Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 333-248929 | |
Entity Registrant Name | Tego Cyber, Inc. | |
Entity Central Index Key | 0001815632 | |
Entity Incorporation, State or Country Code | NV | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,434,816 |
INTERIM CONDENSED BALANCE SHEET
INTERIM CONDENSED BALANCE SHEET - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Current assets | ||
Cash | $ 106,264 | $ 81,872 |
Accounts receivable | 1,150 | 150 |
Total current assets | 107,414 | 82,022 |
Software | 65,750 | 21,500 |
Total assets | 173,164 | 103,522 |
Current liabilities | ||
Accounts payable and accrued liabilities | 36,890 | 15,554 |
Due to related parties | 0 | 1,358 |
Convertible debts | 84,169 | 0 |
Total liabilities | 121,059 | 16,912 |
SHAREHOLDERS' EQUITY | ||
Common shares, 50,000,000 shares authorized, $0.001 par value, 50,000,000 shares authorized $0.001 par value 13,400,236 shares issued and outstanding at March 31, 2021, 12,406,236 shares issued and outstanding at June 30, 2020 | 13,400 | 12,406 |
Additional paid in capital | 520,183 | 175,906 |
Subscriptions receivable | (8,000) | (24,500) |
Accumulated deficit | (473,478) | (77,202) |
Total shareholders' equity | 52,105 | 86,610 |
Total liabilities & shareholders' equity | $ 173,164 | $ 103,522 |
INTERIM CONDENSED BALANCE SHE_2
INTERIM CONDENSED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2021 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, issued | 13,400,236 | 12,406,236 |
Common stock, outstanding | 13,400,236 | 12,406,236 |
INTERIM CONDENSED STATEMENT OF
INTERIM CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | |
REVENUE | ||||
Consulting fees | $ 900 | $ 1,275 | $ 1,275 | $ 4,700 |
OPERATING EXPENSES | ||||
Advertising & promotion | 11,062 | 2,719 | 7,747 | 30,607 |
Bank charges & fees | 490 | 305 | 506 | 1,697 |
Contractors | 3,400 | 263 | 263 | 3,400 |
Exchange & listing fees | 35,250 | 0 | 0 | 44,246 |
Interest on short-term debt | 3,324 | 0 | 0 | 3,850 |
Investor relations | 2,749 | 0 | 0 | 5,498 |
Legal & accounting | 17,820 | 1,500 | 8,225 | 101,810 |
Management fees | 49,500 | 6,000 | 19,200 | 106,000 |
Meals & entertainment | 750 | 229 | 250 | 929 |
Office & administration | 430 | 200 | 210 | 1,503 |
Rent & utilities | 137 | 78 | 234 | 371 |
Subscriptions & dues | 283 | 222 | 222 | 579 |
Travel & hotel | 0 | 576 | 678 | 313 |
Website & internet | 540 | 419 | 826 | 1,483 |
Total operating expenses | 125,735 | 12,511 | 38,361 | 302,286 |
Loss from operations | (124,835) | (11,236) | (37,086) | (297,587) |
OTHER INCOME (EXPENSE) | ||||
Accretion expense | (59,213) | 0 | 0 | (71,724) |
Financing fees | (15,482) | 0 | 0 | (26,965) |
Total other income (expense) | (74,695) | 0 | 0 | (98,690) |
Net loss | $ (199,530) | $ (11,236) | $ (37,086) | $ (396,276) |
BASIC AND DILUTED LOSS PER COMMON SHARE | ||||
Basic and diluted | $ (0.02) | $ (.00) | $ (.00) | $ (0.03) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||
Basic and diluted | 13,152,503 | 9,734,700 | 9,734,700 | 12,964,601 |
INTERIM CONDENSED STATEMENT O_2
INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | Subscriptions Receivable | Accumulated Deficit | Total |
Beginning balance, shares at Sep. 05, 2019 | 0 | ||||
Beginning balance, amount at Sep. 05, 2019 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Shares issued, shares | 9,290,380 | ||||
Shares issued, amount | $ 9,290 | 23,229 | 32,519 | ||
Shares issued as transaction costs for debt, amount | 0 | ||||
Equity portion of convertible debt | 0 | ||||
Warrants issued with convertible debts | 0 | ||||
Net loss for the period | (37,086) | (37,086) | |||
Ending balance, shares at Mar. 31, 2020 | 9,290,380 | ||||
Ending balance, amount at Mar. 31, 2020 | $ 9,290 | 23,229 | 0 | (37,086) | 4,567 |
Beginning balance, shares at Jun. 30, 2020 | 12,406,236 | ||||
Beginning balance, amount at Jun. 30, 2020 | $ 12,406 | 175,906 | (24,500) | (77,202) | 86,610 |
Private placement, shares | 696,000 | ||||
Private placement, amount | $ 696 | 73,304 | 16,500 | 90,500 | |
Shares issued for services, shares | 100,000 | ||||
Shares issued for services, amount | $ 100 | 24,900 | 25,000 | ||
Shares issued as transaction costs for debt, shares | 198,000 | ||||
Shares issued as transaction costs for debt, amount | $ 198 | 32,802 | 33,000 | ||
Equity portion of convertible debt | 124,453 | 124,453 | |||
Warrants issued with convertible debts | 88,818 | 88,818 | |||
Net loss for the period | (396,276) | (396,276) | |||
Ending balance, shares at Mar. 31, 2021 | 13,400,236 | ||||
Ending balance, amount at Mar. 31, 2021 | $ 13,400 | $ 520,183 | $ (8,000) | $ (473,478) | $ 52,105 |
INTERIM CONDENSED STATEMENT O_3
INTERIM CONDENSED STATEMENT OF CASH FLOWS - USD ($) | 7 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss for the period | $ (37,086) | $ (396,276) |
Items not affecting cash | ||
Accretion expense on convertible debts | 0 | 71,724 |
Financing fees | 0 | 26,965 |
Shares issued for services | 18,000 | 25,000 |
Changes in non-cash working capital items: | ||
Accounts receivable | 0 | (1,000) |
Accounts payable and accrued liabilities | 0 | 16,336 |
Due to related parties | 1,284 | (1,358) |
Deferred revenue | 300 | 0 |
Net cash used in operating activities | (17,502) | (258,608) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of software | (15,750) | (39,250) |
Net cash used in investing activities | (15,750) | (39,250) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from shares issued | 36,735 | 74,000 |
Proceeds from convertible debt | 0 | 260,000 |
Convertible debt issuance costs | 0 | (28,250) |
Collection of subscription receivable | 0 | 16,500 |
Net cash provided by financing activities | 36,735 | 322,250 |
Net increase (decrease) in cash | 3,483 | 24,392 |
Cash at beginning of the period | 0 | 81,872 |
Cash at end of the period | 3,483 | 106,264 |
Non-cash investing and financing activities: | ||
Software included in accounts payable and accrued liabilities | 0 | 5,000 |
Shares issued with convertible debt | 0 | 33,000 |
Warrants issued with convertible debt | 0 | 88,818 |
Equity portion of convertible debts | $ 0 | $ 124,453 |
1. ORGANIZATION AND DESCRIPTION
1. ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | Tego Cyber Inc. (the “Company”) was incorporated on September 6, 2019 in the State of Nevada. The Company has developed a threat intelligence platform designed to source then identify threats to an enterprise network before the threat has entered and caused irreparable harm. Tego also offer advanced cybersecurity consulting services including vulnerability assessments, penetration testing, vCISO services, dark web monitoring, cybersecurity policy creation and employee training. The Company’s head office is at at 8565 S. Eastern Ave. #150, Las Vegas, Nevada, 89123. |
2. BASIS OF PRESENTATION
2. BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | The accompanying interim condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to US GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited interim condensed financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s audited financial statements for the year ended June 30, 2020. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended June 30, 2020. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, 2021. |
3. GOING CONCERN UNCERTAINTY
3. GOING CONCERN UNCERTAINTY | 9 Months Ended |
Mar. 31, 2021 | |
Going Concern Uncertainty | |
GOING CONCERN UNCERTAINTY | The accompanying unaudited interim condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of the business. The Company has incurred material losses from operations and has an accumulated deficit. At March 31, 2021, the Company had a working capital deficit of $13,645 (June 30, 2020 - surplus of $65,110). For the nine-month period ended March 31, 2021, the Company sustained net losses and generated negative cash flows from operations. In March 2020, the World Health Organization recognized the outbreak of COVID-19 as a global pandemic. The COVID-19 pandemic and government actions implemented to contain the further spread of COVID-19 have severely restricted economic activity around the world. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The interim condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. These adjustments could be material. The Company’s continuation as a going concern is contingent upon its ability to earn adequate revenues from operations and to obtain additional financing. There is no assurance that the Company will be able to obtain such financing or obtain them on favorable terms. |
4. SUMMARY OF SIGNIFICANT ACCOU
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | This summary of significant accounting policies is presented to assist in understanding the interim condensed financial statements. The interim condensed financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to US GAAP and have been consistently applied in the preparation of the interim condensed financial statements. Basis of Preparation The accompanying interim condensed financial statements have been prepared to present the balance sheet, the statement of operations and comprehensive loss, statement of changes in shareholders’ equity and statement of cash flows of the Company for the nine month period ended March 31, 2021, and have been prepared in accordance with US GAAP. Use of Estimates In preparing the interim condensed financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the interim condensed financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. As at March 31, 2021, substantially all of the Company’s cash was held by major financial institutions located in the United States, which management believes are of high credit quality. With respect to accounts receivable, the Company extended credit based on an evaluation of the customer’s financial condition. The Company generally did not require collateral for accounts receivable and maintained an allowance for doubtful accounts of accounts receivable if necessary. Cash Cash consists of cash held at major financial institutions and is subject to insignificant risk of changes in value. Receivables and Allowance for Doubtful Accounts Trade accounts receivable are recorded at net realizable value and do not bear interest. No allowance for doubtful accounts was made during the nine month period ended March 31, 2021, based on management’s best estimate of the amount of probable credit losses in accounts receivable. The Company evaluates its allowance for doubtful accounts based upon knowledge of its customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis. The review process evaluates all account balances with amounts outstanding for more than 60 days and other specific amounts for which information obtained indicates that the balance may be uncollectible. As of March 31, 2021, there was no allowance for doubtful accounts and the Company does not have any off-balance-sheet credit exposure related to its customers. Software Software is stated at cost less accumulated amortization and is depreciated using the straight-line method over the estimated useful life of the asset. The estimated useful life of the asset is 5 years and is not depreciated until it is available for use by the Company. Leases The Company determines if an arrangement is a lease at inception. Operating and financing right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at the commencement date, in determining the present value of future lease payments. Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. The lease terms may include options to extend or terminate the lease is it is reasonably certain the Company will exercise that option. As at March 31, 2021, the Company had no leases. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, adopted January 1, 2008, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The Company’s financial instruments include cash, current receivables and payables, convertible debts, and warrants. These financial instruments are measured at their respective fair values. The three levels are defined as follows: Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. For cash, accounts receivable, accounts payable and accrued liabilities and due to related parties, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. For convertible debts, the carrying values, excluding any unamortized discounts, approximate the respective fair value. The convertible debts have been discounted to reflect their net present value as at March 31, 2021. The carrying values of embedded conversion features not considered to be derivative instruments were determined by allocating the remaining carrying value of the convertible debt after deducting the estimated carrying value of the liability portion. Estimating fair value for warrants require determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate requires determining the most appropriate inputs to the valuation model including the expected life of the warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them. Revenue Recognition Revenue from providing consulting and management services is recognized in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements: These five elements as applied to the Company’s consulting services results in revenue recorded as services are provided. Income Taxes The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities. Foreign Currency Translation The Company’s functional and reporting currency is United States dollars (“USD”). The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss). Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted earnings (loss) per share assume the conversion, exercise or issuance of all common stock instruments unless the effect is to reduce a loss or increase earnings per share. Recently Issued Accounting Pronouncements Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) did not or are not expected to have a material impact on the Company's present or future financial statements. |
5. SOFTWARE
5. SOFTWARE | 9 Months Ended |
Mar. 31, 2021 | |
Capitalized Computer Software, Net [Abstract] | |
SOFTWARE | Balance, September 6, 2019 $ Additions 21,500 Depreciation Balance, June 30, 2020 21,500 Additions 44,250 Depreciation Balance, March 31, 2021 $ 65,750 As of June 30, 2020 and March 31, 2021, the software is not in use and no depreciation has been recorded for the periods then ended. |
6. RELATED PARTY TRANSACTIONS
6. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related parties are natural persons or other entities that have the ability, directly, or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences. On the date of incorporation 8,000,000 shares were issued to directors and founders at par value as per the following in exchange for concept and services valued at $8,000: Shannon Wilkinson, Director, CEO, CFO, Secretary, Treasurer: 3,000,000; Troy Wilkinson, Director, President: 3,000,000; Michael De Valera, Director: 1,000,000; and Stephen Seminew, Co-Founder: 1,000,000. During the three month and nine month period ended March 31, 2021, there were transactions incurred between the Company and Shannon Wilkinson, Director, CEO, CFO, Secretary and Treasurer for management fees of $24,500 (three months ended March 31, 2020 - $6,000) and $81,000 (nine months ended March 31, 2020 - $11,200). On March 29, 2021, 100,000 shares were issued to Chris White, a director of the Company at a value of $0.25 per share for a total value of $25,000 in exchange for services. At March 31, 2021, there was a balance of $Nil (June 30, 2020 - $1,358) due to directors of the Company. |
7. COMMON SHARES
7. COMMON SHARES | 9 Months Ended |
Mar. 31, 2021 | |
SHAREHOLDERS' EQUITY | |
COMMON SHARES | At March 31, 2021, the Company’s authorized capital consisted of 50,000,000 of common shares with a $0.001 par value and 13,400,236 shares were issued and outstanding. During the period ended June 30, 2020, the Company incurred the following transactions: On November 4, 2019, the Company issued 8,000,000 shares to the founders with a fair value of $8,000 in exchange for services. On November 15, 2019, the Company issued 1,000,000 shares to two non-related parties with a fair value of $10,000 in exchange for services. During the period from November 21, 2019 to March 31, 2020, the Company completed various private placements whereby a total of 290,380 common shares were issued at a price of $0.05 per share for a total value of $14,519. During the nine- month period ended March 31, 2021, the Company incurred the following transactions: During the period from July 2, 2020 to July 31, 2020, the Company completed various private placements whereby a total of 500,000 common shares were issued at a price of $0.05 per share for a total value of $25,000. During the period from November 24, 2020 to March 31, 2021, the Company completed various private placements whereby a total of 196,000 common shares were issued at a price of $0.25 per share for a total value of $49,500. As at March 31, 2021, the Company had a remaining balance of share subscriptions received of $8,000 for shares to be issued. On December 28, 2020, the Company issued 110,000 shares to a non-related party at a price of $0.10 per share for a total value of $11,000 as commitment shares in exchange for services related to the issuance of convertible debt on Note 8 (b). On March 29, 2021, the Company issued 88,000 shares to a non-related party at a price of $0.25 per share for a total value of $12,000 as debt issuance costs related to the issuance of convertible debt on Note 8 (c). On March 29, 2021, the Company issued 100,000 shares to a director of the Company at a price of $0.25 per share for a total value of $25,000 in exchange for services. Warrants During the nine-month period ended March 31, 2021, the Company granted an aggregate of 2,200,000 warrants with a contractual life of two years and exercise price of $0.25 per share to lenders as part of the convertible debt financing transaction (Note 8 (b)). The warrants were valued at $88,818 using the Black Scholes Option Pricing Model with the assumptions outlined below. The stock price was based on recent issuances. Expected life was based on the expiry date of the warrants as the Company did not have historical exercise data of such warrants. March 31, 2021 Stock price $ 0.25 Risk-free interest rate 1.06% Expected life 2 years Expected dividend rate 0% Expected volatility 102.03% Continuity of the Company’s common stock purchase warrants issued and outstanding is as follows: Number of Warrants Weighted Average Exercise Price Outstanding, June 30, 2020 $ Granted 2,200,000 0.25 Exercised Expired Outstanding, March 31, 2021 2,200,000 $ 0.25 As at March 31, 2021, the weighted average remaining contractual life of warrants outstanding was 1.24 years with an intrinsic value of $0.13. |
8. COVERTIBLE DEBTS
8. COVERTIBLE DEBTS | 9 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
COVERTIBLE DEBTS | (a) On November 10, 2020, the Company issued two convertible debts in the principal amount of $20,000 each in exchange for cash. Each convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days lapsed, is convertible at $0.10 per 1 common share, and matures in six months on May 10, 2021. The carrying value of beneficial conversion features not considered to be derivative instruments were determined by allocating the intrinsic value of the conversion features from proceeds. As a result, all of $40,000 proceeds were allocated to the beneficial conversion feature, recorded as equity portions of convertible debt and there were no remaining proceeds available for allocation to the liability portion of the convertible debt. Each convertible debt was discounted by the amounts allocated to the conversion features. As at March 31, 2021, the carrying value of each convertible debt was $15,580 for a total of $31,160 (December 31, 2019 - $Nil). (b) On December 28, 2020, the Company entered into a securities purchase agreement with a non-related party. Pursuant to this agreement, the Company issued a convertible debt in the principal amount of $120,000 at $110,000 with $10,000 original issue discount. In connection with this note, the Company paid an additional $15,000 in cash transaction costs, issued 110,000 common shares valued at $11,000 in transaction costs, and issued 1,100,000 warrants exercisable at $0.25 per share, expiring on December 28, 2022. The warrants were calculated to have a relative fair value of $67,555, which was reduced by the equity components of the transaction costs of $20,657, leaving a value of $46,898 as at March 31, 2021. This convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days lapsed, is convertible at $0.10 per 1 common share, and matures in nine months on September 28, 2021. The proceeds were allocated between the convertible debt and warrants on a relative fair value basis, and the issuance costs were proportioned accordingly. The fair value of the convertible debt was calculated using the present value of the debt and related interest at 12% incremental borrowing rate as the discount rate. The warrants were valued using the Black Scholes Option Pricing Model (Note 7). The carrying value of beneficial conversion features not considered to be derivative instruments was determined by allocating $41,961 for the intrinsic value of the conversion features from the remaining proceeds allocated to the convertible debt after conducting the amount allocated to the warrants. As such, there were no remaining proceeds available for allocating to the liability portion of the convertible debt. As at March 31, 2020, the carrying value of this convertible debt was $45,106 (December 31, 2019 - $Nil) net of $74,894 unamortized discounts. (c) On March 25, 2021, the Company entered into a securities purchase agreement with a non-related party. Pursuant to this agreement, the Company issued a convertible debt in the principal amount of $120,000 at $110,000 with $10,000 original issue discount. In connection with this note, the Company paid an additional $13,250 in cash transactions, issued 88,000 common shares valued at $22,000 in transaction costs, and issued 1,100,000 warrants exercisable at $0.25 per share, expiring on March 25, 2023. The warrants were calculated to have a relative fair value of $74,026, which was reduced by the equity components of the transaction costs of $32,106, leaving a value of $41,920 as at March 31, 2021. This convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days lapsed, is convertible at $0.10 per 1 common share, and matures in nine months on December 25, 2021. The proceeds were allocated between the convertible debt and warrants on a relative fair value basis, and the issuance costs were proportioned accordingly. The fair value of the convertible debt was calculated using the present value of the debt and related interest at 12% incremental borrowing rate as the discount rate. The warrants were valued using the Black Scholes Option Pricing Model (Note 7). The carrying value of beneficial conversion features not considered to be derivative instruments was determined by allocating $42,492 for the intrinsic value of the conversion features from the remaining proceeds allocated to the convertible debt after conducting the amount allocated to the warrants. As such, there were no remaining proceeds available for allocating to the liability portion of the convertible debt. As at March 31, 2020, the carrying value of this convertible debt was $7,903 (December 31, 2019 - $Nil) net of $112,097 unamortized discounts. |
9. COMMITMENTS AND CONTINGENCIE
9. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | The Company leases its corporate office located at 8565 S. Eastern Ave. #150, Las Vegas, Nevada. The initial lease term is for 12 months commencing on September 8, 2019 after which the term is on a month-to-month basis. After the initial term, the Company may cancel the lease agreement at any time by providing 30 days written notice. The Company has elected the short-term lease practical expedient of 12 months and has not recorded a lease. |
10. INCOME TAXES
10. INCOME TAXES | 9 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | As of March 31, 2021, the Company was in a loss position; therefore, no deferred tax liability was recognized related to the undistributed earnings subject to withholding tax. Net operating loss carry forward of the Company, amounted to $473,478 for the nine month period ended March 31, 2021 (March 31 2020 - $37,086). The net operating loss carry forwards are available to be utilized against future taxable income for years through calendar year 2041. In assessing the reliability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled projected future taxable income, and tax planning strategies in making this assessment. |
4. SUMMARY OF SIGNIFICANT ACC_2
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Preparation | The accompanying interim condensed financial statements have been prepared to present the balance sheet, the statement of operations and comprehensive loss, statement of changes in shareholders’ equity and statement of cash flows of the Company for the nine month period ended March 31, 2021, and have been prepared in accordance with US GAAP. |
Use of Estimates | In preparing the interim condensed financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the interim condensed financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. |
Concentrations of Credit Risk | Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. As at March 31, 2021, substantially all of the Company’s cash was held by major financial institutions located in the United States, which management believes are of high credit quality. With respect to accounts receivable, the Company extended credit based on an evaluation of the customer’s financial condition. The Company generally did not require collateral for accounts receivable and maintained an allowance for doubtful accounts of accounts receivable if necessary. |
Cash | Cash consists of cash held at major financial institutions and is subject to insignificant risk of changes in value. |
Receivables and Allowance for Doubtful Accounts | Trade accounts receivable are recorded at net realizable value and do not bear interest. No allowance for doubtful accounts was made during the nine month period ended March 31, 2021, based on management’s best estimate of the amount of probable credit losses in accounts receivable. The Company evaluates its allowance for doubtful accounts based upon knowledge of its customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis. The review process evaluates all account balances with amounts outstanding for more than 60 days and other specific amounts for which information obtained indicates that the balance may be uncollectible. As of March 31, 2021, there was no allowance for doubtful accounts and the Company does not have any off-balance-sheet credit exposure related to its customers. |
Software | Software is stated at cost less accumulated amortization and is depreciated using the straight-line method over the estimated useful life of the asset. The estimated useful life of the asset is 5 years and is not depreciated until it is available for use by the Company. |
Leases | The Company determines if an arrangement is a lease at inception. Operating and financing right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at the commencement date, in determining the present value of future lease payments. Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. The lease terms may include options to extend or terminate the lease is it is reasonably certain the Company will exercise that option. As at March 31, 2021, the Company had no leases. |
Fair Value of Financial Instruments | Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, adopted January 1, 2008, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The Company’s financial instruments include cash, current receivables and payables, convertible debts, and warrants. These financial instruments are measured at their respective fair values. The three levels are defined as follows: Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. For cash, accounts receivable, accounts payable and accrued liabilities and due to related parties, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. For convertible debts, the carrying values, excluding any unamortized discounts, approximate the respective fair value. The convertible debts have been discounted to reflect their net present value as at March 31, 2021. The carrying values of embedded conversion features not considered to be derivative instruments were determined by allocating the remaining carrying value of the convertible debt after deducting the estimated carrying value of the liability portion. Estimating fair value for warrants require determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate requires determining the most appropriate inputs to the valuation model including the expected life of the warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them. |
Revenue Recognition | Revenue from providing consulting and management services is recognized in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements: These five elements as applied to the Company’s consulting services results in revenue recorded as services are provided. |
Income Taxes | The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities. |
Foreign Currency Translation | The Company’s functional and reporting currency is United States dollars (“USD”). The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss). |
Earnings (Loss) per Share | Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted earnings (loss) per share assume the conversion, exercise or issuance of all common stock instruments unless the effect is to reduce a loss or increase earnings per share. |
Recently Issued Accounting Pronouncements | Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) did not or are not expected to have a material impact on the Company's present or future financial statements. |
5. SOFTWARE (Tables)
5. SOFTWARE (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Capitalized Computer Software, Net [Abstract] | |
Software | Balance, September 6, 2019 $ Additions 21,500 Depreciation Balance, June 30, 2020 21,500 Additions 44,250 Depreciation Balance, March 31, 2021 $ 65,750 |
7. COMMON SHARES (Tables)
7. COMMON SHARES (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
SHAREHOLDERS' EQUITY | |
Warrant assumptions | March 31, 2021 Stock price $ 0.25 Risk-free interest rate 1.06% Expected life 2 years Expected dividend rate 0% Expected volatility 102.03% |
Warrant activity | Number of Warrants Weighted Average Exercise Price Outstanding, June 30, 2020 $ Granted 2,200,000 0.25 Exercised Expired Outstanding, March 31, 2021 2,200,000 $ 0.25 |
3. GOING CONCERN UNCERTAINTY (D
3. GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Going Concern Uncertainty | ||
Working capital (deficit) surplus | $ (13,645) | $ 65,110 |
4. SUMMARY OF SIGNIFICANT ACC_3
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Mar. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
Allowance for doubtful accounts | $ 0 |
5. SOFTWARE (Details)
5. SOFTWARE (Details) - USD ($) | 9 Months Ended | 10 Months Ended |
Mar. 31, 2021 | Jun. 30, 2020 | |
Capitalized Computer Software, Net [Abstract] | ||
Software, beginning | $ 21,500 | $ 0 |
Additions | 44,250 | 21,500 |
Depreciation | 0 | 0 |
Software, ending | $ 65,750 | $ 21,500 |
6. RELATED PARTY TRANSACTIONS (
6. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |||||
Management fees | $ 24,500 | $ 6,000 | $ 11,200 | $ 81,000 | |
Due to director | $ 0 | $ 0 | $ 1,358 |
7. COMMON SHARES (Details)
7. COMMON SHARES (Details) | 9 Months Ended |
Mar. 31, 2021$ / shares | |
SHAREHOLDERS' EQUITY | |
Stock price | $ .25 |
Risk-free interest rate | 1.06% |
Expected life | 2 years |
Expected dividend rate | 0.00% |
Expected volatility | 102.03% |
7. COMMON SHARES (Details 1)
7. COMMON SHARES (Details 1) | 9 Months Ended |
Mar. 31, 2021$ / sharesshares | |
SHAREHOLDERS' EQUITY | |
Number of warrants outstanding, beginning | shares | 0 |
Number of warrants granted | shares | 2,200,000 |
Number of warrants exercised | shares | 0 |
Number of warrants expired | shares | 0 |
Number of warrants outstanding, ending | shares | 2,200,000 |
Weighted average exercise price outstanding, beginning | $ / shares | $ .00 |
Weighted average exercise price granted | $ / shares | .25 |
Weighted average exercise price exercised | $ / shares | .00 |
Weighted average exercise price expired | $ / shares | .00 |
Weighted average exercise price outstanding, ending | $ / shares | $ .25 |
7. COMMON SHARES (Details Narra
7. COMMON SHARES (Details Narrative) - $ / shares | 9 Months Ended | |
Mar. 31, 2021 | Jun. 30, 2020 | |
SHAREHOLDERS' EQUITY | ||
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, issued | 13,400,236 | 12,406,236 |
Common stock, outstanding | 13,400,236 | 12,406,236 |
Number of warrants granted | 2,200,000 | |
Weighted average exercise price granted | $ .25 | |
Weighted average remaining contractual life of warrants outstanding | 1 year 2 months 26 days | |
Warrant intrinsic value | $ .13 |
8. COVERTIBLE DEBTS (Details Na
8. COVERTIBLE DEBTS (Details Narrative) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Debt Disclosure [Abstract] | ||
Convertible debts | $ 84,169 | $ 0 |
10. INCOME TAXES (Details Narra
10. INCOME TAXES (Details Narrative) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forward | $ 473,478 | $ 37,086 |