Veritec (VRTC) 10-K 15 Sep 20 2020 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Jun. 30, 2020	Aug. 31, 2020	Dec. 31, 2019
Document And Entity Information
Entity Registrant Name	VERITEC INC
Entity Central Index Key	0000773318
Document Type	10-K
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity's Reporting Status Current?	No
Entity Filer Category	Non-accelerated Filer
Is Entity Small Business?	true
Is Entity Emerging Growth Company?	false
Is Entity Well Known Seasoned Issuer?	No
Is Entity A Voluntary Filer?	No
Is Entity Shell Company?	false
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	NV
Entity File Number	000-15113
Entity Public Float			$ 495,000
Entity Common Stock, Shares Outstanding		39,738,007
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Current Assets:
Cash	$ 228,000	$ 91,000
Accounts receivable	10,000	9,000
Prepaid expenses	6,000	5,000
Total Assets	244,000	105,000
Current Liabilities:
Accounts payable	689,000	717,000
Accounts payable, related party	96,000	100,000
Accrued expenses	70,000	63,000
Customer deposits	91,000	68,000
Convertible notes and notes payable ($467,000 and $590,000 in default)	508,000	654,000
Convertible notes and notes payable, related parties ($215,000 and $206,000 in default)	4,484,000	3,647,000
Total Current Liabilities	5,938,000	5,249,000
Contingent earnout liability	155,000	155,000
Total Liabilities	6,093,000	5,404,000
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; 39,738,007 and 39,538,007 shares issued and outstanding at June 30, 2020, and 2019, respectively	397,000	395,000
Common stock to be issued, 145,000 shares to be issued	12,000	12,000
Additional paid-in capital	18,136,000	18,112,000
Accumulated deficit	(24,395,000)	(23,819,000)
Total Stockholders' Deficiency	(5,849,000)	(5,299,000)
Total Liabilities and Stockholders' Deficiency	$ 244,000	$ 105,000

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2020	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	$ .01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	39,738,007	39,538,007
Common stock, shares outstanding	39,738,007	39,538,007
Common stock, shares to be issued	145,000	145,000
Convertible notes and notes payable, in default	$ 467,000	$ 590,000
Convertible notes and notes payable, related party, in default	$ 215,000	$ 206,000
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

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue:
Mobile banking technology revenue	$ 100,000	$ 120,000
Other revenue, management fee related party	338,000	187,000
Total revenue	438,000	307,000
Cost of Sales	210,000	230,000
Gross Profit	228,000	77,000
Operating Expenses:
General and administrative (including $51,000 and $51,000, respectively, to related party)	630,000	605,000
Research and development	0	19,000
Total Operating Expenses	630,000	624,000
Loss from Operations	(402,000)	(547,000)
Other Income (Expense):
Gain on extinguishment of convertible note payable	(167,000)	0
Interest expense (including $320,000 and $275,000, respectively, to related parties)	(341,000)	(302,000)
Total other expense	(174,000)	(302,000)
Net Loss	$ (576,000)	$ (849,000)
Net Loss Per Common Share - Basic and Diluted	$ (0.01)	$ (0.02)
Weighted Average Number of Shares Outstanding - Basic and Diluted	39,638,829	39,538,007

Consolidated Statements of Op_2

Consolidated Statements of Operations (Parenthetical) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
General and administrative to related party	$ 51,000	$ 51,000
Interest expense to related parties	$ 320,000	$ 275,000

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Deficiency) - 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	$ 395,000	$ 12,000	$ 18,101,000	$ (22,970,000)	$ (4,461,000)
Stock-Based Compensation				11,000		11,000
Net Loss					(849,000)	(849,000)
Ending balance, Shares at Jun. 30, 2019	1,000	39,538,007
Ending balance, Amount at Jun. 30, 2019	$ 1,000	$ 395,000	12,000	18,112,000	(23,819,000)	(5,299,000)
Stock-Based Compensation				16,000		16,000
Common stock issued for services, Share		200,000
Common stock issued for services, Amount		$ 2,000		8,000		10,000
Net Loss					(576,000)	(576,000)
Ending balance, Shares at Jun. 30, 2020	1,000	39,738,007
Ending balance, Amount at Jun. 30, 2020	$ 1,000	$ 397,000	$ 12,000	$ 18,136,000	$ (24,395,000)	$ (5,849,000)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (576,000)	$ (849,000)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Interest accrued on notes payable	341,000	302,000
Common stock issued for services	10,000	0
Stock-based compensation	16,000	11,000
Gain on extinguishment of convertible note payable	(167,000)	0
Changes in operating assets and liabilities:
Accounts receivable	(1,000)	(2,000)
Prepaid expenses	(1,000)	0
Deferred revenues	0	(30,000)
Customer deposits	23,000	68,000
Accounts payable	(28,000)	46,000
Accounts payable, related party	(4,000)	4,000
Accrued expenses	7,000	0
Net cash used in operating activities	(380,000)	(450,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable	0	25,000
Proceeds from notes payable - related party	517,000	377,000
Net cash provided by financing activities	517,000	402,000
NET INCREASE (DECREASE) IN CASH	137,000	(48,000)
CASH AT BEGINNING OF PERIOD	91,000	139,000
CASH AT END OF PERIOD	228,000	91,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$ 0	$ 0

Operations and Summary of Signi

Operations and Summary of Significant Accounting Policies	12 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Veritec, Inc. (Veritec) was formed in the State of Nevada on September 8, 1982. Veritec is primarily engaged in the development, sales, and licensing of products and providing services related to its mobile banking solutions. As a Cardholder Independent Sales Organization, Veritec is able to 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. In addition, we have seven U.S. and twenty-eight foreign pending patent applications. Veritec has had agreements with various banks in the past and is currently seeking a bank to sponsor its Prepaid Card programs. On December 31, 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 8). 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, 2021. The Company earns a fee of 35% of all revenues billed up to June 30, 2021, and recognizes management fee revenue as services are performed. COVID-19 Considerations The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as the responses that the Company, other businesses and governments are taking continue to evolve. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that the COVID-19 pandemic could cause a local, national and/or global economic recession. Policymakers around the globe have responded with fiscal policy actions to support the economy as a whole, but it is presently unknown whether and to what extent further fiscal actions will continue. The magnitude and overall effectiveness of these actions remain uncertain. The Company believes that its Mobile Banking revenues have been negatively affected due to the reduction in customer spending, which negatively impacts the amount of fees earned by the Company from its customers. The Company is also currently experiencing a decline in revenues earned under the management services agreement with The Matthews Group, as The Matthews Group’s customer orders have been negatively impacted by the effects of COVID-19. The severity of the impact of the COVID-19 pandemic on the Company’s business will continue to depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, service providers and suppliers, all of which are uncertain and cannot be predicted. As of the date of issuance of the Company’s financial statements, the extent to which the COVID-19 pandemic may in the future materially impact the Company’s financial condition, liquidity or results of operations is uncertain. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”). Intercompany transactions and balances were eliminated in consolidation. Use of Estimates The preparation of 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long-lived assets, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and valuation of deferred tax assets. Actual results could differ from those estimates. Cash and cash equivalents Investments with original maturities of three months or less are considered to be cash equivalents. The Company held no cash equivalents as of June 30, 2020 and 2019. Accounts Receivable The Company grants uncollateralized credit to customers but requires deposits on unique orders. Management periodically reviews its accounts receivable and provides an allowance for doubtful accounts after analyzing the age of the receivable, payment history and prior experience with the customer. The estimated loss that management believes is probable is included in the allowance for doubtful accounts. While the ultimate loss may differ, management believes that any additional loss will not have a material impact on the Company's financial position. Due to uncertainties in the settlement process, however, it is at least reasonably possible that management's estimate will change during the near term. Based on management’s assessment, no allowance for doubtful accounts was considered necessary at June 30, 2020, or 2019. Revenue Recognition Revenues for the Company are classified into management fee revenue and mobile banking technology. The Company recognizes revenue in accordance with the 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 on a monthly basis 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 9). 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, 2021. The Company earned a fee of 35% of all revenues billed up to June 30, 2020. The Company recognizes management fee revenue as services are performed. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: Fiscal years ended June 30, 2020 2019 Mobile banking technology revenue $ 100,000 $ 120,000 Other revenue, management fee - related party 338,000 187,000 Total revenue $ 438,000 $ 307,000 The following table shows the Company’s disaggregated net sales by customer type for our Mobile banking technology: Fiscal years ended June 30, 2020 2019 Medical $ 63,000 $ 62,000 Associations 11,000 30,000 Education 12,000 12,000 Other 14,000 16,000 Total revenue $ 100,000 $ 120,000 During the years ended June 30, 2020 and 2019, all of the Company’s Mobile banking technology revenues were earned in the United States of America. Other revenue, management fee - related party revenue was $338,000 and $187,000 for the years ended June 30, 2020 and 2019, respectively, and realized from our management services agreement with The Matthews Group, a related party, which requires us to manage The Matthews Group’s barcode technology operations. The Matthews Group’s barcode technology customers are primarily manufacturing companies located in China. Income Taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Research and Development Research and development costs are expensed as incurred. 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 stock outstanding plus the number of additional common stock that would have been outstanding if all dilutive potential common stock had been issued, using the treasury stock method. For the years ended June 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. As of June 30, 2020 and 2019, 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. June 30, 2020 2019 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 21,779,065 20,874,054 Options 3,650,000 3,650,000 Total 25,439,065 24,534,054 Stock-Based Compensation The Company periodically issues stock-based compensation to officers, directors, contractors and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to officers, directors, employees, and for acquiring goods and services from nonemployees, which include grants of employee stock options, are recognized in the financial statements based on their fair values in accordance with Topic 718. Stock option grants, which are generally time vested, will be measured at the grant date fair value and charged to operations on a straight-line basis over the vesting period. The fair value of stock options is determined utilizing the Black-Scholes option-pricing model, which is affected by several variables, including the risk-free interest rate, the expected dividend yield, the expected life of the equity award, the exercise price of the stock option as compared to the fair market value of the common stock on the grant date and the estimated volatility of the common stock over the term of the equity award. 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. The carrying values of notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. Concentrations During the year ended June 30, 2020 and 2019, the Company had one customer, a related party, that represented 77% and 61% of our revenues, respectively. No other customer represented more than 10% of our revenues. 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 Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. 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.

Going Concern

Going Concern	12 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Going Concern	NOTE 2 - GOING CONCERN The accompanying 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 year ended June 30, 2020, the Company recorded a loss of $576,000, used cash in operating activities of $380,000, and at June 30, 2020, the Company had a stockholders’ deficiency of $5,849,000. In addition, as of June 30, 2020, the Company is delinquent in payment of $682,000 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. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty be necessary should we be unable to continue as a going concern. The Company believes it will require additional funds to continue its operations through fiscal 2021 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 consolidated financial statements do not include any adjustments that may result from this uncertainty.

Contingent Earnout Liability

Contingent Earnout Liability	12 Months Ended
	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Contingent Earnout Liability	NOTE 3 –CONTINGENT EARNOUT LIABILITY On September 30, 2014, the Company acquired certain assets and liabilities of the Tangible Payments LLC. A portion of the purchase price for Tangible Payments LLC was an earnout payment of $155,000. The earnout payment is payable on a monthly basis from the net profits derived from the acquired assets commencing three months after the closing. The earnout payment is accelerated and the balance of the earnout payment shall be due in full at such time as Veritec receives equity investments aggregating $1,300,000. For the years ended June 30, 2020 and 2019, there was no net profit derived from the acquired assets, and the Company had not yet received the required equity investments. Accordingly, no payments were made on the earnout.

Convertible Notes and Notes Pay

Convertible Notes and Notes Payable	12 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
CONVERTIBLE NOTES AND NOTES PAYABLE	NOTE 4 – CONVERTIBLE NOTES AND NOTES PAYABLE Convertible notes and notes payable Notes payable includes principal and accrued interest and consists of the following at June 30, 2020 and June 30, 2019: June 30, June 30, (a) Unsecured convertible notes ($18,000 and $185,000 in default) $ 59,000 $ 224,000 (b) Notes payable (in default) 423,000 405,000 (c) Notes payable (in default) 26,000 25,000 Total notes-third parties $ 508,000 $ 654,000 (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. At June 30, 2018, convertible notes totaled $215,000. During the year ended June 30, 2019, interest of $9,000 was added to principal, resulting in a balance owed of $224,000 at June 30, 2019. During the year ended June 30, 2020, interest of $2,000 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 $167,000 resulting in a gain on extinguishment (see Note 9), resulting in a balance owed of $59,000 at June 30, 2020. On June 30, 2020, $18,000 of the convertible notes were in default and convertible at a conversion price of $0.30 per share into 61,286 shares of the Company’s common stock. The balance of $41,000 is due on demand and convertible at a conversion price of $0.08 per share into 512,398 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. At June 30, 2018, the notes totaled $388,000. During the year ended June 30, 2019, interest of $17,000 was added to principal resulting in a balance owed of $405,000 at June 30, 2019. During the year ended June 30, 2020, interest of $18,000 was added to principal resulting in a balance owed of $423,000 at June 30, 2020. At June 30, 2020, $365,000 of notes are secured by the Company’s intellectual property and $58,000 of notes are unsecured. (c) The notes are unsecured and bear interest of 4% per annum and were due on March 17, 2020, and are in default. On March 18, 2019 and June 6, 2019, the Company entered into notes payable for $10,000 and $15,000, respectively, resulting in a balance owed of $25,000 at June 30, 2019. During the year ended June 30, 2020, interest of $1,000 was added to principal, resulting in a balance owed of $26,000 at June 30, 2020. Convertible notes and notes payable-related parties Notes payable-related parties includes principal and accrued interest and consists of the following at June 30, 2020 and June 30, 2019: June 30, June 30, (a) Convertible notes-The Matthews Group $ 1,560,000 $ 1,453,000 (b) Notes payable-The Matthews Group 2,630,000 1,915,000 (c) Convertible notes-other related parties ($215,000 and 206,000 in default) 294,000 279,000 Total notes-related parties $ 4,484,000 $ 3,647,000 (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 8) and is owned 50% by Ms. Van Tran, the Company’s CEO, and 50% by Larry Johanns, a significant shareholder of the Company. At June 30, 2018, convertible notes due to The Matthews Group totaled $1,345,000. During the year ended June 30, 2019, interest of $108,000 was added to principal resulting in a balance payable of $1,453,000 at June 30, 2019. During the year ended June 30, 2020, interest of $107,000 was added to principal resulting in a balance payable of $1,560,000 at June 30, 2020. At June 30, 2020, the notes are convertible at a conversion price of $0.08 per share into 19,505,751 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 8) dated September 30, 2015. At June 30, 2018, notes due to The Matthews Group totaled $1,384,000. During the year ended June 30, 2019, $377,000 of notes payable were issued and interest of $154,000 was added to principal, resulting in a balance owed of $1,915,000 at June 30, 2019. During the year ended June 30, 2020, $517,000 of notes payable were issued and interest of $198,000 was added to principal, resulting in a balance owed of $2,630,000 at June 30, 2020. (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. At June 30, 2018, convertible notes due to other related parties totaled $266,000. During the year ended June 30, 2019, interest of $14,000 was added to principal resulting in a balance owed of $279,000 at June 30, 2019. During the year ended June 30, 2020, interest of $15,000 was added to principal resulting in a balance owed of $294,000 at June 30, 2020. At June 30, 2020, $215,000 of the notes were due in 2010 and are in default, and the balance of $79,000 is due on demand. At June 30, 2020, $215,000 of the notes are convertible at a conversion price of $0.30 per share into 717,081 shares of the Company’s common stock, and $79,000 of the notes are convertible at a conversion price of $0.08 per share into 983,000 shares of the Company’s common stock.

Stockholders' Deficiency

Stockholders' Deficiency	12 Months Ended
	Jun. 30, 2020
Equity [Abstract]
Stockholders' Deficiency	NOTE 5 - STOCKHOLDERS’ DEFICIENCY Preferred Stock The articles of incorporation of Veritec authorize 10,000,000 shares of preferred stock with a par value of $1.00 per share. The Board of Directors is authorized to determine any number of series into which shares of preferred stock may be divided and to determine the rights, preferences, privileges, and restrictions granted to any series of the preferred stock. In 1999, a new Series H convertible preferred stock was authorized. Each share of Series H convertible preferred stock is convertible into 10 shares of the Veritec’s common stock at the option of the holder. As of June 30, 2020 and 2019, there were 1,000 shares of Series H convertible preferred stock issued and outstanding. Common Stock Issued for Services During the twelve months June 30, 2020, the Company issued 200,000 shares of common stock to a consultant, with a fair value of $10,000 at date of grant, which was recognized as compensation cost. Common Stock to be Issued At June 30, 2020 and 2019, 145,000 shares of common stock to be issued with an aggregate value of $12,000 have not been issued and are reflected as common stock to be issued in the accompanying consolidated financial statements.

Stock Options

Stock Options	12 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock Options	NOTE 6 – STOCK OPTIONS A summary of stock options as of June 30, 2020 and for the two years then ended is as follows: Number of Shares Weighted - Average Exercise Price Outstanding at June 30, 2018 2,500,000 $ 0.08 Granted 1,150,000 0.03 Forfeited — $ — Outstanding at June 30, 2019 3,650,000 $ 0.06 Granted — — Forfeited — $ — Outstanding at June 30, 2020 3,650,000 $ 0.06 Exercisable at June 30, 2020 3,650,000 $ 0.06 On January 10, 2020, the Company modified the term of a stock option originally granted to its Chief Executive Officer in February 2013 and due to expire in February 2020. The Company extended the expiration date of the stock option by an additional 24 months. Due to the modification, the Company recorded a charge of approximately $6,000 on the modification date to account for the incremental change in fair value of the stock option before and after the modification,which was recognized as compensation cost. 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 $21,000 and was being amortized over the vesting period of 12 months. During the years ended June 30, 2020 and 2019, the Company recorded stock-based compensation expense of $10,000 and $11,000, respectively, related to the vesting of these options. As of June 30, 2020, the Company had no outstanding unvested options with future compensation costs. The outstanding and exercisable stock options had an intrinsic value of $12,000 and $23,000, respectively, on June 30, 2020, and June 30, 2019. The fair value of each option on the date of grant was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: 2019 Exercise Price $ 0.03 Stock Price $ 0.03 Risk-free interest rate 2.63 % Expected volatility 121 % Expected life (in years) 2.0 Expected dividend yield 0 % Additional information regarding options outstanding as of June 30, 2020, is as follows: Options Outstanding at June 30, 2020 Options Exercisable at June 30, 2020 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 4.48 $ 0.03 1,150,000 $ 0.03 $ 0.08 2,500,000 1.61 $ 0.08 2,500,000 $ 0.08 3,650,000 3,650,000

Income Taxes

Income Taxes	12 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	NOTE 7 - INCOME TAXES For the year ended June 30, 2020, net loss was $576,000, as compared to a net loss of $849,000 for the year ended June 30, 2019. For the years ended June 30, 2020 and 2019, no provision for income taxes was recorded. We made no provision for income taxes due to our utilization of federal net operating loss carryforwards to offset both regular taxable income and alternative minimum taxable income. Reconciliation between the expected federal income tax rate and the actual tax rate is as follows: Year Ended June 30, 2020 2019 Federal statutory tax rate 21 % 21 % State tax, net of federal benefit 6 % 6 % Total tax rate 27 % 27 % Allowance (27 )% (27 )% Effective tax rate — % — % The following is a summary of the deferred tax assets: Year Ended June 30, 2020 2019 Net operating loss carryforwards $ 3,554,000 $ 3,403,000 Deferred tax assets before valuation allowance 3,554,000 3,403,000 Valuation allowance (3,554,000 ) (3,403,000 ) Net deferred tax asset $ — $ — The Company has provided a valuation allowance on the deferred tax assets at June 30, 2020 and 2019 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted. The net change in the valuation allowance for the year ended June 30, 2020, was an increase of $151,000. Veritec has net operating loss carryforwards of approximately $13,162,000 million for federal purposes available to offset future taxable income that expires in varying amounts through 2040. The ability to utilize the net operating loss carryforwards could be limited by Section 382 of the Internal Revenue Code which limits their use if there is a change in control (generally a greater than 50% change in ownership). The Company is subject to examination by tax authorities for all years for which a loss carryforward is utilized in subsequent periods. The Company follows FASB guidelines that address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. This guidance also provides guidance on derecognition, classification, interest, and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2019 and 2018, the Company did not have a liability for unrecognized tax benefits, and no adjustment was required at adoption. The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2020 and 2019, the Company has no accrued interest or penalties related to uncertain tax positions.

Related Party Transactions

Related Party Transactions	12 Months Ended
	Jun. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	NOTE 8 – 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 4). 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, 2021, from the barcode technology operations. During the year ended June 30, 2020 and 2019, the Company recorded management fee revenue related to this agreement of $338,000 and $187,000, 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 years ended June 30, 2020 and 2019, cash flow loans of $517,000 and $377,000, respectively, were made to the Company at 10% interest per annum and due on demand. At June 30, 2020, cash flow loans of $2,630,000 are due to The Matthews Group (see Note 4). 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 June 30, 2020 and 2019, total advances to Ms. Tran amounted to $96,000 and $100,000, 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 both the years ended June 30, 2020 and 2019, lease payments to Ms. Tran totaled $51,000.

Legal Proceedings

Legal Proceedings	12 Months Ended
	Jun. 30, 2020
Commitments and Contingencies
Legal Proceedings	NOTE 9 – LEGAL PROCEEDINGS On or about November 13, 2017, a noteholder (“Plaintiff”) filed a lawsuit in district court in Hennepin County, Minnesota asserting that the Company breached the terms of a promissory note. Plaintiff sought repayment on the principal of the promissory note, in the amount of $100,000, $10,000 of which Plaintiff contend Veritec previously paid, plus interest, collection costs and attorney’s fees. As of May 15, 2018, the date of the last communication on the amount of recovery from Plaintiff, the Plaintiff sought an award or settlement in the amount of $163,000. As of June 30, 2019, the Company had recorded a promissory note payable of $163,000 related to this proceeding. On July 10, 2019, the Company and Plaintiff entered into a Settlement Agreement and Mutual Release, whereas, both the Company and the Plaintiff agreed to generally discharge and forever release each other from future claims, to pay their own legal fees, and the promissory note payable to the Plaintiff was discharged. During the twelve months ended June 30, 2020, the Company recorded a gain on settlement and extinguishment of the promissory note payable of $167,000. 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 $365,000 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 June 30, 2020, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Jun. 30, 2020
Commitments and Contingencies
Commitments and Contingencies	NOTE 10 – COMMITMENTS AND CONTINGENCIES On December 5, 2008, the Company adopted an incentive compensation bonus plan to provide payments to key employees in the aggregated amount of 10% of pre-tax earnings in excess of $3,000,000 after the end of each fiscal year to be distributed annually to employees. As of June 30, 2020, the Company had not achieved annual pre-tax earnings in excess of $3,000,000. On December 5, 2008, the Company entered into an employment agreement with Van Thuy Tran, its Chief Executive Officer, providing for an annual base salary of $150,000 and customary medical and other benefits. The agreement may be terminated by either party upon 30 days’ notice. In the event the Company terminates the agreement without cause, Ms. Tran will be entitled to $1,000,000 payable upon termination, and she will be entitled to severance equal to 12 months compensation and benefits. The Company has also agreed to indemnify Ms. Tran against any liability or damages incurred within the scope of her employment. During the year ended June 30, 2020 and 2019, salaries paid to Van Thuy Tran under this agreement totated $150,000 and $150,000.

Operations and Summary of Sig_2

Operations and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
The Company	The Company Veritec, Inc. (Veritec) was formed in the State of Nevada on September 8, 1982. Veritec is primarily engaged in the development, sales, and licensing of products and providing services related to its mobile banking solutions. As a Cardholder Independent Sales Organization, Veritec is able to 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. In addition, we have seven U.S. and twenty-eight foreign pending patent applications. Veritec has had agreements with various banks in the past and is currently seeking a bank to sponsor its Prepaid Card programs. On December 31, 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 8). 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, 2021. The Company earns a fee of 35% of all revenues billed up to June 30, 2021, and recognizes management fee revenue as services are performed.
COVID-19 Considerations	COVID-19 Considerations The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as the responses that the Company, other businesses and governments are taking continue to evolve. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that the COVID-19 pandemic could cause a local, national and/or global economic recession. Policymakers around the globe have responded with fiscal policy actions to support the economy as a whole, but it is presently unknown whether and to what extent further fiscal actions will continue. The magnitude and overall effectiveness of these actions remain uncertain. The Company believes that its Mobile Banking revenues have been negatively affected due to the reduction in customer spending, which negatively impacts the amount of fees earned by the Company from its customers. The Company is also currently experiencing a decline in revenues earned under the management services agreement with The Matthews Group, as The Matthews Group’s customer orders have been negatively impacted by the effects of COVID-19. The severity of the impact of the COVID-19 pandemic on the Company’s business will continue to depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, service providers and suppliers, all of which are uncertain and cannot be predicted. As of the date of issuance of the Company’s financial statements, the extent to which the COVID-19 pandemic may in the future materially impact the Company’s financial condition, liquidity or results of operations is uncertain.
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”). Intercompany transactions and balances were eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long-lived assets, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and valuation of deferred tax assets. Actual results could differ from those estimates.
Cash and cash equivalents	Cash and cash equivalents Investments with original maturities of three months or less are considered to be cash equivalents. The Company held no cash equivalents as of June 30, 2020 and 2019.
Accounts Receivable	Accounts Receivable The Company grants uncollateralized credit to customers but requires deposits on unique orders. Management periodically reviews its accounts receivable and provides an allowance for doubtful accounts after analyzing the age of the receivable, payment history and prior experience with the customer. The estimated loss that management believes is probable is included in the allowance for doubtful accounts. While the ultimate loss may differ, management believes that any additional loss will not have a material impact on the Company's financial position. Due to uncertainties in the settlement process, however, it is at least reasonably possible that management's estimate will change during the near term. Based on management’s assessment, no allowance for doubtful accounts was considered necessary at June 30, 2020, or 2019.
Revenue Recognition	Revenue Recognition Revenues for the Company are classified into management fee revenue and mobile banking technology. The Company recognizes revenue in accordance with the 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 on a monthly basis 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 9). 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, 2021. The Company earned a fee of 35% of all revenues billed up to June 30, 2020. The Company recognizes management fee revenue as services are performed. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: Fiscal years ended June 30, 2020 2019 Mobile banking technology revenue $ 100,000 $ 120,000 Other revenue, management fee - related party 338,000 187,000 Total revenue $ 438,000 $ 307,000 The following table shows the Company’s disaggregated net sales by customer type for our Mobile banking technology: Fiscal years ended June 30, 2020 2019 Medical $ 63,000 $ 62,000 Associations 11,000 30,000 Education 12,000 12,000 Other 14,000 16,000 Total revenue $ 100,000 $ 120,000 During the years ended June 30, 2020 and 2019, all of the Company’s Mobile banking technology revenues were earned in the United States of America. Other revenue, management fee - related party revenue was $338,000 and $187,000 for the years ended June 30, 2020 and 2019, respectively, and realized from our management services agreement with The Matthews Group, a related party, which requires us to manage The Matthews Group’s barcode technology operations. The Matthews Group’s barcode technology customers are primarily manufacturing companies located in China.
Income Taxes	Income Taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Research and Development	Research and Development Research and development costs are expensed as incurred.
Loss per Common Share	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 stock outstanding plus the number of additional common stock that would have been outstanding if all dilutive potential common stock had been issued, using the treasury stock method. For the years ended June 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. As of June 30, 2020 and 2019, 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. June 30, 2020 2019 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 21,779,065 20,874,054 Options 3,650,000 3,650,000 Total 25,439,065 24,534,054
Stock-Based Compensation	Stock-Based Compensation The Company periodically issues stock-based compensation to officers, directors, contractors and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to officers, directors, employees, and for acquiring goods and services from nonemployees, which include grants of employee stock options, are recognized in the financial statements based on their fair values in accordance with Topic 718. Stock option grants, which are generally time vested, will be measured at the grant date fair value and charged to operations on a straight-line basis over the vesting period. The fair value of stock options is determined utilizing the Black-Scholes option-pricing model, which is affected by several variables, including the risk-free interest rate, the expected dividend yield, the expected life of the equity award, the exercise price of the stock option as compared to the fair market value of the common stock on the grant date and the estimated volatility of the common stock over the term of the equity award.
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. The carrying values of notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates.
Concentrations	Concentrations During the year ended June 30, 2020 and 2019, the Company had one customer, a related party, that represented 77% and 61% of our revenues, respectively. No other customer represented more than 10% of our revenues.
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
Recent Accounting Pronouncements	Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. 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.

Operations and Summary of Sig_3

Operations and Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Disaggregated revenue	The following table shows the Company’s disaggregated net sales by product type: Fiscal years ended June 30, 2020 2019 Mobile banking technology revenue $ 100,000 $ 120,000 Other revenue, management fee - related party 338,000 187,000 Total revenue $ 438,000 $ 307,000 The following table shows the Company’s disaggregated net sales by customer type for our Mobile banking technology: Fiscal years ended June 30, 2020 2019 Medical $ 63,000 $ 62,000 Associations 11,000 30,000 Education 12,000 12,000 Other 14,000 16,000 Total revenue $ 100,000 $ 120,000
Summary of securities excluded from EPS calculation	As of June 30, 2020 and 2019, 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. June 30, 2020 2019 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 21,779,065 20,874,054 Options 3,650,000 3,650,000 Total 25,439,065 24,534,054

Convertible Notes and Notes P_2

Convertible Notes and Notes Payable (Tables)	12 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Convertible notes and notes payable - in default	Notes payable includes principal and accrued interest and consists of the following at June 30, 2020 and June 30, 2019: June 30, June 30, (a) Unsecured convertible notes ($18,000 and $185,000 in default) $ 59,000 $ 224,000 (b) Notes payable (in default) 423,000 405,000 (c) Notes payable (in default) 26,000 25,000 Total notes-third parties $ 508,000 $ 654,000
Convertible notes and notes payable- related party	Notes payable-related parties includes principal and accrued interest and consists of the following at June 30, 2020 and June 30, 2019: June 30, June 30, (a) Convertible notes-The Matthews Group $ 1,560,000 $ 1,453,000 (b) Notes payable-The Matthews Group 2,630,000 1,915,000 (c) Convertible notes-other related parties ($215,000 and 206,000 in default) 294,000 279,000 Total notes-related parties $ 4,484,000 $ 3,647,000

Stock Options (Tables)

Stock Options (Tables)	12 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Summary of Stock Options	A summary of stock options as of June 30, 2020 and for the two years then ended is as follows: Number of Shares Weighted - Average Exercise Price Outstanding at June 30, 2018 2,500,000 $ 0.08 Granted 1,150,000 0.03 Forfeited — $ — Outstanding at June 30, 2019 3,650,000 $ 0.06 Granted — — Forfeited — $ — Outstanding at June 30, 2020 3,650,000 $ 0.06 Exercisable at June 30, 2020 3,650,000 $ 0.06
Fair value of options	The fair value of each option on the date of grant was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: 2019 Exercise Price $ 0.03 Stock Price $ 0.03 Risk-free interest rate 2.63 % Expected volatility 121 % Expected life (in years) 2.0 Expected dividend yield 0 %
Additional information regarding outstanding options	Additional information regarding options outstanding as of June 30, 2020, is as follows: Options Outstanding at June 30, 2020 Options Exercisable at June 30, 2020 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 4.48 $ 0.03 1,150,000 $ 0.03 $ 0.08 2,500,000 1.61 $ 0.08 2,500,000 $ 0.08 3,650,000 3,650,000

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Reconciliation between the federal and actual tax rate	Reconciliation between the expected federal income tax rate and the actual tax rate is as follows: Year Ended June 30, 2020 2019 Federal statutory tax rate 21 % 21 % State tax, net of federal benefit 6 % 6 % Total tax rate 27 % 27 % Allowance (27 )% (27 )% Effective tax rate — % — %
Deferred tax assets	The following is a summary of the deferred tax assets: Year Ended June 30, 2020 2019 Net operating loss carryforwards $ 3,554,000 $ 3,403,000 Deferred tax assets before valuation allowance 3,554,000 3,403,000 Valuation allowance (3,554,000 ) (3,403,000 ) Net deferred tax asset $ — $ —

Operations and Summary of Sig_4

Operations and Summary of Significant Accounting Policies (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue	$ 438,000	$ 307,000
Other revenue related party	338,000	187,000
Mobile banking technology revenue
Revenue	100,000	120,000
Other revenue, management fee - related party
Revenue	$ 338,000	$ 187,000

Operations and Summary of Sig_5

Operations and Summary of Significant Accounting Policies - Disaggregated net sales by customer type (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue	$ 100,000	$ 120,000
Medical
Revenue	63,000	62,000
Associations
Revenue	11,000	30,000
Education
Revenue	12,000	12,000
Other
Revenue	$ 14,000	$ 16,000

Operations and Summary of Sig_6

Operations and Summary of Significant Accounting Policies - Summarized outstanding securities (Details) - shares	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Total	25,439,065	24,534,054
Series H Preferred Stock [Member]
Total	10,000	10,000
Convertible Notes Payable [Member]
Total	21,779,065	20,874,054
Options [Member]
Total	3,650,000	3,650,000

Operations and Summary of Sig_7

Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Other revenue related party	$ 338,000	$ 187,000
One customer [Member]
Sales percentage from major customers	77.00%	61.00%

Going Concern (Details Narrativ

Going Concern (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (576,000)	$ (849,000)
Cash used in operating activities	(380,000)	(450,000)
Stockholders' deficiency	(5,849,000)	$ (5,299,000)	$ (4,461,000)
Notes payable in default	$ 682,000

Contingent Earnout Liability (D

Contingent Earnout Liability (Details Narrative) - Tangible Payments LLC	12 Months Ended
	Sep. 30, 2014USD ($)
Earnout Payment	$ 155,000
Equity investments	$ 1,300,000

Convertible Notes and Notes P_3

Convertible Notes and Notes Payable - Convertible notes and notes payable in default (Details) - USD ($)		Jun. 30, 2020	Jun. 30, 2019
Debt Disclosure [Abstract]
Unsecured convertible notes - in default	[1]	$ 59,000	$ 224,000
Notes payable - (in default)	[2]	423,000	405,000
Notes payable (in default)	[3]	26,000	25,000
Total notes - third parties		$ 508,000	$ 654,000
[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 ($)		Jun. 30, 2020	Jun. 30, 2019
Notes Payable Related Party		$ 4,484,000	$ 3,647,000
The Matthews Group
Convertible Notes, Related Party	[1]	1,560,000	1,453,000
Notes Payable Related Party	[2]	2,630,000	1,915,000
Other
Convertible Notes, Related Party	[3]	$ 294,000	$ 279,000
[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 ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018	Jun. 06, 2018	Mar. 18, 2018
The Matthews Group
Interest rate	10.00%
Minimum [Member] | The Matthews Group
Interest rate	8.00%
Maximum [Member] | The Matthews Group
Interest rate	10.00%
Unsecured convertible notes [Member]
Conversion price	$ 0.30
Convertible debts	$ 226,000	$ 224,000	$ 215,000
Extinguish of convertible note payable	167,000
Gain on extinguishment	59,000
Accrued interest	2,000	9,000
Notes in Default	18,000
Balance due on demand	$ 41,000
Shares issued upon conversion	61,286
Unsecured convertible notes [Member] | Minimum [Member]
Conversion price	$ 0.08
Interest rate	5.00%
Unsecured convertible notes [Member] | Maximum [Member]
Conversion price	$ 0.30
Interest rate	8.00%
Unsecured convertible note [Member]
Conversion price	$ 0.08
Shares issued upon conversion	512,398
Notes Payable (In Default) [Member]
Notes payable	$ 423,000	405,000	388,000
Accrued interest	$ 18,000	17,000
Notes Payable (In Default) [Member] | Minimum [Member]
Interest rate	6.50%
Notes Payable (In Default) [Member] | Maximum [Member]
Interest rate	10.00%
Secured Notes [Member]
Notes payable	$ 365,000
Unsecured Notes [Member]
Notes payable	58,000
Notes Payable (In Default) [Member]
Notes payable	$ 26,000	25,000		$ 15,000	$ 10,000
Accrued interest				$ 1,000
Convertible notes [Member] | The Matthews Group
Conversion price	$ 0.08
Convertible debts	$ 1,560,000	1,453,000	1,345,000
Accrued interest	$ 107,000	108,000
Shares issued upon conversion	19,505,751
Convertible notes [Member] | Other
Conversion price	$ 0.30
Convertible debts	$ 294,000	279,000	266,000
Accrued interest	15,000	14,000
Notes in Default	215,000
Balance due on demand	$ 79,000
Shares issued upon conversion	717,081
Convertible notes [Member] | Minimum [Member] | Other
Conversion price	$ 0.08
Interest rate	8.00%
Convertible notes [Member] | Maximum [Member] | Other
Conversion price	$ 0.30
Interest rate	10.00%
Notes Payable [Member] | The Matthews Group
Interest rate	10.00%
Notes payable	$ 2,630,000	1,915,000	$ 1,384,000
Accrued interest	198,000	154,000
Notes issued	$ 517,000	$ 377,000
Convertible note [Member] | Other
Conversion price	$ 0.08
Balance due on demand	$ 79,000
Shares issued upon conversion	983,000

Stockholders Deficiency (Detail

Stockholders Deficiency (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Equity [Abstract]
Common stock to be issued	145,000	145,000
Common stock to be issued, value	$ 12,000	$ 12,000
Common stock shares issued	200,000
Compensation cost	$ 10,000	$ 11,000

Stock Options - Summary of Stoc

Stock Options - Summary of Stock Options (Details) - $ / shares	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Number of Shares outstanding at beginning	3,650,000	2,500,000
Options Granted	0	1,150,000
Options Forfeited	0	0
Number of Shares outstanding at end	3,650,000	3,650,000
Exercisable at end	3,650,000
Beginning weighted-average exercise price; outstanding	$ 0.06	$ 0.08
Options granted, weighted average exercise price	0	0.03
Options Forfeited, weighted average exercise price	0	.00
Ending weighted-average exercise price; outstanding	0.06	$ 0.06
Weighted-average exercise price; exercisable	$ 0.06

Stock Options - Fair value of o

Stock Options - Fair value of options (Details)	12 Months Ended
	Jun. 30, 2020$ / shares
Share-based Payment Arrangement [Abstract]
Exercise Price	$ 0.03
Stock Price	$ 0.03
Risk-free interest rate	2.63%
Expected volatility	121.00%
Expected life (in years)	2 years
Expected dividend yield	0.00%

Stock Options - Additional info

Stock Options - Additional information regarding outstanding options (Details) - $ / shares	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
Options outstanding, shares	3,650,000	3,650,000	2,500,000
Weighted average exercise price	$ 0.06	$ 0.06	$ 0.08
Options excercisable	3,650,000
Options exercisable, weighted average exercise price	$ 0.06
$0.03 per share
Options outstanding, shares	1,150,000
Weighted average remaining contractual life	4 years 5 months 23 days
Weighted average exercise price	$ 0.03
Options excercisable	1,150,000
Options exercisable, weighted average exercise price	$ 0.03
$0.08 per share
Options outstanding, shares	2,500,000
Weighted average remaining contractual life	1 year 7 months 10 days
Weighted average exercise price	$ 0.08
Options excercisable	2,500,000
Options exercisable, weighted average exercise price	$ 0.08

Stock Options (Details Narrativ

Stock Options (Details Narrative) - USD ($)	Jan. 10, 2020	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Options granted		0	1,150,000
Fair value of stock options granted		$ 21,000
Options granted, expected life		1 year
Compensation expense		$ 10,000	$ 11,000
Outstanding unvested options		0
Options outstanding intrinsic value		12,000	12,000
Options exercisable intrinsic value		$ 23,000	$ 23,000
Modification Compensation expense	$ 6,000

Income Taxes - Reconciliation b

Income Taxes - Reconciliation between the federal and actual tax rate (Details)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Federal Statutory tax rate	21.00%	21.00%
State tax, net of federal benefit	6.00%	6.00%
Change in valuation	27.00%	27.00%
Allowance	(27.00%)	(27.00%)
Effective tax rate	0.00%	0.00%

Income Taxes - Deferred tax ass

Income Taxes - Deferred tax assets (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 3,554,000	$ 3,403,000
Deferred tax assets before valuation allowance	3,554,000	3,403,000
Valuation allowance	(3,554,000)	(3,403,000)
Net deferred tax asset	$ 0	$ 0

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Net Loss	$ (576,000)	$ (849,000)
Net change in the valuation allowance	151,000
Net operating loss carryforwards	$ 13,162,000

Related Party Transactions (Det

Related Party Transactions (Details Narrative)		8 Months Ended	12 Months Ended
		May 31, 2017	Jun. 30, 2021	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)
Managament fee, percent of revenue		0.20	0.35
Other revenue, related party				$ 338,000	$ 187,000
Notes Payable Related Party				4,484,000	3,647,000
Proceeds from notes payable - related party				517,000	377,000
The Matthews Group
Notes Payable Related Party	[1]			$ 2,630,000	1,915,000
Unsecured related party note, interest				10.00%
Unsecured related party note				$ 192,590
Tran [Member]
Ownership of TMG				50.00%
Larry Johanns
Ownership of TMG				50.00%
Chief Executive Officer [Member]
Advances due to related party				$ 96,000	100,000
Rental Payments				$ 51,000	$ 51,000
[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.

Legal Proceedings (Details Narr

Legal Proceedings (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Nov. 13, 2017	Sep. 21, 2016
Commitments and Contingencies
Promissory Note			$ 100,000
Settlement amount			$ 163,000
Convertible note payable relinquished				$ 365,000
Shares to be returned				500,000
Gain on settlement of note payable to former officer	$ 167,000
Promissory note payable		$ 163,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 05, 2008
Incentive compensation plan percentage			10.00%
Incentive Compensation Bonus, Minimum Threshold			$ 3,000,000
Salaries paid	$ 150,000	$ 150,000
Chief Executive Officer [Member]
Annual base salary		$ 150,000