,000 | |
Line of Credit Facility, Interest Rate During Period | 5.00% | |
Line of Credit Facility, Maximum Borrowing Capacity | $500,000 |
8_Related_Parties_Disclosures_1
8. Related Parties Disclosures (Details Narrative) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Jul. 31, 2014 | Oct. 19, 2013 | Apr. 02, 2015 | Oct. 06, 2011 |
People | People | Line Of Credit | Line Of Credit | Sam Telari | John Verghese | Terry Gardner | Malcolm F. Welch | |
Base Salary per month | $15,000 | $6,500 | $10,000 | $2,000 | ||||
Signing bonus | 15,000 | 10,000 | 30,000 | |||||
Vacation Time | 20 days | 15 days | 15 days | 10 days | ||||
Option to purchase shares of company stock | 360,000 | 300,000 | 375,000 | |||||
Stock option purchase price per share | $0.03 | $0.04 | $0.03 | |||||
Stock to be received based on goal achievement | 375,000 | |||||||
Outstanding balance on line of credit | 762,588 | 468,769 | ||||||
Aggregate due to related parties | 56,185 | 56,185 | ||||||
Number of related parties due | 2 | 2 | ||||||
Employment Agreements, total compensation | $433,838 | $668,838 |
9_Stock_Options_and_Warrants_S
9. Stock Options and Warrants - Schedule of Share-based Compensation, Stock Options, Activity (Details) (USD $) | 12 Months Ended | ||
Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | |
Stock Options And Warrants Tables | |||
Options Outstanding, Beginning | 0 | ||
Options Vested, Beginning | 4 | ||
Intrinsic Value, Beginning | $477,900 | ||
Excercise Price, Beginning | $0 | ||
Contractual Term, Beginning | 3 years | 0 years | |
Granted Options Outstanding | 660,000 | ||
Granted Options Vested | 660,000 | ||
Exercised Options Outstanding | 660,000 | ||
Exercised Options Vested | 660,000 | ||
Forfeited Options Outstanding | 4 | ||
Forfeited Options Vested | 4 | ||
Options Outstanding, Ending | 0 | ||
Options Vested, Ending | 0 |
9_Stock_Options_and_Warrants_S1
9. Stock Options and Warrants - Schedule of Share-based Payment Award, Stock Options (Details) | 12 Months Ended |
Jun. 30, 2013 | |
Weighted Average: | |
Dividend rate | 0.00% |
Risk-free interest rate | 1.02% |
Expected lives (years) | 5 years |
Expected price volatility | 400.00% |
Forfeiture Rate | 0.00% |
9_Stock_Options_and_Warrants_D
9. Stock Options and Warrants (Details Narrative) (USD $) | Dec. 02, 2005 |
People | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of individuals | 2 |
Series A Warrants | $4 |
Adjusted average exercise price | 17,300 |
10_Stock_Option_Plan_Details_N
10. Stock Option Plan (Details Narrative) | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Oct. 22, 2004 | Oct. 02, 2009 | Jul. 01, 2013 |
October 22 2004 Plan | October 22 2004 Plan | October 22 2004 Plan | October 2 2009 Plan | July 2013 Plan | |||
Shares authorized for key employees | 120 | ||||||
Shares issued under option plan | 30 | 2,013 | 0 | 0 | |||
Common stock authorized for stock plan | 100,000,000 | 100,000,000 | 10,000 | 10,000,000 |
11_Income_Taxes_Schedule_of_Ef
11. Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Taxes Tables | ||
Federal at federal statutory rate | -3400.00% | -3400.00% |
State, net of federal deduction | -330.00% | -330.00% |
Change in valuation allowance | 3730.00% | 3730.00% |
Effective tax rate | 0.00% | 0.00% |
11_Income_Taxes_Schedule_of_Co
11. Income Taxes - Schedule of Components of Income Tax Expense (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Taxes Tables | ||
Income tax benefit at statutory rate | ($883,977) | ($1,308,200) |
Increase (decrease) in income taxes due to: | ||
Change in valuation allowance | 883,977 | 1,308,200 |
Income Tax Expense |
11_Income_Taxes_Schedule_of_De
11. Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Deferred tax asset (liability), current: | ||
Accounts receivable | $24,300 | $24,300 |
Accrued salaries | 256,500 | 256,500 |
Accrued consulting | 51,600 | 51,600 |
Accrued professional | 256,500 | 256,500 |
Accrued interest | 43,000 | 43,000 |
Accrued expenses | 1,800 | 1,800 |
Deferred revenue | ||
Valuation allowance | -421,200 | -421,200 |
Deferred Tax Assets Current | ||
Deferred tax asset (liability), non-current | ||
Net operating loss | 1,235,100 | 1,235,100 |
Property and equipment | -31,000 | -31,000 |
Valuation allowance | -1,204,100 | -1,204,100 |
Deferred Tax Assets Non-current |
11_Income_Taxes_Details_narrat
11. Income Taxes (Details narrative) (USD $) | Jun. 30, 2013 |
Income Taxes Details Narrative | |
Operating Loss Carryforwards | $7,500,000 |
12_Capital_Equity_Schedule_of_
12. Capital Equity - Schedule of Conversions of Stock (Details) | 12 Months Ended |
Jun. 30, 2013 | |
Shares outstanding | 2,537,164 |
Preferred A | |
Shares outstanding | 2,400,000 |
Conversion rate to common | 375 |
Preferred A-1 | |
Shares outstanding | 8,889 |
Conversion rate to common | 89 |
Preferred A-2 | |
Shares outstanding | 88,889 |
Conversion rate to common | 20 |
Preferred A-3 | |
Shares outstanding | 25,846 |
Conversion rate to common | 16 |
Preferred B-1 | |
Shares outstanding | 12,330 |
Conversion rate to common | 300 |
Preferred B-2 | |
Shares outstanding | 1,210 |
Conversion rate to common | 300 |
12_Commitments_and_Contingenci
12. Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 01, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Office Complex Lease Term | 5 years | ||
Office Complex Monthly Rent, Starting | $3,315 | ||
Office Complex Monthly Rent, Ending | 4,765 | ||
Rent Expense | $48,489 | $42,900 | |
Gain Contingency | As Plaintiff, we have suffered damages as a result thereof, an amount in excess of $4,350,000.00. We are asking for a total damages up to 4 times the amount of loss or close to $16M |
14_Subsequent_Events_Details_N
14. Subsequent Events (Details Narrative) | Jun. 30, 2013 | Jun. 30, 2012 |
Shares of common stock issued | 103,212,682 | 103,212,682 |
John Verghese | ||
Shares of common stock issued | 5,000,000 |