Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Oct. 04, 2023 | Dec. 31, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jun. 30, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity File Number | 000-15113 | ||
Entity Registrant Name | VERITEC, INC. | ||
Entity Central Index Key | 0000773318 | ||
Entity Tax Identification Number | 95-3954373 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 12445 Winnetka Avenue N. | ||
Entity Address, City or Town | Golden Valley | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55427 | ||
City Area Code | 763 | ||
Local Phone Number | 253-2670 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | VRTC | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 305,000 | ||
Entity Common Stock, Shares Outstanding | 39,988,007 | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | Weinberg & Company, P.A. | ||
Auditor Location | Los Angeles, California | ||
Auditor Firm ID | 572 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Current Assets: | ||
Cash | $ 61,000 | $ 66,000 |
Accounts receivable | 7,000 | 7,000 |
Prepaid expenses | 6,000 | 6,000 |
Total Assets | 74,000 | 79,000 |
Current Liabilities: | ||
Accounts payable | 289,000 | 271,000 |
Accounts payable, related party | 119,000 | 102,000 |
Accrued expenses | 60,000 | 59,000 |
Customer deposits | 29,000 | 25,000 |
Convertible notes and notes payable ($525,000 and $506,000 in default) | 570,000 | 550,000 |
Convertible notes and notes payable, related parties ($242,000 and $233,000 in default) | 7,322,000 | 6,353,000 |
Total Current Liabilities | 8,389,000 | 7,360,000 |
Deferred revenues | 200,000 | 0 |
Contingent earnout liability | 155,000 | 155,000 |
Total Liabilities | 8,744,000 | 7,515,000 |
Commitments and Contingencies | ||
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; 39,988,007 and 39,988,007 shares issued and outstanding, respectively | 400,000 | 400,000 |
Common stock to be issued, 145,000 shares to be issued | 12,000 | 12,000 |
Additional paid-in capital | 18,143,000 | 18,143,000 |
Accumulated deficit | (27,226,000) | (25,992,000) |
Total Stockholders' Deficiency | (8,670,000) | (7,436,000) |
Total Liabilities and Stockholders’ Deficiency | $ 74,000 | $ 79,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Convertible notes and notes payable, in default | $ 525,000 | $ 506,000 |
Convertible notes and notes payable, related party, in default | $ 242,000 | $ 233,000 |
Convertible preferred stock, par value | $ 1 | $ 1 |
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 39,988,007 | 39,988,007 |
Common stock, shares outstanding | 39,988,007 | 39,988,007 |
Common stock to be issued | 145,000 | 145,000 |
Series H Convertible Preferred Stock [Member] | ||
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, 2023 | Jun. 30, 2022 | |
Revenue: | ||
Mobile banking technology revenue | $ 140,000 | $ 90,000 |
Other revenue, management fee - related party | 216,000 | 263,000 |
Total revenue | 356,000 | 353,000 |
Cost and Expense: | ||
Cost of revenue | 211,000 | 199,000 |
Selling, general and administrative expenses (including $51,000 and $51,000, respectively, to a related party) | 883,000 | 728,000 |
Total operating expenses | 1,094,000 | 927,000 |
Loss from operations | (738,000) | (574,000) |
Other Income (Expense): | ||
Gain on extinguishment of accounts payable | 0 | 397,000 |
Gain on forgiveness of SBA PPP loans | 0 | 118,000 |
Interest expense (including $475,000 and $426,000, respectively, to related parties) | (496,000) | (447,000) |
Total other income (expense), net | (496,000) | 68,000 |
Net Loss | $ (1,234,000) | $ (506,000) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
General and administrative to related party | $ 51,000 | $ 51,000 |
Interest expense to related parties | $ 475,000 | $ 426,000 |
Net Loss Per Common Share Basic | $ (0.03) | $ (0.01) |
Net Loss Per Common Share Diluted | $ (0.03) | $ (0.01) |
Weighted Average Number of Shares Outstanding Basic | 39,988,007 | 39,988,007 |
Weighted Average Number of Shares Outstanding Diluted | 39,988,007 | 39,988,007 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Common Stock To Be Issued [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Jun. 30, 2021 | $ 1,000 | $ 400,000 | $ 12,000 | $ 18,143,000 | $ (25,486,000) | $ (6,930,000) |
Beginning balance, Shares at Jun. 30, 2021 | 1,000 | 39,998,007 | ||||
Net Loss | (506,000) | (506,000) | ||||
Ending balance, value at Jun. 30, 2022 | $ 1,000 | $ 400,000 | 12,000 | 18,143,000 | (25,992,000) | (7,436,000) |
Ending balance, Shares at Jun. 30, 2022 | 1,000 | 39,988,007 | ||||
Net Loss | (1,234,000) | (1,234,000) | ||||
Ending balance, value at Jun. 30, 2023 | $ 1,000 | $ 400,000 | $ 12,000 | $ 18,143,000 | $ (27,226,000) | $ (8,670,000) |
Ending balance, Shares at Jun. 30, 2023 | 1,000 | 39,988,007 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,234,000) | $ (506,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Interest accrued on notes payable | 495,000 | 447,000 |
Gain on extinguishment of accounts payable | 0 | (397,000) |
Gain on forgiveness of SBA PPP loan | 0 | (118,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 0 | 1,000 |
Prepaid expenses | 0 | (1,000) |
Customer deposits | 4,000 | (72,000) |
Deferred revenue | 200,000 | 0 |
Accounts payable | 18,000 | (23,000) |
Accounts payable, related party | 17,000 | 6,000 |
Accrued expenses | 1,000 | (12,000) |
Net cash used in operating activities | (499,000) | (675,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable-related party | 494,000 | 503,000 |
Net cash provided by financing activities | 494,000 | 503,000 |
NET DECREASE IN CASH | (5,000) | (172,000) |
CASH AT BEGINNING OF PERIOD | 66,000 | 238,000 |
CASH AT END OF PERIOD | 61,000 | 66,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | $ 0 | $ 0 |
OPERATIONS AND SUMMARY OF SIGNI
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2023 | |
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, 2024. The Company earns a fee of 35% of all revenues billed up to June 30, 2024, and recognizes management fee revenue as services are performed. 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 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 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 (Topic 606) (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying the Company’s performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. 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. 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 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, 2024. The Company earned a fee of 35% of all revenues billed up to June 30, 2023. 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: Schedule of disaggregated net sales Fiscal years ended June 30, 2023 2022 Mobile banking technology revenue $ 140,000 $ 90,000 Other revenue, management fee - related party 216,000 263,000 Total revenue $ 356,000 $ 353,000 The following table shows the Company’s disaggregated net sales by customer type: Fiscal years ended June 30, 2023 2022 Medical $ 46,000 $ 53,000 Associations 12,000 12,000 Education 12,000 12,000 Banking 50,000 — Other 20,000 13,000 Other revenue, management fee related party 216,000 263,000 Total revenue $ 356,000 $ 353,000 Mobile banking technology revenues during the year ended June 30, 2023 included the aggregate fees of $ 50,000 Other revenue, management fee - related party revenue was $ 216,000 263,000 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. 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, 2023 and 2022, 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, 2023 and 2022, 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. Schedule of calculation of earnings per share June 30, 2023 2022 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 27,901,581 25,677,568 Options 900,000 900,000 Total 28,811,581 26,587,568 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 convertible and 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, 2023, the Company had three customers, that represented 61 14 13 75 15 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. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. The diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options 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, 2023 | |
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, 2023, the Company recorded a net loss of $ 1,234,000 , used cash in operating activities of $ 499,000 , and at June 30, 2023, the Company had a stockholders’ deficiency of $ 8,670,000 . In addition, as of June 30, 2023, the Company is delinquent in payment of $ 767,000 of its convertible notes and 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 its cash and forecasted cash flow from operations will not be sufficient to continue operations through fiscal 2024 without continued external investment. Subsequent to June 30, 2023, the Company issued a $ 22,000 |
CONTINGENT EARNOUT LIABILITY
CONTINGENT EARNOUT LIABILITY | 12 Months Ended |
Jun. 30, 2023 | |
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 1,300,000 |
CONVERTIBLE NOTES AND NOTES PAY
CONVERTIBLE NOTES AND NOTES PAYABLE | 12 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES AND NOTES PAYABLE | NOTE 4 – CONVERTIBLE NOTES AND NOTES PAYABLE Convertible notes and notes payable Convertible and notes payable includes principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022: Schedule of convertible and notes payable includes principal and accrued interest June 30, June 30, (a) Unsecured convertible notes ($21,000 and $20,000 in default) $ 66,000 $ 64,000 (b) Notes payable (in default) 475,000 458,000 (c) Notes payable (in default) 29,000 28,000 Total notes-third parties $ 570,000 $ 550,000 (a) The notes are unsecured, convertible into common stock at amounts ranging from $ 0.08 0.30 5 8 At June 30, 2021, convertible notes totaled $ 62,000 2,000 64,000 2,000 66,000 21,000 0.30 45,000 0.08 567,180 (b) The notes are either secured by the Company’s intellectual property or unsecured and bear interest ranging from 6.5 10 At June 30, 2021, the notes totaled $ 440,000 18,000 458,000 17,000 475,000 427,000 48,000 (c) The notes are unsecured and bear interest of 4 At June 30, 2021 the notes totaled $ 27,000 1,000 28,000 1,000 29,000 Convertible notes and notes payable-related parties Convertible and notes payable-related parties include principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022: Schedule of convertible and notes payable related parties June 30, June 30, (a) Convertible notes-The Matthews Group $ 1,970,000 $ 1,855,000 (b) Notes payable-The Matthews Group 4,988,000 4,177,000 (c)Convertible notes-other related parties ($242,000 and $233,000 in default) 364,000 321,000 Total notes-related parties $ 7,322,000 $ 6,353,000 (a) The notes are unsecured, convertible into common stock at $ 0.08 8 10 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, 2021, convertible notes due to The Matthews Group totaled $ 1,741,000 114,000 1,855,000 115,000 1,970,000 0.08 24,621,824 (b) The notes are unsecured, accrue interest at 10 At June 30, 2021, notes due to The Matthews Group totaled $ 3,375,000 503,000 299,000 4,177,000 464,000 347,000 4,988,000 (c) The notes are due to a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $ 0.04 0.30 8 10 At June 30, 2021, convertible notes due to other related parties totaled $ 308,000 13,000 321,000 30,000 13,000 364,000 242,000 122,000 242,000 0.30 807,081 92,000 0.09 1,076,347 30,000 0.04 759,863 |
STOCKHOLDERS_ DEFICIENCY
STOCKHOLDERS’ DEFICIENCY | 12 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIENCY | NOTE 5 - STOCKHOLDERS’ DEFICIENCY Preferred Stock The articles of incorporation of Veritec authorize 10,000,000 1.00 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 Company’s common stock at the option of the holder. As of June 30, 2023 and 2022, there were 1,000 Common Stock to be Issued At June 30, 2023 and 2022, 145,000 12,000 |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Jun. 30, 2023 | |
Stock Options | |
STOCK OPTIONS | NOTE 6 – STOCK OPTIONS A summary of stock options as of June 30, 2023 and for the two years then ended is as follows: Schedule of stock options Number of Shares Weighted - Average Exercise Price Outstanding at June 30, 2021 3,400,000 $ 0.08 Granted — — Forfeited (2,500,000 ) $ (0.08 ) Outstanding at June 30, 2022 900,000 $ 0.03 Granted — — Forfeited $ — Outstanding at June 30, 2023 900,000 $ 0.03 Exercisable at June 30, 2023 900,000 $ 0.03 As of June 30, 2023, the Company had no no Additional information regarding options outstanding as of June 30, 2023, is as follows: Schedule of additional information regarding options outstanding Options Outstanding and Exercisable at June 30, 2023 Range of Exercise Price Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $ 0.03 900,000 2.48 $ 0.03 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 - INCOME TAXES For the year ended June 30, 2023, net loss was $ 1,234,000 506,000 no Reconciliation between the expected federal income tax rate and the actual tax rate is as follows: Schedule of reconciliation between the federal and actual tax rate Year Ended June 30, 2023 2022 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: Schedule of deferred tax assets Year Ended June 30, 2023 2022 Net operating loss carryforwards $ 4,315,000 $ 3,982,000 Deferred tax assets before valuation allowance 4,315,000 3,982,000 Valuation allowance (4,315,000 ) (3,982,000 ) Net deferred tax asset $ — $ — The Company has provided a valuation allowance on the deferred tax assets at June 30, 2023 and 2022 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, 2023, was an increase of $ 333,000 Veritec has net operating loss carryforwards of approximately $ 15,983,000 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, 2023 and 2022, 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, 2023 and 2022, the Company has no |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS The Matthews Group is owned 50 50 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, 2024. 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 35 216,000 263,000 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 and reflected as proceeds from unsecured notes payable due The Matthews Group. During the years ended June 30, 2023 and 2022, cash flow loans of $ 464,000 503,000 10 4,988,000 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, 2023 and 2022, total advances to Ms. Tran amounted to $ 119,000 102,000 Other Transactions with Related Parties The Company leases its office facilities from Ms. Tran who owns the building, the Company’s CEO/Executive Chair. For both the years ended June 30, 2023 and 2022, lease payments to Ms. Tran totaled $ 51,000 |
AGREEMENTS WITH NUGEN
AGREEMENTS WITH NUGEN | 12 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
AGREEMENTS WITH NUGEN | NOTE 9 – AGREEMENTS WITH NUGEN On July 4, 2022, the Company entered a Memorandum of Understanding (the “MOU”) for the purpose of forming a strategic partnership between the Company and Nugen Universe, LLC (“Nugen”), a corporation located in Wrightsville Beach, North Carolina. Nugen seeks the Company to modify, create, or build a “private label” system for Nugen, with an initial interest in the Company’s blinxPay technology and Bio-ID verification system. 50,000 50,000 5 no On October 10, 2022, the Company entered into a License and Distributor Agreement (“License Agreement”) with Nugen. The License Agreement became effective on receipt of $ 200,000 in December 2022 and extends through August 31, 2027. The License Agreement grants Nugen a Worldwide license and distribution for the Company’s blinxPay Close-Loop Virtual Wallet and blinxPay Open-Loop Visa Debit and all hardware products of the Company. Per the terms of the License Agreement, Nugen agrees to pay the Company a one-time license payment of $ 1,000,000 for the right to market the Company’s products noted above, of which $ 200,000 was received by the Company in December 2022. The initial $ 200,000 has been recorded as deferred revenue in the Consolidated Balance Sheet. The deferred revenue balance of $200,000 at June 30, 2023, will begin being amortized to Mobile banking technology revenue starting once the Company has met its performance obligations under the License Agreement through the remaining term of the License Agreement, which expires on August 31, 2027. The remaining balance of $ 800,000 is scheduled to be paid as follows: $ 100,000 350,000 350,000 5 % royalty from all sales of products noted above. As of June 30, 2023, no royalty related revenues have been realized under the License Agreement. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | NOTE 10 – LEGAL PROCEEDINGS 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 500,000 365,000 500,000 500,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES On March 26, 2022, as amended on May 10, 2022, the Company and Es Solo Holdings Ltd (“Es Solo”), an England & Wales limited liability company, entered into a Prepaid Card Client Program Management Agreement (“Management Agreement”). Es Solo develops, markets, and operates prepaid card programs through its affiliations with issuing banks, and the Company desires to have Es Solo develop a prepaid card program to be marketed by the Company for card issuing purposes, pursuant to the terms of the Management Agreement. Es Solo agreed to pay the Company $ 10,000 The Company and Es Solo agreed to a 50%/50% revenue share arrangement based on fees collected from customers using the Company’s prepaid, Bio-ID, and debit card products. no On November 1, 2021, the Company and Elite Web Technology Inc. (“Marketer”) entered into a Sales and Marketing Agreement (“Agreement”). The Company agreed that Marketer can market and sale certain Company products as defined in the Agreement. The Company agreed to pay Marketer a sales commission of 15 500,000 2 25,000 1.0 As of June 30, 2023, the Marketer had not met any of its revenue targets and no commissions or equity compensation was due. On December 5, 2008, the Company adopted an incentive compensation bonus plan to provide payments to key employees in the aggregated amount of 10 3,000,000 no 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 1,000,000 150,000 150,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS On July 23, 2023, the Company issued a $ 22,000 convertible promissory note to Van Thuy Tran, its Chief Executive Officer. The convertible note is due upon demand, is unsecured, convertible into common stock at a per share amount of $ 0.04 , and bears interest at a rate of 10 % per annum. |
OPERATIONS AND SUMMARY OF SIG_2
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
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, 2024. The Company earns a fee of 35% of all revenues billed up to June 30, 2024, and recognizes management fee revenue as services are performed. |
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 |
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 |
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 (Topic 606) (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying the Company’s performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. 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. 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 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, 2024. The Company earned a fee of 35% of all revenues billed up to June 30, 2023. 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: Schedule of disaggregated net sales Fiscal years ended June 30, 2023 2022 Mobile banking technology revenue $ 140,000 $ 90,000 Other revenue, management fee - related party 216,000 263,000 Total revenue $ 356,000 $ 353,000 The following table shows the Company’s disaggregated net sales by customer type: Fiscal years ended June 30, 2023 2022 Medical $ 46,000 $ 53,000 Associations 12,000 12,000 Education 12,000 12,000 Banking 50,000 — Other 20,000 13,000 Other revenue, management fee related party 216,000 263,000 Total revenue $ 356,000 $ 353,000 Mobile banking technology revenues during the year ended June 30, 2023 included the aggregate fees of $ 50,000 Other revenue, management fee - related party revenue was $ 216,000 263,000 |
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. |
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, 2023 and 2022, 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, 2023 and 2022, 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. Schedule of calculation of earnings per share June 30, 2023 2022 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 27,901,581 25,677,568 Options 900,000 900,000 Total 28,811,581 26,587,568 |
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 convertible and 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, 2023, the Company had three customers, that represented 61 14 13 75 15 |
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. |
Recently Issued Accounting Standards | 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. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. The diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options 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, 2023 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated net sales | Schedule of disaggregated net sales Fiscal years ended June 30, 2023 2022 Mobile banking technology revenue $ 140,000 $ 90,000 Other revenue, management fee - related party 216,000 263,000 Total revenue $ 356,000 $ 353,000 The following table shows the Company’s disaggregated net sales by customer type: Fiscal years ended June 30, 2023 2022 Medical $ 46,000 $ 53,000 Associations 12,000 12,000 Education 12,000 12,000 Banking 50,000 — Other 20,000 13,000 Other revenue, management fee related party 216,000 263,000 Total revenue $ 356,000 $ 353,000 |
Schedule of calculation of earnings per share | Schedule of calculation of earnings per share June 30, 2023 2022 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 27,901,581 25,677,568 Options 900,000 900,000 Total 28,811,581 26,587,568 |
CONVERTIBLE NOTES AND NOTES P_2
CONVERTIBLE NOTES AND NOTES PAYABLE (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of convertible and notes payable includes principal and accrued interest | Schedule of convertible and notes payable includes principal and accrued interest June 30, June 30, (a) Unsecured convertible notes ($21,000 and $20,000 in default) $ 66,000 $ 64,000 (b) Notes payable (in default) 475,000 458,000 (c) Notes payable (in default) 29,000 28,000 Total notes-third parties $ 570,000 $ 550,000 |
Schedule of convertible and notes payable related parties | Schedule of convertible and notes payable related parties June 30, June 30, (a) Convertible notes-The Matthews Group $ 1,970,000 $ 1,855,000 (b) Notes payable-The Matthews Group 4,988,000 4,177,000 (c)Convertible notes-other related parties ($242,000 and $233,000 in default) 364,000 321,000 Total notes-related parties $ 7,322,000 $ 6,353,000 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Stock Options | |
Schedule of stock options | Schedule of stock options Number of Shares Weighted - Average Exercise Price Outstanding at June 30, 2021 3,400,000 $ 0.08 Granted — — Forfeited (2,500,000 ) $ (0.08 ) Outstanding at June 30, 2022 900,000 $ 0.03 Granted — — Forfeited $ — Outstanding at June 30, 2023 900,000 $ 0.03 Exercisable at June 30, 2023 900,000 $ 0.03 |
Schedule of additional information regarding options outstanding | Schedule of additional information regarding options outstanding Options Outstanding and Exercisable at June 30, 2023 Range of Exercise Price Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $ 0.03 900,000 2.48 $ 0.03 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation between the federal and actual tax rate | Schedule of reconciliation between the federal and actual tax rate Year Ended June 30, 2023 2022 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 — % — % |
Schedule of deferred tax assets | Schedule of deferred tax assets Year Ended June 30, 2023 2022 Net operating loss carryforwards $ 4,315,000 $ 3,982,000 Deferred tax assets before valuation allowance 4,315,000 3,982,000 Valuation allowance (4,315,000 ) (3,982,000 ) Net deferred tax asset $ — $ — |
OPERATIONS AND SUMMARY OF SIG_4
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Product Information [Line Items] | ||
Revenue | $ 356,000 | $ 353,000 |
Mobile Banking [Member] | ||
Product Information [Line Items] | ||
Revenue | 140,000 | 90,000 |
Other Revenue [Member] | ||
Product Information [Line Items] | ||
Revenue | 216,000 | 263,000 |
Medical [Member] | ||
Product Information [Line Items] | ||
Revenue | 46,000 | 53,000 |
Associations [Member] | ||
Product Information [Line Items] | ||
Revenue | 12,000 | 12,000 |
Education [Member] | ||
Product Information [Line Items] | ||
Revenue | 12,000 | 12,000 |
Banking [Member] | ||
Product Information [Line Items] | ||
Revenue | 50,000 | 0 |
Other [Member] | ||
Product Information [Line Items] | ||
Revenue | $ 20,000 | $ 13,000 |
OPERATIONS AND SUMMARY OF SIG_5
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summarized outstanding securities (Details) - shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 28,811,581 | 26,587,568 |
Series H Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 10,000 | 10,000 |
Convertible Notes Payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 27,901,581 | 25,677,568 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 900,000 | 900,000 |
OPERATIONS AND SUMMARY OF SIG_6
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Product Information [Line Items] | ||
Cash and cash equivalents | $ 0 | $ 0 |
Allowance for doubtful accounts | 0 | $ 0 |
Aggregate fees | $ 50,000 | |
Customer One [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 61% | 75% |
Customer Two [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 14% | 15% |
Customer Three [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 13% | |
Related Party [Member] | ||
Product Information [Line Items] | ||
Other revenue related party | $ 216,000 | $ 263,000 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Net loss | $ 1,234,000 | $ 506,000 | |
Cash used in operating activities | 499,000 | 675,000 | |
Stockholders' deficiency | 8,670,000 | $ 7,436,000 | $ 6,930,000 |
Notes payable in default | 767,000 | ||
C E O Executive Chair And Director [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Convertible promissory note | $ 22,000 |
CONTINGENT EARNOUT LIABILITY (D
CONTINGENT EARNOUT LIABILITY (Details Narrative) - Acquisition Assets Liabilities [Member] | 12 Months Ended |
Sep. 30, 2015 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
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, 2023 | Jun. 30, 2022 |
Debt Disclosure [Abstract] | ||
(a) Unsecured convertible notes ($21,000 and $20,000 in default) | $ 66,000 | $ 64,000 |
(b) Notes payable (in default) | 475,000 | 458,000 |
(c) Notes payable (in default) | 29,000 | 28,000 |
Total notes-third parties | $ 570,000 | $ 550,000 |
CONVERTIBLE NOTES AND NOTES P_4
CONVERTIBLE NOTES AND NOTES PAYABLE - Convertible notes and notes payable related party (Details) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total notes-related parties | $ 7,322,000 | $ 6,353,000 |
Matthews Group [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Convertible notes, related party | 1,970,000 | 1,855,000 |
Total notes-related parties | 4,988,000 | 4,177,000 |
Other [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Convertible notes, related party | $ 364,000 | $ 321,000 |
CONVERTIBLE NOTES AND NOTES P_5
CONVERTIBLE NOTES AND NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Mar. 17, 2020 | |
Debt Instrument [Line Items] | |||||
Notes Payable | $ 29,000 | $ 28,000 | |||
Matthews Group [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes Payable | $ 1,970,000 | 1,855,000 | |||
Minimum [Member] | Matthews Group [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 8% | ||||
Maximum [Member] | Matthews Group [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 10% | ||||
Unsecured Convertible Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible debts | $ 66,000 | 64,000 | $ 62,000 | ||
Accrued interest | 2,000 | 2,000 | |||
Notes in default | 21,000 | ||||
Balance due on demand | $ 45,000 | ||||
Shares issued upon conversion | 567,180 | ||||
Unsecured Convertible Notes [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.08 | ||||
Interest rate | 5% | ||||
Unsecured Convertible Notes [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.30 | ||||
Interest rate | 8% | ||||
Notes Payable Default [Member] | |||||
Debt Instrument [Line Items] | |||||
Accrued interest | $ 17,000 | 18,000 | |||
Notes payable | $ 475,000 | 458,000 | 440,000 | ||
Notes Payable Default [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 6.50% | ||||
Notes Payable Default [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 10% | ||||
Secured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 427,000 | ||||
Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes payable | 48,000 | ||||
Notes Payables Default [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 4% | ||||
Accrued interest | 1,000 | 1,000 | |||
Notes payable | $ 29,000 | 28,000 | 27,000 | ||
Convertible Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.08 | ||||
Convertible Notes [Member] | Matthews Group [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.08 | ||||
Convertible debts | $ 1,741,000 | ||||
Accrued interest | $ 115,000 | 114,000 | |||
Shares issued upon conversion | 24,621,824 | ||||
Convertible Notes [Member] | Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible debts | 321,000 | 308,000 | |||
Accrued interest | $ 13,000 | 13,000 | |||
Notes in default | 242,000 | ||||
Balance due on demand | 122,000 | ||||
Notes payable | 364,000 | ||||
Notes issued | $ 30,000 | ||||
Convertible Notes [Member] | Minimum [Member] | Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.04 | ||||
Interest rate | 8% | ||||
Convertible Notes [Member] | Maximum [Member] | Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.30 | ||||
Interest rate | 10% | ||||
Notes Payable [Member] | Matthews Group [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 10% | ||||
Accrued interest | $ 347,000 | 299,000 | |||
Notes payable | 4,988,000 | 4,177,000 | $ 3,375,000 | ||
Notes issued | $ 464,000 | $ 503,000 | |||
Convertible Notes 1 [Member] | Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.30 | ||||
Shares issued upon conversion | 807,081 | ||||
Notes converted | $ 242,000 | ||||
Convertible Note 2 [Member] | Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.09 | ||||
Shares issued upon conversion | 1,076,347 | ||||
Notes converted | $ 92,000 | ||||
Convertible Note 3 [Member] | Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.04 | ||||
Shares issued upon conversion | 759,863 | ||||
Notes converted | $ 30,000 |
STOCKHOLDERS_ DEFICIENCY (Detai
STOCKHOLDERS’ DEFICIENCY (Details Narrative) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Convertible preferred stock, par value | $ 1 | $ 1 |
Common stock to be issued shares | 145,000 | 145,000 |
Common stock to be issued, value | $ 12,000 | $ 12,000 |
Series H Convertible Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
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 |
STOCK OPTIONS - Summary of Stoc
STOCK OPTIONS - Summary of Stock Options (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Stock Options | ||
Number of Shares outstanding at beginning | 900,000 | 3,400,000 |
Beginning weighted average exercise price, outstanding | $ 0.03 | $ 0.08 |
Options granted | 0 | 0 |
Options granted, weighted average exercise price | $ 0 | $ 0 |
Options forfeited | (2,500,000) | |
Options forfeited, weighted average exercise price | $ 0 | $ (0.08) |
Number of Shares outstanding at end | 900,000 | 900,000 |
Ending weighted average exercise price, outstanding | $ 0.03 | $ 0.03 |
Exercisable at end | 900,000 | |
Weighted-average exercise price; exercisable | $ 0.03 |
STOCK OPTIONS - Additional info
STOCK OPTIONS - Additional information regarding outstanding options (Details) - $ / shares | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock Options | |||
Options outstanding, shares | 900,000 | 900,000 | 3,400,000 |
Weighted average remaining contractual life | 2 years 5 months 23 days | ||
Weighted average exercise price | $ 0.03 | $ 0.03 | $ 0.08 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Stock Options | ||
Outstanding unvested options | $ 0 | |
Options exercisable intrinsic value | $ 0 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory tax rate | 21% | 21% |
State tax, net of federal benefit | 6% | 6% |
Total tax rate | 27% | 27% |
Allowance | (27.00%) | (27.00%) |
Effective tax rate | 0% | 0% |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets (Details 1) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 4,315,000 | $ 3,982,000 |
Deferred tax assets before valuation allowance | 4,315,000 | 3,982,000 |
Valuation allowance | (4,315,000) | (3,982,000) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Net Loss | $ 1,234,000 | $ 506,000 |
Provision for income tax | 0 | 0 |
Net change in the valuation allowance | 333,000 | |
Net operating loss carryforwards | 15,983,000 | |
Accrued interest or penalties | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||
Revenue | $ 356,000 | $ 353,000 |
Notes payable related party | 29,000 | 28,000 |
Matthews Group [Member] | ||
Related Party Transaction [Line Items] | ||
Notes payable related party | 1,970,000 | 1,855,000 |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Advances due to related party | 119,000 | 102,000 |
Rental payment | $ 51,000 | 51,000 |
Related Party [Member] | Matthews Group [Member] | ||
Related Party Transaction [Line Items] | ||
Managament fee percent of revenue | 35% | |
Revenue | $ 216,000 | 263,000 |
Proceeds from notes payable - related party | $ 464,000 | $ 503,000 |
Unsecured related party note, interest | 10% | |
Notes payable related party | $ 4,988,000 | |
Ms Tran [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 50% | |
Larry Johanns [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 50% |
AGREEMENTS WITH NUGEN (Details
AGREEMENTS WITH NUGEN (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 04, 2022 | Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue | $ 356,000 | $ 353,000 | ||
Domestic bank sponsor amount | 100,000 | |||
Payments for software | 350,000 | |||
Final stage testing installation and launch expenses | 350,000 | |||
Nugen Universe [Member] | License Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Receipt on license | $ 200,000 | |||
Nugen Universe [Member] | Memorandum of Understanding [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Agreement, description | Nugen seeks the Company to modify, create, or build a “private label” system for Nugen, with an initial interest in the Company’s blinxPay technology and Bio-ID verification system. | |||
Received amount under the agreement | $ 50,000 | |||
Nugen Universe [Member] | Memorandum of Understanding [Member] | Mobile Banking Technology [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue | 50,000 | |||
Royalties | $ 0 | |||
Nugen Universe [Member] | Memorandum of Understanding [Member] | Blinx Pay Technologyand Bio I D Verification System [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty percentage | 5% | |||
Nugen Universe [Member] | License And Distributor Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Agreement, description | The License Agreement grants Nugen a Worldwide license and distribution for the Company’s blinxPay Close-Loop Virtual Wallet and blinxPay Open-Loop Visa Debit and all hardware products of the Company. | |||
Royalty percentage | 5% | |||
Royalties | $ 0 | |||
Receipt on license | 200,000 | |||
License payment | $ 1,000,000 | |||
Initial deferred revenue | 200,000 | |||
Remaining balance paid | $ 800,000 |
LEGAL PROCEEDINGS (Details Narr
LEGAL PROCEEDINGS (Details Narrative) - Former Officer [Member] - Settlement Agreement [Member] - USD ($) | Sep. 21, 2016 | Jun. 30, 2023 |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of shares issued | 500,000 | |
Relinquish convertible note payable and unpaid interest | $ 365,000 | |
Shares to be returned | 500,000 | |
Shares have not relinquished | 500,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
May 10, 2022 | Nov. 01, 2021 | Dec. 05, 2008 | Jun. 30, 2023 | Jun. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Revenues | $ 356,000 | $ 353,000 | |||
Chief Executive Officer [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Annual base salary | $ 150,000 | ||||
Termination loans | $ 1,000,000 | ||||
Salaries paid | 150,000 | 150,000 | |||
Incentive Compensation Bonus Plan [Member] | Key Employees [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Pre-tax earnings | 10% | ||||
Incentive compensation bonus, minimum threshold | $ 3,000,000 | ||||
Annual pre-tax earnings | $ 0 | ||||
Management Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Revenues | $ 0 | ||||
Management Agreement [Member] | Es Solo Holdings [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Program setup fee | $ 10,000 | ||||
Agreement, description | The Company and Es Solo agreed to a 50%/50% revenue share arrangement based on fees collected from customers using the Company’s prepaid, Bio-ID, and debit card products. | ||||
Sales And Marketing Agreement [Member] | Elite Web Technology [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Agreement, description | As of June 30, 2023, the Marketer had not met any of its revenue targets and no commissions or equity compensation was due. | ||||
Sales commission | 15% | ||||
Number of shares issued | 500,000 | ||||
Stock recevied on transaction | $ 2,000,000 | ||||
Sales And Marketing Agreement [Member] | Elite Web Technology [Member] | Equity Option [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Number of shares issued | 25,000 | ||||
Stock recevied on transaction | $ 1,000,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Chief Executive Officer [Member] - Convertible Promissory Note [Member] - Subsequent Event [Member] | Jul. 23, 2023 USD ($) $ / shares |
Subsequent Event [Line Items] | |
Shares issued | $ | $ 22,000 |
Per share amount | $ / shares | $ 0.04 |
Interest rate | 10% |