Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Mar. 31, 2014 | 14-May-14 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'DISCOUNT DENTAL MATERIALS, INC. | ' |
Entity Central Index Key | '0001453099 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 37,550,953 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $7,122 | $8 |
Prepaid expenses | 683,309 | 1,533 |
Total current assets | 690,431 | 1,541 |
Long-term assets: | ' | ' |
Patent rights | 83,900 | 83,900 |
Total long-term assets | 83,900 | 83,900 |
Total assets | 774,331 | 85,441 |
Current liabilities: | ' | ' |
Accounts payable | 54,589 | 81,154 |
Related party payables | 134,656 | 105,006 |
Notes payable to stockholders | ' | 2,000 |
Accrued payroll and taxes | ' | 12,880 |
Related party notes payable | 179,947 | 424,115 |
Total current liabilities | 369,192 | 625,155 |
Long term liabilities: | ' | ' |
Convertible note to stockholders, net of debt discount of $414,997 and $305,882, respectively | 987,503 | 319,118 |
Total Long term liabilities | 987,503 | 319,118 |
Total liabilities | 1,356,695 | 944,273 |
Commitments and contingencies (Note 4) | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock ($0.001 par value: 1,000,000 shares authorized; none issued and outstanding) | ' | ' |
Common stock ($0.001 par value: 249,000,000 shares authorized; 37,550,953 and 31,580,001 shares issued and outstanding at March 31, 2014 and June 30, 2013, respectively | 37,551 | 31,580 |
Additional paid in capital | 4,565,165 | 1,895,617 |
Deficit accumulated during the development stage | -5,185,080 | -2,786,029 |
Total stockholders' equity | -582,364 | -858,832 |
Total liabilities and stockholders' equity | $774,331 | $85,441 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
Long term liabilities: | ' | ' |
Net of debt discount | $414,997 | $305,882 |
Stockholders' deficit | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized shares | 249,000,000 | 249,000,000 |
Common stock, Issued shares | 37,550,953 | 31,580,001 |
Common stock, outstanding shares | 37,550,953 | 31,580,001 |
Unaudited_Condensed_Consolidat
Unaudited Condensed Consolidated Statements Of Operations (USD $) | 3 Months Ended | 9 Months Ended | 49 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Operating Expenses | ' | ' | ' | ' | ' |
Selling, general and administrative expenses | $634,007 | $118,095 | $1,680,106 | $313,946 | $3,784,177 |
Research and development costs | ' | ' | 177,160 | 108,500 | 289,738 |
Depreciation | ' | ' | ' | 357 | 1,711 |
Marketing expenses | 40,681 | 340 | 127,790 | 340 | 131,425 |
Total operating expenses | 674,688 | 118,435 | 1,985,056 | 423,143 | 4,207,051 |
Other (income) expense | ' | ' | ' | ' | ' |
Accretion of debt discount | 100,940 | 34,779 | 307,676 | 68,529 | 449,607 |
Interest expense | 42,991 | 15,752 | 106,319 | 30,602 | 131,422 |
Purchase of shell | ' | ' | ' | ' | 397,000 |
Total other (income) expense | 143,931 | 50,531 | 413,995 | 99,131 | 978,029 |
Net operating loss | -818,619 | -168,966 | -2,399,051 | -522,274 | -5,185,080 |
Loss before income taxes | -818,619 | -168,966 | -2,399,051 | -522,274 | -5,185,080 |
Income taxes | ' | ' | ' | ' | ' |
Net loss | ($818,619) | ($168,966) | ($2,399,051) | ($522,274) | ($5,185,080) |
Loss per share: | ' | ' | ' | ' | ' |
Basic and diluted loss per share | ($0.02) | ($0.01) | ($0.07) | ($0.02) | ' |
Basic and diluted weighted average shares outstanding | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | ' |
Unaudited_Condensed_Consolidat1
Unaudited Condensed Consolidated Statements Of Cash Flows (USD $) | 9 Months Ended | 49 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Cash flows from operating activities: | ' | ' | ' |
Net loss | ($2,399,051) | ($522,274) | ($5,185,080) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation | ' | 357 | 1,711 |
Accretion of debt discount | 307,676 | 68,529 | 449,607 |
Warrants issued for research and development | 65,660 | 108,500 | 174,160 |
Stock compensation related to stock options | 184,875 | ' | 431,375 |
Stock issued for services | 1,113,950 | ' | 1,455,950 |
Supplies contributed for founder's shares | ' | ' | 10,650 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts payable | -26,565 | 44,735 | 54,588 |
Related party payables | 76,343 | 32,962 | 572,964 |
Prepaid expenses | -53,926 | -5,126 | -85,458 |
Accrued payroll and taxes | -12,880 | 41,341 | ' |
Net cash used in operating activities | -743,918 | -230,976 | -2,119,533 |
Cash flows from investing activities: | ' | ' | ' |
Capitalized patent costs | ' | ' | -27,300 |
Purchases of computer equipment | ' | ' | -1,711 |
Net cash used in investing activities | ' | ' | -29,011 |
Cash flows from financing activities: | ' | ' | ' |
Founders capital contribution | ' | ' | 3,250 |
Proceeds from issuance of common stock and warrants, net of offering costs | ' | ' | 791,884 |
Notes payable to related parties | 1,600 | ' | 2,100 |
Repayment of notes payable to related parties | -26,068 | -18,000 | -44,068 |
Repayment of notes payable to stockholders | -5,720 | ' | -25,210 |
Notes payable to stockholders | 781,220 | 273,500 | 1,427,710 |
Net cash flows provided by financing activities: | 751,032 | 255,500 | 2,155,666 |
Net change in cash and cash equivalents | 7,114 | 24,524 | 7,122 |
Cash and cash equivalents- beginning of period | 8 | 4,185 | ' |
Cash and cash equivalents- end of period | 7,122 | 28,709 | 7,122 |
Supplemental disclosure of non cash activities: | ' | ' | ' |
Interest | ' | ' | ' |
Income tax | ' | ' | ' |
Supplemental disclosure on non-cash investing and financing activities: | ' | ' | ' |
Acquisition of patent rights for related party payable and common stock issuable | ' | ' | 56,600 |
Issuance of common stock issuable | ' | ' | 6,600 |
Beneficial conversion feature on convertible note | 416,791 | 400,000 | 864,604 |
Conversion of related party payables into notes payable | ' | 356,700 | 441,615 |
Conversion of short term notes payable into long term note payable | ' | ' | 240,000 |
Stock issued for prepaid services | 1,741,800 | ' | 1,741,800 |
Stock issued for satisfaction of accounts payable | 30,000 | ' | 30,000 |
Conversion of related party notes payable into stock | $236,393 | ' | $236,393 |
ORGANIZATION_AND_PRINCIPAL_ACT
ORGANIZATION AND PRINCIPAL ACTIVITIES | 9 Months Ended |
Mar. 31, 2014 | |
Organization And Principal Activities | ' |
Note 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES | ' |
The financial statements as of March 31, 2014 and for the three and nine months ended March 31, 2014 and 2013 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended June 30, 2013 included on Form 10-K/A filed with the Securities and Exchange Commission on October 4, 2013. |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2014 | |
Basis Of Presentation | ' |
Note 2 - BASIS OF PRESENTATION | ' |
The Company operates in one segment in accordance with accounting guidance Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting. Our Principal Executive Officer has been identified as the chief operating decision maker as defined by FASB ASC Topic 280. | |
The Accounting Standards Codification ("Codification" or "ASC") is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. | |
Description of Business | |
Development Stage Company | |
The Company is a development stage company as defined by ASC section 915-10-20. Although the Company’s planned principal operations have commenced it is still devoting substantially all of its efforts on establishing the business. All losses accumulated since inception has been considered as part of the Company's development stage activities. | |
Fiscal year end | |
The Company’s fiscal year end is June 30. | |
Going Concern | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had a deficit accumulated during the development stage of $5,185,080 and $2,786,029 at March 31, 2014 and June 30, 2013, respectively, and had a net loss of $2,399,051 and $522,274 for the nine months ended March 31, 2014 and 2013, respectively, and net cash used in operating activities of $743,918 and $230,976 for the nine months ended March 31, 2014 and 2013, respectively, with no revenue earned since inception. These matters, among others, raise substantial doubt about our ability to continue as a going concern. | |
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. | |
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |
Mar. 31, 2014 | ||
Summary Of Significant Accounting Policies | ' | |
Note 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements. | ||
Use of Estimates | ||
The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others: useful lives and residual values of long-lived assets, the valuation of equity instruments and the valuation of warrants and options. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. | ||
Principles of Consolidation | ||
The accompanying condensed consolidated financial statements include the accounts of Discount Dental Materials, Inc. and its wholly-owned subsidiary, Cerebain Biotech Corp. (collectively hereinafter referred to as the “Company”). There are no material intercompany transactions. | ||
Revenue Recognition | ||
The Company expects to recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”. | ||
Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured. | ||
Cash and Cash Equivalents | ||
For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of six months or less to be cash equivalents. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured amounts at any given time, however, the Company has not experienced any such losses. | ||
Income Taxes | ||
The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with FASB ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. | ||
The Company accounts for income tax under the provisions of FASB ASC Topic 740, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. | ||
Advertising Costs | ||
Advertising costs are recorded as general and administrative expenses when they are incurred. Advertising costs charged to operations were $127,790 and $340 for the nine months ended March 31, 2014 and 2013, respectively, and $40,681 and $340 for the three months ended March 31, 2014 and 2013, respectively, and are included in marketing costs in the accompanying consolidated statements of operations.. | ||
Research and Development | ||
The Company expenses the cost of research and development as incurred. Research and development costs charged to operations were $177,160 and $108,500 for the nine months ended March 31, 2014 and 2013, respectively, and none for the three months ended March 31, 2014 and 2013, respectively, and are included in research and development costs in the accompanying consolidated statements of operations. | ||
Long-lived Assets | ||
The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets with finite useful lives) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, “Property, Plant, and Equipment”, and FASB ASC Topic 205 “Presentation of Financial Statements”. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2014, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future. | ||
Convertible Debt | ||
In accordance with ASC Topic 470-20, “Debt with Conversion and Other Options”, conventional convertible debt is a financial instrument in which the holder may only realize the value of the conversion option by exercising the option and receiving the entire proceeds in a fixed number of shares or the equivalent amount of cash. Conventional convertible debt with a non-detachable conversion feature that does not contain a cash settlement option, and is not accounted for as a derivative, is recorded as a debt instrument in its entirety. | ||
Non-Cash Equity Transactions | ||
Shares of equity instruments issued for non-cash consideration are recorded at the fair value of the consideration received based on the market value of services to be rendered, or at the value of the stock given, considered in reference to contemporaneous cash sale of stock. | ||
Accounting for Derivative Financial Instruments | ||
The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, “Derivative Instruments and Hedging: Contracts in Entity’s Own Equity” (“ASC Topic 815-40”). The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. | ||
Fair Value of Financial Instruments | ||
The Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2014, and June 30, 2013, the fair value of cash, prepaid expenses, accounts payable, related party payables, and notes payable to stockholders approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates. | ||
Fair Value Measurements | ||
FASB ASC Topic 825 “Financial Instruments,” requires disclosure about fair value of financial instruments. | ||
The FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. | ||
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below. | ||
· | Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. | |
· | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). | |
· | Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). | |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. | ||
Concentrations, Risks, and Uncertainties | ||
The Company is a startup company subject to the substantial business risks and uncertainties inherent to such an entity, including the potential risk of business failure. | ||
Basic and Diluted Earnings Per Share | ||
Basic earnings (loss) per share is based on the weighted-average number of shares of common stock outstanding. Diluted earnings (loss) per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments: | ||
· | Warrants, | |
· | Convertible notes, | |
· | Employee stock options, and | |
· | Other equity awards, which include long-term incentive awards. | |
The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution. The additional shares included in diluted earnings per share represent the number of shares that would be issued if all of the Company’s outstanding dilutive instruments were converted into common stock. | ||
Diluted earnings per share are based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options, warrants, and convertible notes are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period. | ||
Basic and diluted earnings (loss) per share are the same since the Company had net losses for all periods presented and including the additional potential common shares would have an anti-dilutive effect. | ||
Recent Accounting Pronouncements | ||
The Company has evaluated new accounting pronouncements that have been issued and are not yet effective for the Company and determined that there are no such pronouncements expected to have an impact on the Company’s future financial statements. | ||
Reclassifications | ||
Certain reclassifications have been made to the condensed consolidated financial statements for prior periods in order to conform to the current period presentation. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2014 | |
Commitments And Contingencies | ' |
Note 4 - COMMITMENTS AND CONTINGENCIES | ' |
Employment Agreements | |
On June 15, 2013, the Company entered into an employment agreement with Eric Clemons. Under the terms of the agreement, Mr. Clemons shall be paid an annual salary of One Hundred Fifty-Six Thousand Dollars ($156,000.00), shall be entitled to a bonus of $40,000 upon delivery to the company of a prototype medical device from Sonos Models Inc., and should he be responsible for DDOO consolidating with or merge into another corporation or convey all or substantially all of its assets to another corporation, will receive a cash bonus calculated using a Lehman formula of 5% for the first $1,000,000, 4% for the second $1,000,000, 3% for the third $1,000,000, 2% for the fourth $1,000,000, and 1% thereafter. In addition, the Company has issued Mr. Clemons an option to acquire up to 1,000,000 Shares of our Common Stock, fully paid and non-assessable at an exercise price of $0.50 per share subject to a vesting schedule. On August 30, 2013, the Company entered into an addendum to this agreement in which Mr. Clemons will be entitled to a stock award of 250,000 shares of our common restricted stock if, within 24 months, there is a reorganization of the company. Mr. Clemons has agreed to defer the aforementioned annual salary and accept a consulting fee for the same amount. | |
On June 15, 2013, the Company entered into an employment agreement with Wesley Tate. Under the terms of the agreement, Mr. Tate shall be paid an annual salary of One Hundred Five Thousand Dollars ($105,000.00) and shall be entitled to a bonus of $20,000 upon delivery to the company of a prototype medical device form Sonos Models, Inc. In addition, the Company has issued Mr. Tate an option to acquire up to 500,000 Shares of our Common Stock, fully paid and non-assessable at an exercise price of $0.50 per share subject to a vesting schedule. On August 30, 2013, the Company entered into an addendum to this agreement in which Mr. Tate will be entitled to a stock award of 250,000 shares of our common restricted stock if, within 24 months, there is a reorganization of the company. Mr. Tate has agreed to defer the aforementioned annual salary and accept a consulting fee for the same amount. On April 1, 2014, the Company entered into an addendum to this agreement in which Mr. Tate shall be entitled to a stock award of 250,000 DDOO common restricted shares representing a retention bonus as an incentive for him to remain in the employment of the Company. | |
On June 1, 2013, the Company entered into a consulting agreement with Gerald DeCiccio. Under the terms of the agreement, Mr. DeCiccio will be paid a cash retainer of $5,000 per quarter, payable at the beginning of a quarter; $1,000 per major committee meeting as contemplated in the respective committee charter, payable at the beginning of the subsequent quarter; $2,500 per quarter, payable at the beginning of a quarter, for Chairman of the Audit Committee; and $1,000 per quarter, payable at the beginning of a quarter, for Chairman of any other board committee. In addition, he will also be issued 100,000 DDOO common restricted shares annually. The first issuance of 100,000 shares was on the Effective Date of this Agreement. Additional issuances will be made each year on January 1 thereafter. These shares will be fully vested on the date issued. On August 30, 2013, the Company entered into an addendum to this agreement in which Mr. DeCiccio will be entitled to a stock award of 250,000 shares of our common restricted stock if, within 24 months, there is a reorganization of the company. | |
Contracts | |
On September 24, 2012, the Company entered into an agreement with medical device product development company Sonos Models, Inc. (“Sonos”) to build up to three medical device prototypes to be used for testing. The agreement calls for a total cash payment of up to $400,000 and the issuance of warrants to purchase up to 650,000 shares of the Company’s common stock, with the cash payments and warrants to be issued in stages once certain developmental thresholds are achieved. Any warrants issued under this agreement will be immediately exercisable, will be eligible for cashless exercise at the option of the holder and will have a term of three years from the date of the issuance and an exercise price based on the fair market value of the stock on the date of completion of the phase (See Note 8). On April 1, 2014, the Company entered into an addendum to the agreement with Sonos. The following constitutes the modifications made to the Scope of Work section of the original agreement: | |
Sonos shall receive 3,250,000 restricted shares of the company’s common stock for Services provided to the company. Specific services shall be those services originally identified in the Sonos Agreement as Phase 5 – Testing of the device; Phase 6 – Refinements, changes and CAD modeling updates of the design. Refinements and changes made to 3D CAD documentation based on what is learned from testing in Phase 5; and Phase 7- Production or make changes to the device as necessary. The warrants that were to be issued for Phase 4 will not be issued and are hereby null and void. | |
In addition, the Company shall commit to pay Sonos up to One Million Dollars ($1,000,000) for Research and Development costs. Said costs to include, but not limited to, manufacturing, testing, refinements and changes to the medical device. | |
Consulting Agreements | |
The Company had a consulting agreement with its officer, director, and stockholder under which he was compensated $5,000 per month, plus medical benefits. This contract, as amended on January 1, 2012, was for twenty-four (24) months beginning January 2012 (“Initial Term”), automatically renewable for two (2) successive twelve (12) month terms after the Initial Term (“Renewal Term”), and terminable with six month notice during the Renewal Term. On January 18, 2013, the contract was terminated by both parties, notwithstanding the aforementioned termination provisions, with no additional costs owed subsequent to December 31, 2012. The amount of $116,700 owed under the contract as of December 31, 2012 was converted into a note payable (see Note 6). | |
The Company has a consulting agreement with a stockholder to provide accounting and administrative support, under which she is compensated $1,500 per month. This contract was for twelve (12) months beginning September 2010 (“Initial Term”), automatically renewable for one (1) successive twelve (12) month term after the Initial Term (“Renewal Term”), and terminable with six month notice during the Renewal Term. This contract is currently on a month to month basis and can be terminated given 30 days written notice. | |
In addition, the Company had consulting agreements with two (2) of its stockholders, under which the Company compensated each of these stockholders $10,000 per month plus medical benefits. These contracts, as amended on January 1, 2012, were for twenty-four (24) months beginning January 2012 (“Initial Term”), automatically renewable for two (2) successive twelve (12) month terms after the Initial Term (“Renewal Term”), and terminable with six month notice during the Renewal Term. On January 18, 2013, these contracts were terminated by both parties, notwithstanding the aforementioned terminable conditions, with no additional costs owed subsequent to December 31, 2012. The amounts totaling $240,000 owed under these contracts as of December 31, 2012 were converted into a note payable (see Note 6). | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of the company’s biomedical products, under which he is compensated $225 per hour and an engagement fee of 25,000 shares of the Company’s common stock. This contract is for twelve (12) months beginning March 2013, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. This contract was terminated on October 1, 2013. | |
The Company has a consulting agreement with an individual to provide assistance in the introduction of the company to medical device testing organization and to facilitate access to doctors in Uzbekistan, under which he is compensated 250,000 shares of the Company’s common stock. This contract is for twelve (12) months beginning April 2013, and may be renewed or extended for any period as may be agreed by the parties. On November 21, 2013, the Company executed an addendum to this contract for the facilitation of government approval for human testing in Uzbekistan for which the consultant was compensated an additional 250,000 shares of the Company’s common stock. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. As this contract is for a period of twelve months, the Company recorded the $55,000 value of the shares issued for the addendum as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has an engagement agreement with a company to provide financial advisor services, under which they are paid an engagement fee of $45,000 and 25,000 shares of the Company’s common stock. This contract was for six (6) months beginning March 2013, unless extended by mutual written consent or earlier terminated. This contract was not renewed. In December 2013, the Company issued 75,000 shares of additional common stock as payment for $7,500 of remaining related to these accounts payable consulting service invoice (See Note 7). | |
The Company has consulting agreements with four individuals to provide assistance in the marketing of its biomedical products, under which they are compensated an aggregate 1.6 million shares of the Company’s common stock. These contracts are for twelve (12) months beginning July 2013 (“Initial Term”), and may be renewed or extended for any period as may be agreed by the parties. Any of the parties may terminate their respective agreement by providing thirty (30) days written notice of such termination. As these contracts are for a period of twelve months, the Company recorded the $1,024,000 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of its biomedical products, under which he is compensated 250,000 shares of the Company’s common stock. In addition, upon the successful introduction of the company to Investment Banking Firms, the Consultant shall receive 250,000 warrants, cashless, at $0.50 per share, 3 year term. This contract is for twelve (12) months beginning July 2013 (“Initial Term”), and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. As this contract is for a period of twelve months, the Company recorded the $155,000 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
On August 12, 2013, the Company entered into an Advertising Contract with an organization in which they will provide advertising services to the company for a twelve month marketing campaign, beginning August 12, 2013 and ending on August 12, 2014. In exchange for these services the company agreed to pay said organization a total of $125,000, with $20,000 due on August 14, 2013, and the remaining $105,000 payable in eleven equal monthly payments of $9,545, due the 12th of each month, beginning on September 12, 2013; and issue them a total of 150,000 shares of our common stock, restricted in accordance with Rule 144, with piggy back registration rights. As of March 31, 2014, the Company is in arrears $10,000 and is in discussions with the consultant to restructure the terms of the contract. As this contract is for a period of twelve months, the Company recorded the $93,000 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has a consulting agreement with an individual to provide assistance in the introduction of the company to medical device testing organization and to facilitate access to doctors in Poland, under which he is compensated 250,000 shares of the Company’s common stock. This contract is for twelve (12) months beginning October 2013, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. As this contract is for a period of twelve months, the Company recorded the $67,000 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of the company’s biomedical products, under which he is compensated $3,500 per month. This contract is for twelve (12) months beginning October 2013, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of the Company’s biomedical products, under which he is compensated $2,000 per month and an engagement fee of approximately $4,000. This contract is for twelve (12) months beginning October 2013, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of the Company’s biomedical products, under which she is compensated $1,500 per month. This contract is for twelve (12) months beginning October 2013, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. | |
The Company has a consulting agreement with an individual to provide assistance in the introduction of the company to medical device testing organization and to facilitate access to doctors in China, under which he is compensated 250,000 shares of the Company’s common stock. This contract is for twelve (12) months beginning January 2014, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. As this contract is for a period of twelve months, the Company recorded the $37,500 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has consulting agreements with three individuals to provide assistance in the marketing of its biomedical products, under which they are compensated an aggregate 420,000 shares of the Company’s common stock. These contracts are for twelve (12) months beginning February 2014 (“Initial Term”), and may be renewed or extended for any period as may be agreed by the parties. Any of the parties may terminate their respective agreement by providing thirty (30) days written notice of such termination. As these contracts are for a period of twelve months, the Company recorded the $79,800 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of its biomedical products, under which he is compensated and engagement fee of 250,000 shares of the Company’s common stock and $6,000 per month. This contract is for three (3) months beginning February 2014 (“Initial Term”), and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. As this contract is for a period of three months, the Company recorded the $47,500 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a three month period. As of March 31, 2014, the Company has paid the consultant $3,000. The remaining services and payments have been deferred pending the conclusion of the Company’s Definitive 14(A) proxy vote and subsequent submission of required documentation to appropriate authority resulting from said vote. | |
The Company has a consulting agreement with an individual to provide assistance in the marketing of its biomedical products, under which he is compensated 250,000 shares of the Company’s common stock. This contract is for twelve (12) months beginning March 2014 (“Initial Term”), and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. As this contract is for a period of twelve months, the Company recorded the $47,500 value of the shares issued as a prepaid expense and will amortize the expense associated with these issuances over a twelve month period. | |
The Company has a consulting agreement with an individual to provide assistance in capital markets and marketing strategies of the company’s biomedical products, under which he is compensated $5,000 per month. This contract is for twelve (12) months beginning March 2014, and may be renewed or extended for any period as may be agreed by the parties. Either party may terminate this agreement by providing the other with thirty (30) days written notice of such termination. | |
Patent License Agreement | |
The Patent License agreement (see Note 5) provides for a one-time payment of $50,000 due within ninety (90) days of the date of signing of June 10, 2010 (as of the date of this filing, the one-time payment is fully paid), and a royalty payment of six (6) percent of the value of the net sales, as defined, generated from the sale of licensed products. The agreement also provides for yearly minimum royalty payments of $50,000 for each of the fourth, fifth, and sixth anniversary of the date of the agreement, and a yearly minimum royalty payment of $100,000 for each year thereafter during the term of the agreement. The term of the agreement shall continue until the patent in the intellectual property expires, unless terminated sooner under the provisions of the agreement, as defined. | |
Legal | |
The Company is not involved in any legal matters arising in the normal course of business. While incapable of estimation, in the opinion of the management, the individual regulatory and legal matters in which it might involve in the future are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
PATENT_RIGHTS
PATENT RIGHTS | 9 Months Ended |
Mar. 31, 2014 | |
Patent Rights | ' |
Note 5 - PATENT RIGHTS | ' |
On June 10, 2010, the Company entered into a Patent License Agreement under which the Company acquired the exclusive rights to certain intellectual property related to using Omentum for treating dementia conditions. Under the agreement the Company paid rights fees of $50,000 to Dr. Saini, and the Company issued Dr. Saini 8,250,000 shares of our common stock, valued at $6,600 (based on the fair market value on the date of grant) restricted in accordance with Rule 144. As a result Dr. Saini became our largest shareholder. In addition, Dr. Saini will have the option to participate in the sale of equity by the Company in the future, up to ten percent (10%) of the money raised, in exchange for the applicable number of his shares. | |
The patent will have an estimated useful life of 20 years based on the term of the patent. Amortization of the patent will begin when the patent is issued by the United States Patent and Trademark Office and put in use. | |
Through March 31, 2014, the Company has paid legal fees totaling $30,217 related to the patent. |
NOTES_PAYABLE_TO_STOCKHOLDERS
NOTES PAYABLE TO STOCKHOLDERS | 9 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Notes Payable To Stockholders | ' | |||||||||||
Note 6 - NOTES PAYABLE TO STOCKHOLDERS | ' | |||||||||||
Short Term Note Payable | ||||||||||||
On June 30, 2013, the Company converted $84,915 of related party payables owed under consulting agreements, into related party notes payable. The notes matured on December 31, 2013 and accrued interest at two (2.0) percent per annum at maturity. As of March 31, 2014, the outstanding balance of the related party payables is $66,947. The Company and noteholders have agreed to extend the terms of these notes. | ||||||||||||
On January 18, 2013, the Company converted $356,700 of related party payables owed under consulting agreements, into related party notes payable. The notes were scheduled to mature on December 31, 2013 and accrued interest at seven and one-half (7.5) percent per annum at maturity. However, on December 30, 2013, the Company converted $219,700 of related party notes payable to equity. As of March 31, 2014, the outstanding balance of the related party notes payable is $113,000. The Company is currently in default and is in discussions with the noteholder to restructure the terms of the note. | ||||||||||||
Long Term Note Payable | ||||||||||||
The following Table summarizes the long term notes payable: | ||||||||||||
Contracts | Date | Amount | Type Notes | |||||||||
CN #1 | 14-Jun-13 | $ | 25,000 | Convertible Note Payable | ||||||||
CN #2 | 16-Sep-13 | 12,500 | Convertible Note Payable | |||||||||
CN #3 | 11-Nov-13 | 10,000 | Convertible Note Payable | |||||||||
CN #4 | 26-Feb-14 | 1,245,000 | Consolidated Convertible Note Payable | |||||||||
CN #5 | 7-Mar-14 | 10,000 | Convertible Note Payable | |||||||||
CN #6 | 14-Mar-14 | 100,000 | Convertible Note Payable | |||||||||
Total Convertible Notes | 1,402,500 | |||||||||||
Debt Discount | (414,997 | ) | ||||||||||
Total Long Term Liability | 987,503 | |||||||||||
Convertible Note Payable | ||||||||||||
(CN #6) On March 14, 2014, the Company entered into an unsecured $100,000 principal amount convertible promissory note with a non-affiliate stockholder. Under the terms of the note, it matures March 2016, accrues interest at 7.5% per annum beginning April 1, 2014, is convertible into shares of our common stock at $0.20 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. | ||||||||||||
(CN #5) On March 7, 2014, the Company entered into an unsecured $10,000 principal amount convertible promissory note with a non-affiliate stockholder. Under the terms of the note, it matures March 2016, accrues interest at 7.5% per annum beginning April 1, 2014, is convertible into shares of our common stock at $0.20 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. | ||||||||||||
(CN #3) On November 11, 2013, the Company entered into an unsecured $10,000 principal amount convertible promissory note with a non-affiliate stockholder. Under the terms of the note, it matures November 11, 2015, accrues interest at 7.5% per annum beginning December 1, 2013, is convertible into shares of our common stock at $0.20 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. The Note had a beneficial conversion feature valued at $10,000, which was recorded as a debt discount against the face amount of the Note, which is being accreted to interest expense over the 24 month term of the. The Company used a recent sale of stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. | ||||||||||||
(CN #2) On September 16, 2013, the Company entered into an unsecured $12,500 principal amount convertible promissory note with a non-affiliate stockholder. Under the terms of the note, it matures September 2015, accrues interest at 7.5% per annum beginning October 1, 2013, is convertible into shares of our common stock at $0.20 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. The Note had a beneficial conversion feature valued at $12,500, which was recorded as a debt discount against the face amount of the Note, which is being accreted to interest expense over the 24 month term of the Note. The Company used a recent sale of stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. | ||||||||||||
(CN #1) On June 4, 2013, the Company entered into an unsecured $25,000 principal amount convertible promissory note with a non-affiliate stockholder. Under the terms of the note, it matures June 2015, accrues interest at 8.0% per annum beginning July 1, 2013, is convertible into shares of our common stock at $0.50 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. | ||||||||||||
Consolidated Convertible Note Payable | ||||||||||||
The following Table summarizes the consolidated notes payable: | ||||||||||||
Notes | Date | Amount | Consolidated Notes | Additional Funds | ||||||||
CCN #1 | 31-Jul-11 | $ | 60,000 | Not a consolidation note | $ | |||||||
CCN #2 | 13-Oct-11 | 100,000 | Not a consolidation note | |||||||||
CCN #3 | 1-Feb-12 | 80,000 | Not a consolidation note | |||||||||
CCN #4 | 12-Jun-12 | 75,000 | Not a consolidation note | |||||||||
CCN #5 | 18-Jun-12 | 240,000 | Notes 1, 2, 3 | - | ||||||||
CCN #6 | 25-Jul-12 | 100,000 | Not a consolidation note | |||||||||
CCN #7 | 30-Aug-12 | 60,000 | Not a consolidation note | |||||||||
CCN #8 | 1-Nov-12 | 235,000 | Notes 4, 6, 7 | |||||||||
CCN #9 | 27-Dec-12 | 10,000 | Not a consolidation note | |||||||||
CCN #10 | 14-Mar-13 | 600,000 | Notes 5, 8, 9 plus additional funds | 115,000 | ||||||||
CCN #11 | 10-Jul-13 | 120,000 | Not a consolidation note | |||||||||
CCN #12 | 13-Aug-13 | 50,000 | Not a consolidation note | |||||||||
CCN #13 | 16-Oct-13 | 970,000 | Notes 10, 11, 12 plus additional funds | 200,000 | ||||||||
CCN #14 | 20-Dec-13 | 200,000 | Not a consolidation note | |||||||||
CCN #15 | 26-Feb-14 | 1,245,000 | Notes 13, 14 plus additional funds | 75,000 | ||||||||
To properly account for certain Convertible Promissory Notes, the Company performed a detailed analysis to obtain a thorough understanding of the transactions, including understanding the terms of each instrument issued, and any related derivatives entered into. The Company first reviewed ASC Topic 815, to identify whether any equity-linked features in the Notes are freestanding or embedded. The Company determined that there were no free standing features. The Notes were then analyzed in accordance with Topic 815 to determine if the Note should be accounted for at fair value and remeasured at fair value in income. The Company determined that the Notes did not meet the requirements of Topic 815 and therefore accounted for the Notes as conventional debt. The Company then reviewed ASC Topic 470-20, and determined that some of Notes met the criteria of a conventional convertible note and that the Note had a beneficial conversion feature, which was recorded as a debt discount against the face amount of the Note, indicated above. | ||||||||||||
(CN #4) (CNN #15) On February 26, 2014, the Company entered into an unsecured $1,245,000 principal amount convertible promissory note with a non-affiliate stockholder. The Consolidation Note was a consolidation of the foregoing CNN #13 and CNN #14 Promissory and Convertible Notes totaling $1,170,000 with the same Noteholder. Such notes were voided as a result, however, the accrued interest on such notes was still owed and included with the accrued interest of the Consolidation Note until paid. The Company received additional funds totaling $75,000 under the Consolidation Note. Under the terms of the Consolidation Note, it matures February 2016, accrues interest at 7.5% per annum beginning March 1, 2013, is convertible into shares of our common stock at $0.15 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. The Consolidation Note had a beneficial conversion feature valued at $415,000, which was recorded as a debt discount against the face amount of the Consolidation Note, which is being accreted to interest expense over the 24 month term of the Consolidation Note. The Company used a recent sale of stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. | ||||||||||||
(CNN #14) On December 20, 2013, the Company entered into an unsecured $200,000 promissory note with a stockholder. The terms of the note have not been negotiated. On February 26, 2014 the Company structured the terms of the note with the noteholder as described above. | ||||||||||||
(CNN #13) On October 15, 2013, the Company entered into an unsecured $970,000 principal amount convertible promissory note with a non-affiliate stockholder. The Consolidation Note was a consolidation of the foregoing CNN #10, CNN #11 and CNN #12 Promissory and Convertible Notes totaling $770,000 with the same Noteholder. Such notes were voided as a result, however, the accrued interest on such notes was still owed and included with the accrued interest of the Consolidation Note until paid. The Company received additional funds totaling $200,000 under the Consolidation Note. Under the terms of the Consolidation Note, it matures October 2015, accrues interest at 7.5% per annum beginning November 1, 2013, is convertible into shares of our common stock at $0.20 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contains piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. In addition, the Company issued to the holder 500,000 shares of the company’s common stock (See Note 7). The Consolidation Note had a beneficial conversion feature valued at $970,000, which was recorded as a debt discount against the face amount of the Consolidation Note, which is being accreted to interest expense over the 24 month term of the Consolidation Note. The Company used a recent sale of stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. On February 26, 2014 the Company restructured the terms of the note with the noteholder as described above. The unamortized debt discount of $767,915 was offset against additional paid-in capital. | ||||||||||||
(CNN #12) On August 13, 2013, the Company entered into an unsecured $50,000 promissory note with a stockholder. On October 15, 2013 the Company structured the terms of the note with the noteholder as described above. | ||||||||||||
(CNN #11) On July 10, 2013, the Company entered into an unsecured $120,000 principal amount convertible promissory note with a non-affiliate stockholder. Under the terms of the Note, it was scheduled to mature in July 2015, accrued interest at 7.5% per annum beginning July 1, 2013, was convertible into shares of our common stock at $0.20 per share but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock and contained piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. The Note had a beneficial conversion feature valued at $120,000, which was recorded as a debt discount against the face amount of the Note, which was being accreted to interest expense over the 24 month term of the Consolidation Note. The Company used a recent sale of restricted stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. On October 15, 2013 the Company restructured the terms of the note with the noteholder as described above. The unamortized debt discount of $107,500 was offset against additional paid-in capital. | ||||||||||||
(CNN #10) On March 14, 2013, the Company entered into an unsecured $600,000 principal amount convertible promissory note with a non-affiliate stockholder. The Consolidation Note was a consolidation of the foregoing CNN #5, CNN #8 and CNN #9 Promissory and Convertible Notes totaling $485,000 with the same Noteholder. Such notes were voided as a result, however, the accrued interest on such notes was still owed and included with the accrued interest of the Consolidation Note until paid. The Company received additional funds totaling $115,000 under the Consolidation Note. Under the terms of the Consolidation Note, it was scheduled to mature in July 2014, accrued interest at 7.5% per annum beginning March 1, 2013, was convertible into shares of our common stock at $0.30 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contained piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. The Consolidation Note had a beneficial conversion feature valued at $400,000, which was recorded as a debt discount against the face amount of the Consolidation Note, which was being accreted to interest expense over the 17 month term of the Consolidation Note. The Company used a recent sale of restricted stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. On October 15, 2013 the Company restructured the terms of the note with the noteholder as described above. The unamortized debt discount of $235,294 was offset against additional paid-in capital. | ||||||||||||
(CNN #9) On December 27, 2012, the Company entered into an unsecured $10,000 promissory note with a stockholder. On March 14, 2013 the Company structured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #8) On November 1, 2012, the Company entered into an unsecured $235,000 principal amount consolidation promissory note with a non-affiliate stockholder. The Consolidation Promissory Note is a consolidation of the foregoing CNN #4, CNN #6 and CNN #7 promissory notes totaling $235,000 with the same Noteholder. Such notes were voided as a result, however, the accrued interest on such notes is still owed and included with the accrued interest of the Consolidation Promissory Note until paid. The Company did not receive additional funds under the Consolidation Promissory Note, as it was a consolidation of prior notes owed to Noteholder. Under the terms of the Consolidation Promissory Note, it matured January 31, 2013, and accrued interest at 7.5% per annum beginning November 1, 2012. On March 14, 2013 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #7) On August 30, 2012, the Company entered into an unsecured $60,000 promissory note with the same stockholder. The terms of the note had not been negotiated as of the date of issuance. On November 1, 2013 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #6) On July 25, 2012, the Company entered into an unsecured $100,000 promissory note with the same stockholder. This note matured on September 30, 2012 and accrued interest at seven and one-half (7.5) percent per annum at maturity. On November 1, 2013 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #5) On June 18, 2012, the Company entered into a $240,000 principal amount convertible promissory note with a non-affiliate stockholder. The Consolidation Note is a consolidation of the foregoing CNN #1, CNN #2 and CNN #3 Promissory and Convertible Notes totaling $240,000 with the same Noteholder. Such notes were voided as a result, however, the accrued interest on such notes is still owed and included with the accrued interest of the Consolidation Note until paid. The Company did not receive additional funds under the consolidation note, as it was a consolidation of prior notes owed to Noteholder, but Noteholder has loaned the Company an additional $245,000 under the terms of separate promissory notes (non-convertible), as described above. Under the terms of the Consolidation Note, it was scheduled to mature June 2014, accrued interest at 6% per annum beginning July 1, 2012, was convertible into shares of our common stock at $0.32 per share, but only if such conversion would not cause the Noteholder to own more than 9.9% of our outstanding common stock, and contained piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. The Consolidation Note had a beneficial conversion feature valued at $135,000, which was recorded as a debt discount against the face amount of the Consolidation Note, which was being accreted to interest expense over the 24 month term of the Consolidation Note. The Company used a recent sale of restricted stock to determine the fair value of the stock for purposes of calculating the beneficial conversion feature. On March 14, 2013 the Company restructured the terms of these notes with the noteholder as described above. The unamortized debt discount of $83,000 was offset against additional paid-in capital. | ||||||||||||
(CNN #4) On June 12, 2012, the Company entered into an unsecured $75,000 principal amount promissory note with a stockholder. This note, as amended, matured on September 30, 2012 and accrued interest beginning on the maturity date at 7.5% per annum. The Company determined that imputed interest on the note for the period from the issuance date to maturity is immaterial to the financial statements. On November 1, 2013 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #3) On February 1, 2012, the Company entered into an unsecured $80,000 promissory note with the same stockholder. This note matured on April 13, 2012 and accrued interest at six (6) percent per annum. On June 18, 2012 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #2) On October 13, 2011, the Company entered into a $100,000 convertible note (“Convertible Note”) with the same stockholder. The Convertible Note matured on April 13, 2012, accrued interest at six (6) percent per annum, the holder was entitled to convert at $0.32 per share into our common stock. On June 18, 2012 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
(CNN #1) On July 31, 2011, the Company entered into an unsecured $60,000 promissory note with a stockholder. This note matured on April 13, 2012 and accrued interest at six (6) percent per annum at maturity. On June 18, 2012 the Company restructured the terms of these notes with the noteholder as described above. | ||||||||||||
Accrued interest on all notes payable to stockholders at March 31, 2014 totaled $99,769 and is included in related party payables. | ||||||||||||
As of March, 2014, future maturities of notes payable are as follows: | ||||||||||||
Fiscal year ending June 30, | ||||||||||||
2014 | $ | 179,947 | ||||||||||
2015 | $ | 47,500 | ||||||||||
2016 | 1,355,000 | |||||||||||
Total | $ | 1,582,447 |
STOCK_TRANSACTIONS
STOCK TRANSACTIONS | 9 Months Ended |
Mar. 31, 2014 | |
Stock Transactions | ' |
Note 7 - STOCK TRANSACTIONS | ' |
On December 31, 2013 the Company issued 1,575,952 shares of common stock to individuals as payment for related party notes and interest payable. The aggregate Fair Market Value of these shares was $236,393 as the agreed price was $0.15 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On December 11, 2013 the Company issued 500,000 shares of common stock to an individual as payment for financing fees per contract dated October 2013. The aggregate Fair Market Value of these shares was $135,000 as the fair market value of the stock was $0.27 per share. For the three and nine-month periods ended March 31, 2014, the Company recognized an expense of $16,875 and $33,750, respectively. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On December 11, 2013 the Company issued 75,000 shares of common stock to individuals as payment for an outstanding accounts payable consulting service invoice. The aggregate Fair Market Value of these shares was $7,500 as the agreed price was $0.10 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On December 11, 2013 the Company issued 500,000 shares of common stock to individuals as payment for consulting services per contracts dated October and November 2013. The aggregate Fair Market Value of these shares was $122,500 as the fair market value of the stock was $0.27 and $0.22 per share, respectively. For the three and nine-month periods ended March 31, 2014, the Company recognized an expense of $30,625 and $61,250, respectively. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On August 27, 2013 the Company issued 400,000 shares of common stock to individuals as payment for consulting services per contracts dated July and August 2013. The aggregate Fair Market Value of these shares was $248,000 as the fair market value of the stock was $0.62 per share. For the three and nine-month periods ended March 31, 2014 the Company recognized an expense of $62,000 and $186,000 respectively. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On July 23, 2013 the Company issued 1.6 million shares of common stock to individuals as payment for consulting services per contracts dated July 2013. The aggregate Fair Market Value of these shares was $1,024,000 as the fair market value of the stock was $0.64 per share. For the three and nine-month periods ended March 31, 2014 the Company recognized an expense of $256,000 and $768,000, respectively. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
In 2013 the Company issued 25,000 shares of common stock to an individual as payment for consulting services per contract dated March 2013. The company recognized an expense of $10,000 as the fair market value of the shares was $0.40 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
In 2013 the Company issued 100,000 shares of common stock to an individual as payment for consulting services per contract dated June 2013. The company recognized an expense of $100,000 as the fair market value of the shares was $1.00 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
In 2013 the Company issued 250,000 shares of common stock to an individual as payment for consulting services per contract dated April 2013. The company recognized an expense of $182,500 as the fair market value of the shares was $0.73 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
In 2013 the Company issued 25,000 shares of common stock to an individual as payment for consulting services per contract dated March 2013. The company recognized an expense of $19,500 as the fair market value of the shares was $0.78 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. |
OPTIONS_AND_WARRANTS
OPTIONS AND WARRANTS | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Options And Warrants | ' | ||||||||
Note 8 - OPTIONS AND WARRANTS | ' | ||||||||
Options | |||||||||
On June 15, 2013, the Company entered into an employee agreement with Eric Clemons. The agreement calls for an issuance of options to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $0.50 per share, subject to a vesting schedule. Fair Market Value of these options was approximately $821,675. As of March 31, 2014, 200,000 options to purchase the Company’s common stock have vested. For the nine-month periods ended March 31, 2014 and 2013, the Company recognized an expense of $123,252 and $0, respectively and for the period from inception through March 31, 2014 has recognized a total expense of $287,587. For the three month periods ended March 31, 2014 and 2013, the Company recognized an expense of $41,084 and $0, respectively. | |||||||||
On June 15, 2013, the Company entered into an employee agreement with Wesley Tate. The agreement calls for an issuance of options to purchase up to 500,000 shares of the Company’s common stock at an exercise price of $0.50 per share, subject to a vesting schedule. Fair Market Value of these options was approximately $410,825. As of March 31, 2014, 100,000 options to purchase the Company’s common stock have vested. For the nine-month periods ended March 31, 2014 and 2013, the Company recognized an expense of $61,623 and $0, respectively and for the period from inception through March 31, 2014 has recognized a total expense of $143,788. For the three month periods ended March 31, 2014 and 2013, the Company recognized an expense of $20,541 and $0, respectively. | |||||||||
The following represents a summary of the Options outstanding at March 31, 2014 and changes during the years then ended: | |||||||||
2014 | |||||||||
Options Average | |||||||||
Options | Exercise Price | ||||||||
Outstanding, July 1, 2012 | - | $ | - | ||||||
Granted | 1,500,000 | 0.5 | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | - | - | |||||||
Outstanding June 30, 2013 | 1,500,000 | 0.5 | |||||||
Granted | - | - | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | - | - | |||||||
Outstanding, March 31, 2014 | 1,500,000 | $ | 0.5 | ||||||
Exercisable at March 31, 2014 | 300,000 | $ | 0.5 | ||||||
Expected to be vested | 1,200,000 | $ | 0.5 | ||||||
Warrants | |||||||||
On July 1, 2011, the Company entered into a stock purchase agreement with a third party, under which the Company issued him 25,000 restricted common shares along with warrants to purchase an additional 12,500 shares with an exercise price of $0.80 per share and are exercisable for term of two years. The warrants expired July 2013. | |||||||||
On May 17, 2011, the Company entered into a stock purchase agreement with a third party, under which the Company issued him 50,000 restricted common shares along with warrants to purchase an additional 25,000 shares with an exercise price of $0.80 per share and are exercisable for term of two years. The warrants expired May 2013. | |||||||||
On September 24, 2012, the Company entered into an agreement with medical device product development company Sonos Models, Inc. (“Sonos”) to build up to three medical device prototypes to be used for testing. The agreement calls for a total cash payment of up to $400,000 and the issuance of warrants to purchase up to 650,000 shares of the Company’s common stock, with the cash payments and warrants to be issued in stages once certain developmental thresholds are achieved. | |||||||||
Upon signing the agreement the Company issued Sonos warrants to purchase 50,000 shares of the Company’s common stock, valued at $108,500 (based on the fair market value on the date of grant). The Company recognized an expense of $108,500 as Research and Development during the three month period ended September 30, 2012. The fair value was determined using Black-Scholes with a volatility of 235.32%, a risk free rate of 0.27% and 0% dividend yield, these warrants were valued at $108,000 and expensed to Research and Development. The warrants are immediately exercisable, cashless at the option of the holder, and have a term of three years and an exercise price of $0.20 per share. | |||||||||
On December 11, 2013, the company issued Sonos warrants to purchase 200,000 shares of the Company’s common stock, valued at $65,660 (based on the fair market value of the date of grants). The Company recognized an expense of $49,200 as Research and Development during the three month period ended September 30, 2013 related to 100,000 of these warrants to be issued for completion of phases 1b and 2 during that period. The fair value was determined using Black-Scholes with a volatility of 100%, a risk free interest rate of 1.04% and 0% dividend yield. The Company recognized an additional expense of $16,460 as Research and Development during the three month period ended December 31, 2013 related to an additional 100,000 warrants issued to Sonos for the completion of phase 3. The fair value was determined using Black-Scholes with a volatility of 100%, a risk free interest rate of 0.63% and 0% dividend yield. The warrants are immediately exercisable, cashless at the option of the holder, and have a term of three years and an exercise price of $0.20 per share. | |||||||||
The following represents a summary of the Warrants outstanding at March 31, 2014 and changes during the years then ended: | |||||||||
2014 | |||||||||
Weighted Average | |||||||||
Exercise Price | |||||||||
Warrants | |||||||||
Outstanding, July 1, 2013 | 37,500 | $ | 0.8 | ||||||
Granted | 50,000 | 0.2 | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | (25,000 | ) | 0.8 | ||||||
Outstanding, June 30, 2013 | 62,500 | 0.32 | |||||||
Granted | 200,000 | 0.2 | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | (12,500 | ) | 0.8 | ||||||
Outstanding, March 31, 2014 | 250,000 | $ | 0.2 | ||||||
Exercisable at March 31, 2014 | 250,000 | $ | 0.2 |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions | ' |
Note 9 - RELATED PARTY TRANSACTIONS | ' |
Other than as set forth below, and as disclosed in Notes 4, 6, 7, and 8, the Company has not entered into or been a participant in any transaction in which a related person had or will have a direct or indirect material interest. | |
On January 18, 2013, the Company converted $356,700 of related party payables owed under consulting agreements (see Note 4), into related party notes payable. The notes matured on December 31, 2013 and accrued interest at seven and one-half (7.5) percent per annum at maturity. On December 30, 2013, the Company converted $219,700 of related party payables to equity. As of March 31, 2014, the outstanding balance of the related party payables is $113,000. | |
Included in related party payables at March 31, 2014 is $99,769 of accrued interest on notes payable to stockholders. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Loss per share: | ' | ||||||||||||||||
Note 10 - EARNINGS PER SHARE | ' | ||||||||||||||||
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. | |||||||||||||||||
Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. | |||||||||||||||||
The total number of potential additional dilutive options and warrants outstanding was 1,750,000 and 87,500 for the nine months ended March 31, 2014 and 2013, respectively and 1,750,000 and 87,500 for the three months ended March 31, 2014 and 2013, respectively. In addition, the convertible note converts at an exercise price of $0.20 per share of common stock. The warrants and shares underlying the convertible note were considered for the dilutive calculation but in periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. | |||||||||||||||||
The following table sets forth the computation of basic and diluted net income per share: | |||||||||||||||||
For The Nine Months ended | For The Three Months ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss attributable to the common stockholders | $ | (2,399,051 | ) | (522,274 | ) | $ | (818,619 | ) | $ | (168,966 | ) | ||||||
Basic weighted average outstanding shares of common stock | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | |||||||||||||
Dilutive effect of options and warrants | - | - | |||||||||||||||
Diluted weighted average common stock and common stock equivalents | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | |||||||||||||
Earnings (loss) per share: | |||||||||||||||||
Basic and diluted | $ | (0.07 | ) | (0.02 | ) | $ | (0.02 | ) | $ | (0.01 | ) |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
Note 11- SUBSEQUENT EVENTS | ' |
On April 7, 2014 the Company issued 1.17 million shares of common stock to individuals as payment for consulting services per contracts dated January, February and March 2014. The aggregate Fair Market Value of these shares was $212,300 as the fair market value of the stock was $0.15 and $0.19 per share, respectively. For the three and nine-month periods ended March 31, 2014, the Company recognized an expense of $64,950. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On April 7, 2014 the Company issued 150,000 shares of common stock to individuals as payment for an outstanding accounts payable invoice. The aggregate Fair Market Value of these shares was $22,500 as the agreed price was $0.15 per share. This issuance was completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend. | |
On April 14, 2014, we entered into stock purchase agreements with third parties, under which we issued them 66,666 shares of our common stock, restricted in accordance with Rule 144, in exchange for $10,000. The stock purchase agreements include piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. | |
On April 23, 2014, we entered into stock purchase agreements with third parties, under which we issued them 66,666 shares of our common stock, restricted in accordance with Rule 144, in exchange for $10,000. The stock purchase agreements include piggyback registration rights. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Mar. 31, 2014 | |
Basis Of Presentation Policies | ' |
Development stage company | ' |
The Company is a development stage company as defined by ASC section 915-10-20. Although the Company’s planned principal operations have commenced it is still devoting substantially all of its efforts on establishing the business. All losses accumulated since inception has been considered as part of the Company's development stage activities. | |
Fiscal year end | ' |
The Company’s fiscal year end is June 30. | |
Going Concern | ' |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had a deficit accumulated during the development stage of $5,185,080 and $2,786,029 at March 31, 2014 and June 30, 2013, respectively, and had a net loss of $2,399,051 and $522,274 for the nine months ended March 31, 2014 and 2013, respectively, and net cash used in operating activities of $743,918 and $230,976 for the nine months ended March 31, 2014 and 2013, respectively, with no revenue earned since inception. These matters, among others, raise substantial doubt about our ability to continue as a going concern. | |
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. | |
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |
Mar. 31, 2014 | ||
Summary Of Significant Accounting Policies Policies | ' | |
Use of Estimates | ' | |
The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others: useful lives and residual values of long-lived assets, the valuation of equity instruments and the valuation of warrants and options. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. | ||
Principles of Consolidation | ' | |
The accompanying condensed consolidated financial statements include the accounts of Discount Dental Materials, Inc. and its wholly-owned subsidiary, Cerebain Biotech Corp. (collectively hereinafter referred to as the “Company”). There are no material intercompany transactions. | ||
Revenue Recognition | ' | |
The Company expects to recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”. | ||
Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured. | ||
Cash and Cash Equivalents | ' | |
For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of six months or less to be cash equivalents. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured amounts at any given time, however, the Company has not experienced any such losses. | ||
Income Taxes | ' | |
The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with FASB ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. | ||
The Company accounts for income tax under the provisions of FASB ASC Topic 740, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. | ||
Advertising Costs | ' | |
Advertising costs are recorded as general and administrative expenses when they are incurred. Advertising costs charged to operations were $127,790 and $340 for the nine months ended March 31, 2014 and 2013, respectively, and $40,681 and $340 for the three months ended March 31, 2014 and 2013, respectively, and are included in marketing costs in the accompanying consolidated statements of operations.. | ||
Research and Development | ' | |
The Company expenses the cost of research and development as incurred. Research and development costs charged to operations were $177,160 and $108,500 for the nine months ended March 31, 2014 and 2013, respectively, and none for the three months ended March 31, 2014 and 2013, respectively, and are included in research and development costs in the accompanying consolidated statements of operations. | ||
Long-lived Assets | ' | |
The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets with finite useful lives) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, “Property, Plant, and Equipment”, and FASB ASC Topic 205 “Presentation of Financial Statements”. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2014, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future. | ||
Convertible Debt | ' | |
In accordance with ASC Topic 470-20, “Debt with Conversion and Other Options”, conventional convertible debt is a financial instrument in which the holder may only realize the value of the conversion option by exercising the option and receiving the entire proceeds in a fixed number of shares or the equivalent amount of cash. Conventional convertible debt with a non-detachable conversion feature that does not contain a cash settlement option, and is not accounted for as a derivative, is recorded as a debt instrument in its entirety. | ||
Non-Cash Equity Transactions | ' | |
Shares of equity instruments issued for non-cash consideration are recorded at the fair value of the consideration received based on the market value of services to be rendered, or at the value of the stock given, considered in reference to contemporaneous cash sale of stock. | ||
Accounting for Derivative Financial Instruments | ' | |
The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, “Derivative Instruments and Hedging: Contracts in Entity’s Own Equity” (“ASC Topic 815-40”). The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. | ||
Fair Value of Financial Instruments | ' | |
The Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2014, and June 30, 2013, the fair value of cash, prepaid expenses, accounts payable, related party payables, and notes payable to stockholders approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates. | ||
Fair Value Measurements | ' | |
FASB ASC Topic 825 “Financial Instruments,” requires disclosure about fair value of financial instruments. | ||
The FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. | ||
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below. | ||
· | Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. | |
· | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). | |
· | Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). | |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. | ||
Concentrations, Risks, and Uncertainties | ' | |
The Company is a startup company subject to the substantial business risks and uncertainties inherent to such an entity, including the potential risk of business failure. | ||
Basic and Diluted Earnings Per Share | ' | |
Basic earnings (loss) per share is based on the weighted-average number of shares of common stock outstanding. Diluted earnings (loss) per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments: | ||
· | Warrants, | |
· | Convertible notes, | |
· | Employee stock options, and | |
· | Other equity awards, which include long-term incentive awards. | |
The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution. The additional shares included in diluted earnings per share represent the number of shares that would be issued if all of the Company’s outstanding dilutive instruments were converted into common stock. | ||
Diluted earnings per share are based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options, warrants, and convertible notes are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period. | ||
Basic and diluted earnings (loss) per share are the same since the Company had net losses for all periods presented and including the additional potential common shares would have an anti-dilutive effect. | ||
Recent Accounting Pronouncements | ' | |
The Company has evaluated new accounting pronouncements that have been issued and are not yet effective for the Company and determined that there are no such pronouncements expected to have an impact on the Company’s future financial statements. | ||
Reclassifications | ' | |
Certain reclassifications have been made to the condensed consolidated financial statements for prior periods in order to conform to the current period presentation. |
NOTES_PAYABLE_TO_STOCKHOLDERS_
NOTES PAYABLE TO STOCKHOLDERS (Tables) | 9 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Notes Payable To Stockholders Tables | ' | |||||||||||
Summary of long term notes payable | ' | |||||||||||
Contracts | Date | Amount | Type Notes | |||||||||
CN #1 | 14-Jun-13 | $ | 25,000 | Convertible Note Payable | ||||||||
CN #2 | 16-Sep-13 | 12,500 | Convertible Note Payable | |||||||||
CN #3 | 11-Nov-13 | 10,000 | Convertible Note Payable | |||||||||
CN #4 | 26-Feb-14 | 1,245,000 | Consolidated Convertible Note Payable | |||||||||
CN #5 | 7-Mar-14 | 10,000 | Convertible Note Payable | |||||||||
CN #6 | 14-Mar-14 | 100,000 | Convertible Note Payable | |||||||||
Total Convertible Notes | 1,402,500 | |||||||||||
Debt Discount | (414,997 | ) | ||||||||||
Total Long Term Liability | 987,503 | |||||||||||
Summary of Consolidated Convertible Note Payable | ' | |||||||||||
Notes | Date | Amount | Consolidated Notes | Additional Funds | ||||||||
CCN #1 | 31-Jul-11 | $ | 60,000 | Not a consolidation note | $ | |||||||
CCN #2 | 13-Oct-11 | 100,000 | Not a consolidation note | |||||||||
CCN #3 | 1-Feb-12 | 80,000 | Not a consolidation note | |||||||||
CCN #4 | 12-Jun-12 | 75,000 | Not a consolidation note | |||||||||
CCN #5 | 18-Jun-12 | 240,000 | Notes 1, 2, 3 | - | ||||||||
CCN #6 | 25-Jul-12 | 100,000 | Not a consolidation note | |||||||||
CCN #7 | 30-Aug-12 | 60,000 | Not a consolidation note | |||||||||
CCN #8 | 1-Nov-12 | 235,000 | Notes 4, 6, 7 | |||||||||
CCN #9 | 27-Dec-12 | 10,000 | Not a consolidation note | |||||||||
CCN #10 | 14-Mar-13 | 600,000 | Notes 5, 8, 9 plus additional funds | 115,000 | ||||||||
CCN #11 | 10-Jul-13 | 120,000 | Not a consolidation note | |||||||||
CCN #12 | 13-Aug-13 | 50,000 | Not a consolidation note | |||||||||
CCN #13 | 16-Oct-13 | 970,000 | Notes 10, 11, 12 plus additional funds | 200,000 | ||||||||
CCN #14 | 20-Dec-13 | 200,000 | Not a consolidation note | |||||||||
CCN #15 | 26-Feb-14 | 1,245,000 | Notes 13, 14 plus additional funds | 75,000 | ||||||||
Future maturities of notes payable | ' | |||||||||||
As of March, 2014, future maturities of notes payable are as follows: | ||||||||||||
Fiscal year ending June 30, | ||||||||||||
2014 | $ | 179,947 | ||||||||||
2015 | $ | 47,500 | ||||||||||
2016 | 1,355,000 | |||||||||||
Total | $ | 1,582,447 |
OPTIONS_AND_WARRANTS_Tables
OPTIONS AND WARRANTS (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Options And Warrants Tables | ' | ||||||||
summary of the options outstanding | ' | ||||||||
The following represents a summary of the Options outstanding at March 31, 2014 and changes during the years then ended: | |||||||||
2014 | |||||||||
Options Average | |||||||||
Options | Exercise Price | ||||||||
Outstanding, July 1, 2012 | - | $ | - | ||||||
Granted | 1,500,000 | 0.5 | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | - | - | |||||||
Outstanding June 30, 2013 | 1,500,000 | 0.5 | |||||||
Granted | - | - | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | - | - | |||||||
Outstanding, March 31, 2014 | 1,500,000 | $ | 0.5 | ||||||
Exercisable at March 31, 2014 | 300,000 | $ | 0.5 | ||||||
Expected to be vested | 1,200,000 | $ | 0.5 | ||||||
Summary of the warrants outstanding | ' | ||||||||
The following represents a summary of the Warrants outstanding at March 31, 2014 and changes during the years then ended: | |||||||||
2014 | |||||||||
Weighted Average | |||||||||
Exercise Price | |||||||||
Warrants | |||||||||
Outstanding, July 1, 2013 | 37,500 | $ | 0.8 | ||||||
Granted | 50,000 | 0.2 | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | (25,000 | ) | 0.8 | ||||||
Outstanding, June 30, 2013 | 62,500 | 0.32 | |||||||
Granted | 200,000 | 0.2 | |||||||
Exercised | - | - | |||||||
Expired/Forfeited | (12,500 | ) | 0.8 | ||||||
Outstanding, March 31, 2014 | 250,000 | $ | 0.2 | ||||||
Exercisable at March 31, 2014 | 250,000 | $ | 0.2 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Earnings Per Share Tables | ' | ||||||||||||||||
Computation of basic and diluted net income per share | ' | ||||||||||||||||
The following table sets forth the computation of basic and diluted net income per share: | |||||||||||||||||
For The Nine Months ended | For The Three Months ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss attributable to the common stockholders | $ | (2,399,051 | ) | (522,274 | ) | $ | (818,619 | ) | $ | (168,966 | ) | ||||||
Basic weighted average outstanding shares of common stock | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | |||||||||||||
Dilutive effect of options and warrants | - | - | |||||||||||||||
Diluted weighted average common stock and common stock equivalents | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | |||||||||||||
Earnings (loss) per share: | |||||||||||||||||
Basic and diluted | $ | (0.07 | ) | (0.02 | ) | $ | (0.02 | ) | $ | (0.01 | ) |
BASIS_OF_PRESENTATION_Details_
BASIS OF PRESENTATION (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 49 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2013 | |
Basis Of Presentation Details Narrative | ' | ' | ' | ' | ' | ' |
Deficit accumulated during the development stage | $5,185,080 | ' | $5,185,080 | ' | $5,185,080 | $2,786,029 |
Net loss | 818,619 | 168,966 | 2,399,051 | 522,274 | 5,185,080 | ' |
Net cash used in operating activities | ' | ' | 743,918 | 230,976 | 2,119,533 | ' |
Revenue | ' | ' | ' | ' | $0 | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 49 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Summary Of Significant Accounting Policies Details Narrative | ' | ' | ' | ' | ' |
Advertising costs | $40,681 | $340 | $127,790 | $340 | $131,425 |
Research and development costs | ' | ' | $177,160 | $108,500 | $289,738 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | Mar. 31, 2014 | Dec. 31, 2012 |
Commitments And Contingencies Details Narrative | ' | ' |
Prepaid expense amortized | $93,000 | ' |
Amount owed contract | ' | 116,700 |
Total owned amount | ' | 240,000 |
Paid to consultant | $3,000 | ' |
PATENT_RIGHTS_Details_Narrativ
PATENT RIGHTS (Details Narrative) (USD $) | 9 Months Ended |
Mar. 31, 2014 | |
Patent Rights Details Narrative | ' |
Paid legal fees | $30,217 |
NOTES_PAYABLE_TO_STOCKHOLDERS_1
NOTES PAYABLE TO STOCKHOLDERS (Details) (USD $) | Mar. 31, 2014 |
Fiscal year ending June 30, | ' |
2014 | $179,947 |
2015 | 47,500 |
2016 | 1,355,000 |
Total | $1,582,447 |
NOTES_PAYABLE_TO_STOCKHOLDERS_2
NOTES PAYABLE TO STOCKHOLDERS (Details 1) (USD $) | 9 Months Ended |
Mar. 31, 2014 | |
Total Convertible Notes | $1,402,500 |
Debt Discount | -414,997 |
Total Long Term Liability | 987,503 |
Contract One [Member] | ' |
Long term notes payable Notes Type | 'Convertible Note Payable |
Long term notes payable Contracts Date | 14-Jun-13 |
Total Convertible Notes | 25,000 |
Contract Two [Member] | ' |
Long term notes payable Notes Type | 'Convertible Note Payable |
Long term notes payable Contracts Date | 16-Sep-13 |
Total Convertible Notes | 12,500 |
Contract Three [Member] | ' |
Long term notes payable Notes Type | 'Convertible Note Payable |
Long term notes payable Contracts Date | 11-Nov-13 |
Total Convertible Notes | 10,000 |
Contract Four [Member] | ' |
Long term notes payable Notes Type | 'Consolidated Convertible Note Payable |
Long term notes payable Contracts Date | 26-Feb-14 |
Total Convertible Notes | 1,245,000 |
Contract Five [Member] | ' |
Long term notes payable Notes Type | 'Convertible Note Payable |
Long term notes payable Contracts Date | 7-Mar-14 |
Total Convertible Notes | 10,000 |
Contract Six [Member] | ' |
Long term notes payable Notes Type | 'Convertible Note Payable |
Long term notes payable Contracts Date | 14-Mar-14 |
Total Convertible Notes | $100,000 |
NOTES_PAYABLE_TO_STOCKHOLDERS_3
NOTES PAYABLE TO STOCKHOLDERS (Details 2) (USD $) | 9 Months Ended | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Contract One [Member] | Contract Two [Member] | Contract Three [Member] | Contract Four [Member] | Contract Five [Member] | Contract Six [Member] | Contract Seven [Member] | Contract EightMember] | Contract Nine [Member] | Contract Ten [Member] | Contract Eleven [Member] | Contract Twelve [Member] | Contract Thirteen [Member] | Contract Fourteen [Member] | Contract Fifteen [Member] | |
Consolidated notes payable | $60,000 | $100,000 | $80,000 | $75,000 | $240,000 | $100,000 | $60,000 | $235,000 | $10,000 | $600,000 | $120,000 | $50,000 | $970,000 | $200,000 | $1,245,000 |
Consolidated Notes | 'Not a consolidation note | 'Not a consolidation note | 'Not a consolidation note | 'Not a consolidation note | 'Notes 1, 2, 3 | 'Not a consolidation note | 'Not a consolidation note | 'Notes 4, 6, 7 | 'Not a consolidation note | 'Notes 5, 8, 9 plus additional funds | 'Not a consolidation note | 'Not a consolidation note | 'Notes 10, 11, 12 plus additional funds | 'Not a consolidation note | 'Notes 13, 14 plus additional funds |
Additional Funds | ' | ' | ' | ' | ' | ' | ' | ' | ' | $115,000 | ' | ' | $200,000 | ' | $75,000 |
Consolidated Notes Contracts Date | 31-Jul-11 | 13-Oct-11 | 1-Feb-12 | 12-Jun-12 | 18-Jun-12 | 25-Jul-12 | 30-Aug-12 | 1-Nov-12 | 27-Dec-12 | 14-Mar-13 | 10-Jul-13 | 13-Aug-13 | 16-Oct-13 | 20-Dec-13 | 26-Feb-14 |
NOTES_PAYABLE_TO_STOCKHOLDERS_4
NOTES PAYABLE TO STOCKHOLDERS (Details Narrative) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
Notes Payable To Stockholders Details Narrative | ' | ' |
Converted related party payble | ' | $84,915 |
Outstanding balance of related party paybles | 66,947 | ' |
Accrued interest per annum | 2.00% | ' |
Accured intrest related party paybles | 99,769 | ' |
Outstanding balance of related party paybles | 113,000 | ' |
Outstanding balance of notes payable | $0 | ' |
STOCK_TRANSACTIONS_Details_Nar
STOCK TRANSACTIONS (Details Narrative) (USD $) | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended |
Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
On August 27, 2013 [Member] | On August 27, 2013 [Member] | On July 23, 2013 [Member] | On July 23, 2013 [Member] | On December 11, 2013 [Member] | On December 11, 2013 [Member] | On December 11, 2013 [Member] | On December 11, 2013 [Member] | ||
Consulting Services [Member] | Consulting Services [Member] | Financing fee [Member] | Financing fee [Member] | ||||||
Recognized expense | ' | $62,000 | $186,000 | $256,000 | $768,000 | $30,625 | $61,250 | $16,875 | $33,750 |
Common stock issued | 1,575,952 | ' | ' | ' | ' | ' | ' | ' | ' |
OPTIONS_AND_WARRANTS_Details
OPTIONS AND WARRANTS (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Jun. 30, 2013 | |
Options | ' | ' |
Outstanding, beginning of year | 1,500,000 | ' |
Granted | ' | 1,500,000 |
Exercised | ' | ' |
Expired/Forfeited | ' | ' |
Outstanding, ending balance | 1,500,000 | 1,500,000 |
Exercisable at March 31, 2014 | 300,000 | ' |
Expected to be vested | 1,200,000 | ' |
Options Average Exercise Price | ' | ' |
Outstanding, beginning of year | $0.50 | ' |
Granted | ' | $0.50 |
Exercised | ' | ' |
Expired/Forfeited | ' | ' |
Outstanding, ending price | $0.50 | $0.50 |
Exercisable at March 31, 2014 | $0.50 | ' |
Expected to be vested | $0.50 | ' |
Warrants | ' | ' |
Outstanding, beginning of year | 62,500 | 37,500 |
Granted | 200,000 | 50,000 |
Exercised | ' | ' |
Expired/Forfeited | -12,500 | -25,000 |
Outstanding, ending balance | 250,000 | 62,500 |
Exercisable at March 31, 2014 | 250,000 | ' |
Weighted Average Exercise Price | ' | ' |
Outstanding, beginning of year | 0.32 | 0.8 |
Granted | $0.20 | $0.20 |
Exercised | ' | ' |
Expired/Forfeited | $0.80 | $0.80 |
Outstanding, ending balance | 0.2 | 0.32 |
Exercisable at March 31, 2014 | $0.20 | ' |
OPTIONS_AND_WARRANTS_Details_N
OPTIONS AND WARRANTS (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 49 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Total expense | $674,688 | $118,435 | $1,985,056 | $423,143 | $4,207,051 |
Additional expense as Research and Development on warrants | ' | 16,460 | ' | ' | ' |
Additional warrants issued | ' | 100,000 | ' | ' | ' |
Employee Agreement with Eric Clemons [Member] | ' | ' | ' | ' | ' |
Recognized expense | 41,084 | 0 | 123,252 | 0 | ' |
Total expense | ' | ' | ' | ' | 287,587 |
Common stock vested options | 200,000 | ' | 200,000 | ' | 200,000 |
Employee Agreement with Wesley Tate [Member] | ' | ' | ' | ' | ' |
Recognized expense | 20,541 | 0 | 61,623 | 0 | ' |
Total expense | ' | ' | ' | ' | $143,788 |
Common stock vested options | 100,000 | ' | 100,000 | ' | 100,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | Mar. 31, 2014 |
Related Party Transactions Details Narrative | ' |
Outstanding balance of related party paybles | $113,000 |
Accrued interest | $99,769 |
Accrued interest percentage | 7.50% |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | 49 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Earnings Per Share Details | ' | ' | ' | ' | ' |
Net loss attributable to the common stockholders | ($818,619) | ($168,966) | ($2,399,051) | ($522,274) | ($5,185,080) |
Basic weighted average outstanding shares of common stock | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | ' |
Dilutive effect of options and warrants | ' | ' | ' | ' | ' |
Diluted weighted average common stock and common stock equivalents | 34,470,562 | 31,180,001 | 34,470,562 | 31,180,001 | ' |
Earnings (loss) per share: | ' | ' | ' | ' | ' |
Basic and diluted | ($0.02) | ($0.01) | ($0.07) | ($0.02) | ' |
EARNINGS_PER_SHARE_Details_Nar
EARNINGS PER SHARE (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Earnings Per Share Details Narrative | ' | ' | ' | ' |
Total dilutive warrants | 1,750,000 | 87,500 | 1,750,000 | 87,500 |