Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | VERITEC INC | |
Entity Central Index Key | 0000773318 | |
Document Period End Date | Sep. 30, 2019 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity Small Business? | true | |
Is Entity Emerging Growth? | false | |
Entity Common Stock, Shares Outstanding | 39,538,007 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Current Assets: | ||
Cash | $ 180,199 | $ 91,112 |
Accounts receivable | 10,141 | 9,117 |
Prepaid expenses | 4,122 | 5,391 |
Total Assets | 194,462 | 105,620 |
Current Liabilities: | ||
Accounts payable | 713,315 | 716,704 |
Accounts payable, related party | 121,800 | 100,360 |
Accrued expenses | 58,310 | 63,363 |
Customer deposits | 91,190 | 68,251 |
Convertible notes and notes payable ($427,317 and $589,668 in default) | 492,616 | 654,352 |
Convertible notes and notes payable, related parties ($208,374 and $197,124 in default) | 3,826,230 | 3,646,967 |
Total Current Liabilities | 5,303,461 | 5,249,997 |
Contingent earnout liability | 155,000 | 155,000 |
Total Liabilities | 5,458,461 | 5,404,997 |
Stockholders' Deficiency: | ||
Convertible preferred stock, par value $1.00; authorized 10,000,000 shares, 276,000 shares of Series H authorized, 1,000 shares issued and outstanding | 1,000 | 1,000 |
Common stock, par value $.01; authorized 150,000,000 shares; 39,538,007 shares issued and outstanding | 395,380 | 395,380 |
Common stock to be issued, 145,000 shares to be issued | 12,500 | 12,500 |
Additional paid-in capital | 18,116,112 | 18,110,791 |
Accumulated deficit | (23,788,991) | (23,819,048) |
Total Stockholders' Deficiency | (5,263,999) | (5,299,377) |
Total Liabilities and Stockholders' Deficiency | $ 194,462 | $ 105,620 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Convertible preferred stock, par value | $ 1 | $ 1 |
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Convertible preferred stock, shares issued | 1,000 | 1,000 |
Convertible preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.01 | $ .01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 39,538,007 | 39,538,007 |
Common stock, shares outstanding | 39,538,007 | 39,538,007 |
Common stock, shares to be issued | 145,000 | 145,000 |
Convertible notes and notes payable, in default | $ 427,317 | $ 589,668 |
Convertible notes and notes payable, related party, in default | $ 208,374 | $ 197,124 |
Series H Convertible | ||
Convertible preferred stock, shares authorized | 276,000 | 276,000 |
Convertible preferred stock, shares issued | 1,000 | 1,000 |
Convertible preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 1,000 | $ 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||
Mobile banking technology revenue | $ 24,609 | $ 29,100 |
Other revenue, management fee related party | 129,434 | 41,631 |
Total revenue | 154,043 | 70,731 |
Cost of Sales | 55,459 | 62,984 |
Gross Profit | 98,584 | 7,747 |
Operating Expenses: | ||
General and administrative expenses | 155,004 | 178,050 |
Sales and marketing | 429 | |
Research and development | 50 | |
Total Operating Expenses | 155,433 | 178,100 |
Loss from Operations | (56,849) | (170,353) |
Other Income (Expense): | ||
Gain on extinguishment of convertible note payable | 166,921 | |
Interest expense | (80,015) | (72,193) |
Total other income (expense) | 86,906 | (72,193) |
Net Income (Loss) | $ 30,057 | $ (242,546) |
Net Income (Loss) Per Common Share - Basic and Diluted | $ 0 | $ (0.01) |
Weighted Average Number of Shares Outstanding - Basic | 39,538,007 | 39,538,007 |
Weighted Average Number of Shares Outstanding - Diluted | 40,668,007 | 39,538,007 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficiency) (Unaudited) - USD ($) | Preferred Stock | Common Stock | Common Stock to be Issued | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, Shares at Jun. 30, 2018 | 1,000 | 39,538,007 | ||||
Beginning balance, Amount at Jun. 30, 2018 | $ 1,000 | $ 395,380 | $ 12,500 | $ 18,099,576 | $ (22,969,645) | $ (4,461,189) |
Stock-Based Compensation | ||||||
Net Loss | (242,546) | (242,546) | ||||
Ending balance, Shares at Sep. 30, 2018 | 1,000 | 39,538,007 | ||||
Ending balance, Amount at Sep. 30, 2018 | $ 1,000 | $ 395,380 | 12,500 | 18,099,576 | (23,212,191) | (4,703,735) |
Beginning balance, Shares at Jun. 30, 2019 | 1,000 | 39,538,007 | ||||
Beginning balance, Amount at Jun. 30, 2019 | $ 1,000 | $ 395,380 | 12,500 | 18,100,791 | (23,819,048) | (5,299,377) |
Stock-Based Compensation | 5,321 | 5,321 | ||||
Net Loss | 30,057 | 30,057 | ||||
Ending balance, Shares at Sep. 30, 2019 | 1,000 | 39,538,007 | ||||
Ending balance, Amount at Sep. 30, 2019 | $ 1,000 | $ 395,380 | $ 12,500 | $ 18,116,112 | $ (23,788,991) | $ (5,263,999) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ 30,057 | $ (242,546) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Interest accrued on notes payable | 80,015 | 72,192 |
Stock-based compensation expense | 5,321 | |
Gain on extinguishment of convertible note payable | (166,921) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,024) | 569 |
Prepaid expenses | 1,269 | 1,231 |
Customer deposits | 22,839 | |
Deferred revenues | (7,500) | |
Accounts payable | (3,389) | 67,947 |
Accounts payable, related party | 21,440 | |
Accrued expenses | (5,053) | 4,589 |
Net cash used in operating activities | (15,346) | (103,518) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable - related party | 104,433 | 108,949 |
Net cash provided by financing activities | 104,433 | 108,949 |
NET INCREASE IN CASH | 89,087 | 5,431 |
CASH AT BEGINNING OF PERIOD | 91,112 | 139,086 |
CASH AT END OF PERIOD | 180,199 | 144,517 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | ||
Cash paid for taxes |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Veritec, Inc. (Veritec) formed in the State of Nevada on September 8, 1982. Veritec’s wholly-owned subsidiaries include Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”). Nature of Business Veritec is primarily engaged in the mobile banking and payment processing business. As a Cardholder Independent Sales Organization, Veritec can promote and sell Visa-branded card programs. As a Third-Party Servicer, Veritec provides back-end cardholder transaction processing services for Visa-branded card programs on behalf of its sponsoring bank. Veritec has a portfolio of five United States and eight foreign patents. Also, Veritec has seven U.S. and twenty-eight foreign pending patent applications. Veritec had agreements with various banks in the past and is currently seeking a bank to sponsor its Prepaid Card programs. BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended September 30, 2019, are not necessarily indicative of the results that may be expected for the year ending June 30, 2020. The Condensed Consolidated Balance Sheet information as of June 30, 2019, was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended June 30, 2019, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on September 30, 2019. These financial statements should be read in conjunction with that report. The accompanying Condensed Consolidated Financial Statements include the accounts of Veritec and its wholly-owned subsidiaries, Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. Inter-company transactions and balances were eliminated in consolidation. GOING CONCERN The accompanying Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the period ended September 30, 2019, the Company incurred a loss from operations of $56,849 and used cash in operating activities of $15,346, and on September 30, 2019, the Company had a stockholders’ deficit of $5,263,999. In addition, as of September 30, 2019, the Company is delinquent in payment of $635,691 of its notes payable. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on our June 30, 2019 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company believes it will require additional funds to continue its operations through fiscal 2020 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the Company’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales, or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock. The Condensed Consolidated Financial Statements do not include any adjustments that may result from this uncertainty. Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long-lived assets, accruals for potential liabilities, and assumptions used in valuing derivatives and stock-based compensation, and the valuation of deferred taxes assets. Revenue Recognition Revenues for the Company are classified into mobile banking technology revenue and management fee revenue. The Company recognizes revenue in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Mobile Banking Technology Revenue The Company, as a merchant payment processor and a distributor, recognizes revenue from transaction fees charged to cardholders for the use of its issued mobile debit cards. The fees are recognized monthly after all cardholder transactions have been summarized and reconciled with third party processors. The Company has entered into certain long-term agreements to provide application development and support. Some customers paid the agreement in full at signing, and the Company recorded the receipt of payment as deferred revenue. The Company records revenue relating to these agreements on a pro-rata basis over the term of the agreement and reduces its deferred revenue balance accordingly. Other Revenue, Management Fee - Related Party On September 30, 2015, the Company sold all of its assets of its Barcode Technology, which was comprised solely of its intellectual property, to The Matthews Group, a related party (see Note 6). The Company subsequently entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations through June 30, 2020. The Company earns a fee of 35% of all revenues billed up to June 30, 2020, and recognizes management fee revenue as services are performed. Fair Value of Financial Instruments The Company determines the fair value of its assets and liabilities based on the exchange price in U.S. dollars that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of financial instruments such as cash, accounts receivable, and accounts payable and accrued liabilities, approximate the related fair values due to the short-term maturities of these instruments. Net Income (Loss) per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the period ended September 30, 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. For the period ending September 30, 2019, 1,130,000 shares were added to weighted average shares outstanding as they were considered dilutive. The remaining potentially dilutive shares from the Company’s Series H Preferred Stock, Convertible Notes Payable, and a portion of Options were antidilutive because their exercise prices and conversion prices were out of the money. As of September 30, 2019, and 2018, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. As of September 30, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,683,005 19,759,993 Options 2,500,000 2,500,000 Total 23,193,005 22,269,993 Concentrations During the period ended September 30, 2019, the Company had one customer, a related party, that represented 84% of our revenues. During the period ended September 30, 2018, the Company had one customer, a related party that represented 58% of its revenue, and one customer that represented 22% of its revenue. No other customer represented more than 10% of our revenues during the period ended September 30, 2019 and 2018. During the period ended September 30, 2019, and 2018, all of the Company’s revenues were earned in the United States of America. Segments The Company operates in one segment, the mobile financial banking industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision-maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing, and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements. Stock-Based Compensation The Company issues stock options and warrants, shares of common stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation In prior periods through June 30, 2019, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The guidance was issued to simplify the accounting for share-based tranasactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into considertaion the probility of satifing performance conditions. The Company adopted ASU 2018-07 on July 1, 2019. The adoption of the standard did not have a material impact on our financial statements. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Convertible Notes and Notes Pay
Convertible Notes and Notes Payable | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 2 – CONVERTIBLE NOTES AND NOTES PAYABLE Convertible notes and notes payable Convertible notes and notes payable includes principal and accrued interest and consists of the following at September 30, 2019 and June 30, 2019: September 30, 2019 June 30, 2019 (Unaudited) (a) Convertible notes ($17,786 and $184,506 in default) $ 57,682 $ 224,037 (b) Notes payable (in default) 409,531 405,162 (c) Notes payable 25,403 25,153 Total notes-third parties $ 492,616 $ 654,352 (a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand. On June 30, 2019, convertible notes totaled $224,037. During the period ended September 30, 2019, interest of $566 was added to the principal. In addition, the Company and one of the holders of the convertible notes agreed to extinguish a convertible note payable of $166,921 resulting in a gain on extinguishment (see Note 3), resulting in a balance owed of $57,682 at September 30, 2019. On September 30, 2019, $17,786 of the convertible notes were in default and convertible at a conversion price of $0.30 per share into 59,286 shares of the Company’s common stock. The balance of $39,896 is due on demand and convertible at a conversion price of $0.08 per share into 498,702 shares of the Company’s common stock. (b) The notes are either secured by the Company’s intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default. On June 30, 2019, the notes totaled $405,162. During the period ended September 30, 2019, interest of $4,369 was added to the principal, resulting in balance owed of $409,531 on September 30, 2019. On September 30, 2019, $369,248 of notes are secured by the Company’s intellectual property, and $40,283 of notes are unsecured. (c) The notes are unsecured and bear interest of 4% per annum and due on March 17, 2020. On June 30, 2019, the notes totaled $25,153. During the period ended September 30, 2019, interest of $250 was added to the principal, resulting in a balance owed of $25,403 on September 30, 2019. Convertible notes and notes payable-related parties Notes payable-related parties includes principal and accrued interest and consists of the following at September 30, 2019, and June 30, 2019: September 30, 2019 June 30, 2019 (Unaudited) (a) Convertible notes-The Matthews Group $ 1,479,581 $ 1,452,621 (b) Notes payable-The Matthews Group 2,063,421 1,914,618 (c) Convertible notes-other related parties ($208,374 and $206,124 in default) 283,228 279,728 Total notes-related parties $ 3,826,230 $ 3,646,967 (a) The notes are unsecured, convertible into common stock at $0.08 per share, bear interest at rates ranging from 8% to 10% per annum and are due on demand. The Matthews Group is a related party (see Note 6) and is owned 50% by Ms. Van Tran, the Company’s CEO, and 50% by Larry Johanns, a significant shareholder of the Company. On June 30, 2019, convertible notes due to The Matthews Group totaled $1,452,621. During the period ended September 30, 2019, interest of $26,960 was added to the principal resulting in a balance payable of $1,479,581 on September 30, 2019. On September 30, 2019, the notes are convertible at a conversion price of $0.08 per share into 18,494,761 shares of the Company’s common stock. (b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 6) dated September 30, 2015. On June 30, 2019, notes due to The Matthews Group totaled $1,914,618. During the period ended September 30, 2019, $104,433 of notes payable were issued, interest of $44,370 was added to the principal, resulting in a balance owed of $2,063,421 at September 30, 2019. (c) The notes are due to a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $0.08 to $0.30, and bear interest at rates ranging from 8% to 10% per annum. On June 30, 2019, convertible notes due to other related parties totaled $279,728. During the period ended September 30, 2019, interest of $3,500 was added to the principal resulting in a balance owed of $283,228 on September 30, 2019. On September 30, 2019, $208,374 of the notes were due in 2010 and are in default, and the balance of $74,584 is due on demand. At September 30, 2019, $208,374 of the notes are convertible at a conversion price of $0.30 per share into 694,581 shares of the Company’s common stock, and $74,584 of the notes are convertible at a conversion price of $0.08 per share into 935,675 shares of the Company’s common stock. |
Gain on Extinguishment of Conve
Gain on Extinguishment of Convertible Note Payable | 3 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Gain on Extinguishment of Convertible Note Payable | NOTE 3 – GAIN ON EXTINGUISHMENT OF CONVERTIBLE NOTE PAYABLE In May 2009, the Company issued a convertible note payable for $100,000. The note was unsecured, convertible into shares of the Company’s common stock at $0.30 per share, with interest at 8% per annum, and due November 15, 2010. The note was not paid when due and the Company went into default on the convertible note payable. The Company continued to accrue interest on the unpaid principal at 8% per annum, and repaid $10,000 principal in 2014. On November 13, 2017, the noteholder filed a lawsuit in district court in Hennepin County, Minnesota asserting that the Company breached the terms of the promissory note. The noteholder sought repayment on the principal of the promissory note, in the amount of $100,000 less the $10,000 which the Company previously paid, plus interest, collection costs, and attorney’s fees. As of June 30, 2019, the Company had recorded a total of $166,921 for the convertible note payable and accrued interest due to the noteholder. On July 10, 2019, the Company and the noteholder entered into a Settlement Agreement and Mutual Release. The Company and the noteholder agreed to generally discharge and forever release each other from future claims, to pay their own legal fees, and the convertible promissory note payable to the noteholder was discharged. As the Company was legally released from its obligation under the convertible note, the Company recorded a gain on extinguishment of the convertible note payable of $166,921 during the period ended September 30, 2019. |
Stockholders' Deficiency
Stockholders' Deficiency | 3 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Deficiency | NOTE 4 - STOCKHOLDERS’ DEFICIENCY On September 30, 2019, and June 30, 2019, 145,000 shares of common stock to be issued with an aggregate value of $12,500 have not been issued and are reflected as common stock to be issued in the accompanying Condensed Consolidated Financial Statements. |
Stock Options
Stock Options | 3 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options | NOTE 5 – STOCK OPTIONS A summary of stock options as of September 30, 2019, is as follows: Number of Shares Weighted Average Exercise Price Outstanding at June 30, 2019 3,650,000 $ 0.06 Granted — — Forfeited — $ — Outstanding at September 30, 2019 3,650,000 $ 0.06 Exercisable at September 30, 2019 3,362,500 $ 0.07 In December 2018, the Company granted to its directors and employees, stock options to purchase an aggregate of 1,150,000 shares of Common Stock. The fair value of the stock options granted was determined to be $21,285 and is being amortized over the vesting period of 12 months. During the period ended September 30, 2019, the Company recorded stock-based compensation expense of $5,321. As of September 30, 2019, the Company has outstanding unvested options with future compensation costs of $4,749, which will be recorded as compensation cost as the options vest over their remaining average vesting period of three months. The outstanding and exercisable stock options had an intrinsic value of $23,000 and $17,250, respectively, on September 30, 2019. Additional information regarding options outstanding as of September 30, 2019, is as follows: Options Outstanding at September 30, 2019 Options Exercisable at September 30, 2019 Range of Exercise Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Exercise Price $ 0.03 1,150,000 5.23 $ 0.03 862,500 $ 0.03 $ 0.08 2,500,000 0.36 $ 0.08 2,500,000 $ 0.08 3,650,000 3,362,500 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 – RELATED PARTY TRANSACTIONS The Matthews Group is owned 50% by Ms. Tran, the Company’s CEO/Executive Chair and a director, and 50% by Larry Johanns, a significant stockholder of the Company. The Company has relied on The Matthews Group for funding (see Note 2). Management Services Agreement and Related Notes Payable with Related Party The Company’s Barcode Technology was invented by the founders of Veritec as a product identification system for identification and tracking of parts, components, and products mostly in the liquid crystal display (LCD) markets and for secure identification documents, financial cards, medical records, and other high-security applications. On September 30, 2015, the Company sold all of its assets of its Barcode Technology comprised solely of its intellectual property to The Matthews Group. The Company then entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations, on behalf of The Matthews Group, through June 30, 2020. The Matthews Group bears the risk of loss from the barcode operations and has the right to the residual benefits of the barcode operations. In consideration of the services provided by the Company to The Matthews Group, the Company earned a fee of 20% of all revenues up to May 31, 2017, and 35% of all revenues up to June 30, 2020, from the barcode technology operations. During the period ended September 30, 2019 and 2018, the Company recorded management fee revenue related to this agreement of $129,434 and $41,631, respectively. Additionally, pursuant to the management services agreement, all cash flow (all revenues collected less direct costs paid) of the barcode technology operations is retained by the Company as proceeds from unsecured notes payable due The Matthews Group. During the period ended September 30, 2019 and 2018, cash flow loans of $104,433 and $108,949, respectively, were made to the Company at 10% interest per annum and due on demand. On September 30, 2019, cash flow loans of $2,063,241 are due to The Matthews Group (see Note 2). Advances from Related Parties From time to time, Ms. Tran, the Company’s CEO/Executive Chair, provides advances to finance the Company’s working capital requirements. As of September 30, 2019, and June 30, 2019, total advances to Ms. Tran amounted to $121,800 and $100,360, respectively, and have been presented as accounts payable, related party on the accompanying Consolidated Balance Sheets. The advances are unsecured, non-interest bearing, and due on demand. Other Transactions with Related Parties The Company leases its office facilities from Ms. Tran, the Company’s CEO/Executive Chair. For the period ended September 30, 2019 and 2018, lease payments to Ms. Tran totaled $12,750 and are included in general and administrative expenses. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 7 – COMMITMENTS AND CONTINGENCIES On September 21, 2016, the Company entered into a settlement agreement with an individual who was a former officer of the Company. The individual in prior years was also issued 500,000 shares of common stock for services. The Company alleged that the individual used the Company's intellectual property without approval. Under the terms of the settlement agreement, the individual agreed to relinquish a convertible note payable and unpaid interest aggregating $364,686 and return 500,000 shares of common stock previously issued to him. In turn, the Company agreed to release and discharge the individual against all claims arising on or prior to the date of the settlement agreement. As of September 30, 2019, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
The Company | The Company Veritec, Inc. (Veritec) formed in the State of Nevada on September 8, 1982. Veritec’s wholly-owned subsidiaries include Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”). |
Nature of Business | Nature of Business Veritec is primarily engaged in the mobile banking and payment processing business. As a Cardholder Independent Sales Organization, Veritec can promote and sell Visa-branded card programs. As a Third-Party Servicer, Veritec provides back-end cardholder transaction processing services for Visa-branded card programs on behalf of its sponsoring bank. Veritec has a portfolio of five United States and eight foreign patents. Also, Veritec has seven U.S. and twenty-eight foreign pending patent applications. Veritec had agreements with various banks in the past and is currently seeking a bank to sponsor its Prepaid Card programs. |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended September 30, 2019, are not necessarily indicative of the results that may be expected for the year ending June 30, 2020. The Condensed Consolidated Balance Sheet information as of June 30, 2019, was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended June 30, 2019, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on September 30, 2019. These financial statements should be read in conjunction with that report. The accompanying Condensed Consolidated Financial Statements include the accounts of Veritec and its wholly-owned subsidiaries, Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. Inter-company transactions and balances were eliminated in consolidation. |
Going Concern | GOING CONCERN The accompanying Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the period ended September 30, 2019, the Company incurred a loss from operations of $56,849 and used cash in operating activities of $15,346, and on September 30, 2019, the Company had a stockholders’ deficit of $5,263,999. In addition, as of September 30, 2019, the Company is delinquent in payment of $635,691 of its notes payable. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on our June 30, 2019 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company believes it will require additional funds to continue its operations through fiscal 2020 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the Company’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales, or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock. The Condensed Consolidated Financial Statements do not include any adjustments that may result from this uncertainty. |
Use of Estimates | Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long-lived assets, accruals for potential liabilities, and assumptions used in valuing derivatives and stock-based compensation, and the valuation of deferred taxes assets. |
Revenue Recognition | Revenue Recognition Revenues for the Company are classified into mobile banking technology revenue and management fee revenue. The Company recognizes revenue in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers |
Mobile Banking Technology Revenue | Mobile Banking Technology Revenue The Company, as a merchant payment processor and a distributor, recognizes revenue from transaction fees charged to cardholders for the use of its issued mobile debit cards. The fees are recognized monthly after all cardholder transactions have been summarized and reconciled with third party processors. The Company has entered into certain long-term agreements to provide application development and support. Some customers paid the agreement in full at signing, and the Company recorded the receipt of payment as deferred revenue. The Company records revenue relating to these agreements on a pro-rata basis over the term of the agreement and reduces its deferred revenue balance accordingly. |
Other Revenue, Management Fee - Related Party | Other Revenue, Management Fee - Related Party On September 30, 2015, the Company sold all of its assets of its Barcode Technology, which was comprised solely of its intellectual property, to The Matthews Group, a related party (see Note 6). The Company subsequently entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations through June 30, 2020. The Company earns a fee of 35% of all revenues billed up to June 30, 2020, and recognizes management fee revenue as services are performed. |
Loss per Common Share | Net Income (Loss) per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the period ended September 30, 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. For the period ending September 30, 2019, 1,130,000 shares were added to weighted average shares outstanding as they were considered dilutive. The remaining potentially dilutive shares from the Company’s Series H Preferred Stock, Convertible Notes Payable, and a portion of Options were antidilutive because their exercise prices and conversion prices were out of the money. As of September 30, 2019, and 2018, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. As of September 30, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,683,005 19,957,993 Options 2,500,000 2,500,000 Total 23,006,700 22,269,993 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines the fair value of its assets and liabilities based on the exchange price in U.S. dollars that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of financial instruments such as cash, accounts receivable, and accounts payable and accrued liabilities, approximate the related fair values due to the short-term maturities of these instruments. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the period ended September 30, 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. For the period ending September 30, 2019, 1,130,000 shares were added to weighted average shares outstanding as they were considered dilutive. The remaining potentially dilutive shares from the Company’s Series H Preferred Stock, Convertible Notes Payable, and a portion of Options were antidilutive because their exercise prices and conversion prices were out of the money. As of September 30, 2019, and 2018, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. As of September 30, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,683,005 19,957,993 Options 2,500,000 2,500,000 Total 23,006,700 22,269,993 |
Concentrations | Concentrations During the period ended September 30, 2019, the Company had one customer, a related party, that represented 84% of our revenues. During the period ended September 30, 2018, the Company had one customer, a related party that represented 58% of its revenue, and one customer that represented 22% of its revenue. No other customer represented more than 10% of our revenues during the period ended September 30, 2019 and 2018. During the period ended September 30, 2019, and 2018, all of the Company’s revenues were earned in the United States of America. |
Segments | Segments The Company operates in one segment, the mobile financial banking industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision-maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing, and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements. |
Stock Based Compensation | Stock-Based Compensation The Company issues stock options and warrants, shares of common stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation In prior periods through June 30, 2019, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The guidance was issued to simplify the accounting for share-based tranasactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into considertaion the probility of satifing performance conditions. The Company adopted ASU 2018-07 on July 1, 2019. The adoption of the standard did not have a material impact on our financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of securities excluded from EPS calculation | As of September 30, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,683,005 19,759,993 Options 2,500,000 2,500,000 Total 23,193,005 22,269,993 |
Convertible Notes and Notes P_2
Convertible Notes and Notes Payable (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible notes and notes payable | September 30, 2019 June 30, 2019 (Unaudited) (a) Convertible notes ($17,786 and $184,506 in default) $ 57,682 $ 224,037 (b) Notes payable (in default) 409,531 405,162 (c) Notes payable 25,403 25,153 Total notes-third parties $ 492,616 $ 654,352 |
Convertible notes and notes payable- related party | September 30, 2019 June 30, 2019 (Unaudited) (a) Convertible notes-The Matthews Group $ 1,479,581 $ 1,452,621 (b) Notes payable-The Matthews Group 2,063,421 1,914,618 (c) Convertible notes-other related parties ($208,374 and $206,124 in default) 283,228 279,728 Total notes-related parties $ 3,826,230 $ 3,646,967 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options | Number of Shares Weighted Average Exercise Price Outstanding at June 30, 2019 3,650,000 $ 0.06 Granted — — Forfeited — $ — Outstanding at September 30, 2019 3,650,000 $ 0.06 Exercisable at September 30, 2019 3,362,500 $ 0.07 |
Additional information regarding outstanding options | Options Outstanding at September 30, 2019 Options Exercisable at September 30, 2019 Range of Exercise Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Exercise Price $ 0.03 1,150,000 5.23 $ 0.03 862,500 $ 0.03 $ 0.08 2,500,000 0.36 $ 0.08 2,500,000 $ 0.08 3,650,000 3,362,500 |
Summary of securities excluded
Summary of securities excluded from EPS calculation (Details) - shares | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||
Series H Preferred Stock | 10,000 | 10,000 |
Convertible Notes Payable | 20,683,005 | 19,759,993 |
Options | 2,500,000 | 2,500,000 |
Total | 23,193,005 | 22,269,993 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net loss | $ 30,057 | $ (242,546) | ||
Loss from Operations | (56,849) | (170,353) | ||
Cash used in operating activities | (15,346) | (103,518) | ||
Stockholders' deficiency | (5,263,999) | $ (4,703,735) | $ (5,299,377) | $ (4,461,189) |
Notes payable in default | $ 635,691 | |||
Increase in weighted average shares outstanding | 1,130,000 | |||
Customer 1 | ||||
Sales percentage from major customers | 84.00% | 58.00% |
Intangible Assets and Contingen
Intangible Assets and Contingent Earnout Liability (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2015 | Sep. 30, 2014 | |
Amortization expense | $ 16,042 | ||
Tangible Payments LLC | |||
Shares issued | 250,000 | ||
Shares issued, value | $ 37,500 | ||
Aggregate purchase price | $ 192,500 | ||
Earnout Payment | $ 155,000 |
Convertible Notes and Notes P_3
Convertible Notes and Notes Payable - Convertible notes and notes payable (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | ||
Debt Disclosure [Abstract] | ||||
Convertible notes payable | $ 57,682 | [1] | $ 224,037 | |
Notes payable - in default | [2] | 409,531 | 405,162 | |
Notes payable | [3] | 25,403 | 25,153 | |
Total notes - third parties | $ 492,616 | $ 654,352 | ||
[1] | (a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand. | |||
[2] | (b) The notes are either secured by the Companys intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default. | |||
[3] | (c) The notes are unsecured and bear interest of 4% per annum and due on March 17, 2020. |
Convertible Notes and Notes P_4
Convertible Notes and Notes Payable - Convertible notes and notes payable related party (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | |
Notes Payable Related Party | $ 3,826,230 | $ 3,646,967 | |
The Matthews Group | |||
Convertible Notes, Related Party | [1] | 1,479,581 | 1,452,621 |
Notes Payable Related Party | [2] | 2,063,421 | 1,914,618 |
Other | |||
Convertible Notes, Related Party | [3] | $ 283,228 | $ 279,728 |
[1] | (a) The notes are unsecured, convertible into common stock at $0.08 per share, bear interest at rates ranging from 8% to 10% per annum, and are due on demand. | ||
[2] | (b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 8) dated September 30, 2015. At June 30, 2017, notes due to The Matthews Group totaled $805,195. During the year ended June 30, 2018, $599,312 of notes payable were issued, interest of $104,581 was added to principal, and an interest payment of $125,000 was made, leaving a balance owed of $1,384,088 at June 30, 2018. During the year ended June 30, 2019, $377,127 of notes payable were issued and interest of $153,403 was added to principal, leaving a balance owed of $1,914,618 at June 30, 2019. | ||
[3] | (c) The notes are due to a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $0.10 to $0.30, and bear interest at rates ranging from 8% to 10% per annum. |
Convertible Notes and Notes P_5
Convertible Notes and Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |||
Convertible notes payable | $ 57,682 | [1] | $ 224,037 | ||
Notes payable - in default | [2] | 409,531 | 405,162 | ||
Notes payable | [3] | 25,403 | 25,153 | ||
Total notes - third parties | 492,616 | 654,352 | |||
Notes Payable Related Party | 3,826,230 | 3,646,967 | |||
Accrued interest | 566 | ||||
Extinguishment of convertible note | 166,921 | ||||
The Matthews Group | |||||
Convertible Notes, Related Party | [4] | 1,479,581 | 1,452,621 | ||
Notes Payable Related Party | [5] | 2,063,421 | $ 1,914,618 | ||
Conversion price | $ 0.08 | ||||
Shares issued upon conversion | 18,157,765 | ||||
Interest rate | 10.00% | ||||
Other | |||||
Convertible Notes, Related Party | [6] | $ 283,228 | $ 279,728 | ||
Conversion price | $ 0.08 | ||||
Notes payable | $ 265,729 | 279,728 | |||
Notes in Default | 201,624 | ||||
Balance due on demand | $ 73,604 | ||||
[1] | (a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand. | ||||
[2] | (b) The notes are either secured by the Companys intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default. | ||||
[3] | (c) The notes are unsecured and bear interest of 4% per annum and due on March 17, 2020. | ||||
[4] | (a) The notes are unsecured, convertible into common stock at $0.08 per share, bear interest at rates ranging from 8% to 10% per annum, and are due on demand. | ||||
[5] | (b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 8) dated September 30, 2015. At June 30, 2017, notes due to The Matthews Group totaled $805,195. During the year ended June 30, 2018, $599,312 of notes payable were issued, interest of $104,581 was added to principal, and an interest payment of $125,000 was made, leaving a balance owed of $1,384,088 at June 30, 2018. During the year ended June 30, 2019, $377,127 of notes payable were issued and interest of $153,403 was added to principal, leaving a balance owed of $1,914,618 at June 30, 2019. | ||||
[6] | (c) The notes are due to a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $0.10 to $0.30, and bear interest at rates ranging from 8% to 10% per annum. |
Gain on Extinguishment of Con_2
Gain on Extinguishment of Convertible Note Payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
May 31, 2009 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | ||
Convertible note | $ 57,682 | [1] | $ 224,037 | ||
Gain on extinguishment of convertible note payable | $ 166,921 | ||||
Bashwa | |||||
Convertible note | $ 100,000 | ||||
Conversion per share | $ .30 | ||||
Interest | 8.00% | ||||
Due | Nov. 15, 2010 | ||||
[1] | (a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand. |
Stockholders Deficiency (Detail
Stockholders Deficiency (Details Narrative) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Equity [Abstract] | ||
Common stock to be issued | 145,000 | 145,000 |
Common stock to be issued, value | $ 12,500 | $ 12,500 |
Stock Options - Summary of Stoc
Stock Options - Summary of Stock Options (Details) - $ / shares | 1 Months Ended | 3 Months Ended |
Dec. 31, 2018 | Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Beginning number of shares; outstanding | 3,650,000 | |
Beginning weighted-average exercise price; outstanding | $ 0.06 | |
Options Granted | 1,150,000 | |
Options granted, weighted average exercise price | ||
Options Forfeited | ||
Options Forfeited, weighted average exercise price | ||
Ending number of shares; outstanding | 3,650,000 | |
Ending weighted-average exercise price; outstanding | $ 0.06 | |
Number of Shares; exercisable | 3,362,500 | |
Weighted-average exercise price; exercisable | $ 0.07 |
Stock Options - Additional info
Stock Options - Additional information regarding outstanding options (Details) | 3 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Options outstanding, shares | 3,650,000 |
Options excercisable | 3,362,500 |
$0.03 per share | |
Options outstanding, shares | 1,150,000 |
Weighted average remaining contractual life | 5 years 3 months |
Weighted average exercise price | $ / shares | $ 0.03 |
Options excercisable | 862,500 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.03 |
$0.08 per share | |
Options outstanding, shares | 2,500,000 |
Weighted average remaining contractual life | 4 months |
Weighted average exercise price | $ / shares | $ 0.08 |
Options excercisable | 2,500,000 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.08 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended |
Dec. 31, 2018 | Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Options granted | 1,150,000 | |
Fair value of stock options granted | $ 21,285 | |
Compensation expense | $ 5,321 | |
Outstanding unvested options | 4,749 | |
Options outstanding intrinsic value | 23,000 | |
Options exercisable intrinsic value | $ 17,250 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended | 20 Months Ended | 25 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | May 31, 2017 | Jun. 30, 2019USD ($) | ||
Accounts payable, related party | $ 121,800 | $ 100,360 | |||
Managament fee, percent of revenue | 0.20 | 0.35 | |||
Management fee, revenue | 129,434 | $ 41,631 | |||
Notes Payable Related Party | 3,826,230 | $ 3,646,967 | |||
Proceeds from notes payable - related party | 104,433 | 108,949 | |||
The Matthews Group | |||||
Notes Payable Related Party | [1] | 2,063,421 | 1,914,618 | ||
Van Tran | |||||
Advances due to related party | 121,800 | $ 100,360 | |||
Rental Payments | $ 12,750 | $ 12,750 | |||
Larry Johanns | |||||
Ownership of TMG | 50.00% | ||||
Van Tran | |||||
Ownership of TMG | 50.00% | ||||
[1] | (b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 8) dated September 30, 2015. At June 30, 2017, notes due to The Matthews Group totaled $805,195. During the year ended June 30, 2018, $599,312 of notes payable were issued, interest of $104,581 was added to principal, and an interest payment of $125,000 was made, leaving a balance owed of $1,384,088 at June 30, 2018. During the year ended June 30, 2019, $377,127 of notes payable were issued and interest of $153,403 was added to principal, leaving a balance owed of $1,914,618 at June 30, 2019. |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 1 Months Ended |
Sep. 21, 2016 | |
Commitments and Contingencies | |
Settlement Agreement | On September 21, 2016, the Company entered into a settlement agreement with an individual who was a former officer of the Company; The individual in prior years was also issued 500,000 shares of common stock for services. The Company alleged that the individual used the Company's intellectual property without approval. Under the terms of the settlement agreement, the individual agreed to relinquish a convertible note payable and unpaid interest aggregating $364,686 and return 500,000 shares of common stock previously issued to him. In turn, the Company agreed to release and discharge the individual against all claims arising on or prior to the date of the settlement agreement. As of September 30, 2019, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares. |