Quantumsphere 10-Q 17 Feb 15 2015 Q2 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	6 Months Ended
	Dec. 31, 2014	Feb. 16, 2015
Document Information [Line Items]
Entity Registrant Name	QUANTUMSPHERE, INC.
Document Type	10-Q
Document Period End Date	31-Dec-14
Amendment Flag	FALSE
Entity Central Index Key	1387135
Current Fiscal Year End Date	-24
Entity Filer Category	Smaller Reporting Company
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	QSIM
Entity Common Stock, Shares Outstanding		22,255,217

CONDENSED_BALANCE_SHEETS

CONDENSED BALANCE SHEETS (USD $)	Dec. 31, 2014	Jun. 30, 2014
Current Assets
Cash	$1,146,787	$2,702,889
Accounts receivable	548	3,183
Prepaid expenses and other current assets	86,953	57,003
Total current assets	1,234,288	2,763,075
Property and equipment, net	1,524,772	1,533,588
Patents, net	113,915	112,299
Other assets	24,578	24,578
Total assets	2,897,553	4,433,540
Current Liabilities
Accounts payable and accrued expenses	385,961	501,051
Note payable, net of discount	149,346	130,786
Total current liabilities	535,307	631,837
Notes Payable, long-term portion, net of discount	273,414	358,245
Total Liabilities	808,721	990,082
Stockholders' Equity
Convertible preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding	0	0
Common stock, $0.001 par value, 500,000,000 shares authorized, 22,255,217 and 21,385,217 shares issued and outstanding as of December 31, 2014 and June 30, 2014, respectively	22,255	21,385
Additional paid-in capital	41,583,278	40,232,630
Accumulated deficit	-39,516,701	-36,810,557
Total stockholders' equity	2,088,832	3,443,458
Total liabilities and stockholders' equity	$2,897,553	$4,433,540

CONDENSED_BALANCE_SHEETS_Paren

CONDENSED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Jun. 30, 2014
CONDENSED BALANCE SHEETS [Abstract]
Convertible preferred stock, par value per share	$0.00	$0.00
Convertible preferred stock, shares authorized	10,000,000	10,000,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock par value	$0.00	$0.00
Common stock authorized	500,000,000	500,000,000
Common stock, shares issued	22,255,217	21,385,217
Common stock, shares outstanding	22,255,217	21,385,217

CONDENSED_STATEMENTS_OF_OPERAT

CONDENSED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Net Sales	$11,881	$71,271	$25,904	$156,288
Cost of Sales	2,830	25,351	5,667	53,279
Gross Profit	9,051	45,920	20,237	103,009
Operating Expenses
Research and development	599,744	290,909	1,432,671	532,682
Selling, marketing and advertising	5,788	25,175	11,755	26,395
General and administrative	607,824	558,947	1,253,860	936,129
Total operating expenses	1,213,356	875,031	2,698,286	1,495,206
Loss from Operations	-1,204,305	-829,111	-2,678,049	-1,392,197
Other Expense
Interest expense, net	-17,884	-124,984	-41,502	-193,682
Interest expense - amortization of note discounts	-939	0	-1,878	-86,471
Other income	15,235	0	15,285	0
Total other expense, net	-3,588	-124,984	-28,095	-280,153
Loss Before Provision for Income Taxes	-1,207,893	-954,095	-2,706,144	-1,672,350
Provision for Income Taxes	0	800	0	800
Net Loss	($1,207,893)	($954,895)	($2,706,144)	($1,673,150)
Basic and Diluted Loss Per Common Share	($0.05)	($0.09)	($0.12)	($0.15)
Basic and Diluted Weighted-Average Common Shares Outstanding	22,031,685	11,056,059	21,742,690	11,056,059

CONDENSED_STATEMENTS_OF_CASH_F

CONDENSED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	($2,706,144)	($1,673,150)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	191,156	28,481
Stock based compensation expense	481,519	318,121
Change in warrants liabilities	0	-65,556
Discount amortization on note payable	1,878	152,027
Changes in operating assets and liabilities:
Accounts receivable	2,635	-4,133
Prepaid expenses and other current assets	-29,950	-2,599
Accounts payable and accrued expenses	-21,671	412,510
Net cash used in operating activities	-2,080,577	-834,299
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for development of patents	-4,035	-9,492
Purchase of property and equipment	-179,921	-70,368
Net cash used in investing activities	-183,956	-79,860
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuances of convertible notes payable	0	900,000
Principal payments of notes payable	-68,149	0
Common stock buy back	-93,420	0
Proceeds from exercise of common stock options	870,000	0
Net cash provided by financing activities	708,431	900,000
NET INCREASE (DECREASE) IN CASH	-1,556,102	-14,159
CASH - beginning of period	2,702,889	389,394
CASH - end of period	1,146,787	375,235
ADDITIONAL CASH FLOW INFORMATION
Interest paid	41,502	1,121
Income taxes paid	$0	$800

ORGANIZATION_AND_BUSINESS

ORGANIZATION AND BUSINESS	6 Months Ended
	Dec. 31, 2014
ORGANIZATION AND BUSINESS [Abstract]
ORGANIZATION AND BUSINESS	1. ORGANIZATION AND BUSINESS
	QuantumSphere, Inc., formerly known as Way Cool Imports, Inc., was incorporated in the State of Nevada on December 1, 2005 (referred to as the “Company”). On April 22, 2014, the Company entered into an Agreement and Plan of Merger (“Merger”) with QuantumSphere, Inc., a California corporation (“QSI”), whereby, QSI would merge with Way Cool Merger Sub, Inc., a Nevada corporation (“Merger Sub”), a wholly-owned subsidiary of the Company. As a result of the Merger, QSI became a wholly-owned subsidiary of the Company, and the Company issued shares of the Company’s common stock to holders of QSI common stock at a rate of one-to-one.
	The Merger was accounted for as a public shell reverse merger because post-Merger QSI’s shareholders own approximately 82% of the outstanding shares of the Company, QSI’s directors and officers now serve as the directors and officers of the Company, and the operations of QSI are the ongoing business of the Company. Prior to the merger, the Company had insignificant assets, liabilities, and operations. Therefore, the merger has been accounted for as a recapitalization of QSI, which resulted in QSI becoming a public company. All outstanding stock options and warrants are exercisable into shares of common stock of the legal parent entity.
	Subsequent to the Merger, on April 25, 2014, the Company filed Articles of Merger with the Nevada Secretary of State for the purposes of effecting a short-form merger of QSI with and into the Company. The merger of the Company with QSI, its then wholly-owned subsidiary, is referred to as a short-form merger (the “Short-Form Merger”). As part of the Articles of Merger, the Company amended its Articles of Incorporation to change its name from “Way Cool Imports, Inc.” to “Quantumsphere, Inc.”
	In June 2014, the Company elected to change its year end from December 31 to June 30.
	Since commencing operations in 2003, QSI has developed a process to manufacture metallic nanopowders with end-use applications in the battery and chemicals sector. The Company’s products are used on a stand-alone basis, in the validation of Company’s nano-iron catalysts coated onto commercial iron catalysts used in the production of ammonia on a prospective basis, and research, development, and initial marketing of zinc-air battery products. The Company anticipates introducing zinc-air battery products on a commercial basis in the second calendar quarter of 2015  . The Company’s major activities to date have included capital formation, research and development, and marketing of its metallic nanopowder products.

SUMMARY_OF_SIGNIFICANT_ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	The accompanying unaudited condensed financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and applicable sections of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments necessary to make the financial statements not misleading have been included. The condensed balance sheet as of June 30, 2014 was derived from the audited financial statements filed in Form 10-KT on September 26, 2014. Operating results for the three and six months ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending June 30, 2015. For further information, refer to our Transition Report on Form 10-KT for the year ended June 30, 2014 and our Form 8-K concerning the Merger filed on June 16, 2014, and as amended on July 7, 2014.
	Use of Estimates
	The accompanying financial statements are prepared in conformity with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. The use of estimates may also affect the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, realization of capitalized assets, valuation of equity instruments, and deferred income tax asset valuation allowances. Actual results could differ from those estimates.
	Revenue Recognition
	The Company recognizes revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. The Company does not grant customers the right to return the products after such products have been accepted. Amounts billed for shipping and handling are recorded as a component of net sales and the cost incurred for freight is included as a component of operating expenses in the statements of operations.
	Property and Equipment
	Purchased property and equipment is stated at cost, less accumulated depreciation. Repairs and maintenance of equipment are charged to expense as incurred. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Gains or losses on dispositions of property and equipment are included in the results of operations when realized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the shorter of terms of the leases or their estimated useful lives. Depreciation expense on assets acquired under capital leases is included in depreciation expense.
	Patents
	Costs incurred in applying for patents relating to the Company’s process for production of nanopowders have been capitalized. Patents are amortized to reflect the pattern of economic benefits consumed, on a straight-line basis, over the estimated periods benefited. As of December 31, 2014, nine patents have been issued and three patents are pending approval. Amortization relating to issued patents was not significant during the periods presented. Additional significant costs may be required for the continued development of end-use applications for the Company’s technology.
	Impairment of Long-Lived Assets
	Long-lived assets and intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates potential impairment by comparing the carrying amount of the assets with the estimated undiscounted future cash flows associated with them. Should the review indicate that an asset is not recoverable, the Company’s carrying value of the asset would be reduced by the estimated shortfall to fair value.
	Research and Development Costs
	Research and development costs are expensed as incurred. Costs incurred for research and development for new or improved processes to produce nanopowders as well as end use applications for the nanopowders are expensed until the production process or applications have been determined to be commercially viable. Costs incurred after the production process is viable and a working model of the equipment has been completed will be capitalized as long-lived assets.
	Income Taxes
	Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period, if any, and the change during the period in deferred tax assets and liabilities.
	The Company provides for tax contingencies, if any, for federal, state and local exposures relating to audit results, tax planning initiatives and compliance responsibilities. The development of these reserves requires judgments about tax issues, potential outcomes and timing. Although the outcome of such matters is uncertain, in management’s opinion adequate provisions for income taxes have been made for potential liabilities emanating from these reviews. If actual outcomes differ materially from these estimates, they could have a material impact on the Company’s results.
	Loss Per Share
	The Company calculates basic loss per share by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if such additional common shares had been issued and were dilutive.
	Potential common shares, consisting of options and warrants, totaling 12,052,572 and 10,946,415, have been excluded from the computations of diluted net loss per share because the effect would have been anti-dilutive for the three and six months ended December 31, 2014 and 2013, respectively.
	Stock-Based Compensation
	The Company measures all employee stock-based compensation awards using the Black-Scholes-Merton valuation model and allocates the related expense over the requisite service period. The expected volatility is based on the historical volatility of the Company’s stock as determined by its private placement offerings, the expected life of the award is based on the simplified method.
	The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e. the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable.
	Reclassifications
	The Company has reclassified certain prior period amounts to conform with current year presentation, in particular with regard to enhanced allocation of research and development costs that were previously classified as cost of goods sold.
	Risks and Uncertainties
	The Company faces risks and uncertainties relating to its ability to successfully implement and fulfill its strategy. Among other things, these risks include the ability to obtain revenues; manage operations; competition; attract, retain and motivate qualified personnel; maintain and develop new strategic relationships; and the ability to anticipate and adapt to the changing nanotechnology market and any changes in government regulations.
	Therefore, the Company may be subject to the risks of delays in consummating contracts with customers and suppliers, raising sufficient capital to achieve its objectives and other uncertainties, including financial, operational, technological, regulatory and other risks associated with an emerging business, including the potential risks of business failure.  Technology and manufacturing companies with whom the Company is expected to compete, in general, are well capitalized. The Company is competing against entities with the financial and intellectual resources and expressed intent of performing rapid technological innovation. The Company’s resources are limited and must be allocated to focus objectives in order to succeed.
	Going Concern
	The Company has incurred recurring losses from operations from inception and has limited working capital. As of December 31, 2014, the Company had an accumulated deficit of approximately $39.5 million. The Company’s activities will necessitate significant uses of working capital beyond 2015. Additionally, the Company’s capital requirements will depend on many factors, including the success of its continued research and development efforts and the status of competitive products. The Company plans to continue financing its operations with cash received from financing activities. Management is currently attempting to raise additional capital from financing activities to sustain operations until the Company is able to generate sufficient cash flows from operations. There is no assurance that the Company will be able to raise sufficient capital to continue operations and, if available, on terms satisfactory to the Company.

NOTE_PAYABLE

NOTE PAYABLE	6 Months Ended
	Dec. 31, 2014
NOTE PAYABLE [Abstract]
NOTE PAYABLE	3. NOTE PAYABLE
	On June 19, 2014, the Company signed a loan and security agreement with Novus Capital Group that provides up to two loans, each in the amount of $500,000. The initial loan of $500,000 was funded on June 19, 2014. The second loan in the amount of $500,000 was to be funded upon: (a) the Company having secured additional equity financing of not less than $3,000,000 on or before December 31, 2014; (b) the monthly payments on the initial loan being made as agreed; and (c) the Company is not in default on any of its obligations with any of its creditors. The loans accrue at an annual rate of 15.5%, have a term of thirty-six months, and monthly payments on each loan are $17,455, beginning August 10, 2014 for the initial loan. The agreement includes a warrant to purchase 30,000 shares of common stock at an exercise price of $2.00 per share that expires July 1, 2019; 20,000 warrants vested upon the initial funding of $500,000, and 10,000 warrants vest upon the second funding of $500,000. The initial vested warrants were valued at approximately $11,000, using the Black Scholes Merton option pricing model, and recorded as a discount to the note payable. The Company did not meet the additional equity requirement for funding of the second loan of $500,000 as of December 31, 2014.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Dec. 31, 2014
STOCKHOLDERS' EQUITY [Abstract]
STOCKHOLDERS' EQUITY	4. STOCKHOLDERS’ EQUITY
	Common Stock
	In early April 2014, the Company executed a 10,000 for 1 reverse split. As a result of the reverse split, the Company cancelled and repurchased fractional shares comprising approximately 585,000 shares of common stock for $2.00 per share. Shortly after the reverse split, the Company executed a 1 for 10,000 forward split. As of December 31, 2014, the Company had approximately $258,000 of accrued liabilities associated with the share cancellation.
	Stock Options
	During the six months ended December 31, 2014, 870,000 options were exercised at a price of $1.00 per share.
	During the six months ended December 31, 2014, the Company issued to employees, officers, directors, advisory board and consultants options to purchase 520,000 shares of common stock, which are exercisable at a price of $2.00 per share.
	The fair value of stock options granted were estimated on their respective grant dates using the Black-Scholes-Merton option pricing model and the following assumptions for the six months ended December 31, 2014 and 2013:
		Six Months Ended December 31,
		2014	2013
	Risk free interest rate	1.14% - 1.75%	1.03% - 2.71%
	Expected term	3 - 5 years	6 years
	Expected volatility	51.8% - 52.1%	43.8% - 45.5%
	Dividend yield	–	–

CONCENTRATIONS

CONCENTRATIONS	6 Months Ended
	Dec. 31, 2014
CONCENTRATIONS [Abstract]
CONCENTRATIONS	5. CONCENTRATIONS
	For the three months ended December 31, 2014, 34% of net sales were to customers in Asia and 26% of net sales were to customers in Europe. For the three months ended December 31, 2013, 72% of net sales were to a customers in Israel. For the three months ended December 31, 2014, 70% of net sales were to four customers. For the three months ended December 31, 2013, 83% of net sales were to two customers.
	For the six months ended December 31, 2014, 46% of net sales were to customers in Asia and 15% of net sales were to customers in Europe. For the six months ended December 31, 2013, 66% of net sales were to a customers in Israel and 17% of net sales were to customers in Asia. For the six months ended December 31, 2014, 48% of net sales were to three customers. For the six months ended December 31, 2013, 66% of net sales were to one customer.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Dec. 31, 2014
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	6. SUBSEQUENT EVENTS
	Dr. Douglas Carpenter, CTO of the Company, continues to be on a medical leave of absence that began on November 1, 2014. It is presently unknown how long Dr. Carpenter will be on leave, but Company management is confident that it has the necessary resources in place to handle all of Dr. Carpenter’s day-to-day duties and his absence will not have a material effect on the Company or its business operations.

SUMMARY_OF_SIGNIFICANT_ACCOUNT1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Use of Estimates	Use of Estimates
	The accompanying financial statements are prepared in conformity with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. The use of estimates may also affect the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, realization of capitalized assets, valuation of equity instruments, and deferred income tax asset valuation allowances. Actual results could differ from those estimates.
Revenue Recognition	Revenue Recognition
	The Company recognizes revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. The Company does not grant customers the right to return the products after such products have been accepted. Amounts billed for shipping and handling are recorded as a component of net sales and the cost incurred for freight is included as a component of operating expenses in the statements of operations.
Property and Equipment	Property and Equipment
	Purchased property and equipment is stated at cost, less accumulated depreciation. Repairs and maintenance of equipment are charged to expense as incurred. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Gains or losses on dispositions of property and equipment are included in the results of operations when realized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the shorter of terms of the leases or their estimated useful lives. Depreciation expense on assets acquired under capital leases is included in depreciation expense.
Patents	Patents
	Costs incurred in applying for patents relating to the Company’s process for production of nanopowders have been capitalized. Patents are amortized to reflect the pattern of economic benefits consumed, on a straight-line basis, over the estimated periods benefited. As of December 31, 2014, nine patents have been issued and three patents are pending approval. Amortization relating to issued patents was not significant during the periods presented. Additional significant costs may be required for the continued development of end-use applications for the Company’s technology.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets
	Long-lived assets and intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates potential impairment by comparing the carrying amount of the assets with the estimated undiscounted future cash flows associated with them. Should the review indicate that an asset is not recoverable, the Company’s carrying value of the asset would be reduced by the estimated shortfall to fair value.
Research and Development Costs	Research and Development Costs
	Research and development costs are expensed as incurred. Costs incurred for research and development for new or improved processes to produce nanopowders as well as end use applications for the nanopowders are expensed until the production process or applications have been determined to be commercially viable. Costs incurred after the production process is viable and a working model of the equipment has been completed will be capitalized as long-lived assets.
Income Taxes	Income Taxes
	Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period, if any, and the change during the period in deferred tax assets and liabilities.
	The Company provides for tax contingencies, if any, for federal, state and local exposures relating to audit results, tax planning initiatives and compliance responsibilities. The development of these reserves requires judgments about tax issues, potential outcomes and timing. Although the outcome of such matters is uncertain, in management’s opinion adequate provisions for income taxes have been made for potential liabilities emanating from these reviews. If actual outcomes differ materially from these estimates, they could have a material impact on the Company’s results.
Loss Per Share	Loss Per Share
	The Company calculates basic loss per share by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if such additional common shares had been issued and were dilutive.
	Potential common shares, consisting of options and warrants, totaling 12,052,572 and 10,946,415, have been excluded from the computations of diluted net loss per share because the effect would have been anti-dilutive for the three and six months ended December 31, 2014 and 2013, respectively.
Stock-Based Compensation	Stock-Based Compensation
	The Company measures all employee stock-based compensation awards using the Black-Scholes-Merton valuation model and allocates the related expense over the requisite service period. The expected volatility is based on the historical volatility of the Company’s stock as determined by its private placement offerings, the expected life of the award is based on the simplified method.
	The Company accounts for nonemployee stock-based transactions using the fair value of the consideration received (i.e. the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable.
Reclassifications	Reclassifications
	The Company has reclassified certain prior period amounts to conform with current year presentation, in particular with regard to enhanced allocation of research and development costs that were previously classified as cost of goods sold.
Risks and Uncertainties	Risks and Uncertainties
	The Company faces risks and uncertainties relating to its ability to successfully implement and fulfill its strategy. Among other things, these risks include the ability to obtain revenues; manage operations; competition; attract, retain and motivate qualified personnel; maintain and develop new strategic relationships; and the ability to anticipate and adapt to the changing nanotechnology market and any changes in government regulations.
	Therefore, the Company may be subject to the risks of delays in consummating contracts with customers and suppliers, raising sufficient capital to achieve its objectives and other uncertainties, including financial, operational, technological, regulatory and other risks associated with an emerging business, including the potential risks of business failure.  Technology and manufacturing companies with whom the Company is expected to compete, in general, are well capitalized. The Company is competing against entities with the financial and intellectual resources and expressed intent of performing rapid technological innovation. The Company’s resources are limited and must be allocated to focus objectives in order to succeed.
Going Concern	Going Concern
	The Company has incurred recurring losses from operations from inception and has limited working capital. As of December 31, 2014, the Company had an accumulated deficit of approximately $39.5 million. The Company’s activities will necessitate significant uses of working capital beyond 2015. Additionally, the Company’s capital requirements will depend on many factors, including the success of its continued research and development efforts and the status of competitive products. The Company plans to continue financing its operations with cash received from financing activities. Management is currently attempting to raise additional capital from financing activities to sustain operations until the Company is able to generate sufficient cash flows from operations. There is no assurance that the Company will be able to raise sufficient capital to continue operations and, if available, on terms satisfactory to the Company.

STOCKHOLDERS_EQUITY_Tables

STOCKHOLDERS' EQUITY (Tables) (Stock Options [Member])	6 Months Ended
	Dec. 31, 2014
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Schedule of Fair Value Assumptions	The fair value of stock options granted were estimated on their respective grant dates using the Black-Scholes-Merton option pricing model and the following assumptions for the six months ended December 31, 2014 and 2013:
		Six Months Ended December 31,
		2014	2013
	Risk free interest rate	1.14% - 1.75%	1.03% - 2.71%
	Expected term	3 - 5 years	6 years
	Expected volatility	51.8% - 52.1%	43.8% - 45.5%
	Dividend yield	–	–

ORGANIZATION_AND_BUSINESS_Deta

ORGANIZATION AND BUSINESS (Details)	Dec. 31, 2014
ORGANIZATION AND BUSINESS [Abstract]
Outstanding shares owned by QuantumSphere's shareholders	82.00%

SUMMARY_OF_SIGNIFICANT_ACCOUNT2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Antidilutive securities excluded from earnings per share	12,052,572	10,946,415
Accumulated deficit	($39,516,701)		($36,810,557)
Minimum [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Estimated useful lives	3 years
Maximum [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Estimated useful lives	7 years

NOTE_PAYABLE_Details

NOTE PAYABLE (Details) (Loan and Security Agreement [Member], USD $)	6 Months Ended
	Dec. 31, 2014
Debt Instrument [Line Items]
Annual interest rate	15.50%
Term	36 months
Frequency of payments	Monthly
Payment amount	$17,455
Payment commencement date	10-Aug-14
Number of common shares callable under warrant	30,000
Exercise price of warrant	$2
Warrant expiration date	1-Jul-19
Fair value of warrants	11,000
Warrants [Member] | Intitial funding [Member]
Debt Instrument [Line Items]
Number of shares vesting	20,000
Warrants [Member] | Second funding [Member]
Debt Instrument [Line Items]
Number of shares vesting	10,000
Loan One [Member]
Debt Instrument [Line Items]
Issuance date	19-Jun-14
Face amount	500,000
Loan Two [Member]
Debt Instrument [Line Items]
Face amount	500,000
Required cash proceeds required under equity financing agreement	$3,000,000
Equity financing agreement deadline	31-Dec-14

STOCKHOLDERS_EQUITY_Narrative_

STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $)	1 Months Ended	6 Months Ended
	Apr. 30, 2014	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock cancelled and repurchased	585,000
Price per share of stock repurchased	$2
Stock cancellation liability		$258,000
Stockholders' Equity, Reverse Stock Split	10,000 for 1 reverse split.
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued during period		520,000
Exercise price of options issued		$2
Number of options exercised		870,000
Exercise price of options exercised		$1

STOCKHOLDERS_EQUITY_Schedule_o

STOCKHOLDERS' EQUITY (Schedule of Stock Option Fair Value Assumptions) (Details)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term		6 years
Dividend yield	0.00%	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	1.75%	2.71%
Expected term	5 years
Expected volatility	52.10%	45.50%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	1.14%	1.03%
Expected term	3 years
Expected volatility	51.80%	43.80%

CONCENTRATIONS_Details

CONCENTRATIONS (Details)	3 Months Ended	6 Months Ended		3 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2013
Asia [Member]
Concentration Risk [Line Items]
Concentration risk percentage	34.00%	46.00%	17.00%
Israel [Member]
Concentration Risk [Line Items]
Concentration risk percentage			66.00%	72.00%
Europe [Member]
Concentration Risk [Line Items]
Concentration risk percentage	26.00%	15.00%
One Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage			66.00%
Two Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage				83.00%
Three Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage		48.00%
Four Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	70.00%