Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2013 | Feb. 14, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Banjo & Matilda, Inc. | ' |
Entity Central Index Key | '0001481504 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Dec-13 | ' |
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 | ' | 27,836,484 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $27,160 | $11,104 |
Trade receivables, net | 213,676 | 11,120 |
Inventory | 585,792 | 329,598 |
Other assets | 132,519 | 78,505 |
TOTAL CURRENT ASSETS | 959,147 | 430,327 |
NON-CURRENT ASSETS | ' | ' |
Intangible assets | 44,171 | 43,310 |
Other receivable | 106,919 | 142,658 |
Property, plant and equipment | 7,889 | 7,324 |
TOTAL NON-CURRENT ASSETS | 158,979 | 193,292 |
TOTAL ASSETS | 1,118,126 | 623,619 |
CURRENT LIABILITIES | ' | ' |
Trade and other payables | 381,041 | 395,802 |
Trade financing | 217,220 | 93,968 |
Accrued interest | 18,928 | 13,063 |
Loan payable | 184,109 | ' |
TOTAL CURRENT LIABILITIES | 801,298 | 502,833 |
NON-CURRENT LIABILITIES | ' | ' |
Loan from related parties | 256,149 | 293,640 |
TOTAL NON-CURRENT LIABILITIES | 256,149 | 293,640 |
TOTAL LIABILITIES | 1,057,447 | 796,473 |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock, $0.00001 par value, 100,000,000 shares authorized and 1,000,000 and 0 shares issued and outstanding, respectively | 10 | ' |
Common stock, $0.00001 par value, 100,000,000 shares authorized and 27,036,484 and 18,505,539 shares issued and outstanding, respectively | 270 | 185 |
Additional paid-in capital | 666,282 | 246,396 |
Other accumulated comprehensive gain | 56,564 | 51,106 |
Accumulated deficit | -662,447 | -470,541 |
TOTAL STOCKHOLDERS' EQUITY | 60,679 | -172,854 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $1,118,126 | $623,619 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Consolidated Balance Sheets Parenthetical | ' | ' |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 1,000,000 | 0 |
Preferred stock, shares outstanding | 1,000,000 | 0 |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,036,484 | 18,505,539 |
Common stock, shares outstanding | 27,036,484 | 18,505,539 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated Statements Of Operations And Comprehensive Income Loss | ' | ' | ' | ' |
Revenue | $426,015 | $192,060 | $955,229 | $792,479 |
Cost of sales | 242,683 | 101,802 | 584,976 | 470,093 |
Gross profit | 183,332 | 90,258 | 370,253 | 322,386 |
Payroll and employee related expenses | 118,120 | 77,578 | 200,357 | 124,467 |
Administration expense | 30,395 | 32,723 | 63,047 | 62,046 |
Marketing expense | 39,291 | 11,811 | 60,231 | 24,412 |
Occupancy expenses | 27,106 | 12,457 | 36,590 | 24,926 |
Depreciation and amortization expense | 3,276 | 2,323 | 6,507 | 4,649 |
Total | 218,188 | 136,892 | 366,732 | 240,500 |
Income from operations | -34,856 | -46,634 | 3,521 | 81,886 |
Other income (expense) | ' | ' | ' | ' |
Other income | ' | -6 | ' | 13,735 |
Other expenses | -99,138 | ' | -99,138 | ' |
Finance costs | -44,755 | -34,951 | -96,289 | -74,109 |
Total Other Expense | -143,893 | -34,957 | -195,427 | -60,374 |
(Loss) income before income tax | -178,749 | -81,591 | -191,906 | 21,512 |
Provision for income taxes | ' | ' | ' | ' |
Net (loss) income | -178,749 | -81,591 | -191,906 | 21,512 |
Other comprehensive income | ' | ' | ' | ' |
Foreign currency translation | 9,081 | 396 | 5,458 | -10,214 |
Comprehensive (loss) income | ($169,668) | ($81,195) | ($186,448) | $11,298 |
Net (loss) income per share from net (loss) income | ' | ' | ' | ' |
Basic | ($0.01) | ($0.00) | ($0.01) | $0.00 |
Diluted | ($0.01) | ($0.00) | ($0.01) | $0.00 |
Weighted average number of shares outstanding: | ' | ' | ' | ' |
Basic | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 |
Diluted | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows From Operating Activities: | ' | ' |
Net (loss) income | ($191,906) | $21,512 |
Adjustments to reconcile net loss to net cash used by operating activities: | ' | ' |
Depreciation and amortization | 6,507 | 4,649 |
(Increase) / decrease in assets: | ' | ' |
Trade receivables | -210,669 | 15,532 |
Inventory | -275,783 | -50,781 |
Other assets | -58,411 | -27,315 |
Other receivable | 32,896 | 16,577 |
Increase/ (decrease) in current liabilities: | ' | ' |
Trade payables and other liabilities | 1,767 | -36,478 |
Deposits payable | ' | -62,515 |
Net cash used in operating activities | -695,599 | -118,819 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchase of intangible assets | -5,160 | -15,002 |
Purchase of property, plant and equipment | -4,325 | ' |
Net cash used in investing activities | -9,485 | -15,002 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceed from issuance of stock | 120,000 | ' |
Loans, net | 472,444 | 111,884 |
Net trade financing | 130,767 | 33,783 |
Net cash provided by financing activities | 723,211 | 145,667 |
Effect of exchange rate changes on cash and cash equivalents | -2,071 | 67 |
Net (decrease) / increase in cash and cash equivalents | 16,056 | 11,913 |
Cash and cash equivalents at the beginning of the period | 11,104 | 4,061 |
Cash and cash equivalents at the end of the period | 27,160 | 15,974 |
SUPPLEMENTAL DISCLOSURES: | ' | ' |
Conversion of debt to equity | 338,083 | ' |
Cash paid during the year for Income tax payments | ' | ' |
Cash paid during the year for Interest payments | $44,838 | $10,626 |
BASIS_OF_PRESENTATION_AND_DESC
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
NOTE 1- BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | ' |
Banjo and Matilda, Inc. was incorporated in Nevada on December 18, 2009 under the name Eastern World Group, Inc. On September 24, 2013, its name was changed to Banjo & Matilda, Inc. | |
On November 14, 2013, Banjo & Matilda, Inc., entered into a Share Exchange Agreement (the “Exchange Agreement”) with Banjo & Matilda, Pty Ltd., a corporation formed under the laws of Australia (the “Company”) and the shareholders of the Company. Pursuant to the Exchange Agreement, at the closing of the transaction contemplated thereunder (the “Transaction”), the Company became a wholly-owned subsidiary of Banjo & Matilda, Inc. | |
Banjo & Matilda Pty Ltd. was incorporated under the laws of Australia on May 27, 2009 and manufactures and sells cashmere fashion. Headquartered at Bondi Beach, the Aussie lifestyle of sun, sand and surf resonates innately with this label and its philosophy of low maintenance, style and comfort. | |
The ultra-soft cashmere staples, pairing simplicity with cool sophistication has rapidly gained loyal customers worldwide positioning the label as the ‘go-to’ for contemporary cashmere products. | |
Under accounting principles generally accepted in the United States, the share exchange is considered to be a capital transaction in substance, rather than a business combination. That is, the share exchange is equivalent to the issuance of stock by Banjo & Matilda Pty Ltd. for the net monetary assets of the Banjo & Matilda, Inc. accompanied by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the share exchange will be identical to that resulting from a reverse acquisition, except no goodwill will be recorded. Under share reverse takeover accounting, the post reverse acquisition comparative historical financial statements of the legal acquirer, Banjo & Matilda, Inc. are those of the legal acquiree, Banjo & Matilda Pty Ltd., which is considered to be the accounting acquirer. Share and per share amounts stated have been retroactively adjusted to reflect the merger. | |
As a result of the exchange agreement, the reorganization was treated as an acquisition by the accounting acquiree that is being accounted for as a recapitalization and as a reverse merger by the legal acquirer for accounting purposes. Pursuant to the recapitalization, all capital stock shares and amounts and per share data have been retroactively restated. Accordingly, the financial statements include the following: | |
(1) The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the legal acquirer at fair value. | |
(2) The statements of operations include the operations of the accounting acquirer for the period presented and the operations of the legal acquirer from the date of the merger. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”). | |||||||||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited condensed interim financial statements should be read in conjunction with the audited annual financial statements for the years ended June 30, 2013 and 2012. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. Accordingly, the results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the full year. | |||||||||||||||||
Exchange Gain (Loss) | |||||||||||||||||
During the three and six months ended December 31, 2013 and 2012, the transactions of the Company were denominated in foreign currency and were recorded in Australian dollar (AUD) at the rates of exchange in effect when the transactions occurred. Exchange gains and losses are recognized for the different foreign exchange rates applied when the foreign currency assets and liabilities are settled. | |||||||||||||||||
Foreign Currency Translation and Comprehensive Income (Loss) | |||||||||||||||||
The accounts of the Company were maintained, and its financial statements were expressed, in AUD. Such financial statements were translated into USD with the AUD as the functional currency. All assets and liabilities were translated at the exchange rate at the balance sheet date, stockholder’s equity is translated at the historical rates and income statement items are translated at the average exchange rate for the period. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the statements of operations. The resulting translation adjustments are reported under other comprehensive income as a component of shareholders’ equity. There were no significant fluctuations in the exchange rate for the conversion of AUD to USD after the balance sheet date. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, accounts payable, sales returns and recoverability of long-term assets. | |||||||||||||||||
Reportable Segment | |||||||||||||||||
The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. | |||||||||||||||||
Liquidity Matters | |||||||||||||||||
Based upon its current projection of revenue, management believes that its current cash position and available financing provide sufficient resources and operating flexibility through at least the next twelve months. However, there can be no assurance that projected revenue growth and improvement in operating results will occur or that the Company will successfully implement its plans. In the event cash flow from operations is not sufficient, additional sources of financing will be required in order to maintain the Company’s current operations. Whereas management believes it will have access to other financing sources, no assurance can be given that such additional sources of financing will be available on acceptable terms, on a timely basis or at all. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. | |||||||||||||||||
Cost of Sales | |||||||||||||||||
Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties,, and product sampling. | |||||||||||||||||
Operating Overhead Expense | |||||||||||||||||
Operating overhead expense consists primarily of payroll and benefit related costs, rent, depreciation and amortization, professional services, and meetings and travel. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | |||||||||||||||||
The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. | |||||||||||||||||
At December 31, 2013 and 2012, the Company had not taken any significant uncertain tax positions on its tax returns for 2012 and prior years or in computing its tax provision for 2013. | |||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company has a diversified customer base across many markets, predominantly Australia, United States of America, United Kingdom, Europe and the Middle East. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited. In addition, Receivables that are factored through the Company’s Receivable finance facility are guaranteed by the finance company that further mitigates Credit Risk. | |||||||||||||||||
Risks and Uncertainties | |||||||||||||||||
The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets. | |||||||||||||||||
Contingencies | |||||||||||||||||
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. | |||||||||||||||||
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. | |||||||||||||||||
Cash and Equivalents | |||||||||||||||||
Cash and equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At December 31, 2013 and June 30, 2013, the Company had $27,160 and $11,104 in cash in Australia and not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. | |||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. There were no allowances for doubtful accounts as of December 31, 2013 and June 30, 2013. | |||||||||||||||||
Inventory | |||||||||||||||||
Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of December 31, 2013 and June 30, 2013, inventory only consisted of the following: | |||||||||||||||||
December 31, | June 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Work in progress | $ | 160,552 | $ | 124,492 | |||||||||||||
Finished goods | 412,927 | 194,324 | |||||||||||||||
Raw materials | 12,313 | 10,782 | |||||||||||||||
$ | 585,792 | $ | 329,598 | ||||||||||||||
Property, Plant & Equipment | |||||||||||||||||
Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three to 10 years; computer equipment, two to three years; buildings and improvements, five to 15 years; leasehold improvements, two to 10 years; and furniture and equipment, one to five years. | |||||||||||||||||
As of December 31, 2013 and June 30, 2013, Plant and Equipment consisted of the following: | |||||||||||||||||
December 31, | June 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Plant and Equipment | $ | 25,398 | $ | 21,855 | |||||||||||||
Accumulated Depreciation | (17,509 | ) | (14,531 | ) | |||||||||||||
$ | 7,889 | $ | 7,324 | ||||||||||||||
Depreciation was $2,180 and $1,516 for three months ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
Depreciation was $3,527 and $2,970 for six months ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||||||||||
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. | |||||||||||||||||
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |||||||||||||||||
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |||||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815. | |||||||||||||||||
As of December 31, 2013 and June 30, 2013, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value. | |||||||||||||||||
Earnings Per Share (EPS) | |||||||||||||||||
Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). | |||||||||||||||||
The following table sets for the computation of basic and diluted earnings per share for three and six months ended December 31, 2013 and 2012: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
12/31/13 | 12/31/12 | 12/31/13 | 12/31/12 | ||||||||||||||
Basic and Diluted: | |||||||||||||||||
Net (loss) income | $ | (178,749 | ) | $ | (81,591 | ) | $ | (191,906 | ) | $ | 21,512 | ||||||
Weighted average number of shares in computing basic and diluted net (loss) income | |||||||||||||||||
Basic | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 | |||||||||||||
Diluted: | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 | |||||||||||||
Net (loss) income per share | |||||||||||||||||
Basic and diluted: | $ | (0.008 | ) | $ | (0.004 | ) | $ | (0.009 | ) | $ | 0.001 | ||||||
Intangible Assets | |||||||||||||||||
The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset. | |||||||||||||||||
Finite-lived intangible assets primarily consist of software development capitalized. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 1 to 10 years. No events or changes in circumstances indicate that impairment existed as of December 31, 2013. | |||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued an accounting standards update intended to provide guidance on the presentation of unrecognized tax benefits, reflecting the manner in which an entity would settle, at the reporting date, any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This accounting standard will be effective for the Company beginning June 1, 2014; early adoption is permitted. The Company has early adopted this guidance and the adoption did not have a material impact on the Company's consolidated financial position or results of operations. |
OTHER_ASSETS
OTHER ASSETS | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 3 - OTHER ASSETS | ' | ||||||||
Other assets consist of the following as of December 31, 2013 and June 30, 2013: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
VAT paid | $ | 67,547 | $ | 68,168 | |||||
Prepaid and other assets | 64,972 | 10,337 | |||||||
$ | 132,519 | $ | 78,505 |
OTHER_RECEIVABLE
OTHER RECEIVABLE | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 4 - OTHER RECEIVABLE | ' | ||||||||
Other assets consist of the following as of December 31, 2013 and June 30, 2013: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Development grant | $ | 106,919 | $ | 98,792 | |||||
Other receivable | - | 43,866 | |||||||
$ | 106,919 | $ | 142,658 | ||||||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 5 - INTANGIBLE ASSETS | ' | ||||||||
Intangible assets consist of the following as of December 31, 2013 and June 30, 2013: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Website | $ | 50,991 | $ | 47,371 | |||||
Accumulated amortization | (6,820 | ) | (4,061 | ) | |||||
$ | 44,171 | $ | 43,310 | ||||||
The intangible assets are amortized over 1 to 10 years. Amortization expense was $1,090 and $807 for the three months ended December 31, 2013 and 2012 respectively. | |||||||||
Amortization expense was $2,980 and $1,679 for the six months ended December 31, 2013 and 2012 respectively. |
TRADE_AND_OTHER_PAYABLES
TRADE AND OTHER PAYABLES | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 6 - TRADE AND OTHER PAYABLES | ' | ||||||||
As of December 31, 2013 and June 30, 2013, trade and other payable are comprised of the following: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Trade payable | $ | 283,463 | $ | 334,776 | |||||
Employee benefits | 40,431 | 33,085 | |||||||
Other liabilities | 57,147 | 27,941 | |||||||
$ | 381,041 | $ | 395,802 |
TRADE_FINANCING
TRADE FINANCING | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
NOTE 7 - TRADE FINANCING | ' |
The Company has a trade financing agreement with a financial institution in Australia with a maximum limit of AUD $150,000 at an interest rate of 20.95% per annum. As of December 31, 2013 and June 30, 2013, the Company had outstanding balances of $137,553 and $93,968, respectively. | |
The Company entered into a trade financing agreement with a financial institution in New York with a maximum limit of sixty five percent of the accounts receivable at an interest rate of 1/40 of one percent per day. As of December 31, 2013 and June 30, 2013, the Company had outstanding balances of $79,667 and $0, respectively. |
LOANS
LOANS | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 8 - LOANS | ' | ||||||||
In November 2013, the company entered into a short term loan arrangements totalling AUD $100,000 with a shareholder of the Company. Terms of the note were interest rate at 15% per annum or .0329% per day due 30 days from the loan date. The short term note was converted into a 30 day callable convertible note in January 2014. Interest expense on the loan was $1,668 during the six months ended December 31, 2013. | |||||||||
In December 2013, the company entered into a short term loan arrangements totalling $100,000 with an individual. Terms of the note were interest rate at 15% per annum or .0329% per day due 30 days from the loan date. No interest expense was incurred for this loan during the six months ended December 31, 2013. | |||||||||
Related Party Loans | |||||||||
The Company has loans payable in the amount of $256,149 and $293,640 to a shareholder of the Company as of December 31, 2013 and June 30, 2013, respectively. Interest is at three percent (3%) per annum. Interest expense on these loans for the six months ended December 31, 2013 and 2012 was $4,809 and $4,091, respectively. | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Related party loan | $ | 256,149 | $ | 293,640 | |||||
$ | 256,149 | $ | 293,640 |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
NOTE 9 - STOCKHOLDERS' EQUITY | ' |
Preferred Stock | |
Pursuant to an Employment Agreement (the “Agreement”) with the Chief Executive Officer on November 15, 2013, The Company issued 1,000,000 undesignated shares of Preferred Stock each having a par value of $0.00001. The preferred shares shall be entitled to 100 votes to every one share of common stock. The Preferred Shares shall only valid during the term of this Agreement. At the end of the Agreement, November 15, 2016, the shares shall be cancelled and returned to Treasury and the Executive shall have no preferential voting rights. If this Agreement is renewed the preferred shares remain the Executives. | |
Common Stock | |
Pursuant to the Exchange Agreement on November 14, 2013, the Company issued 18,505,539 Common Stock, par value $0.00001 per share for the acquisition of Banjo & Matilda, Pty Ltd. | |
On November 22, 2013, the Company agreed to issue 250,000 shares of the Company stock for $50,000 or $0.20 per share to an individual investor. | |
On November 27, 2013, the Company agreed to issue 250,000 shares of the Company stock for $50,000 or $0.20 per share to an individual investor. | |
On December 2, 2013, the Company agreed to issue 100,000 shares of the Company stock for $20,000 or $0.20 per share to an individual investor. |
INCOME_TAX
INCOME TAX | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
NOTE 10 - INCOME TAX | ' | ||||||||||||||||
The following is a reconciliation of the provision for income taxes as the US federal income tax rate to the income taxes reflected in the Statements of Operations and Comprehensive Income (Loss) for the three and six months ended December 31, 2013 and 2012, respectively: | |||||||||||||||||
Three Months Ended December 31, 2013 and 2012: | |||||||||||||||||
31-Dec-13 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
31-Dec-12 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
Reconciliation of the differences between the statutory U.S. Federal income tax rate and the effective rate is as follows: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
US statutory tax rate (benefit) | 34 | % | 34 | % | |||||||||||||
Tax rate difference | (4 | )% | (4 | )% | |||||||||||||
Net operating loss | (30 | )% | (30 | )% | |||||||||||||
Tax expense at actual rate | - | % | - | % | |||||||||||||
The following is a reconciliation of income tax expense: | |||||||||||||||||
Six Months Ended December 31, 2013 and 2012: | |||||||||||||||||
31-Dec-13 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
31-Dec-12 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
Reconciliation of the differences between the statutory U.S. Federal income tax rate and the effective rate is as follows: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
US statutory tax rate (benefit) | 34 | % | 34 | % | |||||||||||||
Tax rate difference | (4 | )% | (4 | )% | |||||||||||||
Net operating loss | (30 | )% | (30 | )% | |||||||||||||
Tax expense at actual rate | - | % | - | % |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | |
Dec. 31, 2013 | ||
Notes to Financial Statements | ' | |
NOTE 11 - SUBSEQUENT EVENTS | ' | |
Management has evaluated events subsequent through February 13, 2014 for transactions and other events that may require adjustment of and/or disclosure in such financial statements. | ||
· | On January 12, 2014, the Company received $250,000 from Raymond Key in consideration of its Secured Convertible Note in the principal amount of $250,000 (the “Convertible Note”). The Convertible Note bears interest at the rate of 9% per annum and is due on the first anniversary of the date of issuance, January 12, 2015. | |
All or any portion of the principal amount of the Convertible Note and all accrued interest is convertible at the option of theholder into common stock of the Company at a conversion price of thirty cents ($0.30) per share, provided that if theVolume Weighted Average Price (VWAP) for the 30 days immediately preceding the receipt of a conversion notice is less than sixty cents ($.60) per share, the conversion price shall be reduced to twenty cents ($.20) per share. | ||
· | The Company and Mr. Macpherson and Ms. Macpherson have agreed that the shares issuable pursuant to their employment agreements will not be delivered to them until such time as each of them and the Company have determined that this is an appropriate and tax means of compensating them for their efforts. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary Of Significant Accounting Policies Policies | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
The accompanying financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”). | |||||||||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited condensed interim financial statements should be read in conjunction with the audited annual financial statements for the years ended June 30, 2013 and 2012. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. Accordingly, the results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the full year. | |||||||||||||||||
Exchange Gain (Loss) | ' | ||||||||||||||||
During the three and six months ended December 31, 2013 and 2012, the transactions of the Company were denominated in foreign currency and were recorded in Australian dollar (AUD) at the rates of exchange in effect when the transactions occurred. Exchange gains and losses are recognized for the different foreign exchange rates applied when the foreign currency assets and liabilities are settled. | |||||||||||||||||
Foreign Currency Translation and Comprehensive Income (Loss) | ' | ||||||||||||||||
The accounts of the Company were maintained, and its financial statements were expressed, in AUD. Such financial statements were translated into USD with the AUD as the functional currency. All assets and liabilities were translated at the exchange rate at the balance sheet date, stockholder’s equity is translated at the historical rates and income statement items are translated at the average exchange rate for the period. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the statements of operations. The resulting translation adjustments are reported under other comprehensive income as a component of shareholders’ equity. There were no significant fluctuations in the exchange rate for the conversion of AUD to USD after the balance sheet date. | |||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, accounts payable, sales returns and recoverability of long-term assets. | |||||||||||||||||
Reportable Segment | ' | ||||||||||||||||
The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. | |||||||||||||||||
Liquidity Matters | ' | ||||||||||||||||
Based upon its current projection of revenue, management believes that its current cash position and available financing provide sufficient resources and operating flexibility through at least the next twelve months. However, there can be no assurance that projected revenue growth and improvement in operating results will occur or that the Company will successfully implement its plans. In the event cash flow from operations is not sufficient, additional sources of financing will be required in order to maintain the Company’s current operations. Whereas management believes it will have access to other financing sources, no assurance can be given that such additional sources of financing will be available on acceptable terms, on a timely basis or at all. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. | |||||||||||||||||
Cost of Sales | ' | ||||||||||||||||
Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties,, and product sampling. | |||||||||||||||||
Operating Overhead Expense | ' | ||||||||||||||||
Operating overhead expense consists primarily of payroll and benefit related costs, rent, depreciation and amortization, professional services, and meetings and travel. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | |||||||||||||||||
The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. | |||||||||||||||||
At December 31, 2013 and 2012, the Company had not taken any significant uncertain tax positions on its tax returns for 2012 and prior years or in computing its tax provision for 2013. | |||||||||||||||||
Concentration of Credit Risk | ' | ||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company has a diversified customer base across many markets, predominantly Australia, United States of America, United Kingdom, Europe and the Middle East. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited. In addition, Receivables that are factored through the Company’s Receivable finance facility are guaranteed by the finance company that further mitigates Credit Risk. | |||||||||||||||||
Risks and Uncertainties | ' | ||||||||||||||||
The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets. | |||||||||||||||||
Contingencies | ' | ||||||||||||||||
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. | |||||||||||||||||
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. | |||||||||||||||||
Cash and Equivalents | ' | ||||||||||||||||
Cash and equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At December 31, 2013 and June 30, 2013, the Company had $27,160 and $11,104 in cash in Australia and not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. | |||||||||||||||||
Allowance for Doubtful Accounts | ' | ||||||||||||||||
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. There were no allowances for doubtful accounts as of December 31, 2013 and June 30, 2013. | |||||||||||||||||
Inventory | ' | ||||||||||||||||
Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of December 31, 2013 and June 30, 2013, inventory only consisted of the following: | |||||||||||||||||
December 31, | June 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Work in progress | $ | 160,552 | $ | 124,492 | |||||||||||||
Finished goods | 412,927 | 194,324 | |||||||||||||||
Raw materials | 12,313 | 10,782 | |||||||||||||||
$ | 585,792 | $ | 329,598 | ||||||||||||||
Property, Plant & Equipment | ' | ||||||||||||||||
Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three to 10 years; computer equipment, two to three years; buildings and improvements, five to 15 years; leasehold improvements, two to 10 years; and furniture and equipment, one to five years. | |||||||||||||||||
As of December 31, 2013 and June 30, 2013, Plant and Equipment consisted of the following: | |||||||||||||||||
December 31, | June 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Plant and Equipment | $ | 25,398 | $ | 21,855 | |||||||||||||
Accumulated Depreciation | (17,509 | ) | (14,531 | ) | |||||||||||||
$ | 7,889 | $ | 7,324 | ||||||||||||||
Depreciation was $2,180 and $1,516 for three months ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
Depreciation was $3,527 and $2,970 for six months ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||||||||||
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. | |||||||||||||||||
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |||||||||||||||||
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |||||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815. | |||||||||||||||||
As of December 31, 2013 and June 30, 2013, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value. | |||||||||||||||||
Earnings Per Share (EPS) | ' | ||||||||||||||||
Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). | |||||||||||||||||
The following table sets for the computation of basic and diluted earnings per share for three and six months ended December 31, 2013 and 2012: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
12/31/13 | 12/31/12 | 12/31/13 | 12/31/12 | ||||||||||||||
Basic and Diluted: | |||||||||||||||||
Net (loss) income | $ | (178,749 | ) | $ | (81,591 | ) | $ | (191,906 | ) | $ | 21,512 | ||||||
Weighted average number of shares in computing basic and diluted net (loss) income | |||||||||||||||||
Basic | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 | |||||||||||||
Diluted: | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 | |||||||||||||
Net (loss) income per share | |||||||||||||||||
Basic and diluted: | $ | (0.008 | ) | $ | (0.004 | ) | $ | (0.009 | ) | $ | 0.001 | ||||||
Intangible Assets | ' | ||||||||||||||||
The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset. | |||||||||||||||||
Finite-lived intangible assets primarily consist of software development capitalized. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 1 to 10 years. No events or changes in circumstances indicate that impairment existed as of December 31, 2013. | |||||||||||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||||||||||
In July 2013, the FASB issued an accounting standards update intended to provide guidance on the presentation of unrecognized tax benefits, reflecting the manner in which an entity would settle, at the reporting date, any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This accounting standard will be effective for the Company beginning June 1, 2014; early adoption is permitted. The Company has early adopted this guidance and the adoption did not have a material impact on the Company's consolidated financial position or results of operations. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary Of Significant Accounting Policies Tables | ' | ||||||||||||||||
Schedule of inventory | ' | ||||||||||||||||
As of December 31, 2013 and June 30, 2013, inventory only consisted of the following: | |||||||||||||||||
December 31, | June 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Work in progress | $ | 160,552 | $ | 124,492 | |||||||||||||
Finished goods | 412,927 | 194,324 | |||||||||||||||
Raw materials | 12,313 | 10,782 | |||||||||||||||
$ | 585,792 | $ | 329,598 | ||||||||||||||
Summary of Plant and Equipment | ' | ||||||||||||||||
As of December 31, 2013 and June 30, 2013, Plant and Equipment consisted of the following: | |||||||||||||||||
December 31, | June 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Plant and Equipment | $ | 25,398 | $ | 21,855 | |||||||||||||
Accumulated Depreciation | (17,509 | ) | (14,531 | ) | |||||||||||||
$ | 7,889 | $ | 7,324 | ||||||||||||||
Computation of basic and diluted earnings per share | ' | ||||||||||||||||
The following table sets for the computation of basic and diluted earnings per share for three and six months ended December 31, 2013 and 2012: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
12/31/13 | 12/31/12 | 12/31/13 | 12/31/12 | ||||||||||||||
Basic and Diluted: | |||||||||||||||||
Net (loss) income | $ | (178,749 | ) | $ | (81,591 | ) | $ | (191,906 | ) | $ | 21,512 | ||||||
Weighted average number of shares in computing basic and diluted net (loss) income | |||||||||||||||||
Basic | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 | |||||||||||||
Diluted: | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 | |||||||||||||
Net (loss) income per share | |||||||||||||||||
Basic and diluted: | $ | (0.008 | ) | $ | (0.004 | ) | $ | (0.009 | ) | $ | 0.001 | ||||||
OTHER_ASSETS_Tables
OTHER ASSETS (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets Tables | ' | ||||||||
Summary of other assets | ' | ||||||||
Other assets consist of the following as of December 31, 2013 and June 30, 2013: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
VAT paid | $ | 67,547 | $ | 68,168 | |||||
Prepaid and other assets | 64,972 | 10,337 | |||||||
$ | 132,519 | $ | 78,505 |
OTHER_RECEIVABLE_Tables
OTHER RECEIVABLE (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Receivable Tables | ' | ||||||||
Schedule of other receivables | ' | ||||||||
Other assets consist of the following as of December 31, 2013 and June 30, 2013: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Development grant | $ | 106,919 | $ | 98,792 | |||||
Other receivable | - | 43,866 | |||||||
$ | 106,919 | $ | 142,658 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Intangible Assets Tables | ' | ||||||||
Summary of intangible assets | ' | ||||||||
Intangible assets consist of the following as of December 31, 2013 and June 30, 2013: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Website | $ | 50,991 | $ | 47,371 | |||||
Accumulated amortization | (6,820 | ) | (4,061 | ) | |||||
$ | 44,171 | $ | 43,310 |
TRADE_AND_OTHER_PAYABLES_Table
TRADE AND OTHER PAYABLES (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Trade And Other Payables Tables | ' | ||||||||
Trade and other payables | ' | ||||||||
As of December 31, 2013 and June 30, 2013, trade and other payable are comprised of the following: | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Trade payable | $ | 283,463 | $ | 334,776 | |||||
Employee benefits | 40,431 | 33,085 | |||||||
Other liabilities | 57,147 | 27,941 | |||||||
$ | 381,041 | $ | 395,802 |
LOANS_Tables
LOANS (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Loans Tables | ' | ||||||||
Related party loans | ' | ||||||||
Interest expense on these loans for the six months ended December 31, 2013 and 2012 was $4,809 and $4,091, respectively. | |||||||||
December 31, | June 30, | ||||||||
2013 | 2013 | ||||||||
Related party loan | $ | 256,149 | $ | 293,640 | |||||
$ | 256,149 | $ | 293,640 |
INCOME_TAX_Tables
INCOME TAX (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Tables | ' | ||||||||||||||||
Reconciliation of provision for income taxes | ' | ||||||||||||||||
The following is a reconciliation of the provision for income taxes as the US federal income tax rate to the income taxes reflected in the Statements of Operations and Comprehensive Income (Loss) for the three and six months ended December 31, 2013 and 2012, respectively: | |||||||||||||||||
Three Months Ended December 31, 2013 and 2012: | |||||||||||||||||
31-Dec-13 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
31-Dec-12 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
Six Months Ended December 31, 2013 and 2012 | |||||||||||||||||
31-Dec-13 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
31-Dec-12 | U.S. | State | International | Total | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | |||||||||
Deferred | - | - | - | - | |||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | |||||||||
Reconciliation of differences between statutory U.S. Federal income tax rate and effective rate | ' | ||||||||||||||||
Reconciliation of the differences between the statutory U.S. Federal income tax rate and the effective rate is as follows: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
US statutory tax rate (benefit) | 34 | % | 34 | % | |||||||||||||
Tax rate difference | (4 | )% | (4 | )% | |||||||||||||
Net operating loss | (30 | )% | (30 | )% | |||||||||||||
Tax expense at actual rate | - | % | - | % | |||||||||||||
2013 | 2012 | ||||||||||||||||
US statutory tax rate (benefit) | 34 | % | 34 | % | |||||||||||||
Tax rate difference | (4 | )% | (4 | )% | |||||||||||||
Net operating loss | (30 | )% | (30 | )% | |||||||||||||
Tax expense at actual rate | - | % | - | % |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Summary Of Significant Accounting Policies Details | ' | ' |
Work in progress | $160,552 | $124,492 |
Finished goods | 412,927 | 194,324 |
Raw materials | 12,313 | 10,782 |
Inventory | $585,792 | $329,598 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Summary Of Significant Accounting Policies Details 1 | ' | ' |
Plant and Equipment | $25,398 | $21,855 |
Accumulated Depreciation | -17,509 | -14,531 |
Plant and Equipment, net | $7,889 | $7,324 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary Of Significant Accounting Policies Details 2 | ' | ' | ' | ' |
Net (loss) income | ($178,749) | ($81,591) | ($191,906) | $21,512 |
Weighted average number of shares in computing basic and diluted net (loss) income | ' | ' | ' | ' |
Basic | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 |
Diluted: | 23,089,880 | 18,505,539 | 21,679,314 | 18,505,539 |
Net (loss) income per share | ' | ' | ' | ' |
Basic and diluted: | ($0.01) | ($0.00) | ($0.01) | $0.00 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | |
Cash in Australia and not covered by insurance | $27,160 | ' | $27,160 | ' | $11,104 |
Depreciation | $2,180 | $1,516 | $3,527 | $2,970 | ' |
Intangibles assets useful lives | ' | ' | '1 to 10 years | ' | ' |
Computer Software Development [Member] | ' | ' | ' | ' | ' |
Estimated useful lives of property and equipment | ' | ' | 'Three to 10 years | ' | ' |
Computer Equipment [Member] | ' | ' | ' | ' | ' |
Estimated useful lives of property and equipment | ' | ' | 'Two to three years | ' | ' |
Building and Improvements [Member] | ' | ' | ' | ' | ' |
Estimated useful lives of property and equipment | ' | ' | 'Five to 15 years | ' | ' |
Leasehold Improvements [Member] | ' | ' | ' | ' | ' |
Estimated useful lives of property and equipment | ' | ' | 'Two to 10 years | ' | ' |
Furniture and Equipment [Member] | ' | ' | ' | ' | ' |
Estimated useful lives of property and equipment | ' | ' | 'One to five years | ' | ' |
OTHER_ASSETS_Details
OTHER ASSETS (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Other Assets Details | ' | ' |
VAT paid | $67,547 | $68,168 |
Prepaid and other assets | 64,972 | 10,337 |
Total other assets | $132,519 | $78,505 |
OTHER_RECEIVABLE_Details
OTHER RECEIVABLE (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Other Receivable Details | ' | ' |
Development grant | $106,919 | $98,792 |
Other receivable | ' | 43,866 |
Total other receivable | $106,919 | $142,658 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Intangible Assets Details | ' | ' |
Website | $50,991 | $47,371 |
Accumulated amortization | -6,820 | -4,061 |
Intangible assets | $44,171 | $43,310 |
INTANGIBLE_ASSETS_Details_Narr
INTANGIBLE ASSETS (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Assets Details Narrative | ' | ' | ' | ' |
Amortization expense | $1,090 | $807 | $2,980 | $1,679 |
TRADE_AND_OTHER_PAYABLES_Detai
TRADE AND OTHER PAYABLES (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Trade And Other Payables Details | ' | ' |
Trade payable | $283,463 | $334,776 |
Employee benefits | 40,431 | 33,085 |
Other liabilities | 57,147 | 27,941 |
Trade and other payables | $381,041 | $395,802 |
TRADE_FINANCING_Details_Narrat
TRADE FINANCING (Details Narrative) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Trade Financing Details Narrative | ' | ' |
Outstanding balances related to trade financing agreement with institution in Australia | $137,553 | $93,968 |
Outstanding balances related to trade financing agreement with institution in New York | $79,667 | $0 |
LOANS_Details
LOANS (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Loans Details | ' | ' |
Related party loan | $256,149 | $293,640 |
Total related party loan | $256,149 | $293,640 |
LOANS_Details_Narrative
LOANS (Details Narrative) (USD $) | 6 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Loans Details Narrative | ' | ' |
Interest expense on loan from shareholder | $1,668 | ' |
Interest expense on loan from individual | ' | ' |
Interest expense on related party loan | $4,809 | $4,091 |
INCOME_TAX_Details
INCOME TAX (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Details | ' | ' | ' | ' |
Current, U.S. | ' | ' | ' | ' |
Deferred, U.S. | ' | ' | ' | ' |
Total, U.S. | ' | ' | ' | ' |
Current, State | ' | ' | ' | ' |
Deferred, State | ' | ' | ' | ' |
Total, State | ' | ' | ' | ' |
Current, International | ' | ' | ' | ' |
Deferred, International | ' | ' | ' | ' |
Total, International | ' | ' | ' | ' |
Current, Total | ' | ' | ' | ' |
Deferred, Total | ' | ' | ' | ' |
Income tax expense (benefit) | ' | ' | ' | ' |
INCOME_TAX_Details_1
INCOME TAX (Details 1) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Details 1 | ' | ' | ' | ' |
US statutory tax rate (benefit) | 34.00% | 34.00% | 34.00% | 34.00% |
Tax rate difference | -4.00% | -4.00% | -4.00% | -4.00% |
Net operating loss | -30.00% | -30.00% | -30.00% | -30.00% |
Tax expense at actual rate | 0.00% | 0.00% | 0.00% | 0.00% |