Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2019 | Feb. 19, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ESPORTS ENTERTAINMENT GROUP, INC. | |
Entity Central Index Key | 0001451448 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 6,226,432 | |
Entity File Number | 0-54853 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Current assets | ||
Cash | $ 53,283 | $ 43,412 |
Prepaid expenses and other current assets - related parties | 69,390 | 190,280 |
Prepaid expenses and other current assets | 154,342 | 213,817 |
Total current assets | 277,015 | 447,509 |
Fixed assets | 12,145 | 16,577 |
Intangible assets | 3,000 | 81,226 |
Other non-current assets | 6,833 | 16,480 |
TOTAL ASSETS | 298,993 | 561,792 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Accounts payable and accrued expenses | 833,662 | 607,448 |
Due to shareholder | 1,551 | 1,551 |
Convertible note | 3,356,054 | 290,720 |
Derivative liabilities | 5,590,540 | 4,655,031 |
Total liabilities | 9,781,807 | 5,554,750 |
Stockholders' equity (deficit) | ||
Common stock $0.001 par value; 500,000,000 shares authorized, 5,937,670 and 5,849,208 shares issued and outstanding as of December 31, 2019 and June 30, 2019, respectively | 5,938 | 5,849 |
Additional paid-in capital | 6,573,865 | 4,955,380 |
Equity to be issued | 30,000 | 230,000 |
Accumulated deficit | (16,092,617) | (10,184,187) |
Total stockholders' deficit | (9,482,814) | (4,992,958) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 298,993 | $ 561,792 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 5,937,670 | 5,849,208 |
Common stock, shares outstanding | 5,937,670 | 5,849,208 |
Condensed Interim Consolidated
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses: | ||||
General and administrative | $ 668,878 | $ 514,781 | $ 1,361,812 | $ 1,387,560 |
Total operating expenses | 668,878 | 514,781 | 1,361,812 | 1,387,560 |
Operating loss | (668,878) | (514,781) | (1,361,812) | (1,387,560) |
Interest expense | (1,550,418) | (797,509) | (2,262,313) | (797,652) |
Net amortization of debt discount and premium on convertible debt | (840,170) | (55,621) | (550,259) | (55,621) |
Change in fair market value of derivative liabilities | 16,631 | (756,053) | 1,087,347 | (756,053) |
Loss on extinguishment of debt | (2,795,582) | |||
Impairment of intangible asset | (67,131) | (67,131) | ||
Gain on settlement of debt | 42,896 | 42,896 | ||
Foreign Exchange Loss | (1,577) | (1,577) | ||
Loss before income taxes | (3,068,646) | (2,123,964) | (5,908,430) | (2,996,886) |
Income tax expense | ||||
Net loss and comprehensive loss | $ (3,068,646) | $ (2,123,964) | $ (5,908,430) | $ (2,996,886) |
Basic and diluted loss per common share | $ (0.53) | $ (0.37) | $ (1) | $ (0.52) |
Weighted average number of common shares outstanding, basic and diluted | 5,924,230 | 5,811,900 | 5,893,513 | 5,749,997 |
Condensed Interim Consolidate_2
Condensed Interim Consolidated Statements of Changes in Stockholders Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional paid-in capital | Equity to be issued | Accumulated Deficit | Total |
Beginning Balance at Jun. 30, 2018 | $ 5,572 | $ 3,684,266 | $ 379,102 | $ (3,802,822) | $ 266,118 |
Beginning Balance, shares at Jun. 30, 2018 | 5,572,084 | ||||
Common stock and warrants issued for services | $ 11 | 139,489 | (127,500) | 12,000 | |
Common stock and warrants issued for services, shares | 11,000 | ||||
Reduction in equity to be issued upon issuance of common stock | $ 14 | 30,986 | (31,000) | ||
Reduction in equity to be issued upon issuance of common stock, shares | 13,778 | ||||
Warrants exercised for cash | $ 195 | 468,804 | (220,602) | 248,397 | |
Warrants exercised for cash, shares | 195,111 | ||||
Issuance of stock options | 126,829 | 126,829 | |||
Equity to be issued | 62,000 | 62,000 | |||
Net loss for the period | (872,923) | (872,923) | |||
Ending Balance at Sep. 30, 2018 | $ 5,792 | 4,450,374 | 62,000 | (4,675,745) | (157,579) |
Ending Balance, shares at Sep. 30, 2018 | 5,791,973 | ||||
Common stock and warrants issued for services | $ 9 | 88,491 | 88,500 | ||
Common stock and warrants issued for services, shares | 9,000 | ||||
Warrants exercised for cash | $ 18 | 39,878 | 39,896 | ||
Warrants exercised for cash, shares | 17,568 | ||||
Issuance of stock options | 41,630 | 41,630 | |||
Equity to be issued | (62,000) | (62,000) | |||
Net loss for the period | (2,123,963) | (2,123,963) | |||
Ending Balance at Dec. 31, 2018 | $ 5,819 | 4,620,374 | (6,799,708) | (2,173,516) | |
Ending Balance, shares at Dec. 31, 2018 | 5,818,541 | ||||
Beginning Balance at Jun. 30, 2019 | $ 5,849 | 4,955,380 | 230,000 | (10,184,187) | (4,992,958) |
Beginning Balance, shares at Jun. 30, 2019 | 5,849,208 | ||||
Common stock and warrants issued for services | $ 17 | 199,983 | (200,000) | ||
Common stock and warrants issued for services, shares | 16,667 | ||||
Stock based compensation | 55,672 | 55,672 | |||
Net loss for the period | (2,839,784) | (2,839,784) | |||
Ending Balance at Sep. 30, 2019 | $ 5,866 | 5,211,035 | 30,000 | (13,023,971) | (7,777,070) |
Ending Balance, shares at Sep. 30, 2019 | 5,865,875 | ||||
Beginning Balance at Jun. 30, 2019 | $ 5,849 | 4,955,380 | 230,000 | (10,184,187) | (4,992,958) |
Beginning Balance, shares at Jun. 30, 2019 | 5,849,208 | ||||
Ending Balance at Dec. 31, 2019 | $ 5,938 | 6,573,865 | 30,000 | (16,141,617) | (9,482,814) |
Ending Balance, shares at Dec. 31, 2019 | 5,937,670 | ||||
Beginning Balance at Sep. 30, 2019 | $ 5,866 | 5,211,035 | 30,000 | (13,023,971) | (7,777,070) |
Beginning Balance, shares at Sep. 30, 2019 | 5,865,875 | ||||
Common stock and warrants issued for services | $ 9 | 57,991 | 58,000 | ||
Common stock and warrants issued for services, shares | 8,889 | ||||
Stock based compensation | 45,397 | 45,397 | |||
Common stock issued for waiver agreement | $ 5 | 26,897 | 26,902 | ||
Common stock issued for waiver agreement, shares | 5,435 | ||||
Warrants exercised for cash | $ 4 | 9,996 | 10,000 | ||
Warrants exercised for cash, shares | 4,444 | ||||
Non-cash warrant exercised | $ 53 | 1,222,549 | 1,222,602 | ||
Non-cash warrant exercised, shares | 53,027 | ||||
Net loss for the period | (3,068,646) | (3,068,646) | |||
Ending Balance at Dec. 31, 2019 | $ 5,938 | $ 6,573,865 | $ 30,000 | $ (16,141,617) | $ (9,482,814) |
Ending Balance, shares at Dec. 31, 2019 | 5,937,670 |
Condensed Interim Consolidate_3
Condensed Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (5,908,430) | $ (2,996,886) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 329,960 | 268,959 |
Amortization and depreciation | 15,527 | 25,664 |
Impairment of intangible asset | 67,131 | |
Net amortization of debt discount and premium on convertible debt | 550,259 | 55,621 |
Change in the fair market value of derivative liabilities | (1,087,347) | 756,053 |
Loss on extinguishment of debt | 2,795,582 | |
Non-cash interest expense | 2,064,749 | 436,273 |
Gain on settlement of debt | (42,896) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (835) | |
Prepaid expenses | 19,123 | 164,141 |
Accounts payable and accrued expenses | 226,214 | 352,453 |
Net cash used in operating activities | (970,129) | (938,557) |
Cash flows from investing activities: | ||
Rent security deposit | (16,480) | |
Purchase of intangible assets | (1,869) | |
Purchase of equipment | ||
Net cash used in investing activities | (18,349) | |
Cash flows from financing activities: | ||
Proceeds from promissory convertible note | 1,160,000 | 2,050,000 |
Repayment of promissory convertible note | (105,000) | (56,500) |
Deferred financing costs | (85,000) | (410,772) |
Proceeds from exercise of warrants | 10,000 | 288,290 |
Net cash provided by financing activities | 980,000 | 1,871,018 |
Net increase in cash | 9,871 | 914,112 |
Cash, beginning of period | 43,412 | 100,167 |
Cash, end of period | 53,283 | 1,014,279 |
CASH PAID FOR: | ||
Interest | ||
Income taxes | ||
Extinguishment of derivative liability associated with extinguishment of convertible notes | 1,426,323 | |
Extinguishment of debt discount associated with extinguishment of convertible notes | 1,909,280 | |
Debt discount and derivative liability associated with amended and restated note | 1,565,617 | |
Increase in principal amount of convertible debt associated with amended and restated note | 660,000 | |
Derivative liability associated with convertible notes entered into | 1,136,231 | |
Debt discount associated with convertible notes entered into | 1,276,000 | |
Extinguishment of derivative liability associated with cashless warrant exercise | 1,222,602 | |
Original issuance discount of convertible notes | $ 116,000 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Dec. 31, 2019 | |
Nature of Operations [Abstract] | |
Nature of Operations | Note 1 – Nature of Operations Esports Entertainment Group, Inc. (formerly VGambling Inc.) (the "Company") was incorporated in the state of Nevada on July 22, 2008. On April 18, 2017, the majority of the shareholders of the Company's common stock voted to approve a change of the name of the Company from VGambling, Inc. to Esports Entertainment Group, Inc. The Company operates a licensed online gambling platform focused purely on the esports industry. Utilizing our peer-to-peer wagering system, we offer real money betting exchange style wagering on esports events from around the world in a secure environment. A betting exchange allows players to bet against one another rather than a bookmaker. Players can offer odds to, or request odds from, other players who wish to wager. Where traditional bookmakers risk going head-to-head with gamblers on markets, a betting exchange takes on no risk on the particular outcome of an event. Instead, a betting exchange provides the platform for its customers to match bets against one another and takes a small commission on winnings. Betting exchanges are becoming an increasingly integral part of the global gambling landscape, in many cases enabling customers to obtain better odds, more transparency and an experience that feels intuitively fairer. Further, the platform also facilitates gambling through "pool betting" whereby a group of people, be it a fan base of a team or a player or a group of friends and family, can pay a fixed price into a "pool" and then make a selection on an outcome, related to a tournament or game in esport. After the event has finished, those that selected the winner get an equal share of the pool. At the current time, under our existing Curacao license, we are able to accept wagers from residents of over 149 jurisdictions including Canada, Japan, Germany and South Africa. We do not accept wagers from United States residents at this time. |
Basis of Presentation and Going
Basis of Presentation and Going Concern | 6 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Going Concern | Note 2 – Basis of Presentation and Going Concern The Company is in the development stage and has not yet realized profitable operations and has relied on non-operational sources to fund operations. The Company has incurred recurring losses and additional future losses are anticipated as the Company has not yet been able to generate revenue. The Company's activities are subject to significant risks and uncertainties, including failing to obtain the licenses required to operate its gambling business, failing to secure the additional funding required to fully operationalize the Company's business, and the risk of existing or future competitors offering similar or more advanced technology. These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of December 31, 2019, the Company had an accumulated deficit of $16,092,617 and a working capital deficiency of $9,504,792. The Company has not generated any revenues during the six months ended December 31, 2019 and 2018. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. Management's evaluations are based on relevant conditions and events that are known and reasonably to be knowable as of February 19, 2020. Based on the information above, management believes that it is probable that management will be unable to meet its obligations as they come due within one year that the financial statements are issued. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 – Summary of Significant Accounting Policies A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows: Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the "SEC") set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the annual period ended June 30, 2019. The consolidated balance sheet as of June 30, 2019 was derived from the audited consolidated financial statements as of and for the year ended. The consolidated statements include the accounts of the Company and its wholly owned subsidiaries Esports Services Antigua Ltd., Vie Esports Services B.V., Esports Services (Malta) Limited and Esports Entertainment (Malta) Ltd. All material intercompany transactions and balances have been eliminated on consolidation. Certain reclassifications have been made to the prior period condensed consolidated financial statements to conform to the current period presentation. Income (Loss) Per Share Basic income (loss) per share is computed by dividing net loss attributable to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. The following securities were excluded from weighted average diluted common shares outstanding for the six months ended December 31, 2019 and 2018 because their inclusion would have been antidilutive. As of December 31, 2019 2018 Common stock equivalents: Common stock options 51,942 46,608 Warrants issued with notes and placement agent warrants 807,717 436,765 Convertible notes 375,834 537,778 Equity to be issued 2,667 - Totals 1,238,160 1,021,151 Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements. In February 2016, the FASB issued Accounting Standards Codification (ASC) 842, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective July 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted all practical expedients and elected the following accounting policies related to this standard: ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of twelve months or less; and ● The option to not separate lease and non-lease components for equipment leases. The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. Adoption of this standard did not result in the recognition of operating lease right-of-use assets or liability as of July 1, 2019. The Company's accounting for finance leases remained substantially unchanged. The standard did not materially impact operating results or liquidity. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share- based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The guidance was adopted effective July 1, 2019, and the adoption of this ASU did not have a material effect on its consolidated financial statements. In July 2017 the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and The following are new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Company's financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The ASU adds new disclosure requirements for Level 3 measurements. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Company's financial statements. |
Fixed Assets
Fixed Assets | 6 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 4 – Fixed Assets Fixed assets as of December 31, 2019 and June 30, 2019 consists of the following: December 31, June 30, Computer equipment $ 14,450 $ 14,450 Furniture and equipment 20,241 20,241 Total 34,691 34,691 Accumulated depreciation (22,546 ) (18,114 ) Net carrying value $ 12,145 $ 16,577 During the six months ended December 31, 2019 and 2018, the Company recorded total depreciation expense of $4,432 and $4,477, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 5 – Intangible Assets Intangible assets as of December 31, 2019 and June 30, 2019 consists the following: December 31, June 30, Online gaming website $ 127,133 $ 127,133 Accumulated amortization (63,002 ) (45,907 ) Impairment of intangible assets (67,131 ) - Net carrying value $ 3,000 $ 81,226 During the six months ended December 31, 2019 and 2018, the Company recorded total amortization expense of $11,095 and $21,187, respectively. During the six months ended December 31, 2019 and 2018, the Company recorded total impairment expense of $67,131 and $0, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6. Related Party Transactions The Company entered into transactions and owes balances related to cash to officers and directors. a) The Company currently leases office space from the Chief Executive Officer of the Company, Grant Johnson. During the six months ended December 31, 2019 and 2018, the Company incurred rent of $4,800 for both periods, charged by its Chief Executive Officer. As of December 31, 2019 and 2018, the Company owed $0 and $1,200, respectively, to its Chief Executive Officer related to rent payments. b) The Company provides an expense advance to David Watt, a Director of the Company. For the six months ended December 31, 2019 and 2018, the Company had provided an expense advance of $19,337 and $16,023, respectively, to Mr. Watt. As of December 31, 2019 and June 30, 2019, the Company included in prepaid expenses and other current assets – related party $16,050 for both periods related to David Watt's expense advance. c) During the six months ended December 31, 2019 and 2018, Swiss Interactive Software GmbH ("Swiss") charged the Company software consulting fees of $20,505 and $0, respectively, related to the development of the Company's online gaming website. Mr. Rozum is the controlling shareholder of Swiss and was a director and the CTO of the Company until his resignation on September 19, 2019. As of December 31, 2019 and June 30, 2019, the Company owed $36,650 and $93,265, respectively to Swiss. d) During the six months ended December 31, 2019 and 2018, Ardmore Software SP.Z.O.O. ("Ardmore") charged the Company IT consulting fees of $0 and $243,426, respectively and rent expense, totaling $0 and $35,379, respectively. Mr. Rozum is the controlling shareholder of Ardmore and was a director and the CTO of the Company until his resignation on September 19, 2019. As of December 31, 2019 and June 30, 2019, the Company owed $0 and $9,230, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 7 – Commitments and contingencies Swiss Interactive – Related Party On April 7, 2019, we entered into the Software Transfer Agreement with Swiss Interactive for the purchase of the Licensed Software for consideration of $1,700,000, the consummation of which was contingent upon either the Company's completion of (i) any private placement offerings or registered public offerings pursuant to which the Company receives proceeds in excess of $6,000,000 or (ii) any private or public offerings in connection with the listing of the Company's securities on a national securities exchange ("Qualified Offering"). If the Company did not complete a Qualified Offering within six months of the execution date of the transfer agreement, such agreement would become void and the Company and Swiss Interactive would continue to abide by the terms of the existing Betting Gaming Platform Software Agreement entered into with Swiss Interactive Software GmbH on June 12, 2014 (the "Original Software Licensing Agreement"). On November 6, 2019 the Software Transfer Agreement was terminated. Consultant Agreements On June 12, 2014, the Company entered into a Betting Gaming Platform Software Agreement with Swiss Interactive Software GmbH. The monthly fees due under the agreement are based on the percentage of total revenues per month ranging from 5.0% to 10.0%. Monthly fees for platform support and maintenance services are set at a minimum of 2,500 Euros ($2,859) and a maximum of 25,000 Euros ($28,595). The Company must provide 30 days' notice to terminate the agreement. During the quarter ended December 31, 2019, the Betting Gaming Platform Software Agreement was terminated On August 1, 2017, the Company entered into a consulting agreement with a consultant for compensation of $48,000 per year. If the Company's generates revenues exceeding $1,000,000 per month for six consecutive months the base annual compensation will increase to $72,000 per year. On July 13, 2018, the Company entered into an agreement in principle with a third party, to assist the Company with an offering of common stock of the Company or any other financing. Pursuant to this agreement, the Company advanced $50,000 for expenses which has been included in prepaid expenses as a deferred financing cost as of December 31, 2019 and June 30, 2019. In the event the agreement is terminated, the Company has agreed to reimburse the third party for the full amount of accountable expenses incurred to such date, up to a maximum of $200,000. This agreement is subject to completion of an offering. Contingencies Boustead Securities, LLC ("Boustead") has notified the Company that it owes Boustead $192,664, as well as warrants to purchase 94,528 shares of common stock of the Company, as compensation for their acting as the placement agent for the sale of Company securities between June 2017 and 2018. Unless this matter is settled, Boustead has notified us that they plan to file an arbitration claim to resolve this dispute. Management believes this claim to be without merit as it is management's position that Boustead has been paid in full for the services provided and that no further cash or warrants are owed. The JAMS arbitration was originally scheduled for the end of January 2020 and has since been deferred to April 2020. The Company was notified that a claim was made against the Company for approximately $117,000, as compensation for financing commissions in 2017. It is our position that we have paid Boustead in full for the services it provided to us. We have denied that we owe Boustead any additional cash or warrants and have filed motions to dismiss these claims as well as filed counterclaims against Boustead. We plan to continue to vigorously defend the Company against these claims. On December 19, 2018, Mr. Bryan Whatley, filed the first amended complaint against the Company (the "Defendant") in the United States District Court in the District of Nevada for breach of contract in connection with its acting as a finder to assist the Company in finding potential investors. In their complaint, they sought damages in excess of $85,000 plus warrants to purchase shares of the Company's common stock. The Company filed an answer to the first amended complaint denying the existence of a contract between the Company and Mr. Whatley, among other things. Management believes this claim to be without merit as it is management's position that there was no contract. We plan to continue to vigorously defend the Company against this claim. The deadline for Mr. Whatley to respond to the Company's answer was April 12, 2019, and no such response was filed. On April 23, 2019, the Company filed a motion to dismiss with the United States District Court of the State of Nevada. On August 27, 2019, an order that the Defendant's motion to dismiss was granted. |
Convertible Debt
Convertible Debt | 6 Months Ended |
Dec. 31, 2019 | |
Convertible Debt [Abstract] | |
Convertible Debt | Note 8 – Convertible Debt $2,200,000 Secured Convertible Note On November 13, 2018 (the "November 13, 2018 Offering"), the Company issued face value $2,200,000 5% Senior Convertible Notes issued at a 10% original issue discount along with 244,445 warrants for net proceeds of $2,000,000 (the "Notes"). Cash fees paid for financing costs were $336,193. The Notes are secured by all of our assets and accrues interest at 5% per annum, payable in cash at maturity. However, the principal amount may be converted at the option of the holder at any time during the term to maturity into shares of our common stock at a conversion price of $9.0 per share subject to adjustment for capital reorganization events and subsequent sales by the Company of shares of its common stock at a price per share below $9.0. The Notes also contain certain traditional default provisions that are linked to credit or interest risks, such as bankruptcy proceedings, liquidation events and corporate existence. The Company has concluded that the Notes contain an embedded conversion option that is indexed to the Company's stock which contain an optional cash settlement feature. Therefore, the embedded conversion option is subject to classification in the Company's financial statement in liabilities at fair value both at inception and subsequently pursuant to ASC 815. In connection with the issuance of the Note, the Company issued the holders warrants to purchase our common stock. The warrant is exercisable until November 13, 2021 for 244,445 of shares at a purchase price of $11.25 per share subject to adjustment for capital reorganization events and subsequent sales by the Company of shares of its common stock at a price per share below $11.25. The Company has concluded that the Warrants contain an optional cash settlement feature. Therefore, the Warrants are subject to classification in the Company's financial statement in liabilities at fair value both at inception and subsequently pursuant to ASC 815. Additionally, the Company issued its placement agents warrants to purchase its common stock. The warrant is exercisable until December 12, 2023 for 48,889 of shares at a purchase price of $11.25 per share subject to adjustment for capital reorganization events and subsequent sales by the Company of shares of its common stock at a price per share below $11.25. The Company has concluded that the Warrants contain an optional cash settlement feature. Therefore, the Warrants are subject to classification in the Company's financial statement in liabilities at fair value both at inception and subsequently pursuant to ASC 815. On July 17, 2019, the Company and the investors (the "Investors") in its November 13, 2018 Offering entered into Waiver Agreements (the "Waiver Agreements"). Pursuant to the terms of the Waiver Agreement, the Investors waived the exercise of remedies with regard to certain breaches of agreements and any and all events of defaults between the Company and the Investors, including the Notes, Warrants, and Securities Purchase Agreements (the "Transaction Documents"). In consideration for the Investors entrance into the Waiver Agreements, the Company increased the principal amount of each Note issued in the November 13, 2018 Offering by 30%, in the form of an Amended and Restated Senior Secured Convertible Promissory Note (the "Amended and Restated Note"). Additionally, for its role as lead investor, facilitator and negotiating the terms of the Waiver Agreement, the Company issued to Cavalry Fund I LP warrants to purchase 3,333 shares of Common Stock exercisable on or after October 1, 2019 for a term of three (3) years from such date at an exercise price of $11.25 per share (the "Cavalry Warrant"). The Company evaluated the debt modification for the Amended and Restated Note in accordance with ASC 470-50 and concluded that the debt qualified for debt extinguishment as the 10% cash flow test was met. As a result, the $2,200,000 Secured Convertible Note was written off and the Amended and Restated Note was recorded at fair value as of July 17, 2019. On July 17, 2019 the Company wrote off the remaining principal balance of $2,200,000 and recorded the Amended and Restated Note at fair market value in the amount of $4,476,412. On July 17, 2019, of the $4,476,412 fair market value, $2,860,000 represents the face amount of the Amended and Restated Note and $1,616,412 represents the deemed premium paid for the Amended and Restated Note which was recorded as additional debt principal to be amortized over the remaining life of the Amended and Restated Note. The Company accelerated the remaining amortization of the July 17, 2019 premium on November 19, 2019. For the six months ended December 31, 2019, the Company recorded a reduction to amortization expense in the amount of $1,616,412 for the amortization of the deemed premium and a loss on extinguishment of debt in the amount of $2,795,582. On November 19, 2019, the Company and the Investors in its November 13, 2018 Offering have agreed to or entered into subsequent Waiver Agreements (the "November Waiver Agreements"). Pursuant to the terms of the November Waiver Agreement, the Investors agreed to waive the exercise of remedies with regard to any and all events of default between the Company and the Investors, in connection with the Transaction Documents and agreed to extend the maturity of their Notes until February 14, 2020. In connection with the November Waiver Agreement, two investors received partial repayment. In consideration for the Investors entrance into the Waiver Agreements, the Company has agreed to issue to each Investor an additional Warrant (the "Additional Warrant") to purchase such number of shares of the Company's Common Stock equal to 5% of the Warrant Shares initially issuable to such Investor under the Warrant issued to such Investor in the November 13, 2018 Offering, as amended. The Additional Warrant shall have an exercise price of $11.25 per share and shall be in form substantially the same as the Warrants issued in the November 13, 2018 Offering, provided that no cashless provision, ratchet provision or piggyback registration provisions shall be contained in the Additional Warrants. The Company evaluated the debt modification for the Amended and Restated Note in accordance with ASC 470-50 and concluded that the debt did not qualify for debt extinguishment as the 10% cash flow test was not met. As a result, the additional warrants issued in connection with the waiver were fair valued and recorded as a debt discount, and are being amortized to interest expense over the remaining term of the debt. In addition, the Company incurred $50,000 of deferred financing fees in connection with the modification and expensed the fees to interest expense immediately. These notes matured on February 14th and the Company is in active good faith discussions with the noteholders to extend the maturity date. No defaults have been called. Private Placement Offerings On August 14, 2019 and August 29, 2019, the Company consummated the initial closings ("Initial Closings") of a private placement offering (the "Offerings") whereby the Company entered into those certain securities purchase agreement (the "August 2019 Purchase Agreements") with seven (7) accredited investors (the "August Investors"). Pursuant to the August 2019 Purchase Agreements, the Company issued the August Investors those certain convertible promissory notes (the "August Convertible Promissory Notes") in the aggregate principal amount of $522,500 (including a 10% original issue discount) and warrants (the "August Investor Warrants") to purchase 58,057 shares of the Company's common stock for aggregate gross proceeds of $475,000. On October 11, 2019 and December 16, 2019, Company consummated additional closings of the Offerings whereby the Company entered into certain securities purchase agreement accredited investors (the "Q2 Closings"). Pursuant to the Q2 Closings, the Company issued the investors those certain convertible promissory notes (the "Q2 Promissory Notes") in the aggregate principal amount of $753,500 (including a 10% original issue discount) and to purchase 92,278 shares of the Company's common stock for aggregate gross proceeds of $685,000. The August Convertible Promissory Notes and Q2 Promissory Notes, together and in the aggregate the ("Bridge Notes") accrue interest at a rate of 5% per annum and are initially convertible into shares of the Company's common stock at a conversion price of $9.00 per share, subject to adjustment (the "Conversion Price"). The Bridge Notes contain a mandatory conversion mechanism whereby unpaid principal and accrued interest on the Bridge Notes, upon the closing of a Qualified Offering (as defined therein) converts into the securities offered in such a Qualified Offering at the lower of Pursuant to the Bridge Notes, each investor was entitled to 100% warrant coverage, such that investor in the Bridge Notes received the same number of warrants to purchase shares of Common Stock as is the number of shares of Common Stock initially issuable upon conversion of the Bridge Notes as of the date of issuance. The warrants issued in accordance with the Bridge Notes are exercisable at a price of $11.25 per share, subject to adjustment from the date of issuance through August 14, 2022, August 29, 2022, October 11, 2022 and December 16, 2022. Joseph Gunnar & Co., LLC (the "Placement Agent") acted as placement agent for the Offerings and received cash compensation of $85,000 and warrants to purchase 20,778 shares of the Company's common stock, at an initial exercise price of $11.25 per share, subject to adjustment ("Agent Warrants"). The Agent Warrants may be exercised on a "cashless" basis and expire in August 14, 2024 and August 29, 2024. Accounting for the Amended and Restated Notes and Convertible Promissory Notes The Company evaluated the terms and conditions of the Amended and Restated Notes and Convertible Promissory Notes issued in the private placement offerings under the guidance of ASC 815. Because the economic characteristics and risks of the equity-linked conversion options are clearly and closely related to a debt-type host and the conversion features contain an optional cash settlement, the conversion features require classification and measurement as derivative financial instruments. Further, these features individually were not afforded the exemption normally available to derivatives indexed to a company's own stock. Accordingly, our evaluation resulted in the conclusion that this compound derivative financial instrument requires bifurcation and liability classification, at fair value. The compound derivative financial instrument consists of an embedded conversion feature. Current standards contemplate that the classification of financial instruments requires evaluation at each report date. The following tables reflect the allocation of the purchase on the financing dates: Secured Convertible Notes Face Value December 31, June 30, Face value of Amended and Restated Note $ 2,755,000 $ 2,200,000 Face value of Bridge Notes 1,276,000 - Total face value 4,031,000 2,200,000 Aggregate debt discount (674,946 ) (1,919,280 ) Carrying value $ 3,356,054 $ 290,720 The carrying value of the aggregate secured convertible notes at December 31, 2019 and June 30, 2019 was $3,356,054and $290,720, respectively. Discounts and premiums on the convertible notes arise from (i) the allocation of basis to other instruments issued in the transaction, (ii) fees paid directly to the creditor and (iii) initial recognition at fair value, which is greater than face value. Discounts and premiums are amortized through charges to and reductions to amortization of interest expense using the effective interest rate method over the term of the debt agreement. Amortization of debt discounts amounted to $2,166,670 and amortization of debt premium amounted to $1,616,411, which resulted in expense from net amortization in the amount of $550,259 during the six months ended December 31, 2019. During the six months ended December 31, 2018, the Company recorded amortization of debt discount in the amount of $55,621. Derivative Liabilities The carrying value of the compound embedded derivative and warrant derivative liabilities are on the balance sheet, with changes in the carrying value being recorded as a change in fair market value of derivative liabilities on the statements of operations and comprehensive loss. The components of the compound embedded derivative and warrant derivative liabilities as of December 31, 2019 are as follows: Our financing giving rise to derivative financial instruments Indexed Shares Fair Values Compound embedded derivatives: $4,031,000 face value secured convertible notes 447,889 $ 1,958,893 Warrant derivative liabilities (Issued with Notes) 310,496 3,079,230 Warrant derivative liabilities (Placement agent Warrants) 73,000 552,417 831,385 $ 5,590,540 The components of the compound embedded derivative and warrant derivative liabilities as of June 30, 2019 are as follows: Our financing giving rise to derivative financial instruments Indexed Shares Fair Values Compound embedded derivatives: $2,200,000 face value secured convertible notes 244,444 $ 1,777,363 Warrant derivative liabilities (Issued with Notes) 244,445 2,398,057 Warrant derivative liabilities (Placement agent Warrants) 48,889 479,611 537,778 $ 4,655,031 Fair Value Considerations GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels: Level 1 valuations Level 2 valuations Level 3 valuations Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of December 31, 2019. Amounts at Fair Value Measurement Liabilities Fair Value Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,958,893 $ - $ - $ 1,958,893 Derivative liability – warrants 3,631,647 - - 3,631,647 Total $ 5,590,540 $ - $ - $ 5,590,540 Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of June 30, 2019. Amounts at Fair Value Measurement Liabilities Fair Value Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,777,363 $ - $ - $ 1,777,363 Derivative liability – warrants 2,877,668 - - 2,877,668 Total $ 4,655,031 $ - $ - $ 4,655,031 The table below provides a summary of the changes in fair value, including net transfers in and/or out of all financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended December 31, 2019: Amount Balance at June 30, 2019 $ 4,655,031 Change due to warrant exercise (1,222,602 ) Change due to extinguishment of debt (1,426,323 ) Change due to acquired amended and restated note 3,513,920 Change due to issuance of warrants 2,210,550 Change in fair value of derivative liabilities (1,863,171 ) Change in fair value of warrant liabilities (233,969 ) Change due to redemption of convertible debt (42,896 ) $ 5,590,540 The fair value of the derivative conversion features and warrant liabilities as of December 31, 2019 were calculated using a Monte-Carlo option model valued with the following assumptions: December 31, Dividend yield 0% Expected volatility 171.4% - 244.6% Risk free interest rate 1.9% - 2.3% Contractual term (in years) 0.12 – 5.02 Conversion/Exercise price $4.20 - $12.00 Changes in the observable input values would likely cause material changes in the fair value of the Company's Level 3 financial instruments. The features embedded in the secured convertible notes and the warrants were valued using a Monte Carlo based valuation model. The Monte Carlo valuation technique was utilized because it embodies all of the requisite assumptions (including the underlying price, exercise price, term, volatility, and risk-free interest-rate) that are necessary to fair value these instruments. For forward contracts that contingently require net-cash settlement as the principal means of settlement, the Company projects and discounts future cash flows applying probability-weighted to multiple possible outcomes. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of the Company's common stock. Because derivative financial instruments are initially and subsequently carried at fair values, the Company's income will reflect the volatility in these estimate and assumption changes. |
Common Stock
Common Stock | 6 Months Ended |
Dec. 31, 2019 | |
Common Stock [Abstract] | |
Common Stock | Note 9 – Common Stock Issued Common Stock During the six months ended December 31, 2018, the Company issued 110,667 shares of its common stock related to the exercise warrants with a weighted average exercise price of $2.55 per share. During the six months ended December 31, 2018, the Company issued 84,444 shares of its common stock related equity to be issued for the exercise of warrants in a previous period with an exercise price of $2.55 per share. The Company recorded these shares as equity to be issued at June 30, 2018 and did not receive any cash proceeds during the six months ended December 31, 2018. For the six months ended December 31, 2018, the Company recorded $220,602 as a reduction in equity to be issued. During the six months ended December 31, 2018, the Company issued 13,778 shares of its common stock related to a subscription agreement entered into in a previous period. The Company recorded these shares as equity to be issued at June 30, 2018 and did not receive any cash proceeds during the six months ended December 31, 2018. For the six months ended December 31, 2018, the Company recorded $31,000 as a reduction in equity to be issued. During the six months ended December 31, 2018, the Company issued 11,000 shares of its common stock related to services received in a previous period. The Company recorded these shares as equity to be issued at June 30, 2018. For the six months ended December 31, 2018, the Company recorded $127,500 as a reduction in equity to be issued and $6,000 as stock based compensation On October 1, 2019, the Company issued 2,222 shares of its common stock in relation to a sponsorship agreement On October 8, 2019, the Company issued 41,780 shares of its common stock upon the exercise of 79,444 warrants upon a cashless exercise. On October 9, 2019, the Company issued 11,248 shares of its common stock upon the exercise of 21,389 warrants upon a cashless exercise. On October 30, 2019, the Company issued 6,667 shares of its common stock in relation to a consulting agreement. On November 19, 2019, the Company and the Investors in its November 13, 2018 Offering have agreed to or entered into subsequent Waiver Agreements (the "November Waiver Agreements"). Pursuant to the terms of the November Waiver Agreement, the Investors agreed to waive the exercise of remedies with regard to any and all events of default between the Company and the Investors, in connection with the Transaction Documents and agreed to extend the maturity of their Notes until February 14, 2020. Certain of the November Waiver Agreements are subject to continuing discussions regarding partial repayment. In consideration for the Investors entrance into the Waiver Agreements, the Company has agreed to issue to each Investor an additional Warrant (the "Additional Warrant") to purchase such number of shares of the Company's Common Stock equal to 5% of the Warrant Shares initially issuable to such Investor under the Warrant issued to such Investor in the November 13, 2018 Offering, as amended. The Additional Warrant shall have an exercise price of $11.25 per share and shall be in form substantially the same as the Warrants issued in the November 13, 2018 Offering, provided that no cashless provision, ratchet provision or piggyback registration provisions shall be contained in the Additional Warrants. During the six months ended December 31, 2019, the Company issued 4,444 shares of its common stock related to the exercise warrants with a weighted average exercise price of $2.25 per share. During the six months ended December 31, 2019, the Company issued 16,667 shares of its common stock related to a consulting agreement dated June 4, 2019. These shares were recorded as equity to be issued at June 30, 2019, and during the six months ended December 31, 2019, the Company recorded $230,000 as a reduction to equity to be issued. As of December 31, 2019, the Company recorded a prepaid expense in the amount of $150,000 related to the value of the common stock granted for future services to be rendered. |
Warrants
Warrants | 6 Months Ended |
Dec. 31, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | Note 10 – Warrants A summary of the Company's warrant activities is as follows: Number of Weighted Weighted Intrinsic Outstanding, June 30, 2019 727,779 $ 6.30 2.09 years $ 2,563,939 Issued 190,996 11.25 - - Exercised (105,279 ) 7.65 - - Expired (5,779 ) 13.35 - - Outstanding and Exercisable, December 31, 2019 807,717 $ 6.75 2.15 years $ 655,231 There were 105,279 warrants exercised during the six months ended December 31, 2019. The intrinsic value of the warrants exercised during the six months December 31, 2019 and 2018 was $0 and $1,789,666, respectively. As at December 31, 2019, the following warrants were outstanding: Expiry Date Number of Weighted February 2020 23,333 2.25 March 2020 81,111 2.25 June 2020 30,000 2.70 July 2020 45,333 3.30 August 2020 66,667 3.90 November 2021 143,661 11.25 March 2022 177,777 2.25 August 2022 63,556 11.25 October 2022 3,333 11.25 December 2023 48,889 11.25 August 2024 3,056 11.25 November 2024 121,051 11.25 807,717 $ 6.75 |
Stock Options
Stock Options | 6 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | Note 11 – Stock Options On August 1, 2017, the Company adopted the 2017 Stock Incentive Plan (the "2017 Plan") whereby incentive stock options issued to employees, officers, and directors of the Company shall not exceed 2,500,000 of which the purchase price of the stock options shall not be less than 100% of the fair market value of the Company's common stock and the period for exercising the stock options not exceed 10 years from the date of grant. The option price per share with respect to each option shall be determined by the committee for non-qualified stock options. A summary of the Company's stock option activity is as follows: Number of Options Weighted Average Exercise Price Outstanding, June 30, 2019 51,942 $ 10.50 Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2019 51,941 $ 10.50 As of December 31, 2019, the following options were outstanding: Expiry Date Number of Options Issued Number of Options Exercisable Weighted Average Exercise Price August 2020 3,333 3,333 $ 10.50 June 2021 13,334 13,334 10.50 August 2023 35,275 35,275 10.50 51,942 51,942 $ 10.50 As of December 31, 2019, the weighted average remaining life of the options was 4.9 years. During the six months ended December 31, 2019 and 2018, the Company recorded stock-based compensation expense of $329,960 and $268,959, respectively, which has been recorded as stock based compensation in the statements of operations. As of December 31, 2019 and 2018, there was $165,677 and $207,321, respectively, of unrecognized expense related to non-vested stock-based compensation arrangements. The following table provides the details of the total stock-based payments expense during the six months ended December 31, 2019 and 2018: December 31, December 31, Employees and directors' stock-based payments $ 101,070 $ 268,959 Amortization of prepaid expense 228,890 - Total $ 329,960 $ 268,959 |
Segment Information
Segment Information | 6 Months Ended |
Dec. 31, 2019 | |
Segmented Information [Abstract] | |
Segment Information | Note 12 – Segment Information The following tables summarizes financial information by geographic segment. For the six months ended December 31, 2019: Antigua Malta Curacao U.S. Total Net Loss $ 26,462 $ 38,978 $ 94,549 $ 5,748,441 $ 5,908,430 For the six months ended December 31, 2018: Antigua Malta Curacao U.S. Total Net Loss $ - $ 71,517 $ 39,591 $ 2,885,778 $ 2,996,886 As of December 31, 2019: Antigua Malta Curacao U.S. Total Assets $ 106,816 $ 54,853 $ 2,257 $ 135,067 $ 298,993 As of June 30, 2019: Antigua Malta Curacao U.S. Total Assets $ 202,546 $ 6,833 $ 7,095 $ 345,318 $ 561,792 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 – Subsequent Events On January 22, 2020, the Company filed a certificate of amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Nevada to effect a one-for-fifteen reverse stock split of the Company's outstanding shares of common stock. As a result of the reverse stock split, every fifteen shares of the Company's outstanding pre-reverse split common stock were combined and reclassified into one share of common stock. Unless otherwise noted, all share and per share data included in these financial statements retroactively reflect the 1-for-15 reverse stock split. On January 17, 2020 the Company entered into Exchange Agreements with 18 of its investors whereby the investors agreed to exchange warrants to purchase an aggregate of 288,722 shares of common stock for 288,722 shares of the Company's restricted common stock. On February 14, 2020 the notes matured without an amendment to the terms. The Company is not in compliance with the covenants and is in active good faith discussions with the noteholders to extend the maturity date. No defaults have been called. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the "SEC") set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the annual period ended June 30, 2019. The consolidated balance sheet as of June 30, 2019 was derived from the audited consolidated financial statements as of and for the year ended. The consolidated statements include the accounts of the Company and its wholly owned subsidiaries Esports Services Antigua Ltd., Vie Esports Services B.V., Esports Services (Malta) Limited and Esports Entertainment (Malta) Ltd. All material intercompany transactions and balances have been eliminated on consolidation. Certain reclassifications have been made to the prior period condensed consolidated financial statements to conform to the current period presentation. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is computed by dividing net loss attributable to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. The following securities were excluded from weighted average diluted common shares outstanding for the six months ended December 31, 2019 and 2018 because their inclusion would have been antidilutive. As of December 31, 2019 2018 Common stock equivalents: Common stock options 51,942 46,608 Warrants issued with notes and placement agent warrants 807,717 436,765 Convertible notes 375,834 537,778 Equity to be issued 2,667 - Totals 1,238,160 1,021,151 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements. In February 2016, the FASB issued Accounting Standards Codification (ASC) 842, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective July 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted all practical expedients and elected the following accounting policies related to this standard: ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of twelve months or less; and ● The option to not separate lease and non-lease components for equipment leases. The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. Adoption of this standard did not result in the recognition of operating lease right-of-use assets or liability as of July 1, 2019. The Company's accounting for finance leases remained substantially unchanged. The standard did not materially impact operating results or liquidity. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share- based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The guidance was adopted effective July 1, 2019, and the adoption of this ASU did not have a material effect on its consolidated financial statements. In July 2017 the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and The following are new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Company's financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The ASU adds new disclosure requirements for Level 3 measurements. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Company's financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of weighted average diluted common shares outstanding for antidilutive | As of December 31, 2019 2018 Common stock equivalents: Common stock options 51,942 46,608 Warrants issued with notes and placement agent warrants 807,717 436,765 Convertible notes 375,834 537,778 Equity to be issued 2,667 - Totals 1,238,160 1,021,151 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | December 31, June 30, Computer equipment $ 14,450 $ 14,450 Furniture and equipment 20,241 20,241 Total 34,691 34,691 Accumulated depreciation (22,546 ) (18,114 ) Net carrying value $ 12,145 $ 16,577 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | December 31, June 30, Online gaming website $ 127,133 $ 127,133 Accumulated amortization (63,002 ) (45,907 ) Impairment of intangible assets (67,131 ) - Net carrying value $ 3,000 $ 81,226 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Convertible Debt [Abstract] | |
Schedule of allocation purchase of financing dates | Secured Convertible Notes Face Value December 31, June 30, Face value of Amended and Restated Note $ 2,755,000 $ 2,200,000 Face value of Bridge Notes 1,276,000 - Total face value 4,031,000 2,200,000 Aggregate debt discount (674,946 ) (1,919,280 ) Carrying value $ 3,356,054 $ 290,720 |
Schedule of embedded derivative and warrant derivative liabilities | The components of the compound embedded derivative and warrant derivative liabilities as of December 31, 2019 are as follows: Our financing giving rise to derivative financial instruments Indexed Shares Fair Values Compound embedded derivatives: $4,031,000 face value secured convertible notes 447,889 $ 1,958,893 Warrant derivative liabilities (Issued with Notes) 310,496 3,079,230 Warrant derivative liabilities (Placement agent Warrants) 73,000 552,417 831,385 $ 5,590,540 The components of the compound embedded derivative and warrant derivative liabilities as of June 30, 2019 are as follows: Our financing giving rise to derivative financial instruments Indexed Shares Fair Values Compound embedded derivatives: $2,200,000 face value secured convertible notes 244,444 $ 1,777,363 Warrant derivative liabilities (Issued with Notes) 244,445 2,398,057 Warrant derivative liabilities (Placement agent Warrants) 48,889 479,611 537,778 $ 4,655,031 |
Schedule of fair Value financial Assets and Liabilities Measured on a Recurring Basis | Amounts at Fair Value Measurement Liabilities Fair Value Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,958,893 $ - $ - $ 1,958,893 Derivative liability – warrants 3,631,647 - - 3,631,647 Total $ 5,590,540 $ - $ - $ 5,590,540 Amounts at Fair Value Measurement Liabilities Fair Value Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,777,363 $ - $ - $ 1,777,363 Derivative liability – warrants 2,877,668 - - 2,877,668 Total $ 4,655,031 $ - $ - $ 4,655,031 |
Schedule of fair Value financial liabilities measured at fair value on a recurring basis using significant unobservable | Amount Balance at June 30, 2019 $ 4,655,031 Change due to warrant exercise (1,222,602 ) Change due to extinguishment of debt (1,426,323 ) Change due to acquired amended and restated note 3,513,920 Change due to issuance of warrants 2,210,550 Change in fair value of derivative liabilities (1,863,171 ) Change in fair value of warrant liabilities (233,969 ) Change due to redemption of convertible debt (42,896 ) $ 5,590,540 |
Schedule of fair value of the derivative conversion features and warrant liabilities | December 31, Dividend yield 0% Expected volatility 171.4% - 244.6% Risk free interest rate 1.9% - 2.3% Contractual term (in years) 0.12 – 5.02 Conversion/Exercise price $4.20 - $12.00 |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of warrant activities | Number of Weighted Weighted Intrinsic Outstanding, June 30, 2019 727,779 $ 6.30 2.09 years $ 2,563,939 Issued 190,996 11.25 - - Exercised (105,279 ) 7.65 - - Expired (5,779 ) 13.35 - - Outstanding and Exercisable, December 31, 2019 807,717 $ 6.75 2.15 years $ 655,231 |
Schedule of warrants outstanding | Expiry Date Number of Weighted February 2020 23,333 2.25 March 2020 81,111 2.25 June 2020 30,000 2.70 July 2020 45,333 3.30 August 2020 66,667 3.90 November 2021 143,661 11.25 March 2022 177,777 2.25 August 2022 63,556 11.25 October 2022 3,333 11.25 December 2023 48,889 11.25 August 2024 3,056 11.25 November 2024 121,051 11.25 807,717 $ 6.75 |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Number of Options Weighted Average Exercise Price Outstanding, June 30, 2019 51,942 $ 10.50 Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2019 51,941 $ 10.50 |
Schedule of options outstanding | Expiry Date Number of Options Issued Number of Options Exercisable Weighted Average Exercise Price August 2020 3,333 3,333 $ 10.50 June 2021 13,334 13,334 10.50 August 2023 35,275 35,275 10.50 51,942 51,942 $ 10.50 |
Schedule of stock-based payments expense | December 31, December 31, Employees and directors' stock-based payments $ 101,070 $ 268,959 Amortization of prepaid expense 228,890 - Total $ 329,960 $ 268,959 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Convertible Debt [Abstract] | |
Schedule of financial information by geographic segment | For the six months ended December 31, 2019: Antigua Malta Curacao U.S. Total Net Loss $ 26,462 $ 38,978 $ 94,549 $ 5,748,441 $ 5,908,430 For the six months ended December 31, 2018: Antigua Malta Curacao U.S. Total Net Loss $ - $ 71,517 $ 39,591 $ 2,885,778 $ 2,996,886 As of December 31, 2019: Antigua Malta Curacao U.S. Total Assets $ 106,816 $ 54,853 $ 2,257 $ 135,067 $ 298,993 As of June 30, 2019: Antigua Malta Curacao U.S. Total Assets $ 202,546 $ 6,833 $ 7,095 $ 345,318 $ 561,792 |
Basis of Presentation and Goi_2
Basis of Presentation and Going Concern (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (16,092,617) | $ (10,184,187) |
Working capital deficiency | $ 9,504,792 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted average diluted common shares outstanding for antidilutive | 1,238,160 | 1,021,151 |
Common Stock Options [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 51,942 | 46,608 |
Warrant [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 807,717 | 436,765 |
Convertible Debt Securities [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 375,834 | 537,778 |
Equity to be Issued | ||
Weighted average diluted common shares outstanding for antidilutive | 2,667 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Total | $ 34,691 | $ 34,691 |
Accumulated depreciation | (22,546) | (18,114) |
Net carrying value | 12,145 | 16,577 |
Computer equipment [Member] | ||
Total | 14,450 | 14,450 |
Furniture and equipment [Member] | ||
Total | $ 20,241 | $ 20,241 |
Fixed Assets (Details Textual)
Fixed Assets (Details Textual) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fixed Assets [Member] | ||
Fixed Assets (Textual) | ||
Depreciation expense | $ 4,432 | $ 4,477 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Online gaming website | $ 127,133 | $ 127,133 |
Accumulated amortization | (63,002) | (45,907) |
Impairment of intangible assets | (67,131) | |
Net carrying value | $ 3,000 | $ 81,226 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - Intangible Assets [Member] - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets (Textual) | ||
Total amortization expense | $ 11,095 | $ 21,187 |
Impairment of website asset | $ 67,131 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
David Watt [Member] | ||
Related Party Transactions (Textuals) | ||
Related Party Transactions, Description | The Company provides an expense advance to David Watt, a Director of the Company. For the six months ended December 31, 2019 and 2018, the Company had provided an expense advance of $19,337 and $16,023, respectively, to Mr. Watt. As of December 31, 2019 and June 30, 2019, the Company included in prepaid expenses and other current assets – related party $16,050 for both periods related to David Watt’s expense advance. | |
Swiss Interactive Software GmbH [Member] | ||
Related Party Transactions (Textuals) | ||
Related Party Transactions, Description | Swiss Interactive Software GmbH ("Swiss") charged the Company software consulting fees of $20,505 and $0, respectively, related to the development of the Company's online gaming website. Mr. Rozum is the controlling shareholder of Swiss and was a director and the CTO of the Company until his resignation on September 19, 2019. As of December 31, 2019 and June 30, 2019, the Company owed $36,650 and $93,265, respectively to Swiss. | |
Ardmore Software SP.Z.O.O [Member] | ||
Related Party Transactions (Textuals) | ||
Related Party Transactions, Description | The Company IT consulting fees of $0 and $243,426, respectively and rent expense, totaling $0 and $35,379, respectively. Mr. Rozum is the controlling shareholder of Ardmore and was a director and the CTO of the Company until his resignation on September 19, 2019. As of December 31, 2019 and June 30, 2019, the Company owed $0 and $9,230, respectively. | |
Chief Executive Officer [Member] | ||
Related Party Transactions (Textuals) | ||
Rent incurred | $ 4,800 | $ 4,800 |
Rent payments | $ 0 | $ 1,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Apr. 07, 2019 | Dec. 19, 2018 | Jul. 13, 2018 | Aug. 01, 2017 | Jun. 12, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 |
Commitments and Contingencies (Textual) | ||||||||||
Swiss interactive related party, Description | (i) any private placement offerings or registered public offerings pursuant to which the Company receives proceeds in excess of $6,000,000 or (ii) any private or public offerings in connection with the listing of the Company's securities on a national securities exchange ("Qualified Offering"). If the Company did not complete a Qualified Offering within six months of the execution date of the transfer agreement, such agreement would become void and the Company and Swiss Interactive would continue to abide by the terms of the existing Betting Gaming Platform Software Agreement entered into with Swiss Interactive Software GmbH on June 12, 2014 (the "Original Software Licensing Agreement"). On November 6, 2019 the Software Transfer Agreement was terminated. | |||||||||
Consideration | $ 1,700,000 | |||||||||
Consultant agreements, Description | The Company has agreed to reimburse the third party for the full amount of accountable expenses incurred to such date, up to a maximum of $200,000. This agreement is subject to completion of an offering. | The Company entered into a consulting agreement with a consultant for compensation of $48,000 per year. If the Company's generates revenues exceeding $1,000,000 per month for six consecutive months the base annual compensation will increase to $72,000 per year. | The monthly fees due under the agreement are based on the percentage of total revenues per month ranging from 5.0% to 10.0%. Monthly fees for platform support and maintenance services are set at a minimum of 2,500 Euros ($2,859) and a maximum of 25,000 Euros ($28,595). The Company must provide 30 days' notice to terminate the agreement. During the quarter ended December 31, 2019, the Betting Gaming Platform Software Agreement was terminated. | |||||||
Deferred financing cost | $ 50,000 | $ 50,000 | $ 50,000 | |||||||
Contingency, Description | Boustead Securities, LLC (“Boustead”) has notified the Company that it owes Boustead $192,664, as well as warrants to purchase 94,528 shares of common stock of the Company, as compensation for their acting as the placement agent for the sale of Company securities between June 2017 and 2018. | |||||||||
Contingency claim | $ 117,000 | |||||||||
Damages in excess | $ 85,000 | |||||||||
General and administrative | $ 668,878 | $ 514,781 | $ 1,361,812 | $ 1,387,560 | ||||||
Minimum [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Total revenues , percentage | 5.00% | |||||||||
Maximum [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Total revenues , percentage | 10.00% |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Convertible Debt [Abstract] | ||
Face value of Amended and Restated Note | $ 2,755,000 | $ 2,200,000 |
Face value of Bridge Notes | 1,276,000 | |
Total face value | 4,031,000 | 2,200,000 |
Aggregate debt discount | (674,946) | (1,919,280) |
Carrying value | $ 3,356,054 | $ 290,720 |
Convertible Debt (Details 1)
Convertible Debt (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Jun. 30, 2019 | |
Fair Values [Member] | ||
Compound embedded derivatives: | ||
$4,031,000 face value secured convertible notes | $ 1,958,893 | |
$2,200,000 face value secured convertible notes | $ 1,777,363 | |
Warrant derivative liabilities (Issued with Notes) | 3,079,230 | 2,398,057 |
Warrant derivative liabilities (Placement agent Warrants) | 552,417 | 479,611 |
Embedded derivatives Total | 5,590,540 | 4,655,031 |
Indexed Shares [Member] | ||
Compound embedded derivatives: | ||
$4,031,000 face value secured convertible notes | 447,889 | |
$2,200,000 face value secured convertible notes | 244,444 | |
Warrant derivative liabilities (Issued with Notes) | 310,496 | 244,445 |
Warrant derivative liabilities (Placement agent Warrants) | 73,000 | 48,889 |
Embedded derivatives Total | $ 831,385 | $ 537,778 |
Convertible Debt (Details 2)
Convertible Debt (Details 2) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Liabilities | ||
Derivative liability - conversion feature | $ 1,958,893 | $ 1,777,363 |
Derivative liability - warrants | 3,631,647 | 2,877,668 |
Total | 5,590,540 | 4,655,031 |
Level 1 [Member] | ||
Liabilities | ||
Derivative liability - conversion feature | ||
Derivative liability - warrants | ||
Total | ||
Level 2 [Member] | ||
Liabilities | ||
Derivative liability - conversion feature | ||
Derivative liability - warrants | ||
Total | ||
Level 3 [Member] | ||
Liabilities | ||
Derivative liability - conversion feature | 1,958,893 | 1,777,363 |
Derivative liability - warrants | 3,631,647 | 2,877,668 |
Total | $ 5,590,540 | $ 4,655,031 |
Convertible Debt (Details 3)
Convertible Debt (Details 3) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Convertible Debt [Abstract] | ||
Balance at June 30, 2019 | $ 4,655,031 | |
Change due to warrant exercise | (1,222,602) | |
Change due to extinguishment of debt | (1,426,323) | |
Change due to acquired amended and restated note | 3,513,920 | |
Change due to issuance of warrants | 2,210,550 | |
Change in fair value of derivative liabilities | (1,863,171) | |
Change in fair value of warrant liabilities | (233,969) | |
Change due to redemption of convertible debt | (42,896) | |
Balance | $ 5,590,540 | $ 4,655,031 |
Convertible Debt (Details 4)
Convertible Debt (Details 4) | 6 Months Ended |
Dec. 31, 2019$ / shares | |
Dividend yield | 0.00% |
Minimum [Member] | |
Expected volatility | 171.40% |
Risk free interest rate | 1.90% |
Contractual term (in years) | 1 month 13 days |
Conversion/Exercise price | $ 4.20 |
Maximum [Member] | |
Expected volatility | 244.60% |
Risk free interest rate | 2.30% |
Contractual term (in years) | 5 years 7 days |
Conversion/Exercise price | $ 12 |
Convertible Debt (Details Textu
Convertible Debt (Details Textual) - USD ($) | Nov. 13, 2018 | Nov. 19, 2019 | Oct. 11, 2019 | Aug. 14, 2019 | Jul. 17, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 |
Secured convertible notes | $ 2,200,000 | |||||||||
Warrants for net proceeds, shares | 244,445 | |||||||||
Warrants for net proceeds | $ 2,000,000 | |||||||||
Original issue discount | 10.00% | |||||||||
Conversion price | $ 9 | |||||||||
Stock price per share | $ 9 | |||||||||
Purchase price of shares | 48,889 | |||||||||
Amortization debt discounts | $ 2,166,670 | |||||||||
Face value | $ 2,200,000 | |||||||||
Warrant shares initially issuable | $ 6.75 | $ 6.75 | ||||||||
Secured convertible note | $ 4,031,000 | $ 4,031,000 | $ 2,200,000 | |||||||
Loss on extinguishment of debt | (2,795,582) | |||||||||
Amorization of debt premium | 840,170 | $ 55,621 | 550,259 | $ 55,621 | ||||||
Amorization of debt premium | 1,616,411 | 1,616,411 | ||||||||
Aggregate secured convertible notes | $ 3,356,054 | 3,356,054 | $ 290,720 | |||||||
Financing fees | $ 50,000 | |||||||||
Joseph Gunnar Co LLC [Member] | ||||||||||
Purchase price of shares | 20,778 | |||||||||
Warrant shares initially issuable | $ 0.75 | |||||||||
Cash compensation | $ 85,000 | |||||||||
Joseph Gunnar Co LLC [Member] | Minimum [Member] | ||||||||||
Warrant expire date | Aug. 14, 2024 | |||||||||
Joseph Gunnar Co LLC [Member] | Maximum [Member] | ||||||||||
Warrant expire date | Aug. 29, 2014 | |||||||||
AugustI nvestor Warrant [Member] | ||||||||||
Purchase price of shares | 92,278 | 58,057 | ||||||||
Common stock aggregate proceeds | $ 685,000 | $ 475,000 | ||||||||
Private Placement [Member] | ||||||||||
Original issue discount | 10.00% | 10.00% | ||||||||
Conversion price | $ 9 | |||||||||
Convertible promissory note | $ 753,500 | $ 522,500 | ||||||||
Interest rate | 5.00% | |||||||||
Convertible debt, description | (i) the Conversion Price and (ii) 80% of the offering price in the Qualified Offering. The Bridge Notes contain customary events of default (each an “Event of Default”) and mature on August 14, 2020, August 29, 2020, October 16, 2020 and December 6, 2020. | |||||||||
Outstanding principal amount | 130.00% | |||||||||
Accrued interest rate percentage | 18.00% | |||||||||
Private Placement [Member] | Purchase agreement [Member] | ||||||||||
Warrant shares initially issuable | $ 11.25 | |||||||||
Warrant coverage | 100.00% | |||||||||
Amended and Restated Note [Member] | ||||||||||
Debt extinguishment | 10.00% | 10.00% | ||||||||
Secured convertible note | $ 2,860,000 | $ 2,200,000 | $ 2,200,000 | $ 2,200,000 | ||||||
Amended and Restated debt fair market value | 4,476,412 | |||||||||
Fair market value face amount | $ 2,860,000 | 2,860,000 | ||||||||
Deemed premium paid | $ 1,616,412 | $ 2,795,582 | $ 2,795,582 | |||||||
Waiver Agreements [Member] | ||||||||||
Investment company | Increased the principal amount of each Note issued in the November 13, 2018 Offering by 30%, in the form of an Amended and Restated Senior Secured Convertible Promissory Note (the “Amended and Restated Note”). Additionally, for its role as lead investor, facilitator and negotiating the terms of the Waiver Agreement, the Company issued to Cavalry Fund I LP warrants to purchase 3,333 shares of Common Stock exercisable on or after October 1, 2019 for a term of three (3) years from such date at an exercise price of $11.25 per share (the “Cavalry Warrant”). | |||||||||
Warrant shares initially issuable | $ 11.25 | |||||||||
Warrant initially issuable | 5.00% | |||||||||
Secured Convertible Note [Member] | ||||||||||
Original issue discount | 5.00% | |||||||||
Stock price per share | $ 11.25 | |||||||||
Purchase price of shares | 244,445 | |||||||||
Debt discounts | $ 336,193 | |||||||||
Purchase price | 11.25 | |||||||||
Accrues interest | 5.00% |
Common Stock (Details)
Common Stock (Details) - $ / shares | 6 Months Ended | |||||||
Dec. 31, 2019 | Dec. 31, 2018 | Oct. 30, 2019 | Oct. 09, 2019 | Oct. 08, 2019 | Oct. 02, 2019 | Jun. 30, 2019 | Jun. 04, 2019 | |
Common Stock (Textual) | ||||||||
Common stock, shares issued | 5,937,670 | 5,849,208 | ||||||
Exercise price of warrants | $ 6.75 | |||||||
Common Stock [Member] | ||||||||
Common Stock (Textual) | ||||||||
Common stock, shares issued | 4,444 | 6,667 | 21,389 | 79,444 | 2,222 | |||
Warrants issued cashless exercise | 11,248 | 11,248 | ||||||
Common stock, description | The Company issued 110,667 shares of its common stock related to the exercise warrants with a weighted average exercise price of $2.55 per share. | |||||||
Exercise price of warrants | $ 2.25 | |||||||
Common Stock [Member] | Equity to be Issued | ||||||||
Common Stock (Textual) | ||||||||
Common stock, shares issued | 84,444 | |||||||
Common stock, description | The Company recorded these shares as equity to be issued at June 30, 2018 and did not receive any cash proceeds during the six months ended December 31, 2018. For the six months ended December 31, 2018, the Company recorded $220,602 as a reduction in equity to be issued. | |||||||
Exercise price of warrants | $ 2.55 | |||||||
Common Stock [Member] | Subscription Agreement [Member] | ||||||||
Common Stock (Textual) | ||||||||
Common stock, shares issued | 13,778 | |||||||
Common stock, description | The Company recorded these shares as equity to be issued at June 30, 2018 and did not receive any cash proceeds during the six months ended December 31, 2018. For the six months ended December 31, 2018, the Company recorded $31,000 as a reduction in equity to be issued. | |||||||
Common Stock [Member] | Consulting Agreement [Member] | ||||||||
Common Stock (Textual) | ||||||||
Common stock, shares issued | 16,667 | |||||||
Common stock, description | The Company recorded $230,000 as a reduction to equity to be issued. As of December 31, 2019, the Company recorded a prepaid expense in the amount of $150,000 related to the value of the common stock granted for future services to be rendered. | |||||||
Common Stock [Member] | Service [Member] | ||||||||
Common Stock (Textual) | ||||||||
Common stock, shares issued | 11,000 | |||||||
Common stock, description | The Company recorded these shares as equity to be issued at June 30, 2018. For the six months ended December 31, 2018, the Company recorded $127,500 as a reduction in equity to be issued and $6,000 as stock based compensation. |
Warrants (Details)
Warrants (Details) | 6 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of warrants, Ending | 807,717 |
Weighted Average Exercise Price, Ending | $ / shares | $ 6.75 |
Warrant [Member] | |
Number of Warrants, Beginning | 727,779 |
Number of Warrants, Issued | 190,996 |
Number of Warrants, Exercised | (105,279) |
Number of Warrants, Expired | (5,779) |
Number of warrants, Ending | 807,717 |
Weighted-Average Exercise Price,Beginning | $ / shares | $ 6.30 |
Weighted Average Exercise Price, Issued | $ / shares | 11.25 |
Weighted Average Exercise Price,Exercised | $ / shares | 7.65 |
Weighted Average Exercise Price,Expired | $ / shares | 13.35 |
Weighted Average Exercise Price, Ending | $ / shares | $ 6.75 |
Weighted Average Remaining Life (Years), Outstanding | 2 years 1 month 2 days |
Weighted Average Remaining Life (Years), Outstanding and Exercisable | 2 years 1 month 24 days |
Intrinsic Value, Outstanding | 2,563,939 |
Intrinsic Value Issued | |
Intrinsic Value, Exercised | |
Intrinsic Value Expired | |
Intrinsic Value Outstanding Exercisable | 655,231 |
Warrants (Details 1)
Warrants (Details 1) | Dec. 31, 2019$ / sharesshares |
Weighted Average Exercise Price | $ / shares | $ 6.75 |
Number of Warrants Issued and Exercisable | shares | 807,717 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 2.25 |
Number of Warrants Issued and Exercisable | shares | 23,333 |
Expiry Date | Feb. 29, 2020 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 2.25 |
Number of Warrants Issued and Exercisable | shares | 81,111 |
Expiry Date | Mar. 31, 2020 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 2.70 |
Number of Warrants Issued and Exercisable | shares | 30,000 |
Expiry Date | Jun. 30, 2020 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 3.30 |
Number of Warrants Issued and Exercisable | shares | 45,333 |
Expiry Date | Jul. 31, 2020 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 3.90 |
Number of Warrants Issued and Exercisable | shares | 66,667 |
Expiry Date | Aug. 31, 2020 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 11.25 |
Number of Warrants Issued and Exercisable | shares | 143,661 |
Expiry Date | Nov. 30, 2021 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 2.25 |
Number of Warrants Issued and Exercisable | shares | 177,777 |
Expiry Date | Mar. 31, 2022 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 11.25 |
Number of Warrants Issued and Exercisable | shares | 63,556 |
Expiry Date | Aug. 31, 2022 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 11.25 |
Number of Warrants Issued and Exercisable | shares | 3,333 |
Expiry Date | Oct. 30, 2022 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 11.25 |
Number of Warrants Issued and Exercisable | shares | 48,889 |
Expiry Date | Dec. 31, 2023 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 11.25 |
Number of Warrants Issued and Exercisable | shares | 3,056 |
Expiry Date | Aug. 31, 2024 |
Warrant [Member] | |
Weighted Average Exercise Price | $ / shares | $ 11.25 |
Number of Warrants Issued and Exercisable | shares | 121,051 |
Expiry Date | Nov. 30, 2024 |
Warrants (Details Textual)
Warrants (Details Textual) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants (Textual) | ||
Warrants exercised | 105,279 | |
Intrinsic value of warrants exercised | $ 0 | $ 1,789,666 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Number of options, Exercised | $ 1,222,602 | |
Equity Option [Member] | ||
Number of options outstanding, Beginning | 51,942 | |
Number of options, Granted | ||
Number of options, Exercised | ||
Number of options outstanding, Ending | 51,942 | 51,942 |
Weighted average exercise price, Beginning | $ 10.50 | |
Weighted average exercise price, Granted | ||
Weighted average exercise price, Exercised | ||
Weighted average exercise price, Cancelled | ||
Weighted average exercise price, Ending | $ 10.50 | $ 10.50 |
Stock Options (Details 1)
Stock Options (Details 1) | 6 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Options Issued | 51,942 |
Number of Options Exercisable | 51,942 |
Weighted Average Exercise Price | $ / shares | $ 10.50 |
August 2020 [Member] | |
Number of Options Issued | 3,333 |
Number of Options Exercisable | 3,333 |
Weighted Average Exercise Price | $ / shares | $ 10.50 |
Expiry Date | Aug. 31, 2020 |
August 2023 [Member] | |
Number of Options Issued | 35,275 |
Number of Options Exercisable | 35,275 |
Weighted Average Exercise Price | $ / shares | $ 10.50 |
Expiry Date | Aug. 31, 2023 |
June 2021 [Member] | |
Number of Options Issued | 13,334 |
Number of Options Exercisable | 13,334 |
Weighted Average Exercise Price | $ / shares | $ 10.50 |
Expiry Date | Jun. 30, 2021 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total | $ 329,960 | $ 268,959 |
Employees and directors’ stock-based payments [Member] | ||
Total | 101,070 | 268,959 |
Amortization of prepaid expense [Member] | ||
Total | $ 228,890 |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | Nov. 13, 2018 | Aug. 01, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Stock Options (Textual) | ||||
Purchase price of stock | 48,889 | |||
Stock based compensation expense | $ 329,960 | $ 268,959 | ||
Weighted average remaining life | 4 years 10 months 25 days | |||
Unrecognized expense | $ 165,677 | $ 207,321 | ||
Employee Stock Option [Member] | ||||
Stock Options (Textual) | ||||
Purchase price of stock | 2,500,000 | |||
Percentage of fair market value | 100.00% | |||
Stock options not exceed | 10 years |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Net loss | $ (3,068,646) | $ (2,123,964) | $ (5,908,430) | $ (2,996,886) | |
Assets | 298,993 | 298,993 | $ 561,792 | ||
Antigua | |||||
Net loss | 26,462 | ||||
Assets | 106,816 | 106,816 | 202,546 | ||
Malta | |||||
Net loss | 38,978 | 71,517 | |||
Assets | 54,853 | 54,853 | 6,833 | ||
Curacao | |||||
Net loss | 94,549 | 39,591 | |||
Assets | 2,257 | 2,257 | 7,095 | ||
U.S. | |||||
Net loss | 5,748,441 | $ 2,885,778 | |||
Assets | $ 135,067 | $ 135,067 | $ 345,318 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 1 Months Ended |
Jan. 17, 2020shares | |
Common shares issued for warrant exchange | 288,722 |
Exchange Agreements [Member] | |
Common shares issued for warrant exchange | 288,722 |