Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | INTEGRATED VENTURES, INC. | |
Entity Central Index Key | 0001520118 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
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 | 24,048,971 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash | $ 82,295 | $ 749 |
Restricted cash | 40,321 | |
Prepaid expenses and other current assets | 6,500 | 9,000 |
Inventories | 114,851 | 114,851 |
Equipment deposits | 3,896 | |
Marketable securities | 1,700 | |
Total current assets | 203,646 | 170,517 |
Non-current assets: | ||
Property and equipment, net | 1,201,028 | 633,105 |
Digital currencies | 733 | 11,227 |
Deposits | 14,673 | 14,673 |
Total assets | 1,420,080 | 829,522 |
Current liabilities: | ||
Accounts payable | 37,849 | 26,973 |
Accrued expenses | 31,426 | 29,428 |
Due to related party | 74,262 | 20,974 |
Derivative liabilities | 1,009,548 | 2,886,965 |
Convertible notes payable, net of discounts | 161,253 | |
Total current liabilities | 1,314,338 | 2,964,340 |
Total liabilities | 1,314,338 | 2,964,340 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value, (250,000,000 shares authorized, 14,935,239 and 8,964,103 shares issued and outstanding as of March 31, 2019 and June 30, 2018, respectively) | 14,936 | 8,965 |
Additional paid-in capital | 13,252,506 | 9,290,344 |
Stock subscriptions payable | 25,000 | 35,000 |
Accumulated deficit | (13,187,533) | (11,469,936) |
Total stockholders' equity (deficit) | 105,742 | (2,134,818) |
Total liabilities and stockholders' equity (deficit) | 1,420,080 | 829,522 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock | 500 | 500 |
Series B Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock | $ 333 | $ 309 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Jan. 25, 2019 | Jun. 30, 2018 | Dec. 21, 2015 |
Stockholders' equity (deficit): | ||||
Preferred stock, shares authorized | 20,000,000 | |||
Common stock, par value per share | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | |
Common stock, shares issued | 14,935,239 | 8,964,103 | ||
Common stock, shares outstanding | 14,935,239 | 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 | 332,666 | 309,166 | ||
Preferred stock, shares outstanding | 332,666 | 309,166 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||||
Cryptocurrency mining | $ 45,496 | $ 77,500 | $ 223,874 | $ 136,998 |
Sales of cryptocurrency mining equipment | 1,108 | 60,046 | 25,445 | 105,636 |
Total revenues | 46,604 | 137,546 | 249,319 | 242,634 |
Cost of revenues | 193,563 | 98,077 | 627,719 | 148,333 |
Gross margin (loss) | (146,959) | 39,469 | (378,400) | 94,301 |
Operating expenses: | ||||
General and administrative | 339,987 | 108,242 | 1,070,421 | 767,828 |
Impairment of assets | 2,097,930 | |||
Total operating expenses | 339,987 | 108,242 | 3,168,351 | 767,828 |
Loss from operations | (486,946) | (68,773) | (3,546,751) | (673,527) |
Other income (expense): | ||||
Interest and other income | 3 | 1,405 | ||
Interest expense | (60,889) | (15,014) | (105,541) | (158,721) |
Realized gain (loss) on investments | (1,060) | (32,238) | (33,564) | 252,302 |
Gain on extinguishment of debt | 7,934 | |||
Change in fair value of derivative liabilities | 2,744 | 64,628 | 1,968,259 | (351,660) |
Loss on settlement of warrants | (25,000) | |||
Total other income (expense) | (59,205) | 17,379 | 1,829,154 | (273,740) |
Loss before income taxes | (546,151) | (51,394) | (1,717,597) | (947,267) |
Provision for income taxes | ||||
Net loss | $ (546,151) | $ (51,394) | $ (1,717,597) | $ (947,267) |
Net income (loss) per common share: | ||||
Basic | $ (0.05) | $ (0.01) | $ (0.17) | $ (0.12) |
Diluted | $ (0.05) | $ (0.01) | $ (0.17) | $ (0.12) |
Weighted average number of common shares outstanding: | ||||
Basic | 11,571,318 | 8,858,733 | 10,221,220 | 8,088,208 |
Diluted | 11,571,318 | 8,858,733 | 10,221,220 | 8,088,208 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) | Series A Preferred Stock | Series B Preferred Stock [Member] | Common Stock | Additional Paid-in Capital | Stock Subscriptions Payable | Accumulated Deficit | Total |
Beginning balance, Shares at Jun. 30, 2017 | 500,000 | 150,000 | 5,212,563 | ||||
Beginning balance, Amount at Jun. 30, 2017 | $ 500 | $ 150 | $ 5,213 | $ 5,836,607 | $ (5,892,486) | $ (50,016) | |
Reverse stock split rounding, Shares | 115 | ||||||
Reverse stock split rounding, Amount | |||||||
Issuance of Series B preferred stock to officer for compensation, Shares | 70,000 | ||||||
Issuance of Series B preferred stock to officer for compensation, Amount | $ 70 | 408,930 | 409,000 | ||||
Issuance of Series B preferred stock for cash, Shares | 12,500 | ||||||
Issuance of Series B preferred stock for cash, Amount | $ 13 | 124,987 | 125,000 | ||||
Series B preferred stock subscription payable for cash | 35,000 | 35,000 | |||||
Common shares issued in conversion of convertible notes payable, Shares | 2,752,883 | ||||||
Common shares issued in conversion of convertible notes payable, Amount | $ 2,753 | 190,408 | 193,161 | ||||
Common shares issued for cash, Shares | 462,900 | ||||||
Common shares issued for cash, Amount | $ 464 | 719,536 | 720,000 | ||||
Common shares issued for accrued compensation, Shares | 347,222 | ||||||
Common shares issued for accrued compensation, Amount | $ 347 | 15,278 | 15,625 | ||||
Common shares issued in cashless exercise of warrants, Shares | 188,420 | ||||||
Common shares issued in cashless exercise of warrants, Amount | $ 188 | (188) | |||||
Settlement of derivative liabilities | 431,056 | 431,056 | |||||
Net loss | (947,267) | (947,267) | |||||
Ending balance, Shares at Mar. 31, 2018 | 500,000 | 232,500 | 8,964,103 | ||||
Ending balance, Amount at Mar. 31, 2018 | $ 500 | $ 233 | $ 8,965 | 7,726,614 | 35,000 | (6,839,753) | 931,559 |
Beginning balance, Shares at Jun. 30, 2018 | 500,000 | 309,166 | 8,964,103 | ||||
Beginning balance, Amount at Jun. 30, 2018 | $ 500 | $ 309 | $ 8,965 | 9,290,344 | 35,000 | (11,469,936) | (2,134,818) |
Issuance of Series B preferred stock to officer for compensation, Shares | 20,000 | ||||||
Issuance of Series B preferred stock to officer for compensation, Amount | $ 20 | 668,980 | 669,000 | ||||
Common shares issued in conversion of convertible notes payable, Shares | 919,336 | ||||||
Common shares issued in conversion of convertible notes payable, Amount | $ 919 | 124,515 | 125,434 | ||||
Common shares issued in cashless exercise of warrants, Shares | 1,200,000 | ||||||
Common shares issued in cashless exercise of warrants, Amount | $ 1,200 | 691 | 1,891 | ||||
Settlement of derivative liabilities | 35,434 | ||||||
Issuance of Series B preferred stock for property and equipment, Shares | 38,018 | ||||||
Issuance of Series B preferred stock for property and equipment, Amount | $ 38 | 3,003,384 | 3,003,422 | ||||
Issuance of Series B preferred stock for stock subscriptions payable, Shares | 3,500 | ||||||
Issuance of Series B preferred stock for stock subscriptions payable, Amount | $ 4 | 34,996 | (35,000) | ||||
Return and cancellation of Series B preferred stock, Shares | (3,000) | ||||||
Return and cancellation of Series B preferred stock, Amount | $ (3) | 3 | |||||
Conversion of Series B preferred stock to common stock, Shares | (35,018) | 3,501,800 | |||||
Conversion of Series B preferred stock to common stock, Amount | $ (35) | $ 3,502 | (3,467) | ||||
Common shares issued for consulting fees, Shares | 200,000 | ||||||
Common shares issued for consulting fees, Amount | $ 200 | 79,960 | 80,160 | ||||
Common shares issued for debt discount, Shares | 150,000 | ||||||
Common shares issued for debt discount, Amount | $ 150 | 53,100 | 53,250 | ||||
Cash for common stock subscription payable | 25,000 | 25,000 | |||||
Net loss | (1,717,597) | (1,717,597) | |||||
Ending balance, Shares at Mar. 31, 2019 | 500,000 | 332,666 | 14,935,239 | ||||
Ending balance, Amount at Mar. 31, 2019 | $ 500 | $ 333 | $ 14,936 | $ 13,252,506 | $ 25,000 | $ (13,187,533) | $ 105,742 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,717,597) | $ (947,267) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 383,912 | 27,211 |
Stock-based compensation - related party | 669,000 | 409,000 |
Stock-based compensation | 80,160 | |
Amortization of debt discount | 93,725 | 115,722 |
Amortization of original issue discount | 1,347 | |
Impairment of assets | 2,097,930 | |
Change in fair value of derivative liability | (1,968,259) | 351,660 |
Loss on settlement of warrants | 25,000 | |
Gain on extinguishment of debt | (7,934) | |
Financing fees related to notes payable | 32,858 | |
Realized (gain) loss on sale of investments | 33,564 | (252,302) |
Changes in assets and liabilities: | ||
Digital currencies | (224,933) | (145,663) |
Accounts receivable | 15,000 | |
Prepaid expenses and other current assets | 2,500 | (4,500) |
Accrued interest receivable - related party | (98) | |
Inventories | (556,050) | |
Equipment deposits | (46,417) | |
Deposits | (2,500) | |
Accounts payable | 10,876 | (1,531) |
Accrued expenses | 1,998 | 27,742 |
Deferred revenue | 2,524 | |
Due to related party | 53,288 | (22,684) |
Net cash used in operating activities | (483,836) | (978,882) |
Cash flows from investing activities: | ||
Net proceeds from the sale of investments | 203,563 | 674,817 |
Purchase of investments | (9,651) | |
Increase in notes receivable - related party | (49,880) | |
Purchase of property and equipment | (42,447) | (380,144) |
Net cash provided by investing activities | 161,116 | 235,142 |
Cash flows from financing activities: | ||
Proceeds from convertible notes payable | 338,945 | |
Proceeds from sale of preferred stock | 125,000 | |
Proceeds from sale of common stock | 720,000 | |
Proceeds from stock subscriptions payable | 25,000 | 35,000 |
Net cash provided by financing activities | 363,945 | 880,000 |
Net increase in cash | 41,225 | 136,260 |
Cash, beginning of period | 41,070 | 15,691 |
Cash, end of period | 82,295 | 151,951 |
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 | 1,891 | 188 |
Common shares issued for debt discount | 53,250 | |
Common shares issued for conversion of Series B preferred stock | 3,502 | |
Debt discount for derivative liability | 128,167 | 72,617 |
Series B preferred shares for property and equipment | 3,003,422 | |
Series B preferred shares returned and cancelled | 3 | |
Series B preferred shares issued for stock subscription payable | 35,000 | |
Common shares issued for convertible notes payable | 90,000 | 193,161 |
Common shares issued for accrued compensation | 15,625 | |
Accrued interest payable added to note payable | 1,116 | |
Note receivable and accrued interest receivable - related party for marketable securities | 66,850 | |
Marketable securities exchanged for convertible note payable | 37,074 | |
Marketable securities exchanged for accrued expenses | 1,370 | |
Settlement of derivative liabilities | $ 35,434 | $ 431,056 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 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 | 9 Months Ended |
Mar. 31, 2019 | |
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 nine months ended March 31, 2019 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 March 31, 2019 and June 30, 2018 consist of cryptocurrency mining units held for sale or deployment in mining operations, 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 nine months ended March 31, 2019, 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 nine months ended March 31, 2019. 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 March 31, 2019 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 March 31, 2019, 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 March 31, 2019: Derivative liabilities $ 1,009,548 $ - $ - $ 1,009,548 Total liabilities measured at fair value $ 1,009,548 $ - $ - $ 1,009,548 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 nine months ended March 31, 2019, 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 128,167 - - 128,167 Decrease in liabilities for debt conversions (35,434 ) - - (35,434 ) Decrease in liabilities for warrant exercises - (1,891 ) - (1,891 ) Change in fair value 7,556 25,127 (2,000,942 ) (1,968,259 ) Derivative liabilities at March 31, 2019 $ 100,289 $ 23,236 $ 886,023 $ 1,009,548 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. For all periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share; therefore, basic net loss per share is the same as diluted net loss per share. 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 nine months ended March 31, 2019 and through the date of filing this report which the Company believes will have a material impact on its 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 | 9 Months Ended |
Mar. 31, 2019 | |
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 $483,836 in the nine months ended March 31, 2019. As of March 31, 2019, the Company had an accumulated deficit of $13,187,533. 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 | 9 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 4 - PROPERTY AND EQUIPMENT | Property and equipment consisted of the following at: March 31, 2019 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 (441,972 ) (58,060 ) Net $ 1,201,028 $ 633,105 Depreciation and amortization expense, included in cost of revenues, for the three months ended March 31, 2019 and 2018 was $136,917 and $18,509, respectively. Depreciation and amortization expense, included in cost of revenues, for the nine months ended March 31, 2019 and 2018 was $383,912 and $27,211, respectively. |
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT | 9 Months Ended |
Mar. 31, 2019 | |
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 $3,003,422, 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 nine months ended March 31, 2019. 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 | 9 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019, the restricted cash had been fully utilized in digital mining operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2019 | |
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 6, 2019, the Board of Directors of the Company set the annual compensation for Steve Rubakh, effective April 1, 2019, to include annual salary of $150,000 per year and the issuance on a quarterly basis of 50,000 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. On January 24, 2019, the Company issued to Mr. Rubakh a total of 10,000 shares of convertible preferred stock valued on an “as converted to common” basis at $160,000. On March 2, 2019, the Company issued to Mr. Rubakh 5,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $92,000. The total stock-based compensation – related party of $669,000 is included in general and administrative expenses for the nine months ended March 31, 2019. 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. 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 total stock-based compensation – related party of $409,000 is included in general and administrative expenses for the nine months ended March 31, 2019. 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 $74,262 and $20,974 as of March 31, 2019 and June 30, 2018, respectively. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 8 - CONVERTIBLE NOTES PAYABLE | Convertible notes payable, all classified as current, consist of the following at March 31, 2019: Debt Principal Discount Net Geneva Roth Remark Holdings, Inc. #1 $ 38,000 $ 6,872 $ 31,128 BHP Capital NY, Inc. 52,000 22,972 29,028 Armada Investment Fund, LLC 52,000 22,971 29,029 Geneva Roth Remark Holdings, Inc. #2 43,000 16,351 26,649 Geneva Roth Remark Holdings, Inc. #3 78,000 32,581 45,419 Total $ 263,000 $ 101,747 $ 161,253 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 March 31, 2019, $90,000 principal had been converted into a total of $919,336 shares of common stock, resulting in a principal balance of $38,000. As of March 31, 2019, $42,297 of the debt discount had been amortized and there was accrued interest payable of $6,645. The Company recorded a derivative liability of $16,003 as of March 31, 2019. On September 26, 2018, the Company entered into a convertible promissory note 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 March 31, 2019, $23,868 of the debt discount had been amortized and there was accrued interest payable of $2,120. The Company recorded a derivative liability of $19,464 as of March 31, 2019. On September 26, 2018, the Company entered into a convertible promissory note 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 March 31, 2019, $23,868 of the debt discount had been amortized and there was accrued interest payable of $2,120. The Company recorded a derivative liability of $19,463 as of March 31, 2019. On February 6, 2019, the Company entered into a second convertible promissory note with Geneva in the principal amount of $43,000. The note matures on February 6, 2020 and bears interest at 10%. A debt discount of $19,128 was recorded, including a derivative liability of $16,128. 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 March 31, 2019, $2,777 of the debt discount had been amortized and there was accrued interest payable of $624. The Company recorded a derivative liability of $16,105 as of March 31, 2019. On March 21, 2019, the Company entered into a second convertible promissory note with Geneva in the principal amount of $78,000. The note matures on March 21, 2020 and bears interest at 10%. A debt discount of $33,496 was recorded, including a derivative liability of $30,496. 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 March 31, 2019, $915 of the debt discount had been amortized and there was accrued interest payable of $214. The Company recorded a derivative liability of $29,254 as of March 31, 2019. |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 9 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and June 30, 2018, which were issued in March 2015 to members of the Company’s Board of Directors in consideration for services. 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 332,666 and 309,166 shares issued and outstanding as of March 31, 2019 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. On January 24, 2019, the Company issued to Mr. Rubakh a total of 10,000 shares of convertible preferred stock valued on an “as converted to common” basis at $160,000. On March 2, 2019, the Company issued to Mr. Rubakh 5,000 shares of Series B convertible preferred stock valued on an “as converted to common” basis at $92,000. The total stock-based compensation – related party of $669,000 is included in general and administrative expenses for the nine months ended March 31, 2019. In March 2019, a total of 35,018 shares of Series B preferred stock were converted into 3,501,800 shares of common stock. 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. 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 total stock-based compensation – related party of $409,000 is included in general and administrative expenses for the nine months ended March 31, 2019. 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 $3,003,422. 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. In February 2019, an additional 1,200 shares of Series B preferred stock originally issued pursuant to the Asset Purchase Agreement were returned to the Company and cancelled. 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. Of the shares, 12,500 shares were issued for cash of $125,000 and a stock subscription payable of $35,000 was recorded for the other 3,500 shares. On January 9, 2019, the 3,500 shares of Series B preferred stock were issued for stock subscriptions payable of $35,000. Common Stock 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. The Company had 14,935,239 and 8,964,103 shares issued and outstanding as of March 31, 2019 and June 30, 2018, respectively. During the nine months ended March 31, 2019, the Company issued a total of 5,971,136 shares of its common stock. A total of 200,000 shares of common stock, valued at $80,160, based on the closing market price of stock on the date of grant, were issued to a consultant in August and October 2018. 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. A total of 1,200,000 shares of common stock, valued at $1,891, were issued to a lender in the cashless exercise of warrants in August 2018 and January 2019. In March 2019, a total of 3,501,800 shares of common stock, valued at $125,434, were issued in the conversion of 35,018 shares of Series B preferred stock. No gain or loss was recorded as the conversions were completed within the terms of the Series B preferred stock. In March 2019, a total of 919,336 shares of common stock were issued in the conversion of notes payable principal of $90,000, resulting in the extinguishment of derivative liabilities totaling $35,434. No gain or loss was recorded as the conversions were completed within the terms of the debt agreements. During the nine months ended March 31, 2018, the Company issued a total of 3,751,540 shares of its common stock. A total of 2,752,883 shares of the Company’s common stock, valued at $193,161, were issued in conversion of $52,818 note principal, $4,072 accrued interest payable, $103,412 in derivative liabilities, $2,950 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 115 shares due to rounding of shares in the reverse stock split. In January 2018, 462,900 shares of common stock were issued to an institutional investor for cash of $720,000. In September 2017, common shares outstanding were increased by 115 shares due to reverse split rounding. |
WARRANTS
WARRANTS | 9 Months Ended |
Mar. 31, 2019 | |
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 nine months ended March 31, 2019 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 (47,476 ) $ 2.16 Forfeited or expired - $ - Outstanding and exercisable at March 31, 2019 300,899 $ 2.20 1.80 $ - 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 March 31, 2019. Therefore, all warrants issued prior to that date were included in the Company’s calculations of derivative liabilities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2019 | |
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 | 9 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 12 - RESTATEMENT | The Company has restated its financial statements as of March 31, 2018 and for the three months and nine 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 March 31, 2018 Restated Balance Sheet: Integrated Ventures, Inc. Condensed Balance Sheet As Originally Reported on March 31, 2018 Adjustments As Restated March 31, 2018 ASSETS Current assets: Cash $ 151,951 $ - $ 151,951 Digital currencies 2 (2 ) (a) - Prepaid expenses and other current assets 17,083 (5,083 ) (d)(e) 12,000 Inventories 556,050 - 556,050 Equipment deposits 46,417 - 46,417 Marketable securities 1,720 - 1,720 Total current assets 773,223 (5,085 ) 768,138 Non-current assets: Property and equipment, net 362,715 (9,782 ) (c) 352,933 Digital currencies - 2 (a) 2 Deposits 3,200 - 3,200 Total assets $ 1,139,138 $ (14,865 ) $ 1,124,273 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 21,258 $ 1,369 (e) $ 22,627 Accrued expenses 29,349 13,214 (b) 42,563 Deferred revenue 2,524 - 2,524 Due to related party 826 (826 ) (b) - Note payable 125,000 - 125,000 Total current liabilities 178,957 13,757 192,714 Total liabilities 178,957 13,757 192,714 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, 8,964,103 shares issued and outstanding) 8,964 - 8,964 Additional paid-in capital 6,302,013 1,424,602 (d)(f) 7,726,615 Stock subscription payable 35,000 - 35,000 Accumulated deficit (5,386,529 ) (1,453,224 ) (b)(c)(d)(e) (6,839,753 ) Total stockholders’ equity (deficit) 960,181 (28,622 ) 931,559 Total liabilities and stockholders’ equity (deficit) $ 1,139,138 $ (14,865 ) $ 1,124,273 The following adjustments were made to the Restated Statement of Operations for the three months ended March 31, 2018: Integrated Ventures, Inc. Condensed Statement of Operations As Originally Reported for the Three Months Ended March 31, 2018 Adjustments As Restated for the Three Months Ended March 31, 2018 Revenues: Cryptocurrency mining $ 77,500 $ - $ 77,500 Sales of cryptocurrency mining equipment 60,046 - 60,046 Total revenues 137,546 - 137,546 Cost of revenues 91,734 6,343 (c) 98,077 Gross margin 45,812 (6,343 ) 39,469 Operating expenses: General and administrative 102,017 6,225 (e) 108,242 Total operating expenses 102,017 6,225 108,242 Loss from operations (56,205 ) (12,568 ) (68,773 ) Other income (expense): Interest and other income 3 - 3 Interest expense (9,913 ) (5,101 ) (b)(d) (15,014 ) Realized loss on sale of investments (32,198 ) (40 ) (f) (32,238 ) Change in fair value of derivative liabilities 1,223 63,405 (d) 64,628 Total other income (expense) (40,885 ) 58,264 17,379 Loss before income taxes (97,090 ) 45,696 (51,394 ) Provision for income taxes - - - Net loss $ (97,090 ) $ 45,696 $ (51,394 ) Net loss per common share – basic and diluted $ (0.01 ) $ - (g) $ (0.01 ) Weighted average number of common shares outstanding – basic and diluted 8,858,733 - 8,858,733 The following adjustments were made to the Restated Statement of Operations for the nine months ended March 31, 2018: Integrated Ventures, Inc. Condensed Statement of Operations As Originally Reported for the Nine Months Ended March 31, 2018 Adjustments As Restated for the Nine Months Ended March 31, 2018 Revenues: Cryptocurrency mining $ 136,998 $ - $ 136,998 Sales of cryptocurrency mining equipment 105,636 - 105,636 Total revenues 242,634 - 242,634 Cost of revenues 138,552 9,781 (c) 148,333 Gross margin 104,082 (9,781 ) 94,301 Operating expenses: General and administrative 736,141 31,687 (e) 767,828 Total operating expenses 736,141 31,687 767,828 Loss from operations (632,059 ) (41,468 ) (673,527 ) Other income (expense): Interest and other income 1,405 - 1,405 Interest expense (130,232 ) (28,489 ) (b)(d) (158,721 ) Realized gain on sale of investments 331,060 (78,758 ) (f) 252,302 Gain (loss) on extinguishment of debt (268,476 ) 276,410 (d) 7,934 Change in fair value of derivative liabilities 202,420 (554,080 ) (d) (351,660 ) Loss on settlement of warrants (63,765 ) 38,765 (d) (25,000 ) Total other income (expense) 72,412 (346,152 ) (273,740 ) Loss before income taxes (559,647 ) (387,620 ) (947,267 ) Provision for income taxes - - - Net loss $ (559,647 ) $ (387,620 ) $ (947,267 ) Net loss per common share – basic and diluted $ (0.07 ) $ (0.05 ) (g) $ (0.12 ) Weighted average number of common shares outstanding – basic and diluted 8,088,209 - 8,088,209 Integrated Ventures, Inc. Statement of Cash Flows As Originally Reported for the Nine Months Ended March 31, 2018 Adjustments As Restated for the Nine Months Ended March 31, 2018 Cash flows from operating activities: Net loss $ (559,647 ) $ (387,620 ) (b)(c)(d)(e)(f) $ (947,267 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 17,429 9,782 (c) 27,211 Stock-based compensation – related party 409,000 - 409,000 Amortization of debt discount 87,232 28,490 (d) 115,722 Amortization of original issue discount 1,347 - 1,347 Change in fair value of derivative liabilities (202,420 ) 554,080 (d) 351,660 (Gain) loss on extinguishment of debt 268,476 (276,410 ) (d) (7,934 ) Financing fees related to notes payable 32,858 - 32,858 Realized gain on sale of investments (331,020 ) 78,718 (f) (252,302 ) Loss on settlement of warrants 63,765 (38,765 ) (d) 25,000 Changes in assets and liabilities: Digital currencies (145,663 ) - (145,663 ) Accounts receivable 15,000 - 15,000 Prepaid expenses and other current assets (9,583 ) 5,083 (4,500 ) Inventories (556,050 ) - (556,050 ) Equipment deposits (46,417 ) - (46,417 ) Accrued interest receivable – related party (98 ) - (98 ) Deposits (2,500 ) - (2,500 ) Accounts payable (2,900 ) 1,369 (e) (1,531 ) Accrued expenses (825 ) 28,567 (b) 27,742 Deferred revenue 2,524 - 2,524 Due to related party (19,390 ) (3,294 ) (b) (22,684 ) Net cash used in operating activities (978,882 ) - (978,882 ) Cash flows from investing activities: Net proceeds from the sale of investments 674,817 - 674,817 Purchase of investments (9,651 ) - (9,651 ) Increase in notes receivable – related party (49,880 ) - (49,880 ) Purchase of property and equipment (380,144 ) - (380,144 ) Net cash provided by investing activities 235,142 - 235,142 Cash flows from financing activities: Proceeds from sale of common stock 720,000 720,000 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 880,000 - 880,000 Net increase in cash 136,260 - 136,260 Cash, beginning of period 15,691 - 15,691 Cash, end of period $ 151,951 $ - $ 151,951 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 $ 423,133 $ (229,972 ) (d) $ 193,161 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 72,617 Accrued interest added to convertible notes payable 1,116 - 1,116 Settlement of derivative liabilities - 431,056 (d) 431,056 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. Accounts payable increased. (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 | 9 Months Ended |
Mar. 31, 2019 | |
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: Conversion of Series B Preferred Shares Subsequent to March 31, 2019, holders of a total of 56,666 shares of Series B preferred stock converted the shares into a total of 5,666,600 shares of common stock. Issuances of Common Shares Effective April 7, 2019, the Company issued a consultant 20,000 shares of common stock valued at $2,892. On April 2, 2019 and April 4, 2019, a lender converted a total $38,000 debt principal and $6,400 accrued interest payable into a total of 679,938 shares of common stock. On April 18, 2019, a holder exercised 9,346 warrant shares into 700,000 shares of common stock in a cashless warrant exercise. The warrant holder also exercised 11,834 warrant shares into 1,000,000 shares of common stock in a cashless warrant exercise on May 13, 2019. On May 13, 2019, a lender converted $12,500 debt principal and $4,176 accrued interest payable into 310,557 shares of common stock. On May 13, 2019, a lender converted $39,000 debt principal into 736,637 shares of common stock. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Restatement | The Company is restating its condensed financial statements for the three months and nine months ended March 31, 2019 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 March 31, 2019 and June 30, 2018 consist of cryptocurrency mining units held for sale or deployment in mining operations, 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 nine months ended March 31, 2019, 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 nine months ended March 31, 2019. |
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 March 31, 2019 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 March 31, 2019, 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 March 31, 2019: Derivative liabilities $ 1,009,548 $ - $ - $ 1,009,548 Total liabilities measured at fair value $ 1,009,548 $ - $ - $ 1,009,548 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 nine months ended March 31, 2019, 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 128,167 - - 128,167 Decrease in liabilities for debt conversions (35,434 ) - - (35,434 ) Decrease in liabilities for warrant exercises - (1,891 ) - (1,891 ) Change in fair value 7,556 25,127 (2,000,942 ) (1,968,259 ) Derivative liabilities at March 31, 2019 $ 100,289 $ 23,236 $ 886,023 $ 1,009,548 |
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. For all periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share; therefore, basic net loss per share is the same as diluted net loss per share. |
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 nine months ended March 31, 2019 and through the date of filing this report which the Company believes will have a material impact on its 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) | 9 Months Ended |
Mar. 31, 2019 | |
Organization And Summary Of Significant Accounting Policies Tables Abstract | |
Fair value of marketable securities | 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 | Total Level 1 Level 2 Level 3 March 31, 2019: Derivative liabilities $ 1,009,548 $ - $ - $ 1,009,548 Total liabilities measured at fair value $ 1,009,548 $ - $ - $ 1,009,548 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 | 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 128,167 - - 128,167 Decrease in liabilities for debt conversions (35,434 ) - - (35,434 ) Decrease in liabilities for warrant exercises - (1,891 ) - (1,891 ) Change in fair value 7,556 25,127 (2,000,942 ) (1,968,259 ) Derivative liabilities at March 31, 2019 $ 100,289 $ 23,236 $ 886,023 $ 1,009,548 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Property And Equipment | |
Property and equipment | March 31, 2019 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 (441,972 ) (58,060 ) Net $ 1,201,028 $ 633,105 |
DIGIMINE ACQUISITION (Tables)
DIGIMINE ACQUISITION (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Digimine Acquisition | |
Summarized of acquisition | 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 | 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) | 9 Months Ended |
Mar. 31, 2019 | |
Convertible Notes Payable | |
Schedule of convertible notes payable | Debt Principal Discount Net Geneva Roth Remark Holdings, Inc. #1 $ 38,000 $ 6,872 $ 31,128 BHP Capital NY, Inc. 52,000 22,972 29,028 Armada Investment Fund, LLC 52,000 22,971 29,029 Geneva Roth Remark Holdings, Inc. #2 43,000 16,351 26,649 Geneva Roth Remark Holdings, Inc. #3 78,000 32,581 45,419 Total $ 263,000 $ 101,747 $ 161,253 |
WARRANTS (Tables)
WARRANTS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Non Employees [Member] | |
Schedule of warrant | 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 (47,476 ) $ 2.16 Forfeited or expired - $ - Outstanding and exercisable at March 31, 2019 300,899 $ 2.20 1.80 $ - |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Restatement Tables Abstract | |
Restated Balance Sheet | Integrated Ventures, Inc. Condensed Balance Sheet As Originally Reported on March 31, 2018 Adjustments As Restated March 31, 2018 ASSETS Current assets: Cash $ 151,951 $ - $ 151,951 Digital currencies 2 (2 ) (a) - Prepaid expenses and other current assets 17,083 (5,083 ) (d)(e) 12,000 Inventories 556,050 - 556,050 Equipment deposits 46,417 - 46,417 Marketable securities 1,720 - 1,720 Total current assets 773,223 (5,085 ) 768,138 Non-current assets: Property and equipment, net 362,715 (9,782 ) (c) 352,933 Digital currencies - 2 (a) 2 Deposits 3,200 - 3,200 Total assets $ 1,139,138 $ (14,865 ) $ 1,124,273 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 21,258 $ 1,369 (e) $ 22,627 Accrued expenses 29,349 13,214 (b) 42,563 Deferred revenue 2,524 - 2,524 Due to related party 826 (826 ) (b) - Note payable 125,000 - 125,000 Total current liabilities 178,957 13,757 192,714 Total liabilities 178,957 13,757 192,714 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, 8,964,103 shares issued and outstanding) 8,964 - 8,964 Additional paid-in capital 6,302,013 1,424,602 (d)(f) 7,726,615 Stock subscription payable 35,000 - 35,000 Accumulated deficit (5,386,529 ) (1,453,224 ) (b)(c)(d)(e) (6,839,753 ) Total stockholders’ equity (deficit) 960,181 (28,622 ) 931,559 Total liabilities and stockholders’ equity (deficit) $ 1,139,138 $ (14,865 ) $ 1,124,273 |
Restated Statement of Operations | Integrated Ventures, Inc. Condensed Statement of Operations As Originally Reported for the Three Months Ended March 31, 2018 Adjustments As Restated for the Three Months Ended March 31, 2018 Revenues: Cryptocurrency mining $ 77,500 $ - $ 77,500 Sales of cryptocurrency mining equipment 60,046 - 60,046 Total revenues 137,546 - 137,546 Cost of revenues 91,734 6,343 (c) 98,077 Gross margin 45,812 (6,343 ) 39,469 Operating expenses: General and administrative 102,017 6,225 (e) 108,242 Total operating expenses 102,017 6,225 108,242 Loss from operations (56,205 ) (12,568 ) (68,773 ) Other income (expense): Interest and other income 3 - 3 Interest expense (9,913 ) (5,101 ) (b)(d) (15,014 ) Realized loss on sale of investments (32,198 ) (40 ) (f) (32,238 ) Change in fair value of derivative liabilities 1,223 63,405 (d) 64,628 Total other income (expense) (40,885 ) 58,264 17,379 Loss before income taxes (97,090 ) 45,696 (51,394 ) Provision for income taxes - - - Net loss $ (97,090 ) $ 45,696 $ (51,394 ) Net loss per common share – basic and diluted $ (0.01 ) $ - (g) $ (0.01 ) Weighted average number of common shares outstanding – basic and diluted 8,858,733 - 8,858,733 The following adjustments were made to the Restated Statement of Operations for the nine months ended March 31, 2018: Integrated Ventures, Inc. Condensed Statement of Operations As Originally Reported for the Nine Months Ended March 31, 2018 Adjustments As Restated for the Nine Months Ended March 31, 2018 Revenues: Cryptocurrency mining $ 136,998 $ - $ 136,998 Sales of cryptocurrency mining equipment 105,636 - 105,636 Total revenues 242,634 - 242,634 Cost of revenues 138,552 9,781 (c) 148,333 Gross margin 104,082 (9,781 ) 94,301 Operating expenses: General and administrative 736,141 31,687 (e) 767,828 Total operating expenses 736,141 31,687 767,828 Loss from operations (632,059 ) (41,468 ) (673,527 ) Other income (expense): Interest and other income 1,405 - 1,405 Interest expense (130,232 ) (28,489 ) (b)(d) (158,721 ) Realized gain on sale of investments 331,060 (78,758 ) (f) 252,302 Gain (loss) on extinguishment of debt (268,476 ) 276,410 (d) 7,934 Change in fair value of derivative liabilities 202,420 (554,080 ) (d) (351,660 ) Loss on settlement of warrants (63,765 ) 38,765 (d) (25,000 ) Total other income (expense) 72,412 (346,152 ) (273,740 ) Loss before income taxes (559,647 ) (387,620 ) (947,267 ) Provision for income taxes - - - Net loss $ (559,647 ) $ (387,620 ) $ (947,267 ) Net loss per common share – basic and diluted $ (0.07 ) $ (0.05 ) (g) $ (0.12 ) Weighted average number of common shares outstanding – basic and diluted 8,088,209 - 8,088,209 |
Restated Statement of Cash Flows | Integrated Ventures, Inc. Statement of Cash Flows As Originally Reported for the Nine Months Ended March 31, 2018 Adjustments As Restated for the Nine Months Ended March 31, 2018 Cash flows from operating activities: Net loss $ (559,647 ) $ (387,620 ) (b)(c)(d)(e)(f) $ (947,267 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 17,429 9,782 (c) 27,211 Stock-based compensation – related party 409,000 - 409,000 Amortization of debt discount 87,232 28,490 (d) 115,722 Amortization of original issue discount 1,347 - 1,347 Change in fair value of derivative liabilities (202,420 ) 554,080 (d) 351,660 (Gain) loss on extinguishment of debt 268,476 (276,410 ) (d) (7,934 ) Financing fees related to notes payable 32,858 - 32,858 Realized gain on sale of investments (331,020 ) 78,718 (f) (252,302 ) Loss on settlement of warrants 63,765 (38,765 ) (d) 25,000 Changes in assets and liabilities: Digital currencies (145,663 ) - (145,663 ) Accounts receivable 15,000 - 15,000 Prepaid expenses and other current assets (9,583 ) 5,083 (4,500 ) Inventories (556,050 ) - (556,050 ) Equipment deposits (46,417 ) - (46,417 ) Accrued interest receivable – related party (98 ) - (98 ) Deposits (2,500 ) - (2,500 ) Accounts payable (2,900 ) 1,369 (e) (1,531 ) Accrued expenses (825 ) 28,567 (b) 27,742 Deferred revenue 2,524 - 2,524 Due to related party (19,390 ) (3,294 ) (b) (22,684 ) Net cash used in operating activities (978,882 ) - (978,882 ) Cash flows from investing activities: Net proceeds from the sale of investments 674,817 - 674,817 Purchase of investments (9,651 ) - (9,651 ) Increase in notes receivable – related party (49,880 ) - (49,880 ) Purchase of property and equipment (380,144 ) - (380,144 ) Net cash provided by investing activities 235,142 - 235,142 Cash flows from financing activities: Proceeds from sale of common stock 720,000 720,000 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 880,000 - 880,000 Net increase in cash 136,260 - 136,260 Cash, beginning of period 15,691 - 15,691 Cash, end of period $ 151,951 $ - $ 151,951 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 $ 423,133 $ (229,972 ) (d) $ 193,161 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 72,617 Accrued interest added to convertible notes payable 1,116 - 1,116 Settlement of derivative liabilities - 431,056 (d) 431,056 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) | 9 Months Ended |
Mar. 31, 2019 | |
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) | Mar. 31, 2019USD ($) |
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 ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Derivative liabilities | $ 1,009,548 | $ 2,886,965 |
Total liabilities measured at fair value | 1,009,548 | 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 | 1,009,548 | 2,886,965 |
Total liabilities measured at fair value | $ 1,009,548 | $ 2,886,965 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 9 Months Ended |
Mar. 31, 2019USD ($) | |
Derivative liability Beginning | $ 2,886,965 |
Addition to liabilities for new debt/warrants | 128,167 |
Decrease in liabilities for debt conversions | (35,434) |
Decrease in liabilities for warrant exercises | (1,891) |
Change in fair value | (1,968,259) |
Derivative liability Ending | 1,009,548 |
Warrants [Member] | |
Derivative liability Beginning | |
Addition to liabilities for new debt/warrants | |
Decrease in liabilities for debt conversions | |
Decrease in liabilities for warrant exercises | (1,891) |
Change in fair value | 25,127 |
Derivative liability Ending | 23,236 |
Convertible Notes Payable [Member] | |
Derivative liability Beginning | |
Addition to liabilities for new debt/warrants | 128,167 |
Decrease in liabilities for debt conversions | (35,434) |
Decrease in liabilities for warrant exercises | |
Change in fair value | 7,556 |
Derivative liability Ending | 100,289 |
Put Back Rights [Member] | |
Derivative liability Beginning | 2,886,965 |
Addition to liabilities for new debt/warrants | |
Decrease in liabilities for debt conversions | |
Decrease in liabilities for warrant exercises | |
Change in fair value | (2,000,942) |
Derivative liability Ending | $ 886,023 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2018 | |
Property and equipment | $ 1,201,028 | $ 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 ($) | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Going Concern | |||
Net cash used in operating activities | $ (483,836) | $ (978,882) | |
Accumulated deficit | $ (13,187,533) | $ (11,469,936) |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Property and Equipment, Total | $ 1,643,000 | $ 691,165 |
Less accumulated depreciation and amortization | (441,972) | (58,060) |
Property and Equipment, Net | 1,201,028 | 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 | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Property And Equipment Details Abstract | ||||
Depreciation and amortization expense | $ 136,917 | $ 18,509 | $ 383,912 | $ 27,211 |
ASSET PURCHASE AGREEMENT (Detai
ASSET PURCHASE AGREEMENT (Details Narrative) | Aug. 02, 2018USD ($)Numbershares | Mar. 31, 2019USD ($) |
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 | $ | $ 3,003,422 |
DIGIMINE ACQUISITION (Details)
DIGIMINE ACQUISITION (Details) | Mar. 31, 2019USD ($) |
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 ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Property and equipment | $ 1,643,000 | $ 691,165 |
Digital currencies | 733 | $ 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 |
Restricted cash | $ 375,000 | ||
Impairment expense | $ 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 ($) | Mar. 06, 2019 | Mar. 02, 2019 | Jan. 24, 2019 | Mar. 18, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | Aug. 31, 2017 | Mar. 02, 2017 |
Stock-based compensation - related party | $ 669,000 | $ 409,000 | |||||||
Due to related party | $ 74,262 | $ 20,974 | |||||||
Series B Preferred Stock [Member] | |||||||||
Preferred stock shares issued | 332,666 | 309,166 | |||||||
Mr. Rubakh [Member] | |||||||||
Convertible preferred stock shares issued, shares | 10,000 | ||||||||
Convertible preferred stock shares issued, value | $ 160,000 | ||||||||
Due to related party | $ 74,262 | $ 20,974 | |||||||
Conversion of accrued compensation, amount | $ 15,625 | ||||||||
Conversion of accrued compensation, shares issued | 347,222 | ||||||||
Mr. Rubakh [Member] | April 1, 2019 [Member] | |||||||||
Accrued compensation | $ 150,000 | ||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | |||||||||
Preferred stock shares reserved for future issuance periodically | 50,000 | 5,000 | |||||||
Frequency of periodic issuance | Quarterly | Quarterly | |||||||
Convertible preferred stock shares issued, shares | 5,000 | 35,018 | 5,000 | ||||||
Convertible preferred stock shares issued, value | $ 92,000 | ||||||||
Stock-based compensation - related party | $ 669,000 | ||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | On November 1, 2017 [Member] | |||||||||
Convertible preferred stock shares issued, shares | 40,000 | ||||||||
Convertible preferred stock shares issued, value | $ 400,000 | ||||||||
Stock-based compensation - related party | $ 409,000 | ||||||||
Mr. Rubakh [Member] | Series B Preferred Stock [Member] | On August 1, 2017 [Member] | |||||||||
Convertible preferred stock shares issued, shares | 30,000 | ||||||||
Convertible preferred stock shares issued, value | $ 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 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Principal | $ 263,000 | |
Debt Discount | 101,747 | |
Net | 161,253 | |
Convertible Notes Payable [Member] | Geneva Roth Remark Holdings, Inc. [Member] | ||
Principal | 38,000 | |
Debt Discount | 6,872 | |
Net | 31,128 | |
Convertible Notes Payable [Member] | BHP Capital NY, Inc. [Member] | ||
Principal | 52,000 | |
Debt Discount | 22,972 | |
Net | 29,028 | |
Convertible Notes Payable [Member] | Armada Investment Fund, LLC [Member] | ||
Principal | 52,000 | |
Debt Discount | 22,971 | |
Net | 29,029 | |
Convertible Notes Payable [Member] | Geneva Roth Remark Holdings, Inc. #2 [Member] | ||
Principal | 43,000 | |
Debt Discount | 16,351 | |
Net | 26,649 | |
Convertible Notes Payable [Member] | Geneva Roth Remark Holdings, Inc. #3 [Member] | ||
Principal | 78,000 | |
Debt Discount | 32,581 | |
Net | $ 45,419 |
CONVERTIBLE NOTES PAYABLE (De_2
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | Feb. 06, 2019 | Mar. 21, 2019 | Sep. 26, 2018 | Sep. 17, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 |
Principal amount | $ 263,000 | ||||||
Common stock shares issued | 14,935,239 | 8,964,103 | |||||
Proceeds from issuance of common stock | $ 720,000 | ||||||
Derivative liability | 1,009,548 | $ 2,886,965 | |||||
Amortization of debt discount | 93,725 | $ 115,722 | |||||
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 | 19,463 | |||||
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 | 23,868 | ||||||
Accrued interest payable | 2,120 | ||||||
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 | 19,464 | |||||
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 | 23,868 | ||||||
Accrued interest payable | 2,120 | ||||||
Convertible Promissory Note [Member] | Geneva Roth Remark Holdings, Inc. [Member] | |||||||
Principal amount | $ 128,000 | 38,000 | |||||
Convertible promissory note | $ 90,000 | ||||||
Convertible promissory note converted into common stock | 919,336 | ||||||
Maturity date | Sep. 26, 2019 | ||||||
Interest rate | 10.00% | ||||||
Debt discount | $ 49,169 | ||||||
Derivative liability | $ 46,169 | $ 16,003 | |||||
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 | 42,297 | ||||||
Accrued interest payable | 6,645 | ||||||
Convertible Promissory Note [Member] | Geneva [Member] | |||||||
Principal amount | $ 43,000 | ||||||
Maturity date | Feb. 6, 2020 | ||||||
Interest rate | 10.00% | ||||||
Debt discount | $ 19,128 | ||||||
Derivative liability | $ 16,128 | 16,105 | |||||
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 | 2,777 | ||||||
Accrued interest payable | 624 | ||||||
Second Convertible Promissory Note [Member] | Geneva [Member] | |||||||
Principal amount | $ 78,000 | ||||||
Maturity date | Mar. 21, 2020 | ||||||
Interest rate | 10.00% | ||||||
Debt discount | $ 33,496 | ||||||
Derivative liability | $ 30,496 | 29,254 | |||||
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 | 915 | ||||||
Accrued interest payable | $ 214 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) | Mar. 06, 2019shares | Mar. 02, 2019USD ($)shares | Aug. 02, 2018USD ($)Numbershares | Jul. 06, 2017USD ($)shares | Mar. 31, 2019USD ($)$ / sharesshares | Jan. 24, 2019USD ($)shares | Sep. 26, 2018USD ($)shares | Mar. 18, 2018USD ($)shares | Jan. 31, 2018USD ($)shares | Oct. 25, 2017USD ($)$ / sharesshares | Aug. 31, 2017USD ($)shares | Mar. 31, 2015shares | Sep. 30, 2017 | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($)shares | Feb. 28, 2019shares | Jan. 25, 2019shares | Jan. 09, 2019USD ($)shares | Jun. 30, 2018USD ($)$ / sharesshares | Mar. 02, 2017shares | Dec. 21, 2015$ / sharesshares |
Preferred stock, shares authorized | 20,000,000 | ||||||||||||||||||||
Stock-based compensation - related party | $ | $ 669,000 | $ 409,000 | |||||||||||||||||||
Derivative liability | $ | $ 1,009,548 | 1,009,548 | $ 2,886,965 | ||||||||||||||||||
Common stock value | $ | $ 14,936 | $ 14,936 | $ 8,965 | ||||||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | |||||||||||||||||
Common stock, shares issued | 14,935,239 | 14,935,239 | 8,964,103 | ||||||||||||||||||
Common stock, shares outstanding | 14,935,239 | 14,935,239 | 8,964,103 | ||||||||||||||||||
Common shares issued for cashless exercise of warrants, amount | $ | $ 1,891 | $ 188 | |||||||||||||||||||
Common stock shares issued, shares | 5,971,136 | 3,751,540 | |||||||||||||||||||
Convertible debt [Member] | |||||||||||||||||||||
Debt conversion converted instrument, shares issued | 2,752,883 | ||||||||||||||||||||
Value of shares issued upon conversion of debt | $ | $ 193,161 | ||||||||||||||||||||
Debt conversion converted amount, principal | $ | 52,818 | ||||||||||||||||||||
Debt conversion converted amount, accrued interest | $ | 4,072 | ||||||||||||||||||||
Debt conversion converted amount, derivative liabilities | $ | 103,412 | ||||||||||||||||||||
Debt conversion converted amount, fees | $ | 2,950 | ||||||||||||||||||||
Debt conversion converted amount, penalties | $ | $ 29,909 | ||||||||||||||||||||
Asset Purchase Agreement [Member] | Ethereum mining machines [Member] | |||||||||||||||||||||
Number of machines to be purchased under agreement | Number | 182 | ||||||||||||||||||||
August and October 2018 [Member] | Consultant [Member] | |||||||||||||||||||||
Common stock value | $ | $ 80,160 | $ 80,160 | |||||||||||||||||||
Common stock, shares issued | 200,000 | 200,000 | |||||||||||||||||||
Mr. Rubakh [Member] | |||||||||||||||||||||
Convertible preferred stock | 10,000 | ||||||||||||||||||||
Convertible preferred stock value | $ | $ 160,000 | ||||||||||||||||||||
Mr. Rubakh [Member] | April 1, 2018 [Member] | |||||||||||||||||||||
Accrued compensation | $ | $ 150,000 | ||||||||||||||||||||
Institutional Investor [Member] | |||||||||||||||||||||
Shares issued for cash | $ | $ 720,000 | ||||||||||||||||||||
Common stock shares issued, shares | 462,900 | ||||||||||||||||||||
Steve Rubakh [Member] | |||||||||||||||||||||
Common stock shares issued, shares | 347,222 | ||||||||||||||||||||
Common stock shares issued, amount | $ | $ 15,625 | ||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 | 500,000 | |||||||||||||||||
Preferred stock, shares issued | 332,666 | 332,666 | 309,166 | ||||||||||||||||||
Preferred stock, shares outstanding | 332,666 | 332,666 | 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 | $ 0.001 | |||||||||||||||||
Series B Preferred Stock [Member] | Asset Purchase Agreement [Member] | |||||||||||||||||||||
Preferred stock, shares issued | 1,200 | ||||||||||||||||||||
Preferred stock originally issued | 1,800 | 1,800 | |||||||||||||||||||
Series B Preferred Stock [Member] | Four Investors [Member] | On October 25, 2017 [Member] | |||||||||||||||||||||
Preferred stock, shares issued | 3,500 | 3,500 | |||||||||||||||||||
Preferred stock, par value per share | $ / shares | $ 10 | ||||||||||||||||||||
Purchase of shares | 16,000 | ||||||||||||||||||||
Shares issued for cash | $ | $ 12,500 | ||||||||||||||||||||
Investment amount | $ | 125,000 | ||||||||||||||||||||
Stock subscription payable | $ | $ 35,000 | $ 35,000 | |||||||||||||||||||
Series B Preferred Stock [Member] | Mr. Rubakh [Member] | |||||||||||||||||||||
Preferred stock shares reserved for future issuance periodically | 50,000 | 5,000 | |||||||||||||||||||
Frequency of periodic issuance | Quarterly | Quarterly | |||||||||||||||||||
Convertible preferred stock | 5,000 | 35,018 | 35,018 | 5,000 | |||||||||||||||||
Convertible preferred stock value | $ | $ 92,000 | ||||||||||||||||||||
Convertible preferred stock converted into common stock | 3,501,800 | 3,501,800 | |||||||||||||||||||
Stock-based compensation - related party | $ | $ 669,000 | ||||||||||||||||||||
Series B Preferred Stock [Member] | Mr. Rubakh [Member] | On November 1, 2017 [Member] | |||||||||||||||||||||
Convertible preferred stock | 40,000 | 40,000 | |||||||||||||||||||
Convertible preferred stock value | $ | $ 400,000 | ||||||||||||||||||||
Stock-based compensation - related party | $ | $ 409,000 | ||||||||||||||||||||
Series B Preferred Stock [Member] | Mr. Rubakh [Member] | On August 1, 2017 [Member] | |||||||||||||||||||||
Convertible preferred stock | 30,000 | 30,000 | |||||||||||||||||||
Convertible preferred stock value | $ | $ 9,000 | ||||||||||||||||||||
Series B Preferred Stock [Member] | Mr. Rubakh [Member] | On July 1, 2018 [Member] | |||||||||||||||||||||
Preferred stock, shares issued | 5,000 | 5,000 | |||||||||||||||||||
Stock-based compensation - related party | $ | $ 417,000 | ||||||||||||||||||||
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 | $ | $ 3,003,422 | ||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||
Preferred stock, shares issued | 500,000 | 500,000 | 500,000 | ||||||||||||||||||
Preferred stock, shares outstanding | 500,000 | 500,000 | 500,000 | ||||||||||||||||||
Preferred stock, par value per share | $ / shares | $ 0.001 | $ 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 115 shares due to rounding of shares in the reverse stock split | ||||||||||||||||||||
Common Stock | |||||||||||||||||||||
Notes payable | $ | $ 90,000 | $ 90,000 | |||||||||||||||||||
Derivative liability | $ | $ 35,434 | $ 35,434 | |||||||||||||||||||
Common stock, shares issued | 919,336 | 919,336 | |||||||||||||||||||
Common Stock | Lender [Member] | |||||||||||||||||||||
Common shares issued for cashless exercise of warrants, amount | $ | $ 188 | ||||||||||||||||||||
Common shares issued for cashless exercise of warrants, shares | 188,240 | ||||||||||||||||||||
Common stock shares issued, shares | 150,000 | ||||||||||||||||||||
Common stock shares issued, amount | $ | $ 53,250 | ||||||||||||||||||||
Common Stock | Lender [Member] | August 2018 and January 2019 [Member] | |||||||||||||||||||||
Common stock shares issued, shares | 1,200,000 | ||||||||||||||||||||
Common stock shares issued, amount | $ | $ 1,891 | ||||||||||||||||||||
Common Stock | Series B Preferred Stock [Member] | |||||||||||||||||||||
Convertible preferred stock | 35,018 | 35,018 | |||||||||||||||||||
Common stock shares issued, shares | 3,501,800 | ||||||||||||||||||||
Common stock shares issued, amount | $ | $ 125,434 |
WARRANTS (Details)
WARRANTS (Details) - Warrant [Member] | 9 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Number of Outstanding Shares, Beginning Balance | shares | 348,375 |
Granted | shares | |
Exercised | shares | (47,476) |
Forfeited or expired | shares | |
Number of Outstanding Shares, Ending Balance | shares | 300,899 |
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 | 1 year 9 months 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 $6,986, with an automatic one-year renewal period with a 5% increase in the monthly rent. |
RESTATEMENT (Details)
RESTATEMENT (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | |
Current assets: | |||||
Cash | $ 82,295 | $ 749 | |||
Digital currencies | 733 | 11,227 | |||
Prepaid expenses and other current assets | 6,500 | 9,000 | |||
Inventories | 114,851 | 114,851 | |||
Equipment deposits | 3,896 | ||||
Marketable securities | 1,700 | ||||
Total current assets | 203,646 | 170,517 | |||
Non-current assets: | |||||
Property and equipment, net | 1,201,028 | 633,105 | |||
Deposits | 14,673 | 14,673 | |||
Total assets | 1,420,080 | 829,522 | |||
Current liabilities: | |||||
Accounts payable | 37,849 | 26,973 | |||
Accrued expenses | 31,426 | 29,428 | |||
Due to related party | 74,262 | 20,974 | |||
Total current liabilities | 1,314,338 | 2,964,340 | |||
Total liabilities | 1,314,338 | 2,964,340 | |||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value,(40,000,000 shares authorized,8,964,103 shares issued and outstanding) | 14,936 | 8,965 | |||
Additional paid-in capital | 13,252,506 | 9,290,344 | |||
Stock subscription payable | 25,000 | 35,000 | |||
Accumulated deficit | (13,187,533) | (11,469,936) | |||
Total stockholders’ equity (deficit) | 105,742 | (2,134,818) | $ 931,559 | $ (50,016) | |
Total liabilities and stockholders’ equity (deficit) | 1,420,080 | 829,522 | |||
Series A Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | 500 | 500 | |||
Series B Preferred Stock [Member] | |||||
Stockholders'equity (deficit): | |||||
Preferred stock | $ 333 | $ 309 | |||
As Originally Reported [Member] | |||||
Current assets: | |||||
Cash | 151,951 | 15,691 | |||
Digital currencies | 2 | ||||
Prepaid expenses and other current assets | 17,083 | ||||
Inventories | 556,050 | ||||
Equipment deposits | 46,417 | ||||
Marketable securities | 1,720 | ||||
Total current assets | 773,223 | ||||
Non-current assets: | |||||
Property and equipment, net | 362,715 | ||||
Digital currencies | |||||
Deposits | 3,200 | ||||
Total assets | 1,139,138 | ||||
Current liabilities: | |||||
Accounts payable | 21,258 | ||||
Accrued expenses | 29,349 | ||||
Deferred revenue | 2,524 | ||||
Due to related party | 826 | ||||
Note payable | 125,000 | ||||
Total current liabilities | 178,957 | ||||
Total liabilities | 178,957 | ||||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value,(40,000,000 shares authorized,8,964,103 shares issued and outstanding) | 8,964 | ||||
Additional paid-in capital | 6,302,013 | ||||
Stock subscription payable | 35,000 | ||||
Accumulated deficit | (5,386,529) | ||||
Total stockholders’ equity (deficit) | 960,181 | ||||
Total liabilities and stockholders’ equity (deficit) | 1,139,138 | ||||
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 | |||||
Digital currencies | [1] | (2) | |||
Prepaid expenses and other current assets | [2],[3] | (5,083) | |||
Inventories | |||||
Equipment deposits | |||||
Marketable securities | |||||
Total current assets | (5,085) | ||||
Non-current assets: | |||||
Property and equipment, net | [4] | (9,782) | |||
Digital currencies | [1] | 2 | |||
Deposits | |||||
Total assets | (14,865) | ||||
Current liabilities: | |||||
Accounts payable | [3] | 1,369 | |||
Accrued expenses | [5] | 13,214 | |||
Deferred revenue | |||||
Due to related party | [5] | (826) | |||
Note payable | |||||
Total current liabilities | 13,757 | ||||
Total liabilities | 13,757 | ||||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value,(40,000,000 shares authorized,8,964,103 shares issued and outstanding) | |||||
Additional paid-in capital | [2],[6] | 1,424,602 | |||
Stock subscription payable | |||||
Accumulated deficit | [2],[3],[4],[5] | (1,453,224) | |||
Total stockholders’ equity (deficit) | (28,622) | ||||
Total liabilities and stockholders’ equity (deficit) | (14,865) | ||||
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 | 151,951 | $ 15,691 | |||
Digital currencies | |||||
Prepaid expenses and other current assets | 12,000 | ||||
Inventories | 556,050 | ||||
Equipment deposits | 46,417 | ||||
Marketable securities | 1,720 | ||||
Total current assets | 768,138 | ||||
Non-current assets: | |||||
Property and equipment, net | 352,933 | ||||
Digital currencies | 2 | ||||
Deposits | 3,200 | ||||
Total assets | 1,124,273 | ||||
Current liabilities: | |||||
Accounts payable | 22,627 | ||||
Accrued expenses | 42,563 | ||||
Deferred revenue | 2,524 | ||||
Due to related party | |||||
Note payable | 125,000 | ||||
Total current liabilities | 192,714 | ||||
Total liabilities | 192,714 | ||||
Commitments and contingencies | |||||
Stockholders'equity (deficit): | |||||
Common stock, $0.001 par value,(40,000,000 shares authorized,8,964,103 shares issued and outstanding) | 8,964 | ||||
Additional paid-in capital | 7,726,615 | ||||
Stock subscription payable | 35,000 | ||||
Accumulated deficit | (6,839,753) | ||||
Total stockholders’ equity (deficit) | 931,559 | ||||
Total liabilities and stockholders’ equity (deficit) | 1,124,273 | ||||
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] | (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. | ||||
[3] | (e) Total general and administrative expenses decreased as a result of corrections to certain operating expenses. Accounts payable increased. | ||||
[4] | (c) Reduced useful life for depreciation from 5 years to 3 years. | ||||
[5] | (b) Accrued officer compensation was reclassified from accrued expenses to due to related party and subsequently reduced. Accrued interest payable was increased. | ||||
[6] | (f) Adjusted realized gain on sale of investments, including recording gain on sale of related party investment to capital. |
RESTATEMENT (Details 1)
RESTATEMENT (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |||
Revenues: | ||||||
Cryptocurrency mining | $ 45,496 | $ 77,500 | $ 223,874 | $ 136,998 | ||
Sales of cryptocurrency mining equipment | 1,108 | 60,046 | 25,445 | 105,636 | ||
Total revenues | 46,604 | 137,546 | 249,319 | 242,634 | ||
Cost of revenues | 193,563 | 98,077 | 627,719 | 148,333 | ||
Gross margin | (146,959) | 39,469 | (378,400) | 94,301 | ||
Operating expenses: | ||||||
General and administrative | 339,987 | 108,242 | 1,070,421 | 767,828 | ||
Total operating expenses | 339,987 | 108,242 | 3,168,351 | 767,828 | ||
Loss from operations | (486,946) | (68,773) | (3,546,751) | (673,527) | ||
Other income (expense): | ||||||
Interest and other income | 3 | 1,405 | ||||
Interest expense | (60,889) | (15,014) | (105,541) | (158,721) | ||
Gain (loss) on extinguishment of debt | 7,934 | |||||
Change in fair value of derivative liabilities | 2,744 | 64,628 | 1,968,259 | (351,660) | ||
Loss on settlement of warrants | (25,000) | |||||
Total other income (expense) | (59,205) | 17,379 | 1,829,154 | (273,740) | ||
Loss before income taxes | (546,151) | (51,394) | (1,717,597) | (947,267) | ||
Provision for income taxes | ||||||
Net loss | $ (546,151) | $ (51,394) | $ (1,717,597) | $ (947,267) | ||
Net loss per common share: | ||||||
basic and diluted | $ (0.05) | $ (0.01) | $ (0.17) | $ (0.12) | ||
Weighted average number of common shares outstanding: | ||||||
basic and diluted | 11,571,318 | 8,858,733 | 10,221,220 | 8,088,208 | ||
As Originally Reported [Member] | ||||||
Revenues: | ||||||
Cryptocurrency mining | $ 77,500 | $ 136,998 | ||||
Sales of cryptocurrency mining equipment | 60,046 | 105,636 | ||||
Total revenues | 137,546 | 242,634 | ||||
Cost of revenues | 91,734 | 138,552 | ||||
Gross margin | 45,812 | 104,082 | ||||
Operating expenses: | ||||||
General and administrative | 102,017 | 736,141 | ||||
Total operating expenses | 102,017 | 736,141 | ||||
Loss from operations | (56,205) | (632,059) | ||||
Other income (expense): | ||||||
Interest and other income | 3 | 1,405 | ||||
Interest expense | (9,913) | (130,232) | ||||
Realized gain on sale of investments | (32,198) | 331,060 | ||||
Gain (loss) on extinguishment of debt | (268,476) | |||||
Change in fair value of derivative liabilities | 1,223 | 202,420 | ||||
Loss on settlement of warrants | (63,765) | |||||
Total other income (expense) | (40,885) | 72,412 | ||||
Loss before income taxes | (97,090) | (559,647) | ||||
Provision for income taxes | ||||||
Net loss | $ (97,090) | $ (559,647) | ||||
Net loss per common share: | ||||||
basic and diluted | $ (0.01) | $ (0.07) | ||||
Weighted average number of common shares outstanding: | ||||||
basic and diluted | 8,858,733 | 8,088,209 | ||||
Adjustments [Member] | ||||||
Revenues: | ||||||
Cryptocurrency mining | ||||||
Sales of cryptocurrency mining equipment | ||||||
Total revenues | ||||||
Cost of revenues | [1] | 6,343 | 9,781 | |||
Gross margin | (6,343) | (9,781) | ||||
Operating expenses: | ||||||
General and administrative | [2] | 6,225 | 31,687 | |||
Total operating expenses | 6,225 | 31,687 | ||||
Loss from operations | (12,568) | (41,468) | ||||
Other income (expense): | ||||||
Interest and other income | ||||||
Interest expense | [3],[4] | (5,101) | (28,489) | |||
Realized gain on sale of investments | (40) | (78,758) | ||||
Gain (loss) on extinguishment of debt | [4] | 276,410 | ||||
Change in fair value of derivative liabilities | [4] | 63,405 | (554,080) | |||
Loss on settlement of warrants | [4] | 38,765 | ||||
Total other income (expense) | 58,264 | (346,152) | ||||
Loss before income taxes | 45,696 | (387,620) | ||||
Provision for income taxes | ||||||
Net loss | $ 45,696 | $ (387,620) | [1],[2],[3],[4],[5] | |||
Net loss per common share: | ||||||
basic and diluted | [6] | $ (0.05) | ||||
Weighted average number of common shares outstanding: | ||||||
basic and diluted | ||||||
As Restated [Member] | ||||||
Revenues: | ||||||
Cryptocurrency mining | $ 77,500 | $ 136,998 | ||||
Sales of cryptocurrency mining equipment | 60,046 | 105,636 | ||||
Total revenues | 137,546 | 242,634 | ||||
Cost of revenues | 98,077 | 148,333 | ||||
Gross margin | 39,469 | 94,301 | ||||
Operating expenses: | ||||||
General and administrative | 108,242 | 767,828 | ||||
Total operating expenses | 108,242 | 767,828 | ||||
Loss from operations | (68,773) | (673,527) | ||||
Other income (expense): | ||||||
Interest and other income | 3 | 1,405 | ||||
Interest expense | (15,014) | (158,721) | ||||
Realized gain on sale of investments | (32,238) | 252,302 | ||||
Gain (loss) on extinguishment of debt | 7,934 | |||||
Change in fair value of derivative liabilities | 64,628 | (351,660) | ||||
Loss on settlement of warrants | (25,000) | |||||
Total other income (expense) | 17,379 | (273,740) | ||||
Loss before income taxes | (51,394) | (947,267) | ||||
Provision for income taxes | ||||||
Net loss | $ (51,394) | $ (947,267) | ||||
Net loss per common share: | ||||||
basic and diluted | $ (0.01) | $ (0.12) | ||||
Weighted average number of common shares outstanding: | ||||||
basic and diluted | 8,858,733 | 8,088,209 | ||||
[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. Accounts payable increased. | |||||
[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 | 9 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |||
Cash flows from operating activities: | ||||||
Net loss | $ (546,151) | $ (51,394) | $ (1,717,597) | $ (947,267) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | 383,912 | 27,211 | ||||
Stock-based compensation - related party | 80,160 | |||||
Amortization of debt discount | 93,725 | 115,722 | ||||
Amortization of original issue discount | 1,347 | |||||
Change in fair value of derivative liabilities | (1,968,259) | 351,660 | ||||
(Gain) loss on extinguishment of debt | (7,934) | |||||
Financing fees related to notes payable | 32,858 | |||||
Realized gain on sale of investments | 1,060 | 32,238 | 33,564 | (252,302) | ||
Changes in assets and liabilities: | ||||||
Digital currencies | (224,933) | (145,663) | ||||
Accounts receivable | 15,000 | |||||
Prepaid expenses and other current assets | 2,500 | (4,500) | ||||
Inventories | (556,050) | |||||
Accrued interest receivable – related party | (98) | |||||
Accounts payable | 10,876 | (1,531) | ||||
Accrued expenses | 1,998 | 27,742 | ||||
Due to related party | 53,288 | (22,684) | ||||
Net cash used in operating activities | (483,836) | (978,882) | ||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | 203,563 | 674,817 | ||||
Increase in notes receivable – related party | (49,880) | |||||
Purchase of property and equipment | (42,447) | (380,144) | ||||
Net cash provided by investing activities | 161,116 | 235,142 | ||||
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 | 363,945 | 880,000 | ||||
Net increase in cash | 41,225 | 136,260 | ||||
Cash, beginning of period | 749 | |||||
Cash, end of period | $ 82,295 | 82,295 | ||||
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 | 90,000 | 193,161 | ||||
Common shares issued for cashless exercise of warrants | 1,891 | 188 | ||||
Debt discount for derivative liability | 128,167 | 72,617 | ||||
Settlement of derivative liabilities | 35,434 | 431,056 | ||||
Marketable securities exchanged for accrued expenses | 1,370 | |||||
As Originally Reported [Member] | ||||||
Cash flows from operating activities: | ||||||
Net loss | (97,090) | (559,647) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | 17,429 | |||||
Stock-based compensation - related party | 409,000 | |||||
Amortization of debt discount | 87,232 | |||||
Amortization of original issue discount | 1,347 | |||||
Change in fair value of derivative liabilities | (202,420) | |||||
(Gain) loss on extinguishment of debt | 268,476 | |||||
Financing fees related to notes payable | 32,858 | |||||
Realized gain on sale of investments | (331,020) | |||||
Loss on settlement of warrants | 63,765 | |||||
Changes in assets and liabilities: | ||||||
Digital currencies | (145,663) | |||||
Accounts receivable | 15,000 | |||||
Prepaid expenses and other current assets | (9,583) | |||||
Inventories | (556,050) | |||||
Equipment deposits | (46,417) | |||||
Accrued interest receivable – related party | (98) | |||||
Deposits | (2,500) | |||||
Accounts payable | (2,900) | |||||
Accrued expenses | (825) | |||||
Deferred revenue | 2,524 | |||||
Due to related party | (19,390) | |||||
Net cash used in operating activities | (978,882) | |||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | 674,817 | |||||
Purchase of investments | (9,651) | |||||
Increase in notes receivable – related party | (49,880) | |||||
Purchase of property and equipment | (380,144) | |||||
Net cash provided by investing activities | 235,142 | |||||
Cash flows from financing activities: | ||||||
Proceeds from sale of common stock | 720,000 | |||||
Proceeds from sale of preferred stock | 125,000 | |||||
Proceeds from stock subscriptions payable | 35,000 | |||||
Net cash provided by financing activities | 880,000 | |||||
Net increase in cash | 136,260 | |||||
Cash, beginning of period | 15,691 | |||||
Cash, end of period | 151,951 | 151,951 | ||||
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 | 423,133 | |||||
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 | 1,116 | |||||
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 | 45,696 | (387,620) | [1],[2],[3],[4],[5] | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | [2] | 9,782 | ||||
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] | 554,080 | ||||
(Gain) loss on extinguishment of debt | [3] | (276,410) | ||||
Financing fees related to notes payable | ||||||
Realized gain on sale of investments | [5] | 78,718 | ||||
Loss on settlement of warrants | [3] | (38,765) | ||||
Changes in assets and liabilities: | ||||||
Digital currencies | [1] | |||||
Accounts receivable | ||||||
Prepaid expenses and other current assets | 5,083 | |||||
Inventories | ||||||
Equipment deposits | ||||||
Accrued interest receivable – related party | ||||||
Deposits | ||||||
Accounts payable | [4] | 1,369 | ||||
Accrued expenses | [1] | 28,567 | ||||
Deferred revenue | ||||||
Due to related party | [1] | (3,294) | ||||
Net cash used in operating activities | ||||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | ||||||
Purchase of investments | ||||||
Increase in notes receivable – related party | ||||||
Purchase of property and equipment | ||||||
Net cash provided by investing activities | ||||||
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] | 431,056 | ||||
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 | (51,394) | (947,267) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense | 27,211 | |||||
Stock-based compensation - related party | 409,000 | |||||
Amortization of debt discount | 115,722 | |||||
Amortization of original issue discount | 1,347 | |||||
Change in fair value of derivative liabilities | 351,660 | |||||
(Gain) loss on extinguishment of debt | (7,934) | |||||
Financing fees related to notes payable | 32,858 | |||||
Realized gain on sale of investments | (252,302) | |||||
Loss on settlement of warrants | 25,000 | |||||
Changes in assets and liabilities: | ||||||
Digital currencies | (145,663) | |||||
Accounts receivable | 15,000 | |||||
Prepaid expenses and other current assets | (4,500) | |||||
Inventories | (556,050) | |||||
Equipment deposits | (46,417) | |||||
Accrued interest receivable – related party | (98) | |||||
Deposits | (2,500) | |||||
Accounts payable | (1,531) | |||||
Accrued expenses | 27,742 | |||||
Deferred revenue | 2,524 | |||||
Due to related party | (22,684) | |||||
Net cash used in operating activities | (978,882) | |||||
Cash flows from investing activities: | ||||||
Net proceeds from the sale of investments | 674,817 | |||||
Purchase of investments | (9,651) | |||||
Increase in notes receivable – related party | (49,880) | |||||
Purchase of property and equipment | (380,144) | |||||
Net cash provided by investing activities | 235,142 | |||||
Cash flows from financing activities: | ||||||
Proceeds from sale of common stock | 720,000 | |||||
Proceeds from sale of preferred stock | 125,000 | |||||
Proceeds from stock subscriptions payable | 35,000 | |||||
Net cash provided by financing activities | 880,000 | |||||
Net increase in cash | 136,260 | |||||
Cash, beginning of period | 15,691 | |||||
Cash, end of period | $ 151,951 | 151,951 | ||||
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 | 193,161 | |||||
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 | 1,116 | |||||
Settlement of derivative liabilities | 431,056 | |||||
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. Accounts payable increased. | |||||
[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 ($) | May 13, 2019 | Apr. 04, 2019 | Apr. 18, 2019 | Apr. 07, 2019 | Apr. 02, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Common stock, shares issued | 14,935,239 | 8,964,103 | |||||
Common stock value | $ 14,936 | $ 8,965 | |||||
Accrued interest payable | $ 31,426 | $ 29,428 | |||||
Subsequent Event [Member] | Holders [Member] | Series B Preferred Stock [Member] | |||||||
Convertible preferred stock | 56,666 | ||||||
Convertible preferred stock converted into common stock | 5,666,600 | ||||||
Subsequent Event [Member] | Holders [Member] | Warrant [Member] | |||||||
Warrant exercised | 11,834 | 9,346 | |||||
Cashless common stock warrant exercise | 1,000,000 | 700,000 | |||||
Subsequent Event [Member] | Lender [Member] | |||||||
Common stock, shares issued | 310,557 | ||||||
Converted debt principal | $ 12,500 | ||||||
Accrued interest payable | $ 4,176 | ||||||
Subsequent Event [Member] | Lender [Member] | April 2, 2019 and April 4, 2019 [Member] | |||||||
Common stock, shares issued | 679,938 | ||||||
Converted debt principal | $ 38,000 | ||||||
Accrued interest payable | $ 6,400 | ||||||
Subsequent Event [Member] | Consultant [Member] | |||||||
Common stock, shares issued | 20,000 | ||||||
Common stock value | $ 2,892 | ||||||
Subsequent Event [Member] | Lender [Member] | |||||||
Common stock, shares issued | 736,637 | ||||||
Converted debt principal | $ 39,000 |