Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2018 | Feb. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | INTEGRATED VENTURES, INC. | |
Entity Central Index Key | 1,520,118 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,874,103 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,019 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Current assets: | ||
Cash | $ 51,627 | $ 749 |
Restricted cash | 40,321 | |
Prepaid expenses and other current assets | 3,000 | 9,000 |
Inventories | 114,851 | 114,851 |
Equipment deposits | 3,896 | |
Marketable securities | 1,700 | |
Total current assets | 169,478 | 170,517 |
Non-current assets: | ||
Property and equipment, net | 1,337,944 | 633,105 |
Digital currencies | 11,227 | |
Deposits | 14,673 | 14,673 |
Total assets | 1,522,095 | 829,522 |
Current liabilities: | ||
Accounts payable | 29,487 | 26,973 |
Accrued expenses | 24,340 | 29,428 |
Due to related party | 64,774 | 20,974 |
Derivative liabilities | 1,002,993 | 2,886,965 |
Convertible notes payable, net of discounts | 127,934 | |
Total current liabilities | 1,249,528 | 2,964,340 |
Total liabilities | 1,249,528 | 2,964,340 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value, (40,000,000 shares authorized, 9,874,103 and 8,964,103 shares issued and outstanding as of December 31, 2018 and June 30, 2018, respectively) | 9,875 | 8,965 |
Additional paid-in capital | 12,843,224 | 9,290,344 |
Stock subscriptions payable | 60,000 | 35,000 |
Accumulated deficit | (12,641,382) | (11,469,936) |
Total stockholders' equity (deficit) | 272,567 | (2,134,818) |
Total liabilities and stockholders' equity (deficit) | 1,522,095 | 829,522 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock | 500 | 500 |
Series B Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock | $ 350 | $ 309 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 21, 2015 |
Stockholders' equity (deficit): | |||
Common stock, par value per share | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 40,000,000 | 40,000,000 | |
Common stock, shares issued | 9,874,103 | 8,964,103 | |
Common stock, shares outstanding | 9,874,103 | 8,964,103 | |
Series A Preferred Stock [Member] | |||
Stockholders' equity (deficit): | |||
Preferred stock, par value per share | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 500,000 | 500,000 | |
Preferred stock, shares outstanding | 500,000 | 500,000 | |
Series B Preferred Stock [Member] | |||
Stockholders' equity (deficit): | |||
Preferred stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 |
Preferred stock, shares issued | 350,384 | 309,166 | |
Preferred stock, shares outstanding | 350,384 | 309,166 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||||
Cryptocurrency mining | $ 77,913 | $ 59,498 | $ 178,378 | $ 59,498 |
Sales of cryptocurrency mining equipment | 9,557 | 45,590 | 24,337 | 45,590 |
Total revenues | 87,470 | 105,088 | 202,715 | 105,088 |
Cost of revenues | 232,896 | 50,256 | 434,156 | 50,256 |
Gross margin (loss) | (145,426) | 54,832 | (231,441) | 54,832 |
Operating expenses: | ||||
General and administrative | 173,512 | 498,228 | 730,434 | 659,586 |
Impairment of assets | 2,097,930 | |||
Total operating expenses | 173,512 | 498,228 | 2,828,364 | 659,586 |
Loss from operations | (318,938) | (443,396) | (3,059,805) | (604,754) |
Other income (expense): | ||||
Interest and other income | 1,304 | 1,402 | ||
Interest expense | (41,328) | (56,827) | (44,652) | (143,707) |
Realized gain (loss) on investments | (25,266) | 7,193 | (32,504) | 288,416 |
Unrealized loss on investments | (64,987) | (3,876) | ||
Gain on extinguishment of debt | 3,259 | 7,934 | ||
Change in fair value of derivative liabilities | 914,308 | (404,539) | 1,965,515 | (416,288) |
Loss on settlement of warrants | (25,000) | (25,000) | ||
Total other income (expense) | 847,714 | (539,597) | 1,888,359 | (291,119) |
Income (loss) before income taxes | 528,776 | (982,993) | (1,171,446) | (895,873) |
Provision for income taxes | ||||
Net income (loss) | $ 528,776 | $ (982,993) | $ (1,171,446) | $ (895,873) |
Net income (loss) per common share: | ||||
Basic | $ 0.05 | $ (0.12) | $ (0.12) | $ (0.12) |
Diluted | $ 0.01 | $ (0.12) | $ (0.12) | $ (0.12) |
Weighted average number of common shares outstanding: | ||||
Basic | 9,868,668 | 8,252,873 | 9,560,842 | 7,711,319 |
Diluted | 46,817,888 | 8,252,873 | 9,560,842 | 7,711,319 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (1,171,446) | $ (895,873) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 246,996 | 8,702 |
Stock-based compensation - related party | 417,000 | 409,000 |
Stock-based compensation | 80,159 | |
Amortization of debt discount | 38,782 | 108,121 |
Amortization of original issue discount | 1,347 | |
Impairment of assets | 2,097,930 | |
Change in fair value of derivative liabilities | (1,965,515) | 416,288 |
Loss on settlement of warrants | 25,000 | |
Gain on extinguishment of debt | (7,934) | |
Financing fees related to notes payable | 32,358 | |
Realized (gain) loss on sale of investments | 32,504 | (288,416) |
Unrealized loss on investments | 3,876 | |
Changes in assets and liabilities: | ||
Digital currencies | (179,316) | (71,543) |
Prepaid expenses and other current assets | 6,000 | 5,000 |
Accrued interest receivable - related party | (98) | |
Inventories | (17,730) | |
Accounts payable | 2,514 | (827) |
Accrued expenses | (5,088) | 6,411 |
Due to related party | 43,800 | (7,060) |
Net cash used in operating activities | (355,680) | (273,378) |
Cash flows from investing activities: | ||
Net proceeds from the sale of investments | 159,739 | 579,460 |
Increase in notes receivable - related party | (49,880) | |
Purchase of property and equipment | (42,447) | (310,832) |
Net cash provided by investing activities | 117,292 | 218,748 |
Cash flows from financing activities: | ||
Proceeds from convertible notes payable | 223,945 | |
Proceeds from sale of preferred stock | 125,000 | |
Proceeds from stock subscriptions payable | 25,000 | 35,000 |
Net cash provided by financing activities | 248,945 | 160,000 |
Net increase in cash | 10,557 | 105,370 |
Cash, beginning of period | 41,070 | 15,691 |
Cash, end of period | 51,627 | 121,061 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 29,257 | |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Equipment deposits for property and equipment | 3,896 | |
Common shares issued for cashless exercise of warrants | 560 | 188 |
Common shares issued for debt discount | 53,250 | |
Debt discount for derivative liability | 81,543 | 72,617 |
Series B preferred shares for property and equipment | 3,003,422 | |
Series B preferred shares returned and cancelled | 2 | |
Settlement of derivative liabilities | 405,970 | |
Common shares issued for convertible notes payable | 149,049 | |
Common shares issued for accrued compensation | 15,625 | |
Accrued interest payable added to note payable | 1,117 | |
Note receivable and accrued interest receivable - related party for marketable securities | $ 66,850 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | Organization Integrated Ventures, Inc. (the “Company,” “we,” “our,” or “EMS Find”) was incorporated in the State of Nevada on March 22, 2011, under the name of Lightcollar, Inc. On March 20, 2015, the Company amended its articles of incorporation and changed its name from Lightcollar, Inc. to EMS Find, Inc. On May 30, 2017, Integrated Ventures, Inc. (“Integrated Ventures”), a Nevada corporation, was formed as a wholly owned subsidiary of the Company. Pursuant to an Agreement and Plan of Merger dated May 30, 2017, Integrated Ventures was merged into the Company, with the Company being the surviving corporation and changing its name to Integrated Ventures, Inc. The Company has discontinued its prior operations and changed its business focus from its prior technologies relating to the EMS Find platform to acquiring, launching and operating companies in the cryptocurrency sector, mainly in digital currency mining, equipment manufacturing, and sales of branded mining rigs, as well as blockchain software development. The Company is developing and acquiring a diverse portfolio of digital currency assets and block chain technologies, and now operates cryptocurrency mining operations in two facilities located in Pennsylvania and New Jersey. Cryptocurrency mining revenues commenced in November 2017. Crypto-currencies are a medium of exchange that uses decentralized control (a block chain) as opposed to a central bank to track and validate transactions. The Company, through its wholly owned subsidiary, BitcoLab, Inc., is currently mining Bitcoin, Litecoin and Ethereum, whereby the Company earns revenue by solving “blocks” to be added to the block chain. The Company expanded its cryptocurrency mining operations in April 2018 by acquiring the operations of digiMine LLC (“digiMine”) (Note 6) and by purchasing 182 cryptocurrency mining machines from Secure Hosting LLC (“Secure Hosting”) in August 2018 (see Note 5). Basis of Presentation The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim periods ended December 31, 2018 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2019. In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 filed on December 27, 2018 and Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | The significant accounting policies of the Company are disclosed in Notes to Financial Statements included in the Company’s Annual Report on Form 10-K. The following summary of significant accounting policies of the Company is presented to assist in understanding the Company’s interim financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Restatement The Company is restating its condensed financial statements for the three months and six months ended December 31, 2017 to correct reporting of derivative liabilities associated with its convertible notes payable and warrants, stock-based compensation, gain on sale of investments and other miscellaneous corrections. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates. Digital Currencies Digital currencies consist of Bitcoin, Litecoin and Ethereum, generally received for the Company’s own account as compensation for cryptocurrency mining services. Given that there is limited precedent regarding the classification and measurement of cryptocurrencies under current Generally Accepted Accounting Principles (“GAAP”), the Company has determined to account for these digital currencies as indefinite-lived intangible assets in accordance with Accounting Standards Update (“ASU”) No. 350, Intangibles – Goodwill and Other Inventories Inventories at December 31 and June 30, 2018 consist of cryptocurrency mining units held for sale or deployment in mining operatons, and are stated at the lower of cost or estimated realizable value. Payments to equipment suppliers prior to shipment of the equipment are recorded as equipment deposits. Property and Equipment Property and equipment, consisting primarily of computer and other cryptocurrency mining equipment (transaction verification servers) and leasehold improvements, is stated at the lower of cost or estimated realizable value and is depreciated when placed into service using the straight-line method over estimated useful lives. The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. Management has assessed the basis of depreciation of these assets and believes they should be depreciated over a three-year period due to technological obsolescence reflecting rapid development of hardware that has faster processing capacity and other factors. Additionally, during the six months ended December 31, 2018, the Company wrote down cryptocurrency mining equipment by $2,097,930 to estimated net realizable value. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. Management has determined that the three-year diminishing value best reflects the current expected useful life of transaction verification servers. This assessment takes into consideration the availability of historical data and management’s expectations regarding the direction of the industry including potential changes in technology. Management will review this estimate annually and will revise such estimates as and when data becomes available. To the extent that any of the assumptions underlying management’s estimate of useful life of its transaction verification servers are subject to revision in a future reporting period, either as a result of changes in circumstances or through the availability of greater quantities of data, then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets. Derivatives The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market 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 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. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt are included in the value of the derivatives. We estimate the fair value of the derivatives associated with our convertible notes payable, warrants and put-back rights associated with two asset purchase agreements using, as applicable, either the Black-Scholes pricing model or multinomial lattice models that value the derivative liability based on a probability weighted discounted cash flow model using future projections of the various potential outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, and, in the case of our convertible notes payable, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material. Impairment of Long-Lived Assets All assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with ASC 350 and ASC 360. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value or net realizable value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations. Total impairment expense, consisting of write downs for cryptocurrency mining equipment totaled $2,097,930 for the six months ended December 31, 2018. Fair Value of Financial Instruments Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2018 and June 30, 2018, the amounts reported for cash, prepaid expenses and other current assets, accounts payable, accrued expenses and due to related party approximate fair value because of their short maturities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. At December 31, 2018, we had no financial instrument assets measured at fair value. Our marketable securities as of June 30, 2018 are measured at fair value on a recurring basis and estimated as follows: Total Level 1 Level 2 Level 3 Marketable securities $ 1,700 $ 1,700 $ - $ - Total assets measured at fair value $ 1,700 $ 1,700 $ - $ - Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows: Total Level 1 Level 2 Level 3 December 31, 2018: Derivative liabilities $ 1,002,993 $ - $ - $ 1,002,993 Total liabilities measured at fair value $ 1,002,993 $ - $ - $ 1,002,993 June 30, 2018: Derivative liabilities $ 2,886,965 $ - $ - $ 2,886,965 Total liabilities measured at fair value $ 2,886,965 $ - $ - $ 2,886,965 During the six months ended December 31, 2018, the Company had the following activity in its derivative liabilities: Convertible Notes Payable Warrants Put Back Rights Total Derivative liabilities at June 30, 2018 $ - $ - $ 2,886,965 $ 2,886,965 Addition to liabilities for new debt/warrants 81,543 - - 81,543 Change in fair value (385 ) 47,528 (2,012,658 ) (1,965,515 ) Derivative liabilities at December 31, 2018 $ 81,158 $ 47,528 $ 874,307 $ 1,002,993 Stock-Based Compensation The Company accounts for all equity-based payments in accordance with ASC Topic 718, Compensation – Stock Compensation. The Company accounts for non-employee share-based awards based upon ASC 505-50, Equity-Based Payments to Non-Employees. Revenue Recognition Effective July 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, Our revenues currently consist of cryptocurrency mining revenues and revenues from the sale of cryptocurrency mining equipment recognized in accordance with ASC 606 as discussed above. Amounts collected from customers prior to shipment of products are recorded as deferred revenue. The Company earns its cryptocurrency mining revenues by providing transaction verification services within the digital currency networks of crypto-currencies, such as Bitcoin, Litecoin and Ethereum. The Company satisfies its performance obligation at the point in time that the Company is awarded a unit of digital currency through its participation in the applicable network and network participants benefit from the Company’s verification service. In consideration for these services, the Company receives digital currencies, which are recorded as revenue using the closing U.S. dollar price of the related cryptocurrency on the date of receipt. Expenses associated with running the cryptocurrency mining operations, such as equipment depreciation, rent, operating supplies, rent, utilities and monitoring services are recorded as cost of revenues. There is currently no specific definitive guidance in GAAP or alternative accounting frameworks for the accounting for the production and mining of digital currencies and management has exercised significant judgment in determining appropriate accounting treatment for the recognition of revenue for mining of digital currencies. Management has examined various factors surrounding the substance of the Company’s operations and the guidance in ASC 606, including identifying the transaction price, when performance obligations are satisfied, and collectability is reasonably assured being the completion and addition of a block to a blockchain and the award of a unit of digital currency to the Company. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies which could result in a change in the Company’s financial statements. Income Taxes The Company adopted the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. The Company adopted ASC 740-10, Definition of Settlement in FASB Interpretation No. 48, Income (Loss) Per Share Basic net income or loss per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income or loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as “in-the-money” stock options and warrants, convertible debt and convertible preferred stock, were exercised or converted into common stock. Equivalent shares are not utilized when the effect is anti-dilutive. The common shares used in the computation of basic and diluted net income (loss) per share are reconciled as follows: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Weighted average number of shares outstanding – basic 9,868,668 8,252,873 9,560,842 7,711,319 Dilutive effect of convertible debt 1,910,820 - - - Dilutive effect of Series B convertible preferred stock 35,038,400 - - - Weighted average number of shares outstanding – diluted 46,817,888 8,252,873 9,560,842 7,711,319 Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) There were no new accounting pronouncements issued or proposed by the FASB during the six months ended December 31, 2018 and through the date of filing this report which the Company believes will have a material impact on its financial financial statements. Reclassifications Certain amounts in the condensed financial statements for the prior-year periods have been reclassified to conform to the presentation for the current-year periods. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 3 - GOING CONCERN | The Company has reported recurring net losses since its inception and used net cash in operating activities of $355,680 in the six months ended December 31, 2018. As of December 31, 2018, the Company had an accumulated deficit of $12,641,382. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to reach a successful level of operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements. There can be no assurances that the Company will be successful in attaining a profitable level of operations or in generating additional cash from the equity/debt markets or other sources fund its operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Should the Company not be successful in its business plan or in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 4 - PROPERTY AND EQUIPMENT | Property and equipment consisted of the following at: December 31, 2018 June 30, 2018 Cryptocurrency mining equipment $ 1,483,194 $ 573,806 Furniture and equipment 16,366 14,427 Leasehold improvements 143,440 102,932 Total 1,643,000 691,165 Less accumulated depreciation and amortization (305,056 ) (58,060 ) Net $ 1,337,944 $ 633,105 Depreciation and amortization expense, included in cost of revenues, for the three months ended December 31, 2018 and 2017 was $136,778 and $8,702, respectively. Depreciation and amortization expense, included in cost of revenues, for the six months ended December 31, 2018 and 2017 was $246,996 and $8,702, respectively. |
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 5 - ASSET PURCHASE AGREEMENT | On August 2, 2018, the Company entered into an Asset Purchase Agreement with Secure Hosting LLC, a Florida limited liability, for the purchase of 182 Ethereum mining machines. As consideration for the purchase of the machines, the Company issued 38,018 restricted shares of its Series B convertible preferred stock, valued on an “as converted to common” basis at an aggregate of $3,801,800, based on the market value of the Company’s common stock on the date of the transaction. Of the 182 machines purchased, 152 were placed into operations, and 30 units deemed to be under-performing will be utilized by the Company as repair parts or sold as repair parts. The Company performed a lower of cost or market impairment analysis on the machines purchased, including writing off the purchase price allocated to the defective machines, and recorded an impairment expense of $2,097,930, which amount is included in operating expenses for the six months ended December 31, 2018. The Agreement contains customary representations and warranties and covenants as of the Closing Date, including, without limitation, that the Equipment is (i) in good condition, (ii) free of all liens, (iii) not subject to any intellectual property rights other than software used in the Equipment and (iv) covered by certain manufacturer warranties. Because a portion of the machines were defective, certain shares of the Series B preferred stock issued in the transaction were subsequently returned to the Company and cancelled. |
DIGIMINE ACQUISITION
DIGIMINE ACQUISITION | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 6 - DIGIMINE ACQUISITION | In April 2018, the Company acquired the digital currency mining operations of digiMine LLC (“digiMine”) through two Asset Purchase Agreements (the “digiMine Acquisition”) in a transaction recorded as a business combination. On April 16, 2018, the Company entered into an Asset Purchase Agreement with digiMine for the purchase of digiMine’s digital currency mining assets located in Marlboro, New Jersey, the principal assets consisting of: 150 cryptocurrency mining machines; all right, title and interest in, the lease and leasehold improvements for the premises on which digiMine’s business operates; all books and records pertaining to ownership of digiMine’s business as applicable; and restricted cash of $175,000. The Company issued 16,666 shares of its Series B preferred stock to digiMine. The Company also entered into a separate Security and Pledge Agreement, dated as of April 13, 2018, securing its obligations to digiMine under the Asset Purchase Agreement. digiMine has the right (the “Put-Back Right”), at any time commencing April 1, 2019, to require that the Company redeem for cash any of Seller’s then-outstanding Shares at a redemption price equal to 72% of the Shares. The Conversion Amount on execution is equal to $1,200,000 (the “Put-Back Price”) of such Shares; provided, that the Put Back Right expires with respect to any of the Shares at such time as the Shares are registered for resale. Each of the Shares for purposes of the Put-Back Price is equal to a fixed price of $100 per share. On April 30, 2018, the Company entered into a second Asset Purchase Agreement with digiMine for the purchase of digiMine’s digital currency mining assets located in Marlboro, New Jersey, the principal assets consisting of: 97 cryptocurrency mining machines and computer workstation; digital currency portfolio with an estimated value of $15,487; all right, title and interest in, the lease and leasehold improvements for the premises on which digiMine’s business operates; all books and records pertaining to ownership of digiMine’s business as applicable; and restricted cash of $200,000. The Company issued 20,000 shares of its Series B preferred stock to digiMine. The Company also entered into a separate Security and Pledge Agreement, dated as of April 30, 2018, securing its obligations to digiMine under the Agreement. digiMine has the right (the “Put-Back Right”), at any time commencing May 1, 2019, to require that the Company redeem for cash any of Seller’s then-outstanding Shares at a redemption price equal to 72% of the Shares. The Conversion Amount on execution is equal to $1,440,000 (the “Put-Back Price”) of such Shares; provided, that the Put Back Right expires with respect to any of the Shares at such time as the Shares are registered for resale. Each of the Shares for purposes of the Put-Back Price is equal to a fixed price of $100 per share. The Company has identified the Put-Back Rights associated with the two Asset Purchase Agreements as derivatives. The Company engaged an independent valuation firm to estimate the fair value of the Series B preferred stock issued in the two Asset Purchase Agreements, to estimate the value of the derivative liabilities associated with the Put-Back Rights, and allocate the total consideration paid to the assets acquired. The valuation firm developed multinomial lattice models that valued the derivative liability based on a probability weighted discounted cash flow model using future projections of the various potential outcomes. The total consideration paid in the Acquisition is summarized as follows: Value of 36,667 total Series B preferred shares $ 1,163,806 Derivative liabilities associated with Put-Back Rights 3,729,109 Total consideration paid $ 4,892,915 The total consideration paid was allocated to the fair value of the assets acquired as follows: Restricted cash $ 375,000 Property and equipment 350,349 Digital currencies 14,056 Goodwill 4,153,510 Total consideration allocated $ 4,892,915 No liabilities of digiMine were assumed by the Company in the Acquisition. The excess of consideration paid over fair value of assets acquired was recorded as goodwill. The Company performed an impairment analysis on the goodwill at June 30, 2018 and recorded an impairment expense of $4,153,510, which amount is included in operating expenses for the year ended June 30, 2018. The total cash acquired of $375,000 was restricted to fund digital mining operations. As of December 31, 2018, the restricted cash had been fully utilized in digital mining operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 7 - RELATED PARTY TRANSACTIONS | We have one executive officer, Steve Rubakh, who is currently our only full-time employee and sole member of our Board of Directors. Mr. Rubakh is paid an annual salary established by the Board of Directors and is issued shares of Series B Preferred Stock for additional compensation. The number of shares issued, generally on a quarterly basis, is at the discretion of the Board of Directors. On March 18, 2018, the Board of Directors of the Company modified the annual compensation for Steve Rubakh, effective April 1, 2018 to include annual salary of $150,000 per year and the issuance on a quarterly basis of 5,000 shares of Series B preferred stock. On July 1, 2018, the Company issued to Mr. Rubakh 5,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $417,000. The stock-based compensation – related party is included in general and administrative expenses for the six months ended December 31, 2018. On August 1, 2017, the Company issued to Mr. Rubakh 30,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $9,000. The stock-based compensation – related party is included in general and administrative expenses for the six months ended December 31, 2017. On August 31, 2017, Steve Rubakh converted accrued compensation of $15,625 into 347,222 common shares of the Company. Amounts due to related party, including accrued salary to Mr. Rubakh, totaled $64,774 and $20,974 as of December 31, 2018 and June 30, 2018, respectively. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 8 - CONVERTIBLE NOTES PAYABLE | Convertible notes payable, all classified as current, consist of the following at December 31, 2018: Debt Principal Discount Net Geneva Roth Remark Holdings, Inc. $ 128,000 $ 35,025 $ 92,975 BHP Capital NY, Inc. 52,000 34,520 17,480 Armada Investment Fund, LLC 52,000 34,521 17,479 Total $ 232,000 $ 104,066 $ 127,934 On September 17, 2018, the Company entered into a convertible promissory note with Geneva Roth Remark Holdings, Inc. (“Geneva”) in the principal amount of $128,000. The note matures on September 26, 2019 and bears interest at 10%. A debt discount of $49,169 was recorded, including a derivative liability of $46,169. Geneva has the right beginning on the date that is 170 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock. The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the ten trading days ending on the latest complete trading day prior to the date of conversion. As of December 31, 2018, $14,144 of the debt discount had been amortized and there was accrued interest payable of $3,682. The Company recorded a derivative liability of $45,046 as of December 31, 2018. On September 26, 2018, the Company entered into a convertible promissory note with with BHP Capital NY, Inc. (“BHP”) in the principal amount of $52,000, with an original issue discount of $2,000. The note matures on September 17, 2019 and bears interest at 8%. BHP was issued 75,000 shares of the Company’s common stock valued at $26,625 as a fee. A debt discount of $46,840 was recorded, including a derivative liability of $17,687. BHP has the right beginning on the date that is 31 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock. The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the ten trading days ending on the latest complete trading day prior to the date of conversion. As of December 31, 2018, $12,320 of the debt discount had been amortized and there was accrued interest payable of $1,094. The Company recorded a derivative liability of $18,056 as of December 31, 2018. On September 26, 2018, the Company entered into a convertible promissory note with with Armada Investment Fund, LLC (“Armada”) in the principal amount of $52,000, with an original issue discount of $2,000. The note matures on September 17, 2019 and bears interest at 8%. Armada was issued 75,000 shares of the Company’s common stock valued at $26,625 as a fee. A debt discount of $46,840 was recorded, including a derivative liability of $17,687. Armada has the right beginning on the date that is 31 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock. The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the ten trading days ending on the latest complete trading day prior to the date of conversion. As of December 31, 2018, $12,319 of the debt discount had been amortized and there was accrued interest payable of $1,094. The Company recorded a derivative liability of $18,056 as of December 31, 2018. |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 9 - STOCKHOLDERS’ DEFICIT | Preferred Stock Series A Preferred Stock In March 2015, the Company filed with the State of Nevada a Certificate of Designation establishing the designations, preferences, limitations and relative rights of 1,000,000 shares of the Company’s Series A preferred stock (“Series A Preferred Stock”). Holders of the Series A Preferred Stock have the right to vote in aggregate, on all shareholder matters equal to 1,000 votes per share of Series A Preferred Stock. The shares of Series A Preferred Stock are not convertible into shares of common stock. The Company has 1,000,000 shares of Series A Preferred Stock authorized, with 500,000 shares issued and outstanding as of December 31, 2018 and June 30, 2018, which were issued in March 2015 in consideration for services to members of the Company’s Board of Directors. Series B Preferred Stock On December 21, 2015, the Company filed a Certificate of Designation for a new Series B Convertible Preferred Stock with the State of Nevada following approval by the board of directors of the Company. Five Hundred (500,000) Thousand shares of the Company’s authorized preferred stock are designated as the Series B Convertible Preferred Stock (the “Series B Preferred Stock”), par value of $0.001 per share and with a stated value of $0.001 per share (the “Stated Value”). Holders of Series B Preferred Stock shall be entitled to receive dividends, when and as declared by the Board of Directors out of funds legally available therefor. At any time and from time to time after the issuance of shares of the Series B Preferred Stock, each issued share of Series B Preferred Stock is convertible into One (100) Hundred shares of Common Stock (“Conversion Ratio”). The holders of the Series B Preferred Stock shall have the right to vote together with holders of Common Stock, on an as “converted basis”, on any matter that the Company’s shareholders may be entitled to vote on, either by written consent or by proxy. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Series B Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series B Preferred Stock an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable prior to any distribution or payment shall be made to the holders of any junior securities. The Company has 500,000 shares of Series B Preferred Stock authorized, with 350,384 and 309,166 shares issued and outstanding as of December 31, 2018 and June 30, 2018, respectively. On March 18, 2018, the Board of Directors of the Company modified the annual compensation for Steve Rubakh, effective April 1, 2018 to include annual salary of $150,000 per year and the issuance on a quarterly basis of 5,000 shares of Series B preferred stock. On July 1, 2018, the Company issued to Mr. Rubakh 5,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $417,000. The stock-based compensation – related party is included in general and administrative expenses for the six months ended December 31, 2018. As discussed in Note 5, on August 2, 2018, the Company entered into an Asset Purchase Agreement for the purchase of 182 cryptocurrency mining machines. As consideration for the purchase of the machines, the Company issued 38,018 shares of its Series B convertible preferred stock, valued on an “as converted to common” basis at an aggregate of $3,801,800. In December 2018, a total of 1,800 shares of Series B preferred stock originally issued pursuant to the Asset Purchase Agreement were returned to the Company and cancelled. On August 1, 2017, the Company issued to Mr. Rubakh 30,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $9,000. The stock-based compensation – related party is included in general and administrative expenses for the six months ended December 31, 2017. On October 25, 2017, four investors entered into subscription agreements for the purchase of a total of 16,000 shares of Series B Preferred stock for cash at $10 per share. Through December 31, 2017, 12,500 of the shares had been issued for an investment of $125,000. As of December 31, 2018 and June 30, 2018, a stock subscription payable of $35,000 was recorded for unissued shares. On November 1, 2017, the Company issued to Mr. Rubakh 40,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $400,000. The stock-based compensation – related party is included in general and administrative expenses for the six months ended December 31, 2017. Common Stock The Company has 40,000,000 shares of common stock authorized, with 9,874,103 and 8,964,103 shares issued and outstanding as of December 31, 2018 and June 30, 2018, respectively. During the six months ended December 31, 2018, the Company issued a total of 910,000 shares of its common stock. On August 14, 2018, 100,000 shares of common stock valued at $55,000, based on the closing market price of stock on the date of grant, were issued to a consultant. On August 23, 2018, 560,000 shares of common stock were issued to a lender in the cashless exercise of warrants recorded at par value of $560. See Note 10. On September 26, 2018, a total of 150,000 shares of common stock valued at $53,250, based on the closing market price of stock on the date of grant, were issued to two lenders as loan fees. See Note 8. On October 5, 2018, 100,000 shares of common stock valued at $25,160, based on the closing market price of stock on the date of grant, were issued to a consultant. During the six months ended December 31, 2017, the Company issued a total of 3,175,774 shares of its common stock. A total of 2,640,017 shares of the Company’s common stock, valued at $149,049, were issued in conversion of $55,760 note principal, $2,715 accrued interest payable, $58,216 in derivative liabilities, $2,449 in fees and $29,909 in penalties. On July 6, 2017, 188,240 shares of common stock were issued to a lender in the cashless exercise of warrants recorded at par value of $188. On August 31, 2017, 347,222 shares of common stock valued at $15,625 were issued to Steve Rubakh for accrued compensation. On September 30, 2017, the Company increased the number of outstanding common shares by 114 shares due to rounding of shares in the reverse stock split. |
WARRANTS
WARRANTS | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 10 - WARRANTS | The Company has granted warrants to non-employee lenders in connection with the issuance of certain convertible promissory notes and to an investor in connection with the purchase of common shares of the Company. The Company has also granted warrants to officers and directors. Certain of the warrants have been subsequently surrendered to the Company and cancelled. Warrant activity for the six months ended December 31, 2018 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Aggregate Intrinsic Value Outstanding at June 30, 2018 348,375 $ 2.20 2.55 $ - Granted - $ - Exercised (34,333 ) $ 2.16 Forfeited or expired - $ - Outstanding and exercisable at December 31, 2018 314,042 $ 2.20 2.05 $ - Because the number of common shares to be issued under convertible notes payable is indeterminate, the Company concluded that the equity environment was tainted as of December 31, 2018. Therefore, all warrants issued prior to that date were included in the Company’s calculations of derivative liabilities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 11 - COMMITMENTS AND CONTINGENCIES | Legal Matters From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of filing of this report, there were no pending or threatened lawsuits. Operating Leases During the year ended June 30, 2018, the Company consolidated its cryptocurrency mining operations in two locations, Huntingdon Valley, Pennsylvania and Marlboro, New Jersey, where facilities are leased under operating leases. The lease for the Pennsylvania location is on a month-to-month basis at $850 per month. The lease for the New Jersey location was effective April 1, 2018 for a period of one year at a monthly rental of $6,986, with an automatic one-year renewal period with a 5% increase in the monthly rent. We have negotiated reductions in the monthly rental at the New Jersey location for certain months in fiscal year 2019. |
RESTATEMENT
RESTATEMENT | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 12 - RESTATEMENT | The Company has restated its financial statements as of December 31, 2017 and for the three months and six months then ended to correct reporting of derivative liabilities associated with its convertible notes payable and warrants, stock-based compensation, gain on sale of investments and other miscellaneous corrections. The following adjustments were made to the December 31, 2017 Restated Balance Sheet: Integrated Ventures, Inc. Balance Sheet As Originally Reported on December 31, 2017 Adjustments As Restated December 31, 2017 ASSETS Current assets: Cash $ 121,061 $ - $ 121,061 Accounts receivable 15,000 - 15,000 Digital currencies 43,786 (43,786 )(a) - Prepaid expenses and other current assets 2,500 - 2,500 Inventories 17,730 - 17,730 Marketable securities 1,760 - 1,760 Total current assets 201,837 (43,786 ) 158,051 Non-current assets: Property and equipment 305,568 (3,438 )(c) 302,130 Digital currencies - 43,786 (a) 43,786 Deposits 700 - 700 Total assets $ 508,105 $ (3,438 ) $ 504,667 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 23,331 $ - $ 23,331 Accrued expenses 29,745 8,468 (b) 38,213 Due to related party 993 (993 )(b) - Derivative liabilities 21,419 63,404 (d) 84,823 Convertible notes payable, net of discounts 14,458 - 14,458 Note payable 125,000 - 125,000 Total current liabilities 214,946 70,879 285,825 Total liabilities 214,946 70,879 285,825 Commitments and contingencies Stockholders’ equity (deficit): Series A preferred stock, $0.001 par value, (1,000,000 shares authorized, 500,000 shares issued and outstanding) 500 - 500 Series B preferred stock, $0.001 par value, (500,000 shares authorized, 232,500 shares issued and outstanding) 233 - 233 Common stock, $0.001 par value, (40,000,000 shares authorized, 8,388,337 shares issued and outstanding) 8,388 - 8,388 Additional paid-in capital 5,538,477 1,424,603 (d)(f) 6,963,080 Stock subscription payable 35,000 - 35,000 Accumulated deficit (5,289,439 ) (1,498,920 )(b)(c)(d)(e) (6,788,359 ) Total stockholders’ equity (deficit) 293,159 (74,317 ) 218,842 Total liabilities and stockholders’ equity (deficit) $ 508,105 $ (3,438 ) $ 504,667 The following adjustments were made to the Restated Statement of Operations for the three months ended December 31, 2017: Integrated Ventures, Inc. Statement of Operations As Originally Reported for the Three Months Ended December 31, 2017 Adjustments As Restated for the Three Months Ended December 31, 2017 Revenues: Cryptocurrency mining $ 59,498 $ - $ 59,498 Sales of cryptocurrencymining equipment 45,590 - 45,590 Total revenues 105,088 - 105,088 Cost of revenues 46,818 3,438 (c) 50,256 Gross margin 58,270 (3,438 ) 54,832 Operating expenses: General and administrative 494,247 3,981 (e) 498,228 Total operating expenses 494,247 3,981 498,228 Loss from operations (435,977 ) (7,419 ) (443,396 ) Other income (expense): Interest and other income 1,304 - 1,304 Interest expense (34,738 ) (22,089 )(b)(d) (56,827 ) Realized gain on sale of investments 85,911 (78,718 )(f) 7,193 Unrealized loss on investments (64,987 ) - (64,987 ) Gain on extinguishment of debt 3,259 - 3,259 Change in fair value of derivative liabilities 273,032 (677,571 )(d) (404,539 ) Loss on settlement of warrants (63,765 ) 38,765 (d) (25,000 ) Total other income (expense) 200,016 (739,613 ) (539,597 ) Loss before income taxes (235,961 ) (747,032 ) (982,993 ) Provision for income taxes - - - Net loss $ (235,961 ) $ (747,032 ) $ (982,993 ) Net loss per common share: Basic $ (0.03 ) $ (0.09 )(g) $ (0.12 ) Weighted average number of common shares outstanding: Basic 8,252,873 - 8,252,873 The following adjustments were made to the Restated Statement of Operations for the six months ended December 31, 2017: Integrated Ventures, Inc. Statement of Operations As Originally Reported for the Six Months Ended December 31, 2017 Adjustments As Restated for the Six Months Ended December 31, 2017 Revenues: Cryptocurrency mining $ 59,498 $ - $ 59,498 Sales of cryptocurrencymining equipment 45,590 - 45,590 Total revenues 105,088 - 105,088 Cost of revenues 46,818 3,438 (c) 50,256 Gross margin 58,270 (3,438 ) 54,832 Operating expenses: General and administrative 634,124 25,462 (e) 659,586 Total operating expenses 634,124 25,462 659,586 Loss from operations (575,854 ) (28,900 ) (604,754 ) Other income (expense): Interest and other income 1,402 - 1,402 Interest expense (120,319 ) (23,388 )(b)(d) (143,707 ) Realized gain on sale of investments 367,134 (78,718 )(f) 288,416 Unrealized loss on investments (3,876 ) - (3,876 ) Gain (loss) on extinguishment of debt (268,476 ) 276,410 (d) 7,934 Change in fair value of derivative liabilities 201,197 (617,485 )(d) (416,288 ) Loss on settlement of warrants (63,765 ) 38,765 (d) (25,000 ) Total other income (expense) 113,297 (404,416 ) (291,119 ) Loss before income taxes (462,557 ) (433,316 ) (895,873 ) Provision for income taxes - - - Net loss $ (462,557 ) $ (433,316 ) $ (895,873 ) Net loss per common share: Basic $ (0.06 ) $ (0.06 )(g) $ (0.12 ) Weighted average number of common shares outstanding: Basic 7,711,319 - 7,711,319 The Following adjustments were made to the Restated Statement of Cash Flows for the six months ended December 31, 2017: Integrated Ventures, Inc. Statement of Cash Flows As Originally Reported for the Six Months Ended December 31, 2017 Adjustments As Restated for the Six Months Ended December 31, 2017 Cash flows from operating activities: Net loss $ (462,557 ) $ (433,316 )(b)(c)(d)(e)(f) (895,873 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 5,264 3,438 (c) 8,702 Stock-based compensation – related party 409,000 - 409,000 Amortization of debt discount 79,631 28,490 (d) 108,121 Amortization of original issue discount 1,347 - 1,347 Change in fair value of derivative liabilities (201,197 ) 617,485 (d) 416,288 (Gain) loss on extinguishment of debt 268,476 (276,410 )(d) (7,934 ) Financing fees related to notes payable 32,358 - 32,358 Realized gain on sale of investments (367,134 ) 78,718 (f) (288,416 ) Unrealized loss on investments 3,876 - 3,876 Loss on settlement of warrants 63,765 (38,765 )(d) 25,000 Changes in assets and liabilities: Digital currencies (61,892 ) (9,651 )(b) (71,543 ) Prepaid expenses and other current assets 5,000 - 5,000 Inventories (17,730 ) - (17,730 ) Accrued interest receivable – related party (98 ) - (98 ) Accounts payable (827 ) - (827 ) Accrued expenses (1,786 ) 8,197 (b) 6,411 Due to related party (19,223 ) 12,163 (b) (7,060 ) Net cash used in operating activities (263,727 ) (9,651 ) (273,378 ) Cash flows from investing activities: Net proceeds from the sale of investments 579,460 - 579,460 Purchase of investments (9,651 ) 9,651 (b) - Increase in notes receivable – related party (49,880 ) - (49,880 ) Purchase of property and equipment (310,832 ) - (310,832 ) Net cash provided by investing activities 209,097 9,651 218,748 Cash flows from financing activities: Proceeds from sale of preferred stock 125,000 - 125,000 Proceeds from stock subscriptions payable 35,000 - 35,000 Net cash provided by financing activities 160,000 - 160,000 Net increase in cash 105,370 - 105,370 Cash, beginning of period 15,691 - 15,691 Cash, end of period $ 121,061 $ - 121,061 Supplemental disclosure of cash flow information: Cash paid for interest $ - $ - $ - Cash paid for income taxes - - - Non-cash investing and financing activities: Common shares issued for convertible notes payable $ 379,021 (229,972 )(d) 149,049 Common shares issued for due to related party 15,625 - 15,625 Common shares issued for cashless exercise of warrants 188 - 188 Debt discount for derivative liability 47,617 25,000 (d) 72,617 Accrued interest added to convertible notes payable 1,117 - 1,117 Settlement of derivative liabilities - 405,970 (d) 405,970 Marketable securities for conversion of notes receivable 66,850 - 66,850 Marketable securities exchanged for note payable (37,074 ) 37,074 (d) - Marketable securities exchanged for accrued expenses (1,370 ) 1,370 (d) - Marketable securities exchanged for derivative liabilities (78,718 ) 78,718 (d) - Marketable securities exchanged for accounts receivable (15,000 ) 15,000 (d) - Note payable issued in settlement of warrants 25,000 (25,000 )(d) - Derivative liabilities extinguished in settlement of warrants 67,064 (67,064 )(d) - _________________ (a) Reclassified digital currencies from current to long-term asset. (b) Accrued officer compensation was reclassified from accrued expenses to due to related party and subsequently reduced. Accrued interest payable was increased. (c) Reduced useful life for depreciation from 5 years to 3 years. (d) The Company engaged an outside consultant to revise derivative liabilities associated with convertible notes payable and to add derivative liabilities associated with warrants. The calculations were made for each issuance of new debt and warrants and for each conversion, exchange or exercise of debt and warrants. As a result, total derivative liabilities increased, and modifications were made to the calculation of debt discount, interest expense for the amortization of debt discount, and change in fair value of derivative liabilities. In addition, convertible notes payable, net of discounts, increased, interest expense increased, and change in fair value of derivative liabilities decreased. Additionally, no loss on extinguishment of debt for note conversions was recorded, resulting in a decrease in the loss and an increase in additional paid-in capital. (e) Total general and administrative expenses decreased as a result of corrections to certain operating expenses. (f) Adjusted realized gain on sale of investments, including recording gain on sale of related party investment to capital. (g) As a result of the adjustments discussed above, net loss and net loss per share increased. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 13 - SUBSEQUENT EVENTS | Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following: Increase in Authorized Shares On January 25, 2019, the Board of Directors of the Company approved a resolution to increase the number of authorized common shares to 250,000,000 shares and the number of authorized preferred shares to 20,000,000 shares. Issuance of Series B Preferred Shares On January 9, 2019, 3,500 shares of Series B preferred stock were issued for stock subscriptions payable of $35,000. On January 24, 2019, 5,000 shares of Series B preferred stock were issued to Steve Rubakh for compensation valued on an “as converted to common” basis at $80,000. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies | |
Restatement | The Company is restating its condensed financial statements for the three months and six months ended December 31, 2017 to correct reporting of derivative liabilities associated with its convertible notes payable and warrants, stock-based compensation, gain on sale of investments and other miscellaneous corrections. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates. |
Digital Currencies | Digital currencies consist of Bitcoin, Litecoin and Ethereum, generally received for the Company’s own account as compensation for cryptocurrency mining services. Given that there is limited precedent regarding the classification and measurement of cryptocurrencies under current Generally Accepted Accounting Principles (“GAAP”), the Company has determined to account for these digital currencies as indefinite-lived intangible assets in accordance with Accounting Standards Update (“ASU”) No. 350, Intangibles – Goodwill and Other |
Inventories | Inventories at December 31 and June 30, 2018 consist of cryptocurrency mining units held for sale or deployment in mining operatons, and are stated at the lower of cost or estimated realizable value. Payments to equipment suppliers prior to shipment of the equipment are recorded as equipment deposits. |
Property and Equipment | Property and equipment, consisting primarily of computer and other cryptocurrency mining equipment (transaction verification servers) and leasehold improvements, is stated at the lower of cost or estimated realizable value and is depreciated when placed into service using the straight-line method over estimated useful lives. The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. Management has assessed the basis of depreciation of these assets and believes they should be depreciated over a three-year period due to technological obsolescence reflecting rapid development of hardware that has faster processing capacity and other factors. Additionally, during the six months ended December 31, 2018, the Company wrote down cryptocurrency mining equipment by $2,097,930 to estimated net realizable value. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. Management has determined that the three-year diminishing value best reflects the current expected useful life of transaction verification servers. This assessment takes into consideration the availability of historical data and management’s expectations regarding the direction of the industry including potential changes in technology. Management will review this estimate annually and will revise such estimates as and when data becomes available. To the extent that any of the assumptions underlying management’s estimate of useful life of its transaction verification servers are subject to revision in a future reporting period, either as a result of changes in circumstances or through the availability of greater quantities of data, then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets. |
Derivatives | The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market 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 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. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt are included in the value of the derivatives. We estimate the fair value of the derivatives associated with our convertible notes payable, warrants and put-back rights associated with two asset purchase agreements using, as applicable, either the Black-Scholes pricing model or multinomial lattice models that value the derivative liability based on a probability weighted discounted cash flow model using future projections of the various potential outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, and, in the case of our convertible notes payable, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material. |
Impairment of Long-Lived Assets | All assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with ASC 350 and ASC 360. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value or net realizable value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations. Total impairment expense, consisting of write downs for cryptocurrency mining equipment totaled $2,097,930 for the six months ended December 31, 2018. |
Fair Value of Financial Instruments | Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2018 and June 30, 2018, the amounts reported for cash, prepaid expenses and other current assets, accounts payable, accrued expenses and due to related party approximate fair value because of their short maturities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. At December 31, 2018, we had no financial instrument assets measured at fair value. Our marketable securities as of June 30, 2018 are measured at fair value on a recurring basis and estimated as follows: Total Level 1 Level 2 Level 3 Marketable securities $ 1,700 $ 1,700 $ - $ - Total assets measured at fair value $ 1,700 $ 1,700 $ - $ - Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows: Total Level 1 Level 2 Level 3 December 31, 2018: Derivative liabilities $ 1,002,993 $ - $ - $ 1,002,993 Total liabilities measured at fair value $ 1,002,993 $ - $ - $ 1,002,993 June 30, 2018: Derivative liabilities $ 2,886,965 $ - $ - $ 2,886,965 Total liabilities measured at fair value $ 2,886,965 $ - $ - $ 2,886,965 During the six months ended December 31, 2018, the Company had the following activity in its derivative liabilities: Convertible Notes Payable Warrants Put Back Rights Total Derivative liabilities at June 30, 2018 $ - $ - $ 2,886,965 $ 2,886,965 Addition to liabilities for new debt/warrants 81,543 - - 81,543 Change in fair value (385 ) 47,528 (2,012,658 ) (1,965,515 ) Derivative liabilities at December 31, 2018 $ 81,158 $ 47,528 $ 874,307 $ 1,002,993 |
Stock-Based Compensation | The Company accounts for all equity-based payments in accordance with ASC Topic 718, Compensation – Stock Compensation. The Company accounts for non-employee share-based awards based upon ASC 505-50, Equity-Based Payments to Non-Employees. |
Revenue Recognition | Effective July 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, Our revenues currently consist of cryptocurrency mining revenues and revenues from the sale of cryptocurrency mining equipment recognized in accordance with ASC 606 as discussed above. Amounts collected from customers prior to shipment of products are recorded as deferred revenue. The Company earns its cryptocurrency mining revenues by providing transaction verification services within the digital currency networks of crypto-currencies, such as Bitcoin, Litecoin and Ethereum. The Company satisfies its performance obligation at the point in time that the Company is awarded a unit of digital currency through its participation in the applicable network and network participants benefit from the Company’s verification service. In consideration for these services, the Company receives digital currencies, which are recorded as revenue using the closing U.S. dollar price of the related cryptocurrency on the date of receipt. Expenses associated with running the cryptocurrency mining operations, such as equipment depreciation, rent, operating supplies, rent, utilities and monitoring services are recorded as cost of revenues. There is currently no specific definitive guidance in GAAP or alternative accounting frameworks for the accounting for the production and mining of digital currencies and management has exercised significant judgment in determining appropriate accounting treatment for the recognition of revenue for mining of digital currencies. Management has examined various factors surrounding the substance of the Company’s operations and the guidance in ASC 606, including identifying the transaction price, when performance obligations are satisfied, and collectability is reasonably assured being the completion and addition of a block to a blockchain and the award of a unit of digital currency to the Company. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies which could result in a change in the Company’s financial statements. |
Income Taxes | The Company adopted the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. The Company adopted ASC 740-10, Definition of Settlement in FASB Interpretation No. 48, |
Income (Loss) Per Share | Basic net income or loss per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income or loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as “in-the-money” stock options and warrants, convertible debt and convertible preferred stock, were exercised or converted into common stock. Equivalent shares are not utilized when the effect is anti-dilutive. The common shares used in the computation of basic and diluted net income (loss) per share are reconciled as follows: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Weighted average number of shares outstanding – basic 9,868,668 8,252,873 9,560,842 7,711,319 Dilutive effect of convertible debt 1,910,820 - - - Dilutive effect of Series B convertible preferred stock 35,038,400 - - - Weighted average number of shares outstanding – diluted 46,817,888 8,252,873 9,560,842 7,711,319 |
Recently Issued Accounting Pronouncements | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) There were no new accounting pronouncements issued or proposed by the FASB during the six months ended December 31, 2018 and through the date of filing this report which the Company believes will have a material impact on its financial financial statements. |
Reclassifications | Certain amounts in the condensed financial statements for the prior-year periods have been reclassified to conform to the presentation for the current-year periods. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Organization And Summary Of Significant Accounting Policies Tables Abstract | |
Fair value of marketable securities | Our marketable securities as of June 30, 2018 are measured at fair value on a recurring basis and estimated as follows: Total Level 1 Level 2 Level 3 Marketable securities $ 1,700 $ 1,700 $ - $ - Total assets measured at fair value $ 1,700 $ 1,700 $ - $ - |
Fair value of derivative liabilities | Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows: Total Level 1 Level 2 Level 3 December 31, 2018: Derivative liabilities $ 1,002,993 $ - $ - $ 1,002,993 Total liabilities measured at fair value $ 1,002,993 $ - $ - $ 1,002,993 June 30, 2018: Derivative liabilities $ 2,886,965 $ - $ - $ 2,886,965 Total liabilities measured at fair value $ 2,886,965 $ - $ - $ 2,886,965 |
Derivative liability | During the six months ended December 31, 2018, the Company had the following activity in its derivative liabilities: Convertible Notes Payable Warrants Put Back Rights Total Derivative liabilities at June 30, 2018 $ - $ - $ 2,886,965 $ 2,886,965 Addition to liabilities for new debt/warrants 81,543 - - 81,543 Change in fair value (385 ) 47,528 (2,012,658 ) (1,965,515 ) Derivative liabilities at December 31, 2018 $ 81,158 $ 47,528 $ 874,307 $ 1,002,993 |
Schedule of earnings per share, basic and diluted | The common shares used in the computation of basic and diluted net income (loss) per share are reconciled as follows: Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Weighted average number of shares outstanding – basic 9,868,668 8,252,873 9,560,842 7,711,319 Dilutive effect of convertible debt 1,910,820 - - - Dilutive effect of Series B convertible preferred stock 35,038,400 - - - Weighted average number of shares outstanding – diluted 43,817,888 8,252,873 9,560,842 7,711,319 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Property And Equipment | |
Property and equipment | Property and equipment consisted of the following at: December 31, 2018 June 30, 2018 Cryptocurrency mining equipment $ 1,483,194 $ 573,806 Furniture and equipment 16,366 14,427 Leasehold improvements 143,440 102,932 Total 1,643,000 691,165 Less accumulated depreciation and amortization (305,056 ) (58,060 ) Net $ 1,337,944 $ 633,105 |
DIGIMINE ACQUISITION (Tables)
DIGIMINE ACQUISITION (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Digimine Acquisition | |
Summarized of acquisition | The total consideration paid in the Acquisition is summarized as follows: Value of 36,667 total Series B preferred shares $ 1,163,806 Derivative liabilities associated with Put-Back Rights 3,729,109 Total consideration paid $ 4,892,915 |
Schedule of fair value of the assets acquired | The total consideration paid was allocated to the fair value of the assets acquired as follows: Restricted cash $ 375,000 Property and equipment 350,349 Digital currencies 14,056 Goodwill 4,153,510 Total consideration allocated $ 4,892,915 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Convertible Notes Payable | |
Schedule of convertible notes payable | Convertible notes payable, all classified as current, consist of the following at December 31, 2018: Debt Principal Discount Net Geneva Roth Remark Holdings, Inc. $ 128,000 $ 35,025 $ 92,975 BHP Capital NY, Inc. 52,000 34,520 17,480 Armada Investment Fund, LLC 52,000 34,521 17,479 Total $ 232,000 $ 104,066 $ 127,934 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Non Employees [Member] | |
Schedule of warrant | Warrant activity for the six months ended December 31, 2018 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Aggregate Intrinsic Value Outstanding at June 30, 2018 348,375 $ 2.20 2.55 $ - Granted - $ - Exercised (34,333 ) $ 2.16 Forfeited or expired - $ - Outstanding and exercisable at December 31, 2018 314,042 $ 2.20 2.05 $ - |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Restatement Tables Abstract | |
Restated Balance Sheet | The following adjustments were made to the December 31, 2017 Restated Balance Sheet: Integrated Ventures, Inc. Balance Sheet As Originally Reported on December 31, 2017 Adjustments As Restated December 31, 2017 ASSETS Current assets: Cash $ 121,061 $ - $ 121,061 Accounts receivable 15,000 - 15,000 Digital currencies 43,786 (43,786 )(a) - Prepaid expenses and other current assets 2,500 - 2,500 Inventories 17,730 - 17,730 Marketable securities 1,760 - 1,760 Total current assets 201,837 (43,786 ) 158,051 Non-current assets: Property and equipment 305,568 (3,438 )(c) 302,130 Digital currencies - 43,786 (a) 43,786 Deposits 700 - 700 Total assets $ 508,105 $ (3,438 ) $ 504,667 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 23,331 $ - $ 23,331 Accrued expenses 29,745 8,468 (b) 38,213 Due to related party 993 (993 )(b) - Derivative liabilities 21,419 63,404 (d) 84,823 Convertible notes payable, net of discounts 14,458 - 14,458 Note payable 125,000 - 125,000 Total current liabilities 214,946 70,879 285,825 Total liabilities 214,946 70,879 285,825 Commitments and contingencies Stockholders’ equity (deficit): Series A preferred stock, $0.001 par value, (1,000,000 shares authorized, 500,000 shares issued and outstanding) 500 - 500 Series B preferred stock, $0.001 par value, (500,000 shares authorized, 232,500 shares issued and outstanding) 233 - 233 Common stock, $0.001 par value, (40,000,000 shares authorized, 8,388,337 shares issued and outstanding) 8,388 - 8,388 Additional paid-in capital 5,538,477 1,424,603 (d)(f) 6,963,080 Stock subscription payable 35,000 - 35,000 Accumulated deficit (5,289,439 ) (1,498,920 )(b)(c)(d)(e) (6,788,359 ) Total stockholders’ equity (deficit) 293,159 (74,317 ) 218,842 Total liabilities and stockholders’ equity (deficit) $ 508,105 $ (3,438 ) $ 504,667 |
Restated Statement of Operations | The following adjustments were made to the Restated Statement of Operations for the three months ended December 31, 2017: Integrated Ventures, Inc. Statement of Operations As Originally Reported for the Three Months Ended December 31, 2017 Adjustments As Restated for the Three Months Ended December 31, 2017 Revenues: Cryptocurrency mining $ 59,498 $ - $ 59,498 Sales of cryptocurrencymining equipment 45,590 - 45,590 Total revenues 105,088 - 105,088 Cost of revenues 46,818 3,438 (c) 50,256 Gross margin 58,270 (3,438 ) 54,832 Operating expenses: General and administrative 494,247 3,981 (e) 498,228 Total operating expenses 494,247 3,981 498,228 Loss from operations (435,977 ) (7,419 ) (443,396 ) Other income (expense): Interest and other income 1,304 - 1,304 Interest expense (34,738 ) (22,089 )(b)(d) (56,827 ) Realized gain on sale of investments 85,911 (78,718 )(f) 7,193 Unrealized loss on investments (64,987 ) - (64,987 ) Gain on extinguishment of debt 3,259 - 3,259 Change in fair value of derivative liabilities 273,032 (677,571 )(d) (404,539 ) Loss on settlement of warrants (63,765 ) 38,765 (d) (25,000 ) Total other income (expense) 200,016 (739,613 ) (539,597 ) Loss before income taxes (235,961 ) (747,032 ) (982,993 ) Provision for income taxes - - - Net loss $ (235,961 ) $ (747,032 ) $ (982,993 ) Net loss per common share: Basic $ (0.03 ) $ (0.09 )(g) $ (0.12 ) Weighted average number of common shares outstanding: Basic 8,252,873 - 8,252,873 The following adjustments were made to the Restated Statement of Operations for the six months ended December 31, 2017: Integrated Ventures, Inc. Statement of Operations As Originally Reported for the Six Months Ended December 31, 2017 Adjustments As Restated for the Six Months Ended December 31, 2017 Revenues: Cryptocurrency mining $ 59,498 $ - $ 59,498 Sales of cryptocurrencymining equipment 45,590 - 45,590 Total revenues 105,088 - 105,088 Cost of revenues 46,818 3,438 (c) 50,256 Gross margin 58,270 (3,438 ) 54,832 Operating expenses: General and administrative 634,124 25,462 (e) 659,586 Total operating expenses 634,124 25,462 659,586 Loss from operations (575,854 ) (28,900 ) (604,754 ) Other income (expense): Interest and other income 1,402 - 1,402 Interest expense (120,319 ) (23,388 )(b)(d) (143,707 ) Realized gain on sale of investments 367,134 (78,718 )(f) 288,416 Unrealized loss on investments (3,876 ) - (3,876 ) Gain (loss) on extinguishment of debt (268,476 ) 276,410 (d) 7,934 Change in fair value of derivative liabilities 201,197 (617,485 )(d) (416,288 ) Loss on settlement of warrants (63,765 ) 38,765 (d) (25,000 ) Total other income (expense) 113,297 (404,416 ) (291,119 ) Loss before income taxes (462,557 ) (433,316 ) (895,873 ) Provision for income taxes - - - Net loss $ (462,557 ) $ (433,316 ) $ (895,873 ) Net loss per common share: Basic $ (0.06 ) $ (0.06 )(g) $ (0.12 ) Weighted average number of common shares outstanding: Basic 7,711,319 - 7,711,319 |
Restated Statement of Cash Flows | The Following adjustments were made to the Restated Statement of Cash Flows for the six months ended December 31, 2017: Integrated Ventures, Inc. Statement of Cash Flows As Originally Reported for the Six Months Ended December 31, 2017 Adjustments As Restated for the Six Months Ended December 31, 2017 Cash flows from operating activities: Net loss $ (462,557 ) $ (433,316 )(b)(c)(d)(e)(f) (895,873 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 5,264 3,438 (c) 8,702 Stock-based compensation – related party 409,000 - 409,000 Amortization of debt discount 79,631 28,490 (d) 108,121 Amortization of original issue discount 1,347 - 1,347 Change in fair value of derivative liabilities (201,197 ) 617,485 (d) 416,288 (Gain) loss on extinguishment of debt 268,476 (276,410 )(d) (7,934 ) Financing fees related to notes payable 32,358 - 32,358 Realized gain on sale of investments (367,134 ) 78,718 (f) (288,416 ) Unrealized loss on investments 3,876 - 3,876 Loss on settlement of warrants 63,765 (38,765 )(d) 25,000 Changes in assets and liabilities: Digital currencies (61,892 ) (9,651 )(b) (71,543 ) Prepaid expenses and other current assets 5,000 - 5,000 Inventories (17,730 ) - (17,730 ) Accrued interest receivable – related party (98 ) - (98 ) Accounts payable (827 ) - (827 ) Accrued expenses (1,786 ) 8,197 (b) 6,411 Due to related party (19,223 ) 12,163 (b) (7,060 ) Net cash used in operating activities (263,727 ) (9,651 ) (273,378 ) Cash flows from investing activities: Net proceeds from the sale of investments 579,460 - 579,460 Purchase of investments (9,651 ) 9,651 (b) - Increase in notes receivable – related party (49,880 ) - (49,880 ) Purchase of property and equipment (310,832 ) - (310,832 ) Net cash provided by investing activities 209,097 9,651 218,748 Cash flows from financing activities: Proceeds from sale of preferred stock 125,000 - 125,000 Proceeds from stock subscriptions payable 35,000 - 35,000 Net cash provided by financing activities 160,000 - 160,000 Net increase in cash 105,370 - 105,370 Cash, beginning of period 15,691 - 15,691 Cash, end of period $ 121,061 $ - 121,061 Supplemental disclosure of cash flow information: Cash paid for interest $ - $ - $ - Cash paid for income taxes - - - Non-cash investing and financing activities: Common shares issued for convertible notes payable $ 379,021 (229,972 )(d) 149,049 Common shares issued for due to related party 15,625 - 15,625 Common shares issued for cashless exercise of warrants 188 - 188 Debt discount for derivative liability 47,617 25,000 (d) 72,617 Accrued interest added to convertible notes payable 1,117 - 1,117 Settlement of derivative liabilities - 405,970 (d) 405,970 Marketable securities for conversion of notes receivable 66,850 - 66,850 Marketable securities exchanged for note payable (37,074 ) 37,074 (d) - Marketable securities exchanged for accrued expenses (1,370 ) 1,370 (d) - Marketable securities exchanged for derivative liabilities (78,718 ) 78,718 (d) - Marketable securities exchanged for accounts receivable (15,000 ) 15,000 (d) - Note payable issued in settlement of warrants 25,000 (25,000 )(d) - Derivative liabilities extinguished in settlement of warrants 67,064 (67,064 )(d) - |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) | 6 Months Ended |
Dec. 31, 2018 | |
Organization And Basis Of Presentation | |
State of Incorporation | Nevada |
Date of incorporation | Mar. 22, 2011 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Dec. 31, 2018USD ($) |
Marketable securities | $ 1,700 |
Total assets measured at fair value | 1,700 |
Level 1 [Member] | |
Marketable securities | 1,700 |
Total assets measured at fair value | 1,700 |
Level 2 [Member] | |
Marketable securities | |
Total assets measured at fair value | |
Level 3 [Member] | |
Marketable securities | |
Total assets measured at fair value |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Derivative liabilities | $ 1,002,993 | $ 2,886,965 |
Total liabilities measured at fair value | 1,002,993 | 2,886,965 |
Level 1 [Member] | ||
Derivative liabilities | ||
Total liabilities measured at fair value | ||
Level 2 [Member] | ||
Derivative liabilities | ||
Total liabilities measured at fair value | ||
Level 3 [Member] | ||
Derivative liabilities | 1,002,993 | 2,886,965 |
Total liabilities measured at fair value | $ 1,002,993 | $ 2,886,965 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 6 Months Ended |
Dec. 31, 2018USD ($) | |
Derivative liability Beginning | $ 2,886,965 |
Addition to liabilities for new debt/warrants | 81,543 |
Change in fair value | (1,965,515) |
Derivative liability Ending | 1,002,993 |
Warrants [Member] | |
Derivative liability Beginning | |
Addition to liabilities for new debt/warrants | |
Change in fair value | 47,528 |
Derivative liability Ending | 47,528 |
Convertible Notes Payable [Member] | |
Derivative liability Beginning | |
Addition to liabilities for new debt/warrants | 81,543 |
Change in fair value | (385) |
Derivative liability Ending | 81,158 |
Put Back Rights [Member] | |
Derivative liability Beginning | 2,886,965 |
Addition to liabilities for new debt/warrants | |
Change in fair value | (2,012,658) |
Derivative liability Ending | $ 874,307 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Details 2Abstract | ||||
Weighted average number of shares outstanding - basic | 9,868,668 | 8,252,873 | 9,560,842 | 7,711,319 |
Dilutive effect of convertible debt | 1,910,820 | |||
Dilutive effect of Series B convertible preferred stock | 35,038,400 | |||
Weighted average number of shares outstanding - diluted | 46,817,888 | 8,252,873 | 9,560,842 | 7,711,319 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2018 | |
Property and equipment | $ 1,337,944 | $ 633,105 |
Impairment expense of long-lived assets | 2,097,930 | |
Crypto-Currency Mining Equipment [Member] | ||
Property and equipment | $ 2,097,930 | |
Property and equipment estimated useful life | 3 years |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Going Concern | |||
Net cash used in operating activities | $ (355,680) | $ (273,378) | |
Accumulated deficit | $ (12,641,382) | $ (11,469,936) |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Property and Equipment, Total | $ 1,643,000 | $ 691,165 |
Less accumulated depreciation and amortization | (305,056) | (58,060) |
Property and Equipment, Net | 1,337,944 | 633,105 |
Cryptocurrency mining equipment [Member] | ||
Property and Equipment, Total | 1,483,194 | 573,806 |
Furniture and equipment [Member] | ||
Property and Equipment, Total | 16,366 | 14,427 |
Leasehold Improvements [Member] | ||
Property and Equipment, Total | $ 143,440 | $ 102,932 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property And Equipment Details Abstract | ||||
Depreciation and amortization expense | $ 136,778 | $ 8,702 | $ 246,996 | $ 8,702 |
ASSET PURCHASE AGREEMENT (Detai
ASSET PURCHASE AGREEMENT (Details Narrative) | Aug. 02, 2018USD ($)Numbershares | Dec. 31, 2018USD ($) |
Impairment expense | $ | $ 2,097,930 | |
Asset Purchase Agreement [Member] | Ethereum mining machines [Member] | ||
Number of machines to be purchased under agreement | 182 | |
Number of machines placed in operations | 152 | |
Number of machines deemed to be defective | 30 | |
Asset Purchase Agreement [Member] | Series B Convertible Preferred Stock [Member] | Ethereum mining machines [Member] | ||
Restricted stock shares issued for the purchase of machine under agreement | shares | 38,018 | |
Amount of restricted stock shares issued for the purchase of machine under agreement | $ | $ 3,801,800 |
DIGIMINE ACQUISITION (Details)
DIGIMINE ACQUISITION (Details) | Dec. 31, 2018USD ($) |
Digimine Acquisition Details Abstract | |
Value of 36,667 total Series B preferred shares | $ 1,163,806 |
Derivative liabilities associated with Put-Back Rights | 3,729,109 |
Total consideration paid | $ 4,892,915 |
DIGIMINE ACQUISITION (Details 1
DIGIMINE ACQUISITION (Details 1) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Restricted cash | $ 375,000 | |
Property and equipment | $ 1,643,000 | 691,165 |
Digital currencies | $ 11,227 | |
DigiMine LLC [Member] | ||
Restricted cash | 375,000 | |
Property and equipment | 350,349 | |
Digital currencies | 14,056 | |
Goodwill | 4,153,510 | |
Total consideration allocated | $ 4,892,915 |
DIGIMINE ACQUISITION (Details N
DIGIMINE ACQUISITION (Details Narrative) - USD ($) | Apr. 16, 2018 | Apr. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 |
Restricted cash | $ 375,000 | |||
Impairment expense | $ 4,153,510 | |||
DigiMine LLC [Member] | ||||
Restricted cash | $ 375,000 | |||
Goodwill | $ 4,153,510 | |||
Asset Purchase Agreement [Member] | DigiMine LLC [Member] | ||||
Restricted cash | $ 175,000 | $ 200,000 | ||
Description for shares of redemption price | DigiMine has the right (the "Put-Back Right"), at any time commencing April 1, 2019, to require that the Company redeem for cash any of Seller's then-outstanding Shares at a redemption price equal to 72% of the Shares | DigiMine has the right (the "Put-Back Right"), at any time commencing May 1, 2019, to require that the Company redeem for cash any of Seller's then-outstanding Shares at a redemption price equal to 72% of the Shares | ||
Put-Back Price | $ 1,200,000 | $ 1,440,000 | ||
Fixed price | $ 100 | $ 100 | ||
Description of put-back price | The Conversion Amount on execution is equal to $1,200,000 (the "Put-Back Price") of such Shares; provided, that the Put Back Right expires with respect to any of the Shares at such time as the Shares are registered for resale. Each of the Shares for purposes of the Put-Back Price is equal to a fixed price of $100 per share | The Conversion Amount on execution is equal to $1,440,000 (the "Put-Back Price") of such Shares; provided, that the Put Back Right expires with respect to any of the Shares at such time as the Shares are registered for resale. Each of the Shares for purposes of the Put-Back Price is equal to a fixed price of $100 per share | ||
Digital currency portfolio an estimated value | $ 15,487 | |||
Asset Purchase Agreement [Member] | DigiMine LLC [Member] | Series B Preferred Stock [Member] | ||||
Shares issued | 16,666 | 20,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 18, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | Jun. 30, 2018 | |
Stock-based compensation - related party | $ 417,000 | $ 409,000 | ||||
Due to related party | $ 64,774 | $ 20,974 | ||||
Series B Preferred Stock [Member] | ||||||
Preferred stock shares issued | 350,384 | 309,166 | ||||
Mr. Rubakh [Member] | ||||||
Due to related party | $ 64,774 | $ 20,974 | ||||
Conversion of accrued compensation, amount | $ 15,625 | |||||
Conversion of accrued compensation, shares issued | 347,222 | |||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | ||||||
Preferred stock shares reserved for future issuance periodically | 5,000 | |||||
Frequency of periodic issuance | Quarterly | |||||
Mr. Rubakh [Member] | On August 1, 2017 [Member] | Series B Preferred Stock [Member] | ||||||
Preferred stock shares issued | 30,000 | 30,000 | ||||
Stock-based compensation - related party | $ 9,000 | $ 9,000 | ||||
Mr. Rubakh [Member] | On July 1, 2018 [Member] | Series B Preferred Stock [Member] | ||||||
Preferred stock shares issued | 5,000 | |||||
Stock-based compensation - related party | $ 417,000 | |||||
Mr. Rubakh [Member] | April 1, 2018 [Member] | ||||||
Accrued compensation | $ 150,000 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Principal | $ 232,000 | |
Debt Discount | 104,066 | |
Net | 127,934 | |
Convertible Notes Payable [Member] | Geneva Roth Remark Holdings, Inc. [Member] | ||
Principal | 128,000 | |
Debt Discount | 35,025 | |
Net | 92,975 | |
Convertible Notes Payable [Member] | BHP Capital NY, Inc. [Member] | ||
Principal | 52,000 | |
Debt Discount | 34,520 | |
Net | 17,480 | |
Convertible Notes Payable [Member] | Armada Investment Fund, LLC [Member] | ||
Principal | 52,000 | |
Debt Discount | 34,521 | |
Net | $ 17,479 |
CONVERTIBLE NOTES PAYABLE (De_2
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Sep. 26, 2018 | Sep. 17, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Principal amount | $ 232,000 | ||||
Common stock shares issued | 9,874,103 | 8,964,103 | |||
Derivative liability | $ 1,002,993 | $ 2,886,965 | |||
Amortization of debt discount | 38,782 | $ 108,121 | |||
Convertible Promissory Note [Member] | BHP Capital NY, Inc. [Member] | |||||
Principal amount | $ 52,000 | ||||
Original issue discount | $ 2,000 | ||||
Maturity date | Sep. 17, 2019 | ||||
Interest rate | 8.00% | ||||
Common stock shares issued | 75,000 | ||||
Proceeds from issuance of common stock | $ 26,625 | ||||
Debt discount | 46,840 | ||||
Derivative liability | $ 17,687 | 18,056 | |||
Terms of conversion feature | BHP has the right beginning on the date that is 31 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock | ||||
Conversion price, description | The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the ten trading days ending on the latest complete trading day prior to the date of conversion. | ||||
Amortization of debt discount | 12,320 | ||||
Accrued interest | 1,094 | ||||
Convertible Promissory Note [Member] | Geneva Roth Remark Holdings, Inc. [Member] | |||||
Principal amount | $ 128,000 | ||||
Maturity date | Sep. 26, 2019 | ||||
Interest rate | 10.00% | ||||
Debt discount | $ 49,169 | ||||
Derivative liability | $ 46,169 | 45,046 | |||
Terms of conversion feature | Geneva has the right beginning on the date that is 170 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock | ||||
Conversion price, description | The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the ten trading days ending on the latest complete trading day prior to the date of conversion. | ||||
Amortization of debt discount | 14,144 | ||||
Accrued interest | 3,682 | ||||
Convertible Promissory Note [Member] | Armada Investment Fund, LLC [Member] | |||||
Principal amount | $ 52,000 | ||||
Original issue discount | $ 2,000 | ||||
Maturity date | Sep. 17, 2019 | ||||
Interest rate | 8.00% | ||||
Common stock shares issued | 75,000 | ||||
Proceeds from issuance of common stock | $ 26,625 | ||||
Debt discount | 46,840 | ||||
Derivative liability | $ 17,687 | 18,056 | |||
Terms of conversion feature | Armada has the right beginning on the date that is 31 days following the date of the note to convert principal and accrued interest into shares of the Company’s common stock | ||||
Conversion price, description | The conversion price is 70% of the average of the three lowest trading prices of the Company’s common stock during the ten trading days ending on the latest complete trading day prior to the date of conversion. | ||||
Amortization of debt discount | 12,319 | ||||
Accrued interest | $ 1,094 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) | Oct. 05, 2018USD ($)shares | Aug. 02, 2018USD ($)Numbershares | Jul. 06, 2017USD ($)shares | Sep. 26, 2018USD ($)shares | Aug. 23, 2018USD ($)shares | Mar. 18, 2018USD ($)shares | Aug. 31, 2017USD ($)shares | Mar. 31, 2015shares | Sep. 30, 2017USD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Aug. 14, 2018USD ($)shares | Jun. 30, 2018USD ($)$ / sharesshares | Dec. 21, 2015$ / sharesshares |
Stock-based compensation - related party | $ | $ 417,000 | $ 409,000 | ||||||||||||
Common stock value | $ | $ 9,875 | $ 8,965 | ||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||
Common stock, shares authorized | 40,000,000 | 40,000,000 | ||||||||||||
Common stock, shares issued | 9,874,103 | 8,964,103 | ||||||||||||
Common stock, shares outstanding | 9,874,103 | 8,964,103 | ||||||||||||
Common shares issued for cashless exercise of warrants, amount | $ | $ 560 | $ 188 | ||||||||||||
Common stock shares issued, shares | 910,000 | 3,175,774 | ||||||||||||
Unissued shares | $ | $ 35,000 | $ 35,000 | ||||||||||||
Asset Purchase Agreement [Member] | Ethereum mining machines [Member] | ||||||||||||||
Number of machines to be purchased under agreement | Number | 182 | |||||||||||||
Consultant [Member] | ||||||||||||||
Common stock value | $ | $ 55,000 | |||||||||||||
Common stock, shares issued | 100,000 | |||||||||||||
Common Stock | Consultant [Member] | ||||||||||||||
Common stock shares issued, shares | 100,000 | |||||||||||||
Common stock shares issued, amount | $ | $ 25,160 | |||||||||||||
Convertible debt [Member] | ||||||||||||||
Debt conversion converted instrument, shares issued | 2,640,017 | |||||||||||||
Value of shares issued upon conversion of debt | $ | $ 149,049 | |||||||||||||
Debt conversion converted amount, principal | $ | 55,760 | |||||||||||||
Debt conversion converted amount, accrued interest | $ | 2,715 | |||||||||||||
Debt conversion converted amount, derivative liabilities | $ | 58,216 | |||||||||||||
Debt conversion converted amount, fees | $ | 2,449 | |||||||||||||
Debt conversion converted amount, penalties | $ | $ 29,909 | |||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 | |||||||||||
Preferred stock, shares issued | 350,384 | 309,166 | ||||||||||||
Preferred stock, shares outstanding | 350,384 | 309,166 | ||||||||||||
Common stock shares issuable upon conversion of preferred stock | 100 | |||||||||||||
Preferred stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Series B Preferred Stock [Member] | Asset Purchase Agreement [Member] | ||||||||||||||
Preferred stock originally issued | 1,800 | |||||||||||||
Series B Convertible Preferred Stock [Member] | Asset Purchase Agreement [Member] | Ethereum mining machines [Member] | ||||||||||||||
Restricted shares issued | 38,018 | |||||||||||||
Amount of restricted stock shares issued for the purchase of machine under agreement | $ | $ 3,801,800 | |||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||||||||
Preferred stock, shares issued | 500,000 | 500,000 | ||||||||||||
Preferred stock, shares outstanding | 500,000 | 500,000 | ||||||||||||
Preferred stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||
Series A Preferred Stock [Member] | Board of Directors [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,000,000 | |||||||||||||
Preferred stock, shares issued | 500,000 | |||||||||||||
Preferred stock, shares outstanding | 500,000 | |||||||||||||
limitations and relative rights | 1,000,000 | |||||||||||||
Common stock voting rights | Holders of the Series A Preferred Stock have the right to vote in aggregate, on all shareholder matters equal to 1,000 votes per share of Series A Preferred Stock | |||||||||||||
Common Stock | ||||||||||||||
Reverse stock split, description | The Company increased the number of outstanding common shares by 114 shares due to rounding of shares in the reverse stock split | |||||||||||||
Four Investors [Member] | Series B Preferred Stock [Member] | On October 25, 2017 [Member] | ||||||||||||||
Preferred stock, par value per share | $ / shares | $ 10 | |||||||||||||
Purchase of shares | 16,000 | |||||||||||||
Shares issued for investment | 12,500 | |||||||||||||
Investment amount | $ | $ 125,000 | |||||||||||||
Mr. Rubakh [Member] | April 1, 2018 [Member] | ||||||||||||||
Accrued compensation | $ | $ 150,000 | |||||||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | ||||||||||||||
Preferred stock shares reserved for future issuance periodically | 5,000 | |||||||||||||
Frequency of periodic issuance | Quarterly | |||||||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | On November 1, 2017 [Member] | ||||||||||||||
Preferred stock, shares issued | 40,000 | |||||||||||||
Stock-based compensation - related party | $ | $ 400,000 | |||||||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | On August 1, 2017 [Member] | ||||||||||||||
Preferred stock, shares issued | 30,000 | 30,000 | ||||||||||||
Stock-based compensation - related party | $ | $ 9,000 | $ 9,000 | ||||||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | On July 1, 2018 [Member] | ||||||||||||||
Preferred stock, shares issued | 5,000 | |||||||||||||
Stock-based compensation - related party | $ | $ 417,000 | |||||||||||||
Steve Rubakh [Member] | ||||||||||||||
Common stock shares issued, shares | 347,222 | |||||||||||||
Common stock shares issued, amount | $ | $ 15,625 | |||||||||||||
Lender [Member] | Common Stock | ||||||||||||||
Common shares issued for cashless exercise of warrants, amount | $ | $ 188 | $ 560 | ||||||||||||
Common shares issued for cashless exercise of warrants, shares | 188,240 | 560,000 | ||||||||||||
Common stock shares issued, shares | 150,000 | |||||||||||||
Common stock shares issued, amount | $ | $ 53,250 |
WARRANTS (Details)
WARRANTS (Details) - Warrant [Member] | 6 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Number of Outstanding Shares, Beginning Balance | shares | 348,375 |
Granted | shares | |
Exercised | shares | (34,333) |
Forfeited or expired | shares | |
Number of Outstanding Shares, Ending Balance | shares | 314,042 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 2.20 |
Granted | $ / shares | |
Exercised | $ / shares | 2.16 |
Forfeited or expired | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 2.20 |
Weighted average remaining contractual life (Years), Outstanding and exercisable, Beginning Balance | 2 years 6 months 18 days |
Weighted average remaining contractual life (Years), Outstanding and exercisable, Ending Balance | 2 years 18 days |
Aggregate intrinsic value, Beginning Balance | $ | |
Aggregate intrinsic value, Ending Balance | $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 12 Months Ended |
Jun. 30, 2018 | |
Pennsylvania [Member] | |
Operating lease term description | The lease for the Pennsylvania location is on a month-to-month basis at $850 per month. |
New Jersey [Member] | |
Operating lease term description | The lease for the New Jersey location was effective April 1, 2018 for a period of one year at a monthly rental of $6,986, with an automatic one-year renewal period with a 5% increase in the monthly rent. |
RESTATEMENT (Details)
RESTATEMENT (Details) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Current assets: | |||||
Cash | $ 51,627 | $ 749 | |||
Digital currencies | 11,227 | ||||
Prepaid expenses and other current assets | 3,000 | 9,000 | |||
Inventories | 114,851 | 114,851 | |||
Marketable securities | 1,700 | ||||
Total current assets | 169,478 | 170,517 | |||
Non-current assets: | |||||
Property and equipment | 1,337,944 | 633,105 | |||
Deposits | 14,673 | 14,673 | |||
Total assets | 1,522,095 | 829,522 | |||
Current liabilities: | |||||
Accounts payable | 29,487 | 26,973 | |||
Accrued expenses | 24,340 | 29,428 | |||
Due to related party | 64,774 | 20,974 | |||
Derivative liabilities | 1,002,993 | 2,886,965 | |||
Convertible notes payable, net of discounts | 127,934 | ||||
Total current liabilities | 1,249,528 | 2,964,340 | |||
Total liabilities | 1,249,528 | 2,964,340 | |||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value, (40,000,000 shares authorized, 8,388,337 shares issued and outstanding) | 9,875 | 8,965 | |||
Additional paid-in capital | 12,843,224 | 9,290,344 | |||
Stock subscription payable | 60,000 | 35,000 | |||
Accumulated deficit | (12,641,382) | (11,469,936) | |||
Total stockholders’ equity (deficit) | 272,567 | (2,134,818) | |||
Total liabilities and stockholders’ equity (deficit) | 1,522,095 | 829,522 | |||
Series A Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | 500 | 500 | |||
Series B Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | $ 350 | $ 309 | |||
As Originally Reported [Member] | |||||
Current assets: | |||||
Cash | $ 121,061 | $ 15,691 | |||
Accounts receivable | 15,000 | ||||
Digital currencies | 43,786 | ||||
Prepaid expenses and other current assets | 2,500 | ||||
Inventories | 17,730 | ||||
Marketable securities | 1,760 | ||||
Total current assets | 201,837 | ||||
Non-current assets: | |||||
Property and equipment | 305,568 | ||||
Digital currencies | |||||
Deposits | 700 | ||||
Total assets | 508,105 | ||||
Current liabilities: | |||||
Accounts payable | 23,331 | ||||
Accrued expenses | 29,745 | ||||
Due to related party | 993 | ||||
Derivative liabilities | 21,419 | ||||
Convertible notes payable, net of discounts | 14,458 | ||||
Note payable | 125,000 | ||||
Total current liabilities | 214,946 | ||||
Total liabilities | 214,946 | ||||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value, (40,000,000 shares authorized, 8,388,337 shares issued and outstanding) | 8,388 | ||||
Additional paid-in capital | 5,538,477 | ||||
Stock subscription payable | 35,000 | ||||
Accumulated deficit | (5,289,439) | ||||
Total stockholders’ equity (deficit) | 293,159 | ||||
Total liabilities and stockholders’ equity (deficit) | 508,105 | ||||
As Originally Reported [Member] | Series A Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | 500 | ||||
As Originally Reported [Member] | Series B Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | 233 | ||||
Adjustments [Member] | |||||
Current assets: | |||||
Cash | |||||
Accounts receivable | |||||
Digital currencies | [1] | (43,786) | |||
Prepaid expenses and other current assets | |||||
Inventories | |||||
Marketable securities | |||||
Total current assets | (43,786) | ||||
Non-current assets: | |||||
Property and equipment | [2] | (3,438) | |||
Digital currencies | [1] | 43,786 | |||
Deposits | |||||
Total assets | (3,438) | ||||
Current liabilities: | |||||
Accounts payable | |||||
Accrued expenses | [3] | 8,468 | |||
Due to related party | [3] | (993) | |||
Derivative liabilities | [4] | 63,404 | |||
Convertible notes payable, net of discounts | |||||
Note payable | |||||
Total current liabilities | 70,879 | ||||
Total liabilities | 70,879 | ||||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value, (40,000,000 shares authorized, 8,388,337 shares issued and outstanding) | |||||
Additional paid-in capital | [4],[5] | 1,424,603 | |||
Stock subscription payable | |||||
Accumulated deficit | [2],[3],[4],[6] | (1,498,920) | |||
Total stockholders’ equity (deficit) | (74,317) | ||||
Total liabilities and stockholders’ equity (deficit) | (3,438) | ||||
Adjustments [Member] | Series A Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | |||||
Adjustments [Member] | Series B Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | |||||
As Restated [Member] | |||||
Current assets: | |||||
Cash | 121,061 | $ 15,691 | |||
Accounts receivable | 15,000 | ||||
Digital currencies | |||||
Prepaid expenses and other current assets | 2,500 | ||||
Inventories | 17,730 | ||||
Marketable securities | 1,760 | ||||
Total current assets | 158,051 | ||||
Non-current assets: | |||||
Property and equipment | 302,130 | ||||
Digital currencies | 43,786 | ||||
Deposits | 700 | ||||
Total assets | 504,667 | ||||
Current liabilities: | |||||
Accounts payable | 23,331 | ||||
Accrued expenses | 38,213 | ||||
Due to related party | |||||
Derivative liabilities | 84,823 | ||||
Convertible notes payable, net of discounts | 14,458 | ||||
Note payable | 125,000 | ||||
Total current liabilities | 285,825 | ||||
Total liabilities | 285,825 | ||||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value, (40,000,000 shares authorized, 8,388,337 shares issued and outstanding) | 8,388 | ||||
Additional paid-in capital | 6,963,080 | ||||
Stock subscription payable | 35,000 | ||||
Accumulated deficit | (6,788,359) | ||||
Total stockholders’ equity (deficit) | 218,842 | ||||
Total liabilities and stockholders’ equity (deficit) | 504,667 | ||||
As Restated [Member] | Series A Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | 500 | ||||
As Restated [Member] | Series B Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | $ 233 | ||||
[1] | (a) Reclassified digital currencies from current to long-term asset. | ||||
[2] | (c) Reduced useful life for depreciation from 5 years to 3 years. | ||||
[3] | (b) Accrued officer compensation was reclassified from accrued expenses to due to related party and subsequently reduced. Accrued interest payable was increased. | ||||
[4] | (d) The Company engaged an outside consultant to revise derivative liabilities associated with convertible notes payable and to add derivative liabilities associated with warrants. The calculations were made for each issuance of new debt and warrants and for each conversion, exchange or exercise of debt and warrants. As a result, total derivative liabilities increased, and modifications were made to the calculation of debt discount, interest expense for the amortization of debt discount, and change in fair value of derivative liabilities. In addition, convertible notes payable, net of discounts, increased, interest expense increased, and change in fair value of derivative liabilities decreased. Additionally, no loss on extinguishment of debt for note conversions was recorded, resulting in a decrease in the loss and an increase in additional paid-in capital. | ||||
[5] | (f) Adjusted realized gain on sale of investments, including recording gain on sale of related party investment to capital. | ||||
[6] | (e) Total general and administrative expenses decreased as a result of corrections to certain operating expenses. |
RESTATEMENT (Details 1)
RESTATEMENT (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Revenues | ||||||
Cryptocurrency mining | $ 77,913 | $ 59,498 | $ 178,378 | $ 59,498 | ||
Sales of cryptocurrencymining equipment | 9,557 | 45,590 | 24,337 | 45,590 | ||
Total revenues | 87,470 | 105,088 | 202,715 | 105,088 | ||
Cost of revenues | 232,896 | 50,256 | 434,156 | 50,256 | ||
Gross margin | (145,426) | 54,832 | (231,441) | 54,832 | ||
Operating expenses: | ||||||
General and administrative | 173,512 | 498,228 | 730,434 | 659,586 | ||
Total operating expenses | 173,512 | 498,228 | 2,828,364 | 659,586 | ||
Loss from operations | (318,938) | (443,396) | (3,059,805) | (604,754) | ||
Other income (expense): | ||||||
Interest and other income | 1,304 | 1,402 | ||||
Interest expense | (41,328) | (56,827) | (44,652) | (143,707) | ||
Realized gain on sale of investments | (25,266) | 7,193 | (32,504) | 288,416 | ||
Unrealized loss on investments | 64,987 | 3,876 | ||||
Gain (loss) on extinguishment of debt | 3,259 | 7,934 | ||||
Change in fair value of derivative liabilities | 914,308 | (404,539) | 1,965,515 | (416,288) | ||
Loss on settlement of warrants | (25,000) | (25,000) | ||||
Total other income (expense) | 847,714 | (539,597) | 1,888,359 | (291,119) | ||
Loss before income taxes | 528,776 | (982,993) | (1,171,446) | (895,873) | ||
Provision for income taxes | ||||||
Net loss | $ 528,776 | $ (982,993) | $ (1,171,446) | $ (895,873) | ||
Net loss per common share: | ||||||
Basic | $ 0.05 | $ (0.12) | $ (0.12) | $ (0.12) | ||
Weighted average number of common shares outstanding: | ||||||
Basic | 9,868,668 | 8,252,873 | 9,560,842 | 7,711,319 | ||
As Originally Reported [Member] | ||||||
Revenues | ||||||
Cryptocurrency mining | $ 59,498 | $ 59,498 | ||||
Sales of cryptocurrencymining equipment | 45,590 | 45,590 | ||||
Total revenues | 105,088 | 105,088 | ||||
Cost of revenues | 46,818 | 46,818 | ||||
Gross margin | 58,270 | 58,270 | ||||
Operating expenses: | ||||||
General and administrative | 494,247 | 634,124 | ||||
Total operating expenses | 494,247 | 634,124 | ||||
Loss from operations | (435,977) | (575,854) | ||||
Other income (expense): | ||||||
Interest and other income | 1,304 | 1,402 | ||||
Interest expense | (34,738) | (120,319) | ||||
Realized gain on sale of investments | 85,911 | 367,134 | ||||
Unrealized loss on investments | (64,987) | (3,876) | ||||
Gain (loss) on extinguishment of debt | 3,259 | (268,476) | ||||
Change in fair value of derivative liabilities | 273,032 | 201,197 | ||||
Loss on settlement of warrants | (63,765) | (63,765) | ||||
Total other income (expense) | 200,016 | 113,297 | ||||
Loss before income taxes | (235,961) | (462,557) | ||||
Provision for income taxes | ||||||
Net loss | $ (235,961) | $ (462,557) | ||||
Net loss per common share: | ||||||
Basic | $ (0.03) | $ (0.06) | ||||
Weighted average number of common shares outstanding: | ||||||
Basic | 8,252,873 | 7,711,319 | ||||
Adjustments [Member] | ||||||
Revenues | ||||||
Cryptocurrency mining | ||||||
Sales of cryptocurrencymining equipment | ||||||
Total revenues | ||||||
Cost of revenues | [1] | 3,438 | 3,438 | |||
Gross margin | (3,438) | (3,438) | ||||
Operating expenses: | ||||||
General and administrative | [2] | 3,981 | 25,462 | |||
Total operating expenses | 3,981 | 25,462 | ||||
Loss from operations | (7,419) | (28,900) | ||||
Other income (expense): | ||||||
Interest and other income | ||||||
Interest expense | [3],[4] | (22,089) | (23,388) | |||
Realized gain on sale of investments | [5] | (78,718) | (78,718) | |||
Unrealized loss on investments | ||||||
Gain (loss) on extinguishment of debt | 276,410 | [4] | ||||
Change in fair value of derivative liabilities | [4] | (677,571) | (617,485) | |||
Loss on settlement of warrants | [4] | 38,765 | 38,765 | |||
Total other income (expense) | (739,613) | (404,416) | ||||
Loss before income taxes | (747,032) | (433,316) | ||||
Provision for income taxes | ||||||
Net loss | $ (747,032) | $ (433,316) | [1],[2],[3],[4],[5] | |||
Net loss per common share: | ||||||
Basic | [6] | $ (0.09) | $ (0.06) | |||
Weighted average number of common shares outstanding: | ||||||
Basic | ||||||
As Restated [Member] | ||||||
Revenues | ||||||
Cryptocurrency mining | $ 59,498 | $ 59,498 | ||||
Sales of cryptocurrencymining equipment | 45,590 | 45,590 | ||||
Total revenues | 105,088 | 105,088 | ||||
Cost of revenues | 50,256 | 50,256 | ||||
Gross margin | 54,832 | 54,832 | ||||
Operating expenses: | ||||||
General and administrative | 498,228 | 659,586 | ||||
Total operating expenses | 498,228 | 659,586 | ||||
Loss from operations | (443,396) | (604,754) | ||||
Other income (expense): | ||||||
Interest and other income | 1,304 | 1,402 | ||||
Interest expense | (56,827) | (143,707) | ||||
Realized gain on sale of investments | 7,193 | 288,416 | ||||
Unrealized loss on investments | (64,987) | (3,876) | ||||
Gain (loss) on extinguishment of debt | 3,259 | 7,934 | ||||
Change in fair value of derivative liabilities | (404,539) | (416,288) | ||||
Loss on settlement of warrants | (25,000) | (25,000) | ||||
Total other income (expense) | (539,597) | (291,119) | ||||
Loss before income taxes | (982,993) | (895,873) | ||||
Provision for income taxes | ||||||
Net loss | $ (982,993) | $ (895,873) | ||||
Net loss per common share: | ||||||
Basic | $ (0.12) | $ (0.12) | ||||
Weighted average number of common shares outstanding: | ||||||
Basic | 8,252,873 | 7,711,319 | ||||
[1] | (c) Reduced useful life for depreciation from 5 years to 3 years. | |||||
[2] | (e) Total general and administrative expenses decreased as a result of corrections to certain operating expenses. | |||||
[3] | (b) Accrued officer compensation was reclassified from accrued expenses to due to related party and subsequently reduced. Accrued interest payable was increased. | |||||
[4] | (d) The Company engaged an outside consultant to revise derivative liabilities associated with convertible notes payable and to add derivative liabilities associated with warrants. The calculations were made for each issuance of new debt and warrants and for each conversion, exchange or exercise of debt and warrants. As a result, total derivative liabilities increased, and modifications were made to the calculation of debt discount, interest expense for the amortization of debt discount, and change in fair value of derivative liabilities. In addition, convertible notes payable, net of discounts, increased, interest expense increased, and change in fair value of derivative liabilities decreased. Additionally, no loss on extinguishment of debt for note conversions was recorded, resulting in a decrease in the loss and an increase in additional paid-in capital. | |||||
[5] | (f) Adjusted realized gain on sale of investments, including recording gain on sale of related party investment to capital. | |||||
[6] | (g) As a result of the adjustments discussed above, net loss and net loss per share increased. |
RESTATEMENT (Details 2)
RESTATEMENT (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Cash flows from operating activities: | ||||||
Net loss | $ 528,776 | $ (982,993) | $ (1,171,446) | $ (895,873) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | 246,996 | 8,702 | ||||
Stock-based compensation - related party | 80,159 | |||||
Amortization of debt discount | 38,782 | 108,121 | ||||
Amortization of original issue discount | 1,347 | |||||
Change in fair value of derivative liabilities | (1,965,515) | 416,288 | ||||
(Gain) loss on extinguishment of debt | (3,259) | (7,934) | ||||
Financing fees related to notes payable | 32,358 | |||||
Realized gain on sale of investments | 25,266 | (7,193) | 32,504 | (288,416) | ||
Unrealized loss on investments | (64,987) | (3,876) | ||||
Changes in assets and liabilities: | ||||||
Digital currencies | (179,316) | (71,543) | ||||
Prepaid expenses and other current assets | 6,000 | 5,000 | ||||
Inventories | (17,730) | |||||
Accrued interest receivable – related party | (98) | |||||
Accounts payable | 2,514 | (827) | ||||
Accrued expenses | (5,088) | 6,411 | ||||
Due to related party | 43,800 | (7,060) | ||||
Net cash used in operating activities | (355,680) | (273,378) | ||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | 159,739 | 579,460 | ||||
Increase in notes receivable – related party | (49,880) | |||||
Purchase of property and equipment | (42,447) | (310,832) | ||||
Net cash provided by investing activities | 117,292 | 218,748 | ||||
Cash flows from financing activities: | ||||||
Proceeds from sale of preferred stock | 125,000 | |||||
Proceeds from stock subscriptions payable | 25,000 | 35,000 | ||||
Net cash provided by financing activities | 248,945 | 160,000 | ||||
Net increase in cash | 10,557 | 105,370 | ||||
Cash, beginning of period | 749 | |||||
Cash, end of period | $ 51,627 | 51,627 | ||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | 29,257 | |||||
Non-cash investing and financing activities: | ||||||
Common shares issued for convertible notes payable | 149,049 | |||||
Common shares issued for cashless exercise of warrants | 560 | 188 | ||||
Debt discount for derivative liability | 81,543 | 72,617 | ||||
Settlement of derivative liabilities | 405,970 | |||||
As Originally Reported [Member] | ||||||
Cash flows from operating activities: | ||||||
Net loss | (235,961) | (462,557) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | 5,264 | |||||
Stock-based compensation - related party | 409,000 | |||||
Amortization of debt discount | 79,631 | |||||
Amortization of original issue discount | 1,347 | |||||
Change in fair value of derivative liabilities | (201,197) | |||||
(Gain) loss on extinguishment of debt | (3,259) | 268,476 | ||||
Financing fees related to notes payable | 32,358 | |||||
Realized gain on sale of investments | (85,911) | (367,134) | ||||
Unrealized loss on investments | 64,987 | 3,876 | ||||
Loss on settlement of warrants | 63,765 | |||||
Changes in assets and liabilities: | ||||||
Digital currencies | (61,892) | |||||
Prepaid expenses and other current assets | 5,000 | |||||
Inventories | (17,730) | |||||
Accrued interest receivable – related party | (98) | |||||
Accounts payable | (827) | |||||
Accrued expenses | (1,786) | |||||
Due to related party | (19,223) | |||||
Net cash used in operating activities | (263,727) | |||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | 579,460 | |||||
Purchase of investments | (9,651) | |||||
Increase in notes receivable – related party | (49,880) | |||||
Purchase of property and equipment | (310,832) | |||||
Net cash provided by investing activities | 209,097 | |||||
Cash flows from financing activities: | ||||||
Proceeds from sale of preferred stock | 125,000 | |||||
Proceeds from stock subscriptions payable | 35,000 | |||||
Net cash provided by financing activities | 160,000 | |||||
Net increase in cash | 105,370 | |||||
Cash, beginning of period | 15,691 | |||||
Cash, end of period | 121,061 | 121,061 | ||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | ||||||
Cash paid for income taxes | ||||||
Non-cash investing and financing activities: | ||||||
Common shares issued for convertible notes payable | 379,021 | |||||
Common shares issued for due to related party | 15,625 | |||||
Common shares issued for cashless exercise of warrants | 188 | |||||
Debt discount for derivative liability | 47,617 | |||||
Accrued interest added to convertible notes payable | 1,117 | |||||
Settlement of derivative liabilities | ||||||
Marketable securities for conversion of notes receivable | 66,850 | |||||
Marketable securities exchanged for note payable | (37,074) | |||||
Marketable securities exchanged for accrued expenses | (1,370) | |||||
Marketable securities exchanged for derivative liabilities | (78,718) | |||||
Marketable securities exchanged for accounts receivable | (15,000) | |||||
Note payable issued in settlement of warrants | 25,000 | |||||
Derivative liabilities extinguished in settlement of warrants | 67,064 | |||||
Adjustments [Member] | ||||||
Cash flows from operating activities: | ||||||
Net loss | (747,032) | (433,316) | [1],[2],[3],[4],[5] | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | [2] | 3,438 | ||||
Stock-based compensation - related party | ||||||
Amortization of debt discount | [3] | 28,490 | ||||
Amortization of original issue discount | ||||||
Change in fair value of derivative liabilities | [3] | 617,485 | ||||
(Gain) loss on extinguishment of debt | (276,410) | [3] | ||||
Financing fees related to notes payable | ||||||
Realized gain on sale of investments | [5] | 78,718 | 78,718 | |||
Unrealized loss on investments | ||||||
Loss on settlement of warrants | [5] | (38,765) | ||||
Changes in assets and liabilities: | ||||||
Digital currencies | [1] | (9,651) | ||||
Prepaid expenses and other current assets | ||||||
Inventories | ||||||
Accrued interest receivable – related party | ||||||
Accounts payable | ||||||
Accrued expenses | [1] | 8,197 | ||||
Due to related party | [1] | 12,163 | ||||
Net cash used in operating activities | (9,651) | |||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | ||||||
Purchase of investments | 9,651 | |||||
Increase in notes receivable – related party | ||||||
Purchase of property and equipment | ||||||
Net cash provided by investing activities | 9,651 | |||||
Cash flows from financing activities: | ||||||
Proceeds from sale of preferred stock | ||||||
Proceeds from stock subscriptions payable | ||||||
Net cash provided by financing activities | ||||||
Net increase in cash | ||||||
Cash, beginning of period | ||||||
Cash, end of period | ||||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | ||||||
Cash paid for income taxes | ||||||
Non-cash investing and financing activities: | ||||||
Common shares issued for convertible notes payable | [3] | (229,972) | ||||
Common shares issued for due to related party | ||||||
Common shares issued for cashless exercise of warrants | ||||||
Debt discount for derivative liability | [3] | 25,000 | ||||
Accrued interest added to convertible notes payable | ||||||
Settlement of derivative liabilities | [3] | 405,970 | ||||
Marketable securities for conversion of notes receivable | ||||||
Marketable securities exchanged for note payable | [3] | 37,074 | ||||
Marketable securities exchanged for accrued expenses | [3] | 1,370 | ||||
Marketable securities exchanged for derivative liabilities | [3] | 78,718 | ||||
Marketable securities exchanged for accounts receivable | [3] | 15,000 | ||||
Note payable issued in settlement of warrants | [3] | (25,000) | ||||
Derivative liabilities extinguished in settlement of warrants | [3] | (67,064) | ||||
As Restated [Member] | ||||||
Cash flows from operating activities: | ||||||
Net loss | (982,993) | (895,873) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | 8,702 | |||||
Stock-based compensation - related party | 409,000 | |||||
Amortization of debt discount | 108,121 | |||||
Amortization of original issue discount | 1,347 | |||||
Change in fair value of derivative liabilities | 416,288 | |||||
(Gain) loss on extinguishment of debt | (3,259) | (7,934) | ||||
Financing fees related to notes payable | 32,358 | |||||
Realized gain on sale of investments | (7,193) | (288,416) | ||||
Unrealized loss on investments | 64,987 | 3,876 | ||||
Loss on settlement of warrants | 25,000 | |||||
Changes in assets and liabilities: | ||||||
Digital currencies | (71,543) | |||||
Prepaid expenses and other current assets | 5,000 | |||||
Inventories | (17,730) | |||||
Accrued interest receivable – related party | (98) | |||||
Accounts payable | (827) | |||||
Accrued expenses | 6,411 | |||||
Due to related party | (7,060) | |||||
Net cash used in operating activities | (273,378) | |||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | 579,460 | |||||
Purchase of investments | ||||||
Increase in notes receivable – related party | (49,880) | |||||
Purchase of property and equipment | (310,832) | |||||
Net cash provided by investing activities | 218,748 | |||||
Cash flows from financing activities: | ||||||
Proceeds from sale of preferred stock | 125,000 | |||||
Proceeds from stock subscriptions payable | 35,000 | |||||
Net cash provided by financing activities | 160,000 | |||||
Net increase in cash | 105,370 | |||||
Cash, beginning of period | 15,691 | |||||
Cash, end of period | $ 121,061 | 121,061 | ||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | ||||||
Cash paid for income taxes | ||||||
Non-cash investing and financing activities: | ||||||
Common shares issued for convertible notes payable | 149,049 | |||||
Common shares issued for due to related party | 15,625 | |||||
Common shares issued for cashless exercise of warrants | 188 | |||||
Debt discount for derivative liability | 72,617 | |||||
Accrued interest added to convertible notes payable | 1,117 | |||||
Settlement of derivative liabilities | 405,970 | |||||
Marketable securities for conversion of notes receivable | 66,850 | |||||
Marketable securities exchanged for note payable | ||||||
Marketable securities exchanged for accrued expenses | ||||||
Marketable securities exchanged for derivative liabilities | ||||||
Marketable securities exchanged for accounts receivable | ||||||
Note payable issued in settlement of warrants | ||||||
Derivative liabilities extinguished in settlement of warrants | ||||||
[1] | (b) Accrued officer compensation was reclassified from accrued expenses to due to related party and subsequently reduced. Accrued interest payable was increased. | |||||
[2] | (c) Reduced useful life for depreciation from 5 years to 3 years. | |||||
[3] | (d) The Company engaged an outside consultant to revise derivative liabilities associated with convertible notes payable and to add derivative liabilities associated with warrants. The calculations were made for each issuance of new debt and warrants and for each conversion, exchange or exercise of debt and warrants. As a result, total derivative liabilities increased, and modifications were made to the calculation of debt discount, interest expense for the amortization of debt discount, and change in fair value of derivative liabilities. In addition, convertible notes payable, net of discounts, increased, interest expense increased, and change in fair value of derivative liabilities decreased. Additionally, no loss on extinguishment of debt for note conversions was recorded, resulting in a decrease in the loss and an increase in additional paid-in capital. | |||||
[4] | (e) Total general and administrative expenses decreased as a result of corrections to certain operating expenses. | |||||
[5] | (f) Adjusted realized gain on sale of investments, including recording gain on sale of related party investment to capital. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jan. 25, 2019 | Jan. 24, 2019 | Jan. 09, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 21, 2015 |
Common stock, shares increase | 9,874,103 | 8,964,103 | ||||
Common stock value | $ 9,875 | $ 8,965 | ||||
Stock subscriptions payable | $ 60,000 | $ 35,000 | ||||
Series B Preferred Stock [Member] | ||||||
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 | |||
Subsequent Event [Member] | Series B Preferred Stock [Member] | ||||||
Shares issued | 3,500 | |||||
Stock subscriptions payable | $ 35,000 | |||||
Subsequent Event [Member] | Series B Preferred Stock [Member] | Steve Rubakh [Member] | ||||||
Shares issued | 5,000 | |||||
Common stock value | $ 80,000 | |||||
Subsequent Event [Member] | Board of Directors [Member] | ||||||
Common stock, shares increase | 250,000,000 | |||||
Preferred stock, shares authorized | 20,000,000 |