Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Oct. 07, 2019 | Dec. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | MPHASE TECHNOLOGIES INC | ||
Entity Central Index Key | 0000825322 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Reporting Status Current | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,000,000 | ||
Entity Common Stock, Shares Outstanding | 12,392,102 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Current Assets | ||
Cash | $ 33,996 | $ 261 |
Accounts receivable, net | 2,526,155 | |
Prepaid expenses | 8,820 | |
Total Current Assets | 2,568,971 | 261 |
Property and equipment, net | 11,048 | |
Goodwill | 6,020 | |
Intangible asset - purchased software, net | 3,025,801 | |
Other assets | 3,058 | 800 |
Total Assets | 5,614,898 | 1,061 |
Current Liabilities | ||
Accounts payable | 366,274 | 421,056 |
Accrued expenses | 3,368,801 | 1,273,569 |
Due to related parties | 65,459 | 226,045 |
Notes payable to officers | 25,251 | 777,912 |
Convertible notes payable, net of discount | 2,351 | |
Notes payable to director and investor | 133,274 | |
Current portion, liabilities in arrears with convertible features | 109,000 | 997,698 |
Current portion, liabilities in arrears - judgement settlement agreement (Note 9) | 855,660 | |
Derivative liability | 133,669 | |
Liabilities of discontinued operations | 82,795 | 163,976 |
Total Current Liabilities | 5,009,260 | 3,993,530 |
Commitments and Contingencies (Note 15) | ||
Stockholders' Equity (Deficit) | ||
Preferred stock, $0.01 par value; 1,000 shares authorized and 1,000 shares and no shares issued and outstanding at June 30, 2019 and June 30, 2018, respectively | 10 | |
Common stock, $0.01 par value; 25,000,000 shares authorized and 11,689,078 and 3,372,103 shares issued and outstanding at June 30, 2019 and June 30, 2018, respectively | 116,890 | 33,721 |
Additional paid-in-capital | 214,007,203 | 207,652,502 |
Common stock to be issued | 115,388 | |
Accumulated deficit | (213,633,853) | (211,678,692) |
Total Stockholders' Equity (Deficit) | 605,638 | (3,992,469) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 5,614,898 | $ 1,061 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | May 17, 2019 | Mar. 21, 2019 | Jan. 04, 2019 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | |||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized | 1,000 | 1,000 | |||
Preferred stock, shares issued | 1,000 | ||||
Preferred stock, shares outstanding | 1,000 | ||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 25,000,000 | 125,000,000,000 | 125,000,000,000 | 125,000,000,000 | 25,000,000 |
Common stock, shares issued | 11,689,078 | 3,372,103 | |||
Common stock, shares outstanding | 11,689,078 | 3,372,103 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 2,500,000 | |
Cost of revenue | ||
Gross Profit | 2,500,000 | |
General and administrative expenses | 4,265,886 | 735,026 |
Operating loss | (1,765,886) | (735,026) |
Other Income (Expense): | ||
Interest expense | (210,594) | (246,162) |
Loss on change in fair value of derivative liability | (30,508) | |
Initial derivative expense | (25,161) | |
Amortization of debt discount | (2,260) | |
Amortization of deferred financing costs | (90) | |
Gain on extinguishment of debt | 60,398 | 1,107,922 |
Total Other Income (Expense) | (208,215) | 861,760 |
(Loss) Income from continuing operations before income taxes | (1,974,101) | 126,734 |
Income taxes | ||
(Loss) Income from continuing operations | (1,974,101) | 126,734 |
Discontinued operations (Note 16) | ||
Income from discontinued operations | 18,940 | 187,170 |
Net (loss) income | $ (1,955,161) | $ 313,904 |
(Loss) Income per common share: | ||
(Loss) Income from continuing operations per common share - basic | $ (0.23) | $ 0.04 |
(Loss) Income from continuing operations per common share - diluted | (0.23) | 0.04 |
Income from discontinued operations per common share - basic | 0 | 0.06 |
Income from discontinued operations per common share - diluted | 0 | 0.05 |
(Loss) Income per common share - basic | (0.23) | 0.09 |
(Loss) Income per common share - diluted | $ (0.23) | $ 0.09 |
Weighted average shares outstanding - basic | 8,505,508 | 3,336,811 |
Weighted average shares outstanding - diluted | 8,505,508 | 3,600,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' (Deficit) Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid in Capital [Member] | Common Stock to be Issued [Member] | Accumulated Deficit [Member] | Total |
Balance at Jun. 30, 2017 | $ 35,529 | $ 207,448,124 | $ (211,992,596) | $ (4,508,943) | ||
Balance, shares at Jun. 30, 2017 | 3,552,943 | |||||
Issuance of Common Stock to accredited investors in private placements, net of $9,000 fees | $ 3,600 | 77,400 | 81,000 | |||
Issuance of Common Stock to accredited investors in private placements, net of $9,000 fees, shares | 360,000 | |||||
Beneficial Conversion Feature Interest Expense Charged to Additional Paid in Capital | $ 121,570 | $ 121,570 | ||||
Return to treasury of shares cancelled by significant shareholders, shares | (5,408) | 5,408 | ||||
Reversal of accrued fees from private placements to accredited investors | $ (540,840) | |||||
Issuance of Common Stock for the conversion of Related Party debts and Strategic Vendor payables , shares | ||||||
Net Loss | 313,904 | 313,904 | ||||
Balance at Jun. 30, 2018 | $ 33,721 | $ 207,652,502 | (211,678,692) | (3,992,469) | ||
Balance, shares at Jun. 30, 2018 | 3,372,103 | |||||
Issuance of Common Stock to accredited investors in private placements, net of $9,000 fees | $ 6,400 | 153,600 | 160,000 | |||
Issuance of Common Stock to accredited investors in private placements, net of $9,000 fees, shares | 640,000 | |||||
Beneficial Conversion Feature Interest Expense Charged to Additional Paid in Capital | 91,177 | 91,177 | ||||
Reversal of accrued fees from private placements to accredited investors | 7,500 | 7,500 | ||||
Issuance of Common Stock for accrued services | $ 11,500 | 563,500 | 575,000 | |||
Issuance of Common Stock for accrued services, shares | 1,150,000 | |||||
Issuance of Common Stock for the conversion of Related Party debts and Strategic Vendor payables | $ 38,987 | 1,762,070 | 1,801,057 | |||
Issuance of Common Stock for the conversion of Related Party debts and Strategic Vendor payables , shares | 3,898,733 | |||||
Issuance of Common Stock in connection with employment contract | $ 26,209 | 1,284,240 | 1,310,449 | |||
Issuance of Common Stock in connection with employment contract, shares | 2,620,899 | |||||
Warrants earned under employment contract | 2,492,697 | 2,492,697 | ||||
Issuance of Preferred Stock in connection with employment contract | $ 10 | (10) | ||||
Issuance of Preferred Stock in connection with employment contract, shares | 1,000 | |||||
Common stock to be issued for the conversion of Related Party debts and Strategic Vendor payables | $ 115,388 | 115,388 | ||||
Issuance of Common Stock in connection with reverse split for fractional shares and adjustments | $ 73 | (73) | ||||
Issuance of Common Stock in connection with reverse split for fractional shares and adjustments, shares | 7,343 | |||||
Net Loss | (1,955,161) | (1,955,161) | ||||
Balance at Jun. 30, 2019 | $ 10 | $ 116,890 | $ 214,007,203 | $ 115,388 | $ (213,633,853) | $ 605,638 |
Balance, shares at Jun. 30, 2019 | 1,000 | 11,689,078 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' (Deficit) Equity (Parenthetical) | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Private placement fees | $ 9,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (1,955,161) | $ 313,904 |
Adjustments to reconcile net (loss) income to net cash from operating activities: | ||
Depreciation and amortization | 683 | |
Gain on extinguishment of debt | (60,398) | (1,107,922) |
Amortization of deferred financing costs | 90 | |
Amortization of debt discount | 2,260 | |
Initial derivative expense | 25,161 | |
Loss on change in fair value of derivative liability | 30,508 | |
Amortization of deferred compensation and beneficial conversion interest expense | 91,177 | 121,570 |
Stock-based compensation | 3,819,610 | |
Changes in operating assets and liabilities: | ||
Increase in prepaid expenses | (1,332) | |
Increase in other assets | (2,258) | |
Increase in accounts receivable | (2,500,000) | |
Increase in accounts payable and accrued expenses | 346,373 | 755,048 |
Net cash (used in) provided by operating activities of continuing operations | (203,970) | 83,283 |
Net cash used in operating activities of discontinued operations | (256,511) | |
Net cash used in operating activities | (203,970) | (173,228) |
Cash flows from investing activities: | ||
Payments toward Travel Buddhi purchased software intangible | (55,000) | |
Capitalized software development costs | (4,852) | |
Net cash used in investing activities of continuing operations | (59,852) | |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes payable, net | 53,000 | |
Proceeds from notes payable to related parties | 144,557 | 78,404 |
Proceeds from issuance of common stock, net of finder's fees | 193,000 | 81,000 |
Due to related party - Eagle | 9,000 | |
Proceeds of demand note - Investor | 2,000 | |
Repayments under settlement agreement | (93,000) | |
Repayments of notes payable to related parties | (1,078) | |
Net cash provided by financing activities of continuing operations | 297,557 | 169,326 |
Net cash used by financing activities of discontinued operations | ||
Net cash provided by financing activities | 297,557 | 169,326 |
Net increase (decrease) in cash | 33,735 | (3,902) |
Cash at beginning of period | 261 | 4,163 |
Cash at end of period | 33,996 | 261 |
Supplemental disclosure: | ||
Cash paid for interest | 9,684 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Reversal of accrued fees from private placements to accredited investors | 7,500 | |
Acquisition of Travel Buddhi purchased software intangible under promissory note payable, net of payments | 60,281 | |
Acquisition of Alpha Predictions under promissory note payable | 1,438 | |
Issuance of Common Stock for accrued services | ||
Value | $ 575,000 | |
Shares | 1,150,000 | |
Issuance of Common Stock for the conversion of Related Party debts and Strategic Vendor payables | ||
Value | $ 1,801,057 | |
Shares | $ 3,898,733 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and Nature of Business | NOTE 1: ORGANIZATION AND NATURE OF BUSINESS mPhase Technologies, Inc. (“mPhase” or the “Company”) was initially incorporated in New Jersey in 1979 under the name Tecma Laboratory, Inc. In 1987, the Company changed its name to Tecma Laboratories, Inc. As Tecma Laboratories, Inc., the Company was primarily engaged in the research, development and exploration of products in the skin care field. On February 17, 1997, the Company acquired Lightpaths, Inc., a Delaware corporation, which was engaged in the development of telecommunications products incorporating DSL technology, and the Company changed its name to Lightpaths TP Technologies, Inc. On May 5, 1997, the Company completed a reverse merger with Lightpaths TP Technologies, Inc. and thereafter changed its name to mPhase Technologies, Inc. on June 2, 1997. mPhase, a New Jersey corporation is a publicly-held company with 11,689,078 shares of common stock outstanding and 461,553 shares of common stock to be issued at June 30, 2019. The Company’s common stock is traded on the OTC Pink Quotation System under the ticker symbol XDSL. The Company from inception through June 30, 2010 focused much of its efforts in the commercial deployment of its TV+ products for delivery of broadcast IPTV, and DSL component products which include POTS splitters. Beginning in 2004, the Company added a new line of power cell batteries and electronic sensors (magnetometers) being developed through the use of nano-technology. The Company discontinued its TV+ line of products as of June 30, 2010 as well as its electronic sensor products. In recent years, the Company has shifted its primary business focus to the development of innovative power cells and related products through the science of microfluidics, microelectromechanical systems (MEMS) and nano-technology. Using these disciplines, it has developed a battery that has a significantly longer shelf life prior to activation than conventional batteries. In addition, such battery product, unlike conventional batteries, is capable of disposal after use without harm to the environment. This technology is a significant technology and business of the Company today. Presently the Company is pursuing strategic alternatives to best monetize its patent portfolio, including partnering to exploit its opportunities for its drug delivery system. The Company is seeking to engage a grant and project proposal consultant to obtain government funding available under the Departments of Defense and Homeland Security including The Department of Defense Ordnance Technology Consortium (“DOTC”), Small Business Innovative Research (“SBIR”), Cooperative Research and Development Agreements (“CRADA”) and similar programs for targeted applications for its smart nano-battery applications. On January 11, 2019, the Company underwent a major change in management and control. The new management of the Company is positioning the Company to be a technology leader in artificial intelligence and machine learning while enabling a more rapid commercial development of its patent portfolio and other intellectual property. Artificial Intelligence is just simple math executed on an enormous scale. The more instances and calculations a system can process, the more possible it is for that system to emulate human-like cognitive abilities. With the advent of cloud infrastructure, GPU-accelerated processing and deep learning architectures, it is now commercially viable to perform this math at such speeds and efficiency that Artificial Intelligence (human-like cognitive abilities) can be embedded directly into business operations, platform architectures, business services and customer experiences. The Company’s goal is to generate significant revenue from its artificial intelligence and machine learning technologies. mPower Technologies, Inc. is a New Jersey corporation and is a wholly-owned consumer products subsidiary of mPhase Technologies, Inc. This subsidiary had its last significant sale of Jump products during the first quarter of fiscal 2017 and this product line is reflected as discontinued operations within these consolidated financial statements. Medds, Inc., is a Wyoming corporation and is a wholly-owned subsidiary of mPhase Technologies, Inc. Medds, Inc., was formed to capitalize on opportunities for the Company’s drug delivery system. The Company is presently headquartered 9841 Washingtonian Blvd., Suite 390, Gaithersburg, MD 20878. |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2: GOING CONCERN The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $1,955,161 and has incurred negative cash flows from operations of $203,970 for the year ended June 30, 2019. At June 30, 2019, the Company had a working capital deficit of $2,440,289, and an accumulated deficit of $213,633,853. It is management’s opinion that these facts raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing, without additional debt or equity financing. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company was able to enter into convertible debt arrangements and private placements of equity with accredited independent investors to provide liquidity and capital resources during the preceding two fiscal years. In addition, and from time to time during fiscal years 2019 and 2018, the Company raised necessary working capital through bridge loans from officers. During the years ended June 30, 2019 and 2018, the Company received net proceeds from private placements with accredited investors of $193,000 and $81,000, respectively. In order to meet its working capital needs through the next twelve months and to fund the growth of our nanotechnology, artificial intelligence, and machine learning technologies, the Company may consider plans to raise additional funds through the issuance of equity or debt. Although the Company intends to obtain additional financing to meet its cash needs, the Company may be unable to secure any additional financing on terms that are favorable or acceptable to it, if at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation The consolidated financial statements for the years ended June 30, 2019 and 2018, include the operations of mPhase and its wholly-owned subsidiaries, mPower Technologies, Inc., Medds, Inc., mPhase Technologies India Private Limited effective March 19, 2019, and Alpha Predictions LLP effective June 30, 2019. All significant intercompany accounts and transactions have been eliminated in the consolidation. Foreign Currency Translation and Transactions The functional currency of our operations in India is the Indian Rupee. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, and income and expense items are translated at the average exchange rates in effect during the applicable period. The aggregate effect of foreign currency translation is recorded in accumulated other comprehensive income/loss in our consolidated balance sheets. Our net investment in our Indian operations is recorded at the historical rate and the resulting foreign currency translation adjustments are included in accumulated other comprehensive income/loss in our consolidated balance sheets. From the effective date of our India subsidiaries, mPhase Technologies India Private Limited and Alpha Predictions LLP, through June 30, 2019, foreign currency translation gains were not significant and did not have a material impact on the consolidated balance sheets or consolidated statements of operations. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted. Significant estimates include the collectability of accounts receivable, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the deferred tax asset valuation allowance. Concentrations of Credit Risk Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with three financial institutions. Deposits held with the financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation on such deposits, but may be redeemed upon demand. The Company performs periodic evaluations of the relative credit standing of the financial institutions. With respect to accounts receivable, the Company monitors the credit quality of its customers as well as maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Revenue Risk Agreements which potentially subject the Company to concentrations of revenue risk consist principally of one customer agreement. For the years ended June 30, 2019 and 2018, this one customer accounted for 100% and 0% of our total revenue, respectively. At June 30, 2019 and 2018, this one customer accounted for 99% and 0% of our total accounts receivable, respectively. Cash and Cash Equivalents For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. There were no cash equivalents at June 30, 2019 or 2018. Accounts Receivable The Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established loss reserves, the Company makes judgments regarding its customers’ ability to make required payments, economic events, and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. The Company maintains reserves for potential credit losses, and such losses traditionally have been within its expectations. The Company has determined no allowance for doubtful accounts is required at June 30, 2019 or 2018. Property and Equipment All expenditures on the acquisition for property and equipment are recorded at cost and capitalized as incurred, provided the asset benefits the Company for a period of more than one year. Expenditures on routine repairs and maintenance of property and equipment are charged directly to operating expense. The property and equipment is depreciated based upon its estimated useful life after being placed in service, which is 3 to 5 years. When equipment is retired, sold or impaired, the resulting gain or loss is reflected in earnings. The Company incurred depreciation expense of $0 and $683 for the years ended June 30, 2019 and 2018, respectively. Impairment of Long-Lived Assets In accordance with Accounting Standards Codification (“ASC”) 360-10, “Property, Plant, and Equipment”, the Company periodically reviews its long- lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the years ended June 30, 2019 and 2018, the Company did not impair any long-lived assets. Goodwill and Intangible Assets Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company tests goodwill for impairment by first comparing the fair value of the reporting unit to its carrying value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss. On June 30, 2020, we will perform our annual evaluation of goodwill impairment to determine if the estimated fair value of the reporting unit exceeds its carrying value. Patents and licenses are capitalized when the Company determines there will be a future benefit derived from such assets and are stated at cost. Amortization is computed using the straight-line method over the estimated useful life of the asset, generally five years. As of June 30, 2019, and 2018, the book value of patents and licenses of $214,383, has been fully amortized and no amortization expense was recorded for the years ended June 30, 2019 and 2018. Capitalized Software Development Costs The Company follows the provisions of ASC 350-40, “Internal Use Software.” ASC 350-40 provides guidance for determining whether computer software is internal-use software, and on accounting for the proceeds of computer software originally developed or obtained for internal use and then subsequently sold to the public. It also provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. Capitalized software development costs are amortized on a straight-line basis over the estimated useful lives, currently three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. As of June 30, 2019, the book value of purchased and developed technology of $3,025,801, included two technology platforms, a machine learning platform and an artificial intelligence platform. For the year ended June 30, 2019 and 2018, there was no amortization of either purchased technology platforms. Fair Value of Financial Instruments The Company accounts for the fair value of financial instruments in accordance with ASC topic 820, “Fair Value Measurements and Disclosures” (ASC 820), formerly SFAS No. 157 “Fair Value Measurements”. ASC 820 defines “fair value” as the price 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. ASC 820 also describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial instruments consist principally of cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities, due to related parties, and current and long-term debt. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The fair value of short and long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value with the exception of the fair value of due to related parties as the fair value cannot be determined due to a lack of similar instruments available to the Company. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. Revenue Recognition Revenue is derived from the sale of artificial intelligence and machine learning focused technology products. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. In the event any discounts, sales incentives, or similar arrangements are agreed to with a customer, such amounts are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue (see Note 7). Share-Based Compensation The Company computes share based payments in accordance with ASC 718-10, Compensation (“ASC 718-10”) and Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment No. 107 (“SAB 107”). The Company has applied the provisions of SAB 107 in its adoption of ASC 718-10. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50, Equity Based Payments to Non-Employees. The Company estimates the fair value of stock options and warrants by using the Black-Scholes option pricing model. Derivative Instruments The Company enters into financing arrangements that consist of freestanding derivative instruments or are hybrid instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC topic 815, Accounting for Derivative Instruments and Hedging Activities as well as related interpretations of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument. The Company estimates fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of the Company’s common stock. Since derivative financial instruments are initially and subsequently carried at fair values, our income (expense) going forward will reflect the volatility in these estimates and assumption changes. Convertible Debt Instruments The Company records debt net of debt discount for beneficial conversion features and warrants, on a relative fair value basis. Beneficial conversion features are recorded pursuant to the Beneficial Conversion and Debt Topics of the Financial Accounting Standards Board (“FASB”) ASC. The amounts allocated to warrants and beneficial conversion rights are recorded as debt discount and as additional paid-in-capital. Debt discount is amortized to interest expense over the life of the debt. Income Taxes The Company accounts for income taxes in accordance with Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes (“ASC 740”). Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities and net operating loss and tax credit carryforwards given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740. At June 30, 2019 and 2018, the Company had a full valuation allowance against its deferred tax assets. ASC 740 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company’s tax returns for its June 30, 2019, 2018, 2017, and 2016 tax years may be selected for examination by the taxing authorities as the statute of limitations remains open. The Company recognizes expenses for tax penalties and interest assessed by the Internal Revenue Service and other taxing authorities upon receiving valid notice of assessments. The Company has received no such notices for the years ended June 30, 2019 and 2018. Earnings Per Share In accordance with the provisions of FASB ASC Topic 260, Earnings per Share, basic earnings per share (“EPS”) is computed by dividing earnings available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating EPS on a diluted basis. In computing diluted EPS, only potential common shares that are dilutive, those that reduce EPS or increase loss per share, are included. The effect of contingently issuable shares are not included if the result would be anti-dilutive, such as when a net loss is reported. Therefore, basic and diluted EPS are computed using the same number of weighted average shares for the year ended June 30, 2019, as we incurred a net loss for this period. At June 30, 2019, there were outstanding warrants to purchase up to 4,985,394 shares of the Company’s common stock, and notes payable held by a third party and former officer with convertible features that if converted, would total 232,750 shares of the Company’s common stock, which may dilute future EPS. At June 30, 2018, the Company had notes payable held by third parties and notes, unpaid wages, and fees due to officers and directors, with convertible features that if converted, would total 5,524,765 shares of the Company’s common stock, which may dilute future EPS. Recently Adopted Accounting Standards Effective July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in US GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted ASC 606 using the modified retrospective method, which did not have an impact on its consolidated financial statements. The Company expects the impact to net income of the new standard will be immaterial on an ongoing quarterly and annual basis. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 7 for additional information regarding the Company’s adoption of ASC 606. Effective July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which provides clarification on classifying a variety of activities within the statement of cash flows. The Company determined the adoption of ASU 2016-15 did not have a material impact on its consolidated financial statements. Effective July 1, 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The Company determined the adoption of ASU 2017-01 did not have a material impact on its consolidated financial statements. Effective July 1, 2018, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. The Company determined the adoption of ASU 2017-09 did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of fiscal 2020. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842, which amends certain aspects of the new lease standard. The Company is currently evaluating the impact of adopting ASU 2016-02 and ASU 2017-13 on the Company’s financial position, results of operations or cash flows. In July 2017, the FASB issued ASU 2017-11, Update to Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period, however, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. The ASU makes limited changes to the guidance on classifying certain financial instruments as either liabilities or equity. The ASU is intended to improve (1) the accounting for instruments with “down-round” provisions and (2) the readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain pending content with scope exceptions. The standard is effective for the Company as of July 1, 2019, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concept Statement, including the consideration of costs and benefits. The standard is effective for the Company as of July 1, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concept Statement, including the consideration of costs and benefits. The standard is effective for the Company as of July 1, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial statements. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4: PROPERTY AND EQUIPMENT At June 30, 2019 and 2018, the Company’s property and equipment consist of the following: June 30, 2019 2018 Computer equipment $ 11,048 $ - Research equipment 48,383 48,383 Office and marketing 151,118 151,118 Property and equipment, at cost 210,549 199,501 Less: accumulated depreciation (199,501 ) (199,501 ) Property and equipment, net $ 11,048 $ - The Company recorded $0 and $683 of depreciation expense for the years ended June 30, 2019 and 2018, respectively. There was no property and equipment impairments recorded for the years ended June 30, 2019 and 2018. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Business Acquisition | NOTE 5: BUSINESS ACQUISITION On June 30, 2019, the Company acquired 99% of the outstanding common shares of Alpha Predictions LLP (“Alpha Predictions”). Alpha Predictions is an India-based technology company that has developed a suite of commercial data analysis products for use across multiple industries. The Company expects the acquisition to result in synergies with its other operating divisions, which will drive revenue growth and innovation. The goodwill of $6,020 arising from the acquisition consists largely of the synergies expected from combining the operations of the Company and Alpha Predictions. The following table summarizes the consideration paid for Alpha Predictions and the fair values of the assets acquired and liabilities assumed recognized at the acquisition date. Consideration Cash $ 1,438 Fair value of total consideration transferred 1,438 Recognized amounts of identifiable assets acquired and liabilities assumed Cash 3,127 Accounts receivable 26,155 Prepaid expenses 7,488 Property and equipment 11,048 Intangible asset – purchased software 2,905,668 Accounts payable (26,067 ) Accrued expenses and other current liabilities (2,924,288 ) Income tax provision, current (7,713 ) Total identifiable net assets (4,582 ) Goodwill $ 6,020 The Company is currently evaluating the fair values of the assets acquired and liabilities assumed. The preliminary estimates and measurements are, therefore, subject to change during the measurement period. The acquired intangible asset – developed software was recognized at fair value as of the acquisition date. It is provisionally subject to a useful life of 3 years, pending further evaluation of the underlying software. The fair value of the one-percent noncontrolling interest in Alpha Predictions was determined to be immaterial, based on extrapolation of the price paid by the Company for its controlling interest and consideration of any potential control premiums. Acquisition-related costs expensed by the Company were immaterial for the fiscal years ended June 30, 2019 and 2018. The revenue and net loss of the combined entity had the acquisition date been July 1, 2017, are as follows: For the Years Ended June 30, 2019 2018 Supplemental pro forma: Revenue $ 4,554,594 $ 1,245,556 (Loss) Income $ (2,959,165 ) $ (829,656 ) Supplemental pro forma amounts were calculated after applying adjustments to reflect amortization of acquired intangible asset – purchased software that would have been charged had the acquisition date been July 1, 2017. |
Intangible Asset - Purchased So
Intangible Asset - Purchased Software, Net | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset - Purchased Software, Net | NOTE 6: INTANGIBLE ASSET – PURCHASED SOFTWARE, NET Intangible asset – Purchased Software, net, is comprised of the following at: June 30, 2019 2018 Purchased software $ 3,025,801 $ - Less: accumulated amortization - - Purchased software, net $ 3,025,801 $ - Intangible asset – Purchased Software consists of the following two developed software technologies: Alpha Predictions purchased software $ 2,905,668 Travel Buddhi purchased software 120,133 Total purchased software $ 3,025,801 The Alpha Predictions developed software was acquired as further described in Note 5. The Travel Buddhi developed software was acquired on February 15, 2019, for $115,281 and included all rights, software, and code of the technology platform. During the fiscal year ended June 30, 2019, $55,000 of the Travel Buddhi purchase price was paid and $60,281 remained outstanding. At June 30, 2019, the Travel Buddhi technology platform has not been placed in service, but is expected to be during fiscal year 2020. Developed software costs are amortized on a straight-line basis over three years. Amortization of developed software costs is included in depreciation and amortization within the consolidated statements of operations. There was no amortization expense related to purchased software for the fiscal years ended June 30, 2019 and 2018. Future amortization expense related to the existing net carrying amount of developed software at June 30, 2019 is expected to be as follows: Fiscal year 2020 $ 1,008,600 Fiscal year 2021 1,008,600 Fiscal year 2022 1,008,601 $ 3,025,801 |
Revenue
Revenue | 12 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 7: REVENUE The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Software and product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring software and products. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Sales taxes and other similar taxes are excluded from revenue. The adoption of ASC 606 resulted in no impact to the individual financial statement line items of the Company’s audited consolidated statements of operations during the year ended June 30, 2019. For the year ended June 30, 2019, the Company was subject to revenue and accounts receivable concentration risk as one customer accounted for 100% and 99% of revenue and accounts receivable, respectively. Additionally, for the year ended June 30, 2019, the Company was subject to geography concentration risk as its single revenue generating customer is located in India. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 8: ACCRUED EXPENSES Accrued expenses is comprised of the following at: June 30, 2019 2018 Accrued interest $ 104,179 $ 72,638 Accrued wages 208,353 395,582 Other expenses 150,601 88,154 Accrued payment for acquired technology intangible asset 2,905,668 - Accrued stock bonus - 575,000 Total accrued expenses, continuing operations $ 3,368,801 $ 1,131,374 Total accrued expenses, discontinued operations $ - $ 142,195 |
Short Term Notes Payable
Short Term Notes Payable | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short Term Notes Payable | NOTE 9: SHORT TERM NOTES PAYABLE Short term notes payable is comprised of the following: June 30, 2019 2018 Note payable, John Fife (dba St. George Investors)/Judgment Settlement Agreement [1] $ 855,660 $ 885,365 Note payable, former director (Eagle) [2] - 130,274 Note payable, investor [3] - 3,000 Note payable, finance company - discontinued liability [4] - 39,468 Total short-term notes payable $ 855,660 $ 1,058,107 [1] [2] [3] [4] |
Convertible Debt Arrangements
Convertible Debt Arrangements | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debt Arrangements | NOTE 10: Convertible Debt Arrangements JMJ Financial During April 2017, the Company received a judgment from the Federal District Court of Northern Illinois Eastern Division in its favor dismissing a claim by River North Equity which negated two notes River North Equity purchased from JMJ Financial. At June 30, 2017, the amount recorded as a current liability for the two notes and accrued interest thereon subject to the River North Equity claim was $1,046,416. Such amount was included in the amount recorded as a current liabilities for all three convertible notes and accrued interest thereon previously issued to JMJ Financial which totaled $1,212,940 on that date. As a result of the proceeding, on July 17, 2017, the Company recorded the cancellation of the two notes assigned to River North from JMJ Financial for a total of $693,060 of principal and $358,534 accrued interest thereon. This resulted in a $1,051,594 gain from the extinguishment of debt during the year ended June 30, 2018. At June 30, 2019, this debt was reclassified to current liabilities as current portion, liabilities in arrears – judgment settlement agreement. At June 30, 2019 and 2018, the amount recorded in current liabilities for the one convertible note and accrued interest thereon due to JMJ Financial was $193,287 and $178,521, respectively. During the fiscal years ended June 30, 2019 and 2018 the Company recorded $14,766 and $17,175, respectively of interest for the outstanding convertible note. As of June 30, 2019 and 2018, the aggregate remaining amount of convertible securities held by JMJ could be converted into 9,664 and 8,926 shares, respectively, with a conversion price of $20. John Fife (dba St. George Investors) / Fife Judgment Effective December 10, 2018, the Company entered into a “Judgment Settlement Agreement” to satisfy in full the Forbearance Agreement with Fife that was previously in effect. As a result, under the Judgment Settlement Agreement, no shares of the Company’s common stock are issuable or eligible to be converted into. Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. The Company has made all payments required as of the date hereof. Failure to make any of the payments, when due, will result in an additional debt obligation, inclusive of principal and interest at the date of default ($570,660 as of June 30, 2019), to be immediately due and payable by the Company. During the year ended June 30, 2018, the Company did not make any repayments to Fife under the Forbearance obligation, as amended. The value of the forbearance debt obligation on June 30, 2018 was $885,365. MH Investment Trust II On April 10, 2019 the Company repaid $3,000 that was accepted as payment, in full, for the convertible promissory note to M.H. Investment Trust II. At the time of the payment, the outstanding principal balance and accrued interest was $3,333 and $3,737, respectively. As a result of the settlement payment, the Company recognized a gain on extinguishment of debt of $4,070. At June 30, 2018 the note balance was $3,333 and accrued interest was $3,118 accruing at 12% per annum, was due under this convertible promissory note. Power Up Lending On June 19, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group (“Lender”) and issued an 8% convertible promissory note in the principal amount of $78,000 to the Lender with a maturity date of June 19, 2020. The Company received proceeds in the amount of $45,800, with $25,000 refinancing a prior convertible promissory note due to the Lender that had been in default, $3,000 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this Securities Purchase Agreement and Convertible Promissory Note and $4,200 being paid to the Company’s Transfer Agent to satisfy an outstanding balance. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $103,161, deferred financing costs of $3,000 and debt discount of $75,000. The deferred financing costs and debt discount are being amortized over the term of the note. The aggregate balance of the convertible promissory note and accrued interest was $78,000 and $188, respectively, at June 30, 2019. Notes payable under convertible debt and debenture agreements, net is comprised of the following: June 30, 2019 2018 JMJ Financial $ 109,000 $ 109,000 John Fife (dba St. George Investors) / Fife Judgment - 885,365 MH Investment Trust II - 3,000 Power Up Lending 2,351 - Total convertible debt arrangements, net $ 111,351 $ 997,365 At June 30, 2019 and 2018, accrued interest on these convertible notes of $84,475 and $72,638, respectively, is included within accrued expenses of the consolidated balance sheets. |
Derivative Liability
Derivative Liability | 12 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 11: DERIVATIVE LIABILITY The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operation as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from June 30, 2018 to June 30, 2019, as there was no derivative liability at June 30, 2017: Conversion feature derivative liability June 30, 2018 $ - Initial fair value of derivative liability recorded as debt discount 75,000 Initial fair value of derivative liability recorded as deferred financing costs 3,000 Initial fair value of derivative liability charged to other expense 25,161 Loss on change in fair value included in earnings 30,508 June 30, 2019 $ 133,669 Total derivative liability at June 30, 2019 and June 30, 2018 amounted to $133,669 and $0, respectively. The change in fair value included in earnings of $30,508 is due in part to the quoted market price of the Company’s common stock decreasing from $1.00 at June 30, 2018 to $0.85 at June 30, 2019, coupled with substantially reduced conversion prices due to the effect of “ratchet” provisions incorporated within the convertible notes payable. The Company used the following assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with Binomial simulations at June 30, 2019: Expected volatility 1,872.2 % Expected term 11.5 months Risk-free interest rate 1.92 % Stock price $ 0.85 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | NOTE 12: STOCKHOLDERS’ EQUITY (DEFICIT) The total number of shares of all classes of stock that the Company shall have the authority to issue is 100,001,000 shares consisting of 100,000,000 shares of common stock, $0.01 par value per share, of which 11,689,078 are issued and outstanding and 461,553 are to be issued at June 30, 2019 and 1,000 shares of preferred stock, par value $0.01 per share of which 1,000 shares have been designated as Series A Super Voting Preferred of which 1,000 are issued and outstanding at June 30, 2019. On January 4, 2019 the State of New Jersey accepted an Amendment to the Company’s Certificate of Incorporation providing for the increase in authorized shares of common stock to 125 billion shares and the change to no par value. On March 21, 2019, the Company’s Board of Directors approved 1) an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to i) decrease the number of authorized shares of common stock of the Company to 25,000,000 shares from 125,000,000,000 shares and ii) increase the par value to $0.01 per share, and 2) granting discretionary authority to the Company’s Board of Directors to amend the Certificate of Incorporation to effect one or more consolidations of the issued and outstanding shares of common stock of the Company, pursuant to which the shares of common stock would be combined and reclassified into one share of common stock at a ratio of 1-for-5,000 (the “Reverse Stock Split”). On May 17, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation to decrease its authorized common stock from 125,000,000,000 shares to 25,000,000 shares. Effective May 22, 2019 the Company completed a 1-for-5,000 reverse split of its common stock. On August 27, 2019, the Company’s Board of Directors approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to increase the number of authorized shares of common stock of the Company to 100,000,000 shares from 25,000,000 shares. On September 4, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation to increase its authorized common stock from 25,000,000 shares to 100,000,000 shares. Common Stock Private Placements During the year ended June 30, 2019, the Company received $193,000 of net proceeds from the issuance of 640,000 shares of common stock and 132,000 shares of common stock to be issued in private placements with accredited investors, incurring no finder’s fees. During the year ended June 30, 2018, the Company received $81,000 of net proceeds from the issuance of 360,000 shares of common stock in private placements with accredited investors, incurring finder’s fees of $9,000. Stock Award Payable During the year ended June 30, 2019, Messrs. Durando, Dotoli and Smiley received 800,000 shares of common stock, which were valued at $400,000, Mr. Biderman a former outside Director received 200,000 shares of common stock, which were valued at $100,000 and strategic consultants received 150,000 shares of common stock, which were valued at $75,000. In the aggregate, this group received a total of 1,150,000 shares of common stock, which were valued at $0.50 per share or $575,000, based on the closing price of the Company’s common stock on September 24, 2018. At June 30, 2018, the $575,000 was included in accrued expenses. Stock Based Compensation During the year ended June 30, 2019, the Company issued 2,620,899 (“Signing Shares”) shares of common stock to its President and CEO, Mr. Bhatnagar, in connection with the commencement of his employment with the Company. The grant date fair value of $1,310,449 is based upon the closing price of the Company’s common stock on January 11, 2019, and is included in stock-based compensation expense within the consolidated statement of operations. On June 1, 2019, the Company granted 231,635 shares of common stock to Mr. Cutchens, the Company’s Chief Financial Officer. The common stock will vest 25% on the six month, 1 year, 2 year, and 3 year anniversaries of the grant date. The Company recorded $16,464 of stock-based compensation expense during the year ended June 30, 2019, related to this common stock grant. During the year ended June 30, 2018, the Company did not issue any common stock to employees or officers. Conversion of Debt Securities During the fiscal year ended June 30, 2019, the Company issued 3,898,733 shares of common stock and had 329,553 shares of common stock to be issued to a number of related parties and strategic consultants in connection with prior services provided to the Company. The shares issued were valued at $1,883,445. During the fiscal year ended June 30, 2018, there were no shares of common stock issued to related parties or strategic consultants. During the fiscal years ended June 30, 2019 and 2018, there were no conversions by JMJ Financial, John Fife (dba St. George Investors) / Fife Judgment, MH Investment Trust II, or Power Up Lending. Reserved Shares The convertible promissory note entered into with Power Up Lending by the Company on June 19, 2019, requires the Company to reserve 1,258,064 shares of its Common Stock for potential future conversions under such instruments. At June 30, 2019, 7,202 shares of the Company’s Common Stock remain subject to be returned to the Company’s treasury for cancellation. Such shares were not sold as part of 8,000 shares of the Company’s Common Stock that was advanced during fiscal year 2014 under an Equity Line of Credit. Retired Shares During the year ended June 30, 2019, there were no shares of the Company’s Common Stock returned for retirement or otherwise. During the year ended June 30, 2018, 540,840 outstanding shares of the Company’s Common Stock were returned to the Company by Mr. Smiley (273,445 shares) and Patricia Dotoli, the spouse of Gus Dotoli (267,395 shares) to provide the Company with sufficient authorized but unissued shares of stock and enable the Company to have additional authorized shares of its Common Stock to complete present private placements to provide operating capital for the Company. Common Stock Warrants Warrant Agreement – Earned Warrants Mr. Bhatnagar, the Company’s President and CEO, is entitled to receive warrants to acquire 4% of the outstanding fully diluted common stock of the Company (the “Earned Warrants”) each time the Company’s revenue increases by $1,000,000. The exercise price of the Earned Warrants is equal to $0.50 per share and he may not receive shares whereby Signing Shares and Earned Warrants exceed 80% of the fully diluted common stock of the Company (“Warrant Cap”). Warrant Agreement – Accelerated Warrants Mr. Bhatnagar, the Company’s President and CEO, shall immediately receive the remaining amount of warrants necessary to acquire up to 80% of the outstanding fully diluted common stock of the Company (“Accelerated Warrants”) when either of the following occur: a) the Company completes a stock or asset purchase of Scepter Commodities, LLC; or b) the Company completes a stock or asset purchase of any other entity, either of which, in the aggregate, together with prior revenue increases achieved by the Company, results in the consolidated revenues of the Company being not less than $15,000,000; or c) the Company grows a similar business organically within mPhase to include contracts generating revenues in excess of $15,000,000; or d) the Company meets the listing requirements of either the NYSE or NASDAQ As of the year ended June 30, 2019, as the Company’s revenue achieved $2,500,000, Mr. Bhatnagar earned warrants to acquire 4,985,394 shares of the Company’s common stock under the provisions of the Warrant Agreement. At June 30, 2019, there remains approximately 32,400,000 shares of the Company’s common stock that Mr. Bhatnagar can earn. For the year ended June 30, 2019, the Company recognized $2,492,697 of stock-based compensation expense related to the earned warrants. At June 30, 2019, there remains approximately $16,200,000 of stock-based compensation expense that the Company expects to recognize over the next six months. The Company estimates the fair value of each option award on the date of grant using a black-scholes option valuation model that uses the assumptions noted in the table below. Because black-scholes option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were utilized during 2019: Expected volatility 21,779.77 % Weighted-average volatility 21,779.77 % Expected dividends 0 % Expected term (in years) 5.0 Risk-free rate 2.52 % The following table sets forth common stock purchase warrants outstanding at June 30, 2019: Warrants Weighted Average Exercise Price Intrinsic Value Outstanding, June 30, 2018 - $ - $ - Warrants earned 4,985,394 0.50 - Warrants forfeited - - - Outstanding, June 30, 2019 4,985,394 $ 0.50 $ - Common stock issuable upon exercise of warrants 4,985,394 $ 0.50 $ - Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Warrants Exercisable Range of Exercise Prices Number Outstanding at June 30, 2019 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at June 30, 2019 Weighted Average Exercise Price $ 0.50 4,985,394 4.75 $ 0.50 4,985,394 $ 0.50 4,985,394 4.75 $ 0.50 4,985,394 $ 0.50 Settlement and New Funding Share Reserves The Company agreed to reserve a total of 3,000,000 shares of its common stock of which 532,040 shares of common stock were reserved for and issued concurrently for the conversion of 75% of outstanding accounts payables to officers’ and a director (discussed below), 1,967,960 shares of common stock were reserved to reduce liabilities outstanding December 31, 2018 (“Settlement Reserve”), and 500,000 shares of common stock were reserved to fund continuing operations (“Funding Reserve”). At June 30, 2019, 1,225,949 shares of common stock remained available from the initial Settlement Reserve to settle prior liabilities and 185,063, shares of common stock remained available from the Funding Reserve to fund continuing operations. Settlement Reserve Funding Initial Shares of Common Stock to Establish Reserve 1,967,960 500,000 Shares issued concurrently to transition agreement for the conversion of 75% strategic vendors, outstanding December 31, 2018 (61,200 ) - Shares available upon execution of the Transition Agreement dated January 11, 2019 1,906,760 500,000 Shares issued subsequent to a “Change in Control” to accredited investors in private placements through June 30, 2019 (680,811 ) (314,937 ) Shares of Common Stock available at June 30, 2019 1,225,949 185,063 Prior Liabilities – Settlement Reserve 1,967,960 shares of the Company’s common stock have been reserved to settle the debts of the Company that were outstanding at December 31, 2018, in the following priority; the Judgement Settlement Agreement (formerly Fife forbearance Agreement), JMJ Financial, Inc., MH Investment Trust, Power Up Lending Ltd, as well as other liabilities satisfactory to the CEO of the Company and the Company (as per Section 2(a) of the Reserve Agreement concurrent with “Change in Control Agreements”, dated January 11, 2019). At June 30, 2019, 1,225,949 shares of common stock remain available under this reserve category. Officer’s and Director’s – Conversion Share Reserve 532,040 shares of the Company’s common stock were reserved for the conversion of 75% of payables to officers’ and a director that were outstanding December 31, 2018, (as per Section 2(a) of the Reserve Agreement concurrent with “Change in Control Agreements”, dated January 11, 2019). All these shares were issued effective December 31, 2018 and no shares remain available under this reserve category. Continuing Operations Share Reserve 500,000 shares of the Company’s common stock were reserved as per Section 2(c) to be sold at a price, not less than $0.25 per share in periodic Private Placements, (as per Section 2(a) of the Reserve Agreement concurrent with “Change in Control Agreements”, dated January 11, 2019). At June 30, 2019, 185,063 shares of common stock remain available under this reserve category. Final Adjustment for Liabilities Eliminated by Settlement Reserve To the extent Company does not eliminate the above-mentioned liabilities by July 11, 2019, or the cost to do so requires more than the funding provided by the Warrant Cap pertaining to Warrants to be issued to Mr. Bhatnagar, the Settlement Reserve shares shall be increased by that number of shares at $0.25, which equals the amount of the remaining liabilities. Series A Preferred Stock On January 11, 2019, the Company issued 1,000 shares of Series A Preferred Stock to Mr. Bhatnagar as the Company’s new President and CEO, to effectuate voting control of the Company pursuant to the terms of the Transition Agreement. The Series A Preferred shares were recorded at par value, are not tradeable, and have a nominal liquidation value. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13: RELATED PARTY TRANSACTIONS Microphase Corporation At June 30, 2019, the Company owed $32,545 to Microphase for previously leased office space at its Norwalk location and for certain research and development services and shared administrative personnel from time to time, all through December 31, 2015. Former Director Mr. Biderman, a former outside Director, received 200,000 shares of the Company’s common stock valued at $100,000 pursuant to a resolution of the Company’s Board dated November 28, 2017, whereby such shares would be issued when enough authorized shares became available. The liability for this award was included in accrued expenses at June 30, 2018. The shares of the Company’s common stock were issued during the year ended June 30, 2019. During the year ended June 30, 2019, Mr. Biderman, a former outside Director’s affiliated firms of Palladium Capital Advisors and Eagle Strategic Advisers converted $186,000 of accrued fees into 372,000 shares and $132,234 of a note and accrued interest into 276,205 shares of the Company’s common stock. At June 30, 2019, there was no outstanding balance for accrued fees or for a note with accrued interest. Effective October 1, 2018, the Company reversed to additional paid in capital $7,500 of accrued finders’ fees waved by Eagle Strategic Advisers and no amount of such fees was accrued to this former outside Director’s affiliated firm at June 30, 2019. During the fiscal years ended June 30, 2019 and 2018 the Company recorded $1,959 and $7,895 of accrued interest on this loan. Transactions With Officers At various points during past fiscal years certain officers of the Company provided bridge loans to the Company evidenced by individual promissory notes and deferred compensation so as to provide working capital to the Company. All of these notes accrue interest at the rate of 6% per annum, and are payable on demand. During the fiscal years ended June 30, 2019 and 2018, the officers advanced $144,507 and $77,326 to provide working capital to the Company and $15,467 and $44,274 has been charged for interest on loans from officers. At June 30, 2019 and 2018, these outstanding notes including accrued interest totaled $58,165 and $777,712, respectively. At June 30, 2019 and 2018, these promissory notes are convertible into shares of the Company common stock, if available. During the fiscal year ended June 30, 2019, Messrs. Durando, Dotoli and Smiley received 800,000 shares of common stock, which were valued at $400,000, Mr. Biderman a former outside Director received 200,000 shares of common stock, which were valued at $100,000 and strategic consultants received 150,000 shares of common stock, which were valued at $75,000. In the aggregate, this group received a total of 1,150,000 shares of common stock, which was valued at $575,000 and included in accrued expenses at June 30, 2018. During the fiscal year ended June 30, 2019, the Company issued 3,898,733 shares of common stock and had 329,553 shares to be issued to a number of related parties and strategic consultants in connection with prior services provided to the Company. The shares issued were valued at $1,883,445. During the fiscal year ended June 30, 2018, there were no shares of common stock issued to related parties or strategic consultants. During the fiscal year ended June 30, 2019, the Company incurred $9,000 of expense related to legal and consulting services provided by Mr. Smiley, the Company’s former CFO and legal counsel. During the fiscal year ended June 30, 2019, the Company issued 2,620,899 (“Signing Shares”) shares of common stock to its President and CEO, Mr. Bhatnagar, in connection with the commencement of his employment with the Company. The grant date fair value of $1,310,449 is based upon the closing price of the Company’s common stock on January 11, 2019, and is included in stock-based compensation expense within the consolidated statement of operations. On June 1, 2019, the Company granted 231,635 shares of common stock to Mr. Cutchens, the Company’s Chief Financial Officer. The common stock will vest 25% on the six month, 1 year, 2 year, and 3 year anniversaries of the grant date. The Company recorded $16,464 of stock-based compensation expense during the year ended June 30, 2019, related to this common stock grant. During the year ended June 30, 2018, the Company did not issue any common stock to employees or officers. Conversion Feature and Conversions of Debt to Officers’ The Company amortized the remaining $91,177 deferred charge balance to beneficial conversion feature interest expense for the year ended June 30, 2019. At June 30, 2019, there is no deferred charges for beneficial conversion feature interest expense remaining. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14: INCOME TAXES The Company accounts for income taxes taking into account deferred tax assets and liabilities which represent the future tax consequences of the differences between financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred liabilities are recognized for taxable temporary differences. 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 not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year the change is enacted. Due to recurring losses, the Company’s tax provision for the years ended June 30, 2019 and 2018 was $0. At June 30, 2019 and 2018, the difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows: June 30, 2019 2018 Statutory federal rate (21.0 )% (21.0 )% State income tax rate, net of federal benefit (7.2 )% (7.2 )% Permanent differences, including stock based compensation and beneficial conversion interest expense 28.9 % 29.0 % Change in valuation allowance (0.7 )% (0.8 )% Effective tax rate - % - % At June 30, 2019 and 2018, the Company’s deferred tax assets were as follows: June 30, 2019 2018 Deferred tax liability Property and equipment $ - $ - Total deferred tax liability $ - $ - June 30, 2019 2018 Deferred tax asset Federal and state net operating loss carry forward $ 26,156,755 $ 27,672,065 Other temporary differences - - Total deferred tax asset 26,156,755 27,672,065 Net deferred tax asset 26,156,755 27,672,065 Less: valuation allowance (26,156,755 ) (27,672,065 ) $ - $ - In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has recorded a full valuation allowance against its net deferred tax assets because it is not currently able to conclude that it is more likely than not that these assets will be realized. The amount of deferred tax assets considered to be realizable could be increased in the near term if estimates of future taxable income during the carryforward period are increased. The valuation allowance decreased by $1,515,310 and $14,977,935 during the fiscal years ended June 30, 2019 and 2018, respectively, as a result of a reduction in the total NOL carry forwards due to expiring loss years. As of June 30, 2019, the Company has federal net operating loss carryforwards of approximately $105,200,000 and approximately $56,500,000 to offset future federal and state income taxes. Net operating loss carryforwards expire through 2038. Under the Internal Revenue Code Section 382, certain stock transactions which significantly change ownership, including the sale of stock to new investors, the exercise of options to purchase stock, or other transactions between shareholders could limit the amount of net operating loss carryforwards that may be utilized on an annual basis to offset taxable income in future periods. At June 30, 2019 and 2018, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company did not recognize any interest or penalties related to uncertain tax positions at June 30, 2019 and 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15: COMMITMENTS AND CONTINGENCIES Commitments Effective May 1, 2019, the Company relocated its corporate office to 9841 Washingtonian Blvd., Suite 390, Gaithersburg, MD 20878, and incurs rent expense of $1,350 per month, which is payable to a related party. The lease term with the related party is a month-to-month arrangement. Judgement Settlement Agreement Effective December 10, 2018, the Company entered into a “Judgment Settlement Agreement” to satisfy in full the Forbearance Agreement with Fife that was previously in effect. As a result, under the Judgment Settlement Agreement, no shares of the Company’s common stock are issuable or eligible to be converted into. Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. The Company has made all payments required as of the date hereof. Failure to make any of the payments, when due, will result in an additional debt obligation, inclusive of principal and interest at the date of default ($570,660 as of June 30, 2019), to be immediately due and payable by the Company (see Note 10). Contracts and Commitments Executed Pursuant to the Transition Agreement In the transaction whereby, Mr. Bhatnagar acquired control of the Company on January 11, 2019, the Company entered into material commitments including an employment agreement and a warrant agreement (see Note 12). Contingencies Judgment Settlement Agreement Effective December 10, 2018, the Company entered into a “Judgment Settlement Agreement” to satisfy in full the Forbearance Agreement with Fife that was previously in effect. As a result, under the Judgment Settlement Agreement, no shares of the Company’s common stock are issuable or eligible to be converted into. Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. The Company has made all payments required as of the date hereof. Failure to make any of the payments, when due, will result in an additional debt obligation, inclusive of principal and interest at the date of default ($570,660 as of June 30, 2019), to be immediately due and payable by the Company (see Note 10). Should the Company satisfy the liability as described within the Judgement Settlement Agreement above, the Company would realize a gain on such settlement of approximately $580,000. Amounts Contingent upon Certain Terms of Change in Control Agreements Effective January 11, 2019 To the extent Company does not eliminate the certain liabilities within six months of the effective date, the Warrant Cap for warrants issued to Mr. Bhatnagar shall increase by such number of shares at a price of $0.25 to equal the amount of the remaining liability. The Change in Control Agreements, effective January 11, 2019, also have certain provisions that may accelerate the warrant “earn out” formula contained in the Transition Agreement. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 16: DISCONTINUED OPERATIONS The Company has classified the operating results and associated assets and liabilities from its Jump line of products, which ceased generating material revenue during the first quarter of fiscal year 2017, as Discontinued Operations in the Consolidated Financial Statements for the Fiscal Years ended June 30, 2019 and 2018. The assets and liabilities associated with discontinued operations included in our Consolidated Balance Sheets were as follows: June 30, 2019 June 30, 2018 Discontinued Continuing Total Discontinued Continuing Total Assets Current Assets Cash $ - $ 33,996 $ 33,996 $ - $ 261 $ 261 Accounts receivable, net - 2,526,155 2,526,155 - - - Prepaid expenses - 8,820 8,820 - - - Total Current Assets - 2,568,971 2,568,971 - 261 261 Property and equipment, net - 11,048 11,048 - - - Goodwill - 6,020 6,020 - - - Intangible asset - developed software, net - 3,025,801 3,025,801 - - - Other assets - 3,058 3,058 - 800 800 Total Assets $ - $ 5,614,898 $ 5,614,898 $ - $ 1,061 $ 1,061 Liabilities Current Liabilities Accounts payable $ 82,795 $ 366,274 $ 449,069 $ 124,508 $ 421,056 $ 545,564 Accrued expenses - 3,368,801 3,368,801 - 1,273,569 1,273,569 Due to related parties - 65,459 65,459 - 226,045 226,045 Notes payable to officers - 25,251 25,251 - 777,912 777,912 Convertible notes payable, net - 2,351 2,351 - - - Notes payable to director and investor - - - - 133,274 133,274 Note payable to finance company - - - 39,468 - 39,468 Liabilities in arrears with convertible features - 109,000 109,000 - 997,698 997,698 Liabilities in arrears - judgement settlement agreement (Note 9) - 855,660 855,660 - - - Derivative liability - 133,669 133,669 - - - Total Current Liabilities $ 82,795 $ 4,926,465 $ 5,009,260 $ 163,976 $ 3,829,554 $ 3,993,530 The revenues and expenses associated with discontinued operations included in our Consolidated Statements of Operations were as follows: Year Ended June 30, 2019 2018 Discontinued Continuing Total Discontinued Continuing Total Revenue $ - $ 2,500,000 $ 2,500,000 $ - $ - $ - Cost of revenue - - - - - - Gross Profit - 2,500,000 2,500,000 - - - General and administrative expenses - 4,265,886 4,265,886 22,009 735,026 757,035 Operating loss - (1,765,886 ) (1,765,886 ) (22,009 ) (735,026 ) (757,035 ) Other Income (Expense): Interest expense (11,508 ) (210,594 ) (222,102 ) (41,957 ) (246,162 ) (288,119 ) Loss on change in fair value of derivative liability - (30,508 ) (30,508 ) - - - Initial derivative expense - (25,161 ) (25,161 ) - - - Amortization of debt discount - (2,260 ) (2,260 ) - - - Amortization of deferred financing costs - (90 ) (90 ) - - - Gain on extinguishment of debt 30,448 60,398 90,846 250,570 1,107,922 1,358,492 Other income - - - 566 - 566 Total Other Income (Expense) 18,940 (208,215 ) (189,275 ) 209,179 861,760 1,070,939 Income (Loss) before income taxes 18,940 (1,974,101 ) (1,955,161 ) 187,170 126,734 313,904 Income taxes - - - - - - Net income (loss) $ 18,940 $ (1,974,101 ) $ (1,955,161 ) $ 187,170 $ 126,734 $ 313,904 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 17: SUBSEQUENT EVENTS From July 1, 2019 through September 30, 2019, the Company issued 64,800 shares of its common stock to a number of related parties and strategic consultants in connection with prior services provided to the Company. The shares issued were valued at $16,200. On July 30, 2019, the Company entered into a Securities Purchase Agreement dated as of July 30, 2019 with Power Up Lending Group (“Lender”), and issued an 8% Convertible Promissory Note in the principal amount of $53,000 to the Lender with a maturity date of July 30, 2020. The Company received net proceeds in the amount of $50,000 as a result of $3,000 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this Securities Purchase Agreement and Convertible Promissory Note. On August 27, 2019, the Company’s Board of Directors approved the filing of an amendment (the “Amendment”) to the Company’s Certificate of Incorporation to increase the authorized shares of common stock from 25 million shares to 100 million shares pursuant to Section 14A:7-2(4) of the Business Corporation Law of the State of New Jersey. The Amendment was filed with the State of New Jersey on September 4, 2019. On September 5, 2019, the Company entered into a Securities Purchase Agreement dated as of September 5, 2019 with Power Up Lending Group (“Lender”), and issued an 8% Convertible Promissory Note in the principal amount of $53,000 to the Lender with a maturity date of September 5, 2020. On September 9, 2019, the Company received net proceeds in the amount of $46,800 as a result of $3,000 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this Securities Purchase Agreement and Convertible Promissory Note and $3,200 being paid to the Company’s Transfer Agent to satisfy an outstanding balance. On September 24, 2019, the Company entered into a Securities Purchase Agreement dated as of September 24, 2019 with accredited investors (“Lenders”), and issued 8% Convertible Promissory Notes in the principal amount of $124,200 (including an aggregate of $9,200 in original issue discounts) to the Lenders with maturity dates of September 24, 2020. On September 27, 2019, the Company received net proceeds in the amount of $112,000 as a result of $3,000 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this Securities Purchase Agreement and Convertible Promissory Notes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements for the years ended June 30, 2019 and 2018, include the operations of mPhase and its wholly-owned subsidiaries, mPower Technologies, Inc., Medds, Inc., mPhase Technologies India Private Limited effective March 19, 2019, and Alpha Predictions LLP effective June 30, 2019. All significant intercompany accounts and transactions have been eliminated in the consolidation. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currency of our operations in India is the Indian Rupee. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, and income and expense items are translated at the average exchange rates in effect during the applicable period. The aggregate effect of foreign currency translation is recorded in accumulated other comprehensive income/loss in our consolidated balance sheets. Our net investment in our Indian operations is recorded at the historical rate and the resulting foreign currency translation adjustments are included in accumulated other comprehensive income/loss in our consolidated balance sheets. From the effective date of our India subsidiaries, mPhase Technologies India Private Limited and Alpha Predictions LLP, through June 30, 2019, foreign currency translation gains were not significant and did not have a material impact on the consolidated balance sheets or consolidated statements of operations. |
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 (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted. Significant estimates include the collectability of accounts receivable, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the deferred tax asset valuation allowance. |
Concentrations of Credit Risk | Concentrations of Credit Risk Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with three financial institutions. Deposits held with the financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation on such deposits, but may be redeemed upon demand. The Company performs periodic evaluations of the relative credit standing of the financial institutions. With respect to accounts receivable, the Company monitors the credit quality of its customers as well as maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Revenue Risk Agreements which potentially subject the Company to concentrations of revenue risk consist principally of one customer agreement. For the years ended June 30, 2019 and 2018, this one customer accounted for 100% and 0% of our total revenue, respectively. At June 30, 2019 and 2018, this one customer accounted for 99% and 0% of our total accounts receivable, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. There were no cash equivalents at June 30, 2019 or 2018. |
Accounts Receivable | Accounts Receivable The Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established loss reserves, the Company makes judgments regarding its customers’ ability to make required payments, economic events, and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. The Company maintains reserves for potential credit losses, and such losses traditionally have been within its expectations. The Company has determined no allowance for doubtful accounts is required at June 30, 2019 or 2018. |
Property and Equipment | Property and Equipment All expenditures on the acquisition for property and equipment are recorded at cost and capitalized as incurred, provided the asset benefits the Company for a period of more than one year. Expenditures on routine repairs and maintenance of property and equipment are charged directly to operating expense. The property and equipment is depreciated based upon its estimated useful life after being placed in service, which is 3 to 5 years. When equipment is retired, sold or impaired, the resulting gain or loss is reflected in earnings. The Company incurred depreciation expense of $0 and $683 for the years ended June 30, 2019 and 2018, respectively. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with Accounting Standards Codification (“ASC”) 360-10, “Property, Plant, and Equipment”, the Company periodically reviews its long- lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the years ended June 30, 2019 and 2018, the Company did not impair any long-lived assets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company tests goodwill for impairment by first comparing the fair value of the reporting unit to its carrying value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss. On June 30, 2020, we will perform our annual evaluation of goodwill impairment to determine if the estimated fair value of the reporting unit exceeds its carrying value. Patents and licenses are capitalized when the Company determines there will be a future benefit derived from such assets and are stated at cost. Amortization is computed using the straight-line method over the estimated useful life of the asset, generally five years. As of June 30, 2019, and 2018, the book value of patents and licenses of $214,383, has been fully amortized and no amortization expense was recorded for the years ended June 30, 2019 and 2018. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company follows the provisions of ASC 350-40, “Internal Use Software.” ASC 350-40 provides guidance for determining whether computer software is internal-use software, and on accounting for the proceeds of computer software originally developed or obtained for internal use and then subsequently sold to the public. It also provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. Capitalized software development costs are amortized on a straight-line basis over the estimated useful lives, currently three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. As of June 30, 2019, the book value of purchased and developed technology of $3,025,801, included two technology platforms, a machine learning platform and an artificial intelligence platform. For the year ended June 30, 2019 and 2018, there was no amortization of either purchased technology platforms. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for the fair value of financial instruments in accordance with ASC topic 820, “Fair Value Measurements and Disclosures” (ASC 820), formerly SFAS No. 157 “Fair Value Measurements”. ASC 820 defines “fair value” as the price 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. ASC 820 also describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial instruments consist principally of cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities, due to related parties, and current and long-term debt. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The fair value of short and long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value with the exception of the fair value of due to related parties as the fair value cannot be determined due to a lack of similar instruments available to the Company. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. |
Revenue Recognition | Revenue Recognition Revenue is derived from the sale of artificial intelligence and machine learning focused technology products. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. In the event any discounts, sales incentives, or similar arrangements are agreed to with a customer, such amounts are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue (see Note 7). |
Share-Based Compensation | Share-Based Compensation The Company computes share based payments in accordance with ASC 718-10, Compensation (“ASC 718-10”) and Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment No. 107 (“SAB 107”). The Company has applied the provisions of SAB 107 in its adoption of ASC 718-10. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50, Equity Based Payments to Non-Employees. The Company estimates the fair value of stock options and warrants by using the Black-Scholes option pricing model. |
Derivative Instruments | Derivative Instruments The Company enters into financing arrangements that consist of freestanding derivative instruments or are hybrid instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC topic 815, Accounting for Derivative Instruments and Hedging Activities as well as related interpretations of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument. The Company estimates fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of the Company’s common stock. Since derivative financial instruments are initially and subsequently carried at fair values, our income (expense) going forward will reflect the volatility in these estimates and assumption changes. |
Convertible Debt Instruments | Convertible Debt Instruments The Company records debt net of debt discount for beneficial conversion features and warrants, on a relative fair value basis. Beneficial conversion features are recorded pursuant to the Beneficial Conversion and Debt Topics of the Financial Accounting Standards Board (“FASB”) ASC. The amounts allocated to warrants and beneficial conversion rights are recorded as debt discount and as additional paid-in-capital. Debt discount is amortized to interest expense over the life of the debt. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes (“ASC 740”). Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities and net operating loss and tax credit carryforwards given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740. At June 30, 2019 and 2018, the Company had a full valuation allowance against its deferred tax assets. ASC 740 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company’s tax returns for its June 30, 2019, 2018, 2017, and 2016 tax years may be selected for examination by the taxing authorities as the statute of limitations remains open. The Company recognizes expenses for tax penalties and interest assessed by the Internal Revenue Service and other taxing authorities upon receiving valid notice of assessments. The Company has received no such notices for the years ended June 30, 2019 and 2018. |
Earnings Per Share | Earnings Per Share In accordance with the provisions of FASB ASC Topic 260, Earnings per Share, basic earnings per share (“EPS”) is computed by dividing earnings available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating EPS on a diluted basis. In computing diluted EPS, only potential common shares that are dilutive, those that reduce EPS or increase loss per share, are included. The effect of contingently issuable shares are not included if the result would be anti-dilutive, such as when a net loss is reported. Therefore, basic and diluted EPS are computed using the same number of weighted average shares for the year ended June 30, 2019, as we incurred a net loss for this period. At June 30, 2019, there were outstanding warrants to purchase up to 4,985,394 shares of the Company’s common stock, and notes payable held by a third party and former officer with convertible features that if converted, would total 232,750 shares of the Company’s common stock, which may dilute future EPS. At June 30, 2018, the Company had notes payable held by third parties and notes, unpaid wages, and fees due to officers and directors, with convertible features that if converted, would total 5,524,765 shares of the Company’s common stock, which may dilute future EPS. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in US GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted ASC 606 using the modified retrospective method, which did not have an impact on its consolidated financial statements. The Company expects the impact to net income of the new standard will be immaterial on an ongoing quarterly and annual basis. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 7 for additional information regarding the Company’s adoption of ASC 606. Effective July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which provides clarification on classifying a variety of activities within the statement of cash flows. The Company determined the adoption of ASU 2016-15 did not have a material impact on its consolidated financial statements. Effective July 1, 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The Company determined the adoption of ASU 2017-01 did not have a material impact on its consolidated financial statements. Effective July 1, 2018, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. The Company determined the adoption of ASU 2017-09 did not have a material impact on its consolidated financial statements. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of fiscal 2020. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842, which amends certain aspects of the new lease standard. The Company is currently evaluating the impact of adopting ASU 2016-02 and ASU 2017-13 on the Company’s financial position, results of operations or cash flows. In July 2017, the FASB issued ASU 2017-11, Update to Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period, however, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. The ASU makes limited changes to the guidance on classifying certain financial instruments as either liabilities or equity. The ASU is intended to improve (1) the accounting for instruments with “down-round” provisions and (2) the readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain pending content with scope exceptions. The standard is effective for the Company as of July 1, 2019, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concept Statement, including the consideration of costs and benefits. The standard is effective for the Company as of July 1, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concept Statement, including the consideration of costs and benefits. The standard is effective for the Company as of July 1, 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial statements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | At June 30, 2019 and 2018, the Company’s property and equipment consist of the following: June 30, 2019 2018 Computer equipment $ 11,048 $ - Research equipment 48,383 48,383 Office and marketing 151,118 151,118 Property and equipment, at cost 210,549 199,501 Less: accumulated depreciation (199,501 ) (199,501 ) Property and equipment, net $ 11,048 $ - |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed Recognized | The following table summarizes the consideration paid for Alpha Predictions and the fair values of the assets acquired and liabilities assumed recognized at the acquisition date. Consideration Cash $ 1,438 Fair value of total consideration transferred 1,438 Recognized amounts of identifiable assets acquired and liabilities assumed Cash 3,127 Accounts receivable 26,155 Prepaid expenses 7,488 Property and equipment 11,048 Intangible asset – purchased software 2,905,668 Accounts payable (26,067 ) Accrued expenses and other current liabilities (2,924,288 ) Income tax provision, current (7,713 ) Total identifiable net assets (4,582 ) Goodwill $ 6,020 |
Schedule of Supplemental Pro-Forma | The revenue and net loss of the combined entity had the acquisition date been July 1, 2017, are as follows: For the Years Ended June 30, 2019 2018 Supplemental pro forma: Revenue $ 4,554,594 $ 1,245,556 (Loss) Income $ (2,959,165 ) $ (829,656 ) |
Intangible Asset - Purchased _2
Intangible Asset - Purchased Software, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Asset | Intangible asset – Purchased Software, net, is comprised of the following at: June 30, 2019 2018 Purchased software $ 3,025,801 $ - Less: accumulated amortization - - Purchased software, net $ 3,025,801 $ - |
Schedule of Intangible Asset by Developed Software | Intangible asset – Purchased Software consists of the following two developed software technologies: Alpha Predictions purchased software $ 2,905,668 Travel Buddhi purchased software 120,133 Total purchased software $ 3,025,801 |
Schedule of Future Amortization Expense | Future amortization expense related to the existing net carrying amount of developed software at June 30, 2019 is expected to be as follows: Fiscal year 2020 $ 1,008,600 Fiscal year 2021 1,008,600 Fiscal year 2022 1,008,601 $ 3,025,801 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses is comprised of the following at: June 30, 2019 2018 Accrued interest $ 104,179 $ 72,638 Accrued wages 208,353 395,582 Other expenses 150,601 88,154 Accrued payment for acquired technology intangible asset 2,905,668 - Accrued stock bonus - 575,000 Total accrued expenses, continuing operations $ 3,368,801 $ 1,131,374 Total accrued expenses, discontinued operations $ - $ 142,195 |
Short Term Notes Payable (Table
Short Term Notes Payable (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Short Term Notes Payable | Short term notes payable is comprised of the following: June 30, 2019 2018 Note payable, John Fife (dba St. George Investors)/Judgment Settlement Agreement [1] $ 855,660 $ 885,365 Note payable, former director (Eagle) [2] - 130,274 Note payable, investor [3] - 3,000 Note payable, finance company - discontinued liability [4] - 39,468 Total short-term notes payable $ 855,660 $ 1,058,107 [1] [2] [3] [4] |
Convertible Debt Arrangements (
Convertible Debt Arrangements (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes payable Under Convertible Debt and Debenture Agreements, Net | Notes payable under convertible debt and debenture agreements, net is comprised of the following: June 30, 2019 2018 JMJ Financial $ 109,000 $ 109,000 John Fife (dba St. George Investors) / Fife Judgment - 885,365 MH Investment Trust II - 3,000 Power Up Lending 2,351 - Total convertible debt arrangements, net $ 111,351 $ 997,365 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Reconciliation of the Derivative Liability | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from June 30, 2018 to June 30, 2019, as there was no derivative liability at June 30, 2017: Conversion feature derivative liability June 30, 2018 $ - Initial fair value of derivative liability recorded as debt discount 75,000 Initial fair value of derivative liability recorded as deferred financing costs 3,000 Initial fair value of derivative liability charged to other expense 25,161 Loss on change in fair value included in earnings 30,508 June 30, 2019 $ 133,669 |
Schedule of Derivative Assumptions | The Company used the following assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with Binomial simulations at June 30, 2019: Expected volatility 1,872.2 % Expected term 11.5 months Risk-free interest rate 1.92 % Stock price $ 0.85 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Assumptions Used | The following assumptions were utilized during 2019: Expected volatility 21,779.77 % Weighted-average volatility 21,779.77 % Expected dividends 0 % Expected term (in years) 5.0 Risk-free rate 2.52 % |
Schedule of Common Stock Purchase Warrants Outstanding | The following table sets forth common stock purchase warrants outstanding at June 30, 2019: Warrants Weighted Average Exercise Price Intrinsic Value Outstanding, June 30, 2018 - $ - $ - Warrants earned 4,985,394 0.50 - Warrants forfeited - - - Outstanding, June 30, 2019 4,985,394 $ 0.50 $ - Common stock issuable upon exercise of warrants 4,985,394 $ 0.50 $ - |
Schedule of Warrants Outstanding and Exercisable by Exercise Price Range | Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Warrants Exercisable Range of Exercise Prices Number Outstanding at June 30, 2019 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at June 30, 2019 Weighted Average Exercise Price $ 0.50 4,985,394 4.75 $ 0.50 4,985,394 $ 0.50 4,985,394 4.75 $ 0.50 4,985,394 $ 0.50 |
Schedule of Common Stock Available for Funding Reserve | Settlement Reserve Funding Initial Shares of Common Stock to Establish Reserve 1,967,960 500,000 Shares issued concurrently to transition agreement for the conversion of 75% strategic vendors, outstanding December 31, 2018 (61,200 ) - Shares available upon execution of the Transition Agreement dated January 11, 2019 1,906,760 500,000 Shares issued subsequent to a “Change in Control” to accredited investors in private placements through June 30, 2019 (680,811 ) (314,937 ) Shares of Common Stock available at June 30, 2019 1,225,949 185,063 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Effective Income Tax Rates | At June 30, 2019 and 2018, the difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows: June 30, 2019 2018 Statutory federal rate (21.0 )% (21.0 )% State income tax rate, net of federal benefit (7.2 )% (7.2 )% Permanent differences, including stock based compensation and beneficial conversion interest expense 28.9 % 29.0 % Change in valuation allowance (0.7 )% (0.8 )% Effective tax rate - % - % |
Schedule of Deferred Tax Assets and Liability | At June 30, 2019 and 2018, the Company’s deferred tax assets were as follows: June 30, 2019 2018 Deferred tax liability Property and equipment $ - $ - Total deferred tax liability $ - $ - June 30, 2019 2018 Deferred tax asset Federal and state net operating loss carry forward $ 26,156,755 $ 27,672,065 Other temporary differences - - Total deferred tax asset 26,156,755 27,672,065 Net deferred tax asset 26,156,755 27,672,065 Less: valuation allowance (26,156,755 ) (27,672,065 ) $ - $ - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | The assets and liabilities associated with discontinued operations included in our Consolidated Balance Sheets were as follows: June 30, 2019 June 30, 2018 Discontinued Continuing Total Discontinued Continuing Total Assets Current Assets Cash $ - $ 33,996 $ 33,996 $ - $ 261 $ 261 Accounts receivable, net - 2,526,155 2,526,155 - - - Prepaid expenses - 8,820 8,820 - - - Total Current Assets - 2,568,971 2,568,971 - 261 261 Property and equipment, net - 11,048 11,048 - - - Goodwill - 6,020 6,020 - - - Intangible asset - developed software, net - 3,025,801 3,025,801 - - - Other assets - 3,058 3,058 - 800 800 Total Assets $ - $ 5,614,898 $ 5,614,898 $ - $ 1,061 $ 1,061 Liabilities Current Liabilities Accounts payable $ 82,795 $ 366,274 $ 449,069 $ 124,508 $ 421,056 $ 545,564 Accrued expenses - 3,368,801 3,368,801 - 1,273,569 1,273,569 Due to related parties - 65,459 65,459 - 226,045 226,045 Notes payable to officers - 25,251 25,251 - 777,912 777,912 Convertible notes payable, net - 2,351 2,351 - - - Notes payable to director and investor - - - - 133,274 133,274 Note payable to finance company - - - 39,468 - 39,468 Liabilities in arrears with convertible features - 109,000 109,000 - 997,698 997,698 Liabilities in arrears - judgement settlement agreement (Note 9) - 855,660 855,660 - - - Derivative liability - 133,669 133,669 - - - Total Current Liabilities $ 82,795 $ 4,926,465 $ 5,009,260 $ 163,976 $ 3,829,554 $ 3,993,530 The revenues and expenses associated with discontinued operations included in our Consolidated Statements of Operations were as follows: Year Ended June 30, 2019 2018 Discontinued Continuing Total Discontinued Continuing Total Revenue $ - $ 2,500,000 $ 2,500,000 $ - $ - $ - Cost of revenue - - - - - - Gross Profit - 2,500,000 2,500,000 - - - General and administrative expenses - 4,265,886 4,265,886 22,009 735,026 757,035 Operating loss - (1,765,886 ) (1,765,886 ) (22,009 ) (735,026 ) (757,035 ) Other Income (Expense): Interest expense (11,508 ) (210,594 ) (222,102 ) (41,957 ) (246,162 ) (288,119 ) Loss on change in fair value of derivative liability - (30,508 ) (30,508 ) - - - Initial derivative expense - (25,161 ) (25,161 ) - - - Amortization of debt discount - (2,260 ) (2,260 ) - - - Amortization of deferred financing costs - (90 ) (90 ) - - - Gain on extinguishment of debt 30,448 60,398 90,846 250,570 1,107,922 1,358,492 Other income - - - 566 - 566 Total Other Income (Expense) 18,940 (208,215 ) (189,275 ) 209,179 861,760 1,070,939 Income (Loss) before income taxes 18,940 (1,974,101 ) (1,955,161 ) 187,170 126,734 313,904 Income taxes - - - - - - Net income (loss) $ 18,940 $ (1,974,101 ) $ (1,955,161 ) $ 187,170 $ 126,734 $ 313,904 |
Organization and Nature of Bu_2
Organization and Nature of Business (Details Narrative) - shares | Jun. 30, 2019 | Jun. 30, 2018 |
Accounting Policies [Abstract] | ||
Common stock, shares outstanding | 11,689,078 | 3,372,103 |
Common stock to be issued, shares | 461,553 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss incurred | $ (1,955,161) | $ 313,904 |
Net cash used in operating activities | (203,970) | (173,228) |
Working capital deficit | 2,440,289 | |
Accumulated deficit | (213,633,853) | (211,678,692) |
Proceeds from issuance of common stock | $ 193,000 | $ 81,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash and cash equivalents | ||
Allowance for doubtful account receivable | ||
Depreciation expense | 683 | |
Impairment of long lived assets | ||
Intangible assets | 3,025,801 | |
Amortization expense of intangible assets | ||
Income tax examination, likelihood of unfavourable settlement | Greater than 50 percent | |
Common Stock [Member] | Third Party and Former Officer [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 4,985,394 | |
Note Payable [Member] | Third Party and Former Officer [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 232,750 | 5,524,765 |
Patents and Licenses [Member] | ||
Intangible assets | $ 214,383 | $ 214,383 |
Amortization expense of intangible assets | ||
Technology Platforms [Member] | ||
Capitalized software development costs | 3,025,801 | |
Amortization expense of capitalized software development costs | ||
Minimum [Member] | ||
Property and equipment, estimated useful life | P3Y | |
Maximum [Member] | ||
Property and equipment, estimated useful life | P5Y | |
One Customer [Member] | Sales Revenue [Member] | ||
Concentration risk, percentage | 100.00% | 0.00% |
One Customer [Member] | Accounts Receivable [Member] | ||
Concentration risk, percentage | 99.00% | 0.00% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 683 | |
Property and equipment impairments |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Property and equipment, at cost | $ 210,549 | $ 199,501 |
Less: accumulated depreciation | (199,501) | (199,501) |
Property and equipment, net | 11,048 | |
Computer Equipment [Member] | ||
Property and equipment, at cost | 11,048 | |
Research Equipment [Member] | ||
Property and equipment, at cost | 48,383 | 48,383 |
Office and Marketing [Member] | ||
Property and equipment, at cost | $ 151,118 | $ 151,118 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill | $ 6,020 | |
Intangible Asset- Developed Software [Member] | ||
Property and equipment, estimated useful life | P3Y | |
Alpha Predictions LLP [Member] | ||
Business acquisition, percentage of voting interests acquired | 99.00% |
Business Acquisition - Schedule
Business Acquisition - Schedule of Assets acquired and Liabilities Assumed Recognized (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||
Cash | $ 1,438 | |
Fair value of total consideration transferred | 1,438 | |
Cash | 3,127 | |
Accounts receivable | 26,155 | |
Prepaid expenses | 7,488 | |
Property and equipment | 11,048 | |
Intangible asset - purchased software | 2,905,668 | |
Accounts payable | (26,067) | |
Accrued expenses and other current liabilities | (2,924,288) | |
Income tax provision, current | (7,713) | |
Total identifiable net assets | (4,582) | |
Goodwill | $ 6,020 |
Business Acquisition - Schedu_2
Business Acquisition - Schedule of Supplemental Pro-Forma (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||
Revenue | $ 4,554,594 | $ 1,245,556 |
(Loss) Income | $ (2,959,165) | $ (829,656) |
Intangible Asset - Purchased _3
Intangible Asset - Purchased Software, Net (Details Narrative) - USD ($) | Feb. 15, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Asset acquisition | $ 55,000 | ||
Asset purchase price remaining outstanding amount | 60,281 | ||
Amortization expense related to purchased software | |||
Developed Software [Member] | |||
Amortized of straight line term | 3 years | ||
Travel Buddhi Developed Software [Member] | |||
Asset acquisition | $ 115,281 |
Intangible Asset - Purchased _4
Intangible Asset - Purchased Software, Net - Schedule of Intangible Asset (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Purchased software | $ 3,025,801 | |
Less: accumulated amortization | ||
Purchased software, net | $ 3,025,801 |
Intangible Asset - Purchased _5
Intangible Asset - Purchased Software, Net - Schedule of Intangible Asset by Developed Software (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Total purchased software | $ 3,025,801 | |
Alpha Predictions Purchased Software [Member] | ||
Total purchased software | 2,905,668 | |
Travel Buddhi Purchased Software [Member] | ||
Total purchased software | $ 120,133 |
Intangible Asset - Purchased _6
Intangible Asset - Purchased Software, Net - Schedule of Future Amortization Expense (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Fiscal year 2020 | $ 1,008,600 | |
Fiscal year 2021 | 1,008,600 | |
Fiscal year 2022 | 1,008,600 | |
Future amortization expense | $ 3,025,801 |
Revenue (Details Narrative)
Revenue (Details Narrative) - One Customer [Member] | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Sales Revenue [Member] | ||
Concentration risk percentage | 100.00% | 0.00% |
Accounts Receivable [Member] | ||
Concentration risk percentage | 99.00% | 0.00% |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 104,179 | $ 72,638 |
Accrued wages | 208,353 | 395,582 |
Other expenses | 150,601 | 88,154 |
Accrued payment for acquired technology intangible asset | 2,905,668 | |
Accrued stock bonus | 575,000 | |
Total accrued expenses, continuing operations | 3,368,801 | 1,273,569 |
Total accrued expenses, discontinued operations | $ 142,195 |
Short Term Notes Payable - Sche
Short Term Notes Payable - Schedule of Short Term Notes Payable (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 | |
Total short-term notes payable | $ 855,660 | $ 1,058,107 | |
Notes Payable One [Member] | |||
Total short-term notes payable | [1] | 855,660 | 885,365 |
Notes Payable Two [Member] | |||
Total short-term notes payable | [2] | 130,274 | |
Notes Payable Three [Member] | |||
Total short-term notes payable | [3] | 3,000 | |
Notes Payable Four [Member] | |||
Total short-term notes payable | [4] | $ 39,468 | |
[1] | Effective December 10, 2018, the Company entered into a "Judgment Settlement Agreement" to satisfy in full the Forbearance Agreement with Fife that was previously in effect. As a result, under the Judgment Settlement Agreement, no shares of the Company's common stock are issuable or eligible to be converted into. Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. The Company has made all payments required as of the date hereof. Failure to make any of the payments, when due, will result in an additional debt obligation, inclusive of principal and interest at the date of default ($570,660 as of June 30, 2019), to be immediately due and payable by the Company. | ||
[2] | During fiscal year 2019 $132,234 of principal and accrued interest was converted into 276,205 shares of the Company's common stock | ||
[3] | During fiscal year 2019 $3,000 of principal was converted into 12,000 shares of the Company's common stock | ||
[4] | During fiscal year 2019 $25,000 of principal and accrued interest was refinanced by a new convertible note payable dated June 19, 2019 (see Note 10) and the balance of $18,776 was forgiven by the lender and is recognized as income from discontinued operations within the consolidated statements of operations |
Short Term Notes Payable - Sc_2
Short Term Notes Payable - Schedule of Short Term Notes Payable (Details) (Parenthetical) - USD ($) | Dec. 10, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Debt converted into shares | 9,664 | 8,926 | |
New Convertible Notes Payable [Member] | |||
Debt principal and accrued interest | $ 25,000 | ||
Recognized as income from discontinued operation | 18,776 | ||
Common Stock [Member] | |||
Debt principal and accrued interest | $ 132,234 | ||
Debt converted into shares | 276,205 | ||
Common Stock [Member] | |||
Debt principal and accrued interest | $ 3,000 | ||
Debt converted into shares | 12,000 | ||
Judgement Settlement Agreement [Member] | |||
Debt payments per month | $ 15,000 | ||
Debt final payments | $ 195,000 | ||
Debt payment terms description | Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. | ||
Default amount includes principal and interest | $ 570,660 |
Convertible Debt Arrangements_2
Convertible Debt Arrangements (Details Narrative) | Jun. 19, 2019USD ($)Integer | Apr. 10, 2019USD ($) | Dec. 10, 2018USD ($) | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)shares | Jul. 17, 2017USD ($) | Jun. 30, 2017USD ($) |
Convertible note amount | $ 111,351 | $ 997,365 | |||||
Accrued interest | 84,475 | 72,638 | |||||
Gain on extinguishment of debt | 60,398 | 1,107,922 | |||||
Debt outstanding convertible note | $ 20 | $ 20 | |||||
Debt conversion of shares | shares | 9,664 | 8,926 | |||||
Derivative liability | $ 133,669 | ||||||
Convertible notes payable, discount | 2,351 | ||||||
Judgement Settlement Agreement [Member] | |||||||
Debt payments per month | $ 15,000 | ||||||
Debt final payments | $ 195,000 | ||||||
Debt payment terms description | Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. | ||||||
Default amount includes principal and interest | 570,660 | ||||||
Forbearance Agreement [Member] | |||||||
Forbearance debt obligation, amount | 885,365 | ||||||
Securities Purchase Agreement with Power Up Lending Group [Member] | 8% Convertible Promissory Note [Member] | |||||||
Debt principal amount | $ 78,000 | 78,000 | |||||
Accrued interest | 188 | ||||||
Repayments of debt | $ 4,200 | ||||||
Debt maturity date | Jun. 19, 2020 | ||||||
Proceeds from debt | $ 45,800 | ||||||
Default amount on convertible note | 25,000 | ||||||
Payment to reimburse amount | $ 3,000 | ||||||
Debt conversion percentage | 62.00% | ||||||
Conversion trading days | Integer | 20 | ||||||
Derivative liability | $ 103,161 | ||||||
Deferred financing cost | 3,000 | ||||||
Debt discount | $ 75,000 | ||||||
River North Equity [Member] | |||||||
Debt claim amount | $ 1,046,416 | ||||||
JMJ Financial [Member] | |||||||
Convertible note amount | 193,287 | 193,287 | $ 1,212,940 | ||||
Accrued interest | 178,521 | 178,521 | |||||
Gain on extinguishment of debt | 1,051,594 | ||||||
Debt outstanding convertible note | 14,766 | 17,175 | |||||
River North from JMJ Financial [Member] | |||||||
Debt principal amount | $ 693,060 | ||||||
Accrued interest | $ 358,534 | ||||||
M.H. Investment Trust II [Member] | |||||||
Convertible note amount | 3,000 | ||||||
M.H. Investment Trust II [Member] | Convertible Promissory Note [Member] | |||||||
Debt principal amount | $ 3,333 | 3,333 | |||||
Accrued interest | 3,737 | $ 3,118 | |||||
Gain on extinguishment of debt | 4,070 | ||||||
Repayments of debt | $ 3,000 | ||||||
Debt interest percentage | 12.00% |
Convertible Debt Arrangements -
Convertible Debt Arrangements - Schedule of Notes payable Under Convertible Debt and Debenture Agreements, Net (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Total convertible debt arrangements, net | $ 111,351 | $ 997,365 |
JMJ Financial [Member] | ||
Total convertible debt arrangements, net | 109,000 | 109,000 |
John Fife [Member] | ||
Total convertible debt arrangements, net | 885,365 | |
MH Investment Trust II [Member] | ||
Total convertible debt arrangements, net | 3,000 | |
Power Up Lending [Member] | ||
Total convertible debt arrangements, net | $ 2,351 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 133,669 | |
Loss on change in fair value of derivative liability | $ 30,508 | |
Conversion price per share | $ 0.85 | $ 1 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Reconciliation of the Derivative Liability (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability, beginning balance | ||
Initial fair value of derivative liability recorded as debt discount | 75,000 | |
Initial fair value of derivative liability recorded as deferred financing costs | 3,000 | |
Initial fair value of derivative liability charged to other expense | 25,161 | |
Loss on change in fair value included in earnings | 30,508 | |
Derivative liability, ending balance | $ 133,669 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Assumptions (Details) | 12 Months Ended |
Jun. 30, 2019$ / shares | |
Stock price | $ 0.85 |
Expected Volatility [Member] | |
Fair value of measurement percentage | 1872.20% |
Expected Term [Member] | |
Fair value of measurement of term | 11 years 6 months |
Risk-free Interest Rate [Member] | |
Fair value of measurement percentage | 1.92% |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) (Details Narrative) | Jun. 01, 2019USD ($) | May 22, 2019 | Dec. 31, 2018shares | Sep. 24, 2018USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Sep. 04, 2019shares | Aug. 27, 2019shares | Jun. 19, 2019shares | May 17, 2019shares | Mar. 21, 2019$ / sharesshares | Jan. 11, 2019shares | Jan. 04, 2019shares |
Classes of stock, shares authorized | 100,001,000 | ||||||||||||
Common stock, shares authorized | 25,000,000 | 25,000,000 | 125,000,000,000 | 125,000,000,000 | 125,000,000,000 | ||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Common stock, shares issued | 11,689,078 | 3,372,103 | |||||||||||
Common stock, shares outstanding | 11,689,078 | 3,372,103 | |||||||||||
Common stock to be issued, shares | 461,553 | ||||||||||||
Preferred stock, shares authorized | 1,000 | 1,000 | |||||||||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||||||||||
Preferred stock, shares issued | 1,000 | ||||||||||||
Preferred stock, shares outstanding | 1,000 | ||||||||||||
Stockholders' equity, reverse stock split | 1-for-5,000 | 1-for-5,000 | |||||||||||
Proceeds from issuance of common stock | $ | $ 193,000 | $ 81,000 | |||||||||||
Private placement, finder fees | $ | 9,000 | ||||||||||||
Issuance of common stock for services | $ | 575,000 | ||||||||||||
Accrued expenses | $ | 3,368,801 | 1,273,569 | |||||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 25.00% | ||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights description | The common stock will vest 25% on the six month, 1 year, 2 year, and 3 year anniversaries of the grant date. | ||||||||||||
Stock-based compensation expense | $ | $ 16,464 | ||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants | $ | $ 1,801,057 | ||||||||||||
Common stock, capital shares reserved for future issuance | 1,258,064 | ||||||||||||
Treasury stock, common, shares | 7,202 | ||||||||||||
Revenue | $ | $ 2,500,000 | ||||||||||||
Acquire maximumum percentage of outstanding fully diluted common stock, upon certain condition description | Mr. Bhatnagar, the Company's President and CEO, shall immediately receive the remaining amount of warrants necessary to acquire up to 80% of the outstanding fully diluted common stock of the Company ("Accelerated Warrants") when either of the following occur: a) the Company completes a stock or asset purchase of Scepter Commodities, LLC; or b) the Company completes a stock or asset purchase of any other entity, either of which, in the aggregate, together with prior revenue increases achieved by the Company, results in the consolidated revenues of the Company being not less than $15,000,000; or c) the Company grows a similar business organically within mPhase to include contracts generating revenues in excess of $15,000,000; or d) the Company meets the listing requirements of either the NYSE or NASDAQ. | ||||||||||||
Stock-based compensation | $ | $ 3,819,610 | ||||||||||||
Conversion percentage | 0.75 | ||||||||||||
Prior Liabilities - Settlement Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 1,967,960 | 1,225,949 | |||||||||||
Continuing Operations Share Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 185,063 | ||||||||||||
Officer's And Director - Conversion Share Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 532,040 | ||||||||||||
Conversion percentage | 0.75 | ||||||||||||
Settlement and New Funding Share Reserves [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 3,000,000 | ||||||||||||
Settlement and New Funding Share Reserves [Member] | Settlement Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 1,967,960 | ||||||||||||
Settlement and New Funding Share Reserves [Member] | Funding Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 500,000 | ||||||||||||
Settlement and New Funding Share Reserves [Member] | Prior Liabilities - Settlement Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 1,225,949 | ||||||||||||
Settlement and New Funding Share Reserves [Member] | Continuing Operations Share Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 185,063 | ||||||||||||
2014 under an Equity Line of Credit [Member] | |||||||||||||
Treasury stock, common, shares | 8,000 | ||||||||||||
Messrs Durando, Dotoli and Smiley [Member] | |||||||||||||
Issuance of common Stock to accredited investors in private placements | 800,000 | ||||||||||||
Mr. Biderman [Member] | |||||||||||||
Issuance of common Stock to accredited investors in private placements | 200,000 | ||||||||||||
Mr. Smiley [Member] | |||||||||||||
Treasury stock, common, shares | 540,840 | ||||||||||||
Patricia Dotoli [Member] | |||||||||||||
Treasury stock, common, shares | 273,445 | ||||||||||||
Gus Dotoli [Member] | |||||||||||||
Treasury stock, common, shares | 267,395 | ||||||||||||
Mr. Bhatnagar [Member] | |||||||||||||
Issuance of common Stock to accredited investors in private placements | 2,620,899 | ||||||||||||
Common stock, capital shares reserved for future issuance | 32,400,000 | ||||||||||||
Exercise price of warrants | $ / shares | $ 0.50 | ||||||||||||
Class of warrant number of securities called by warrants | 4,985,394 | ||||||||||||
Mr. Bhatnagar [Member] | Final Adjustment for Liabilities Eliminated by Settlement Reserve [Member] | |||||||||||||
Exercise price of warrants | $ / shares | $ 0.25 | ||||||||||||
Mr. Bhatnagar [Member] | Warrant Agreement - Earned Warrants [Member] | |||||||||||||
Stock-based compensation | $ | $ 2,492,697 | ||||||||||||
Unrecognized stock-based compensation expense | $ | 16,200,000 | ||||||||||||
Mr. Bhatnagar [Member] | Warrant Agreement - Accelerated Warrants [Member] | |||||||||||||
Revenue | $ | $ 2,500,000 | ||||||||||||
Warrants exceed percentage of fully diluted common stock | 80.00% | ||||||||||||
Common Stock [Member] | |||||||||||||
Common stock to be issued, shares | 329,553 | ||||||||||||
Issuance of common Stock to accredited investors in private placements | 640,000 | 360,000 | |||||||||||
Issuance of common stock for services, shares | 1,150,000 | 1,150,000 | |||||||||||
Issuance of common stock for services | $ | $ 575,000 | $ 11,500 | |||||||||||
Share issued price per share | $ / shares | $ 0.50 | ||||||||||||
Accrued expenses | $ | $ 575,000 | ||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants, shares | 3,898,733 | ||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants | $ | $ 38,987 | ||||||||||||
Common Stock [Member] | Messrs Durando, Dotoli and Smiley [Member] | |||||||||||||
Issuance of common stock for services, shares | 800,000 | ||||||||||||
Issuance of common stock for services | $ | $ 400,000 | ||||||||||||
Common Stock [Member] | Mr. Biderman [Member] | |||||||||||||
Issuance of common stock for services, shares | 200,000 | ||||||||||||
Issuance of common stock for services | $ | $ 100,000 | ||||||||||||
Shares granted, shares, stock based compensation | 2,620,899 | ||||||||||||
Shares granted, value, stock based compensation | $ | $ 1,310,449 | ||||||||||||
Common Stock [Member] | Strategic Consultants [Member] | |||||||||||||
Issuance of common stock for services, shares | 150,000 | ||||||||||||
Issuance of common stock for services | $ | $ 75,000 | ||||||||||||
Common Stock [Member] | Employees or Officers [Member] | |||||||||||||
Shares granted, value, stock based compensation | $ | |||||||||||||
Private Placement [Member] | |||||||||||||
Common stock to be issued, shares | 132,000 | ||||||||||||
Proceeds from issuance of common stock | $ | $ 193,000 | $ 81,000 | |||||||||||
Private Placement [Member] | Continuing Operations Share Reserve [Member] | |||||||||||||
Common stock, capital shares reserved for future issuance | 500,000 | ||||||||||||
Exercise price of warrants | $ / shares | $ 0.25 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Preferred stock, shares authorized | 1,000 | ||||||||||||
Series A Preferred Stock [Member] | Mr. Bhatnagar [Member] | |||||||||||||
Preferred stock, shares issued | 1,000 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Assumptions Used (Details) | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Expected volatility | 21779.77% |
Weighted-average volatility | 21779.77% |
Expected dividends | 0.00% |
Expected term (in years) | 5 years |
Risk-free rate | 2.52% |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Schedule of Common Stock Purchase Warrants Outstanding (Details) | 12 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Equity [Abstract] | |
Warrants outstanding, beginning balance | shares | |
Warrants earned | shares | 4,985,394 |
Warrants forfeited | shares | |
Warrants outstanding, ending balance | shares | 4,985,394 |
Common stock issuable upon exercise of warrants outstanding | shares | 4,985,394 |
Weighted average exercise price warrants outstanding, beginning balance | $ / shares | $ 0.50 |
Weighted average exercise price warrants earned | $ / shares | |
Weighted average exercise price warrants forfeited | $ / shares | 0.50 |
Weighted average exercise price warrants outstanding, ending balance | $ / shares | |
Common stock issuable upon exercise of warrants outstanding weighted average exercise price | $ / shares | $ 0.50 |
Warrants outstanding, intrinsic value beginning balance | $ | |
Intrinsic value warrants earned | $ | |
Intrinsic value warrants forfeited | $ | |
Warrants outstanding, intrinsic value ending balance | $ | |
Common stock issuable upon exercise of warrants outstanding intrinsic value | $ |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) - Schedule of Warrants Outstanding and Exercisable by Exercise Price Range (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Common stock issuable upon exercise of warrants outstanding number | 4,985,394 | |
Warrants [Member] | ||
Common stock issuable upon exercise of warrants outstanding number | 4,985,394 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 4 years 9 months | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.50 | |
Common stock issuable upon warrants exercisable number | 4,985,394 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.50 | |
Warrants [Member] | Exercise Price Range [Member] | ||
Common stock issuable upon exercise of warrants outstanding, range of exercise price | $ 0.50 | |
Common stock issuable upon exercise of warrants outstanding number | 4,985,394 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 4 years 9 months | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.50 | |
Common stock issuable upon warrants exercisable number | 4,985,394 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.50 |
Stockholders' Equity (Deficit_6
Stockholders' Equity (Deficit) - Schedule of Common Stock Available for Funding Reserve (Details) | 12 Months Ended |
Jun. 30, 2019shares | |
Settlement Reserve [Member] | |
Initial Shares of Common Stock to Establish Reserve | 1,967,960 |
Shares issued concurrently to transition agreement for the conversion of 75% strategic vendors, outstanding December 31, 2018 | (61,200) |
Shares available upon execution of the Transition Agreement dated January 11, 2019 | 1,906,760 |
Shares issued subsequent to a "Change in Control" to accredited investors in private placements through June 30, 2019 | (680,811) |
Shares of Common Stock available at June 30, 2019 | 1,225,949 |
Funding Reserve [Member] | |
Initial Shares of Common Stock to Establish Reserve | 500,000 |
Shares issued concurrently to transition agreement for the conversion of 75% strategic vendors, outstanding December 31, 2018 | |
Shares available upon execution of the Transition Agreement dated January 11, 2019 | 500,000 |
Shares issued subsequent to a "Change in Control" to accredited investors in private placements through June 30, 2019 | (314,937) |
Shares of Common Stock available at June 30, 2019 | 185,063 |
Stockholders' Equity (Deficit_7
Stockholders' Equity (Deficit) - Schedule of Common Stock Available for Funding Reserve (Details) (Parenthetical) | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Conversion percentage | 0.75 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 01, 2019 | Jun. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Oct. 01, 2018 |
Number of common stock shares issued, value | $ 160,000 | $ 81,000 | |||
Debt converted into shares, amount | $ 20 | $ 20 | |||
Debt converted into shares | 9,664 | 8,926 | |||
Accrued interest | $ 84,475 | $ 72,638 | |||
Common stock to be issued, shares | 461,553 | ||||
Common stock vesting percentage | 25.00% | ||||
Amortization of deferred compensation and beneficial conversion interest expense | $ 91,177 | 121,570 | |||
Mr. Biderman [Member] | |||||
Number of common stock shares issued | 200,000 | ||||
Number of common stock shares issued, value | $ 100,000 | ||||
Additional paid in capital to accrued finder fee | $ 7,500 | ||||
Accrued interest | $ 1,959 | 7,895 | |||
Officers [Member] | |||||
Number of common stock shares issued | 1,150,000 | ||||
Number of common stock shares issued, value | $ 575,000 | ||||
Debt interest rate | 6.00% | ||||
Loan from officers | $ 144,507 | 77,326 | |||
Interest on loans | 15,467 | 44,274 | |||
Outstanding amount | $ 58,165 | $ 777,712 | |||
Messrs Durando, Dotoli and Smiley [Member] | |||||
Number of common stock shares issued | 800,000 | ||||
Number of common stock shares issued, value | $ 400,000 | ||||
Mr. Biderman [Member] | |||||
Number of common stock shares issued | 200,000 | ||||
Number of common stock shares issued, value | $ 100,000 | ||||
Consultants [Member] | |||||
Number of common stock shares issued | 150,000 | ||||
Number of common stock shares issued, value | $ 75,000 | ||||
Related Parties and Consultants [Member] | |||||
Number of common stock shares issued | 3,898,733 | ||||
Number of common stock shares issued, value | $ 1,883,445 | ||||
Common stock to be issued, shares | 329,553 | ||||
Mr. Smiley [Member] | |||||
Legal and consulting expenses | $ 9,000 | ||||
Mr. Bhatnagar [Member] | |||||
Number of common stock shares issued | 2,620,899 | ||||
Number of common stock shares issued, value | $ 1,310,449 | ||||
Mr. Cutchens [Member] | |||||
Number of common stock shares granted | 231,635 | ||||
Common stock vesting percentage | 25.00% | ||||
Microphase Corporation [Member] | |||||
Company owed amount | 32,545 | ||||
Palladium Capital Advisors [Member] | Mr. Biderman [Member] | |||||
Debt converted into shares, amount | $ 186,000 | ||||
Debt converted into shares | 372,000 | ||||
Eagle Strategic Advisors [Member] | Mr. Biderman [Member] | |||||
Debt converted into shares, amount | $ 132,234 | ||||
Debt converted into shares | 276,205 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | ||
Decrease in valuation allowance | 1,515,310 | $ 14,977,935 |
Federal net operating loss carryforwards | 105,200,000 | |
Offset future federal and state income taxes | $ 56,500,000 | |
Net operating loss carryforwards expiration | Dec. 31, 2038 |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Income Tax Rates (Details) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal rate | (21.00%) | (21.00%) |
State income tax rate, net of federal benefit | (7.20%) | (7.20%) |
Permanent differences, including stock based compensation and beneficial conversion interest expense | 28.90% | 29.00% |
Change in valuation allowance | (0.70%) | (0.80%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liability (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Property and equipment | ||
Total deferred tax liability | ||
Federal and state net operating loss carry forward | 26,156,755 | 27,672,065 |
Other temporary differences | ||
Total deferred tax asset | 26,156,755 | 27,672,065 |
Net deferred tax asset | 26,156,755 | 27,672,065 |
Less: valuation allowance | (26,156,755) | (27,672,065) |
Deferred tax assets, net |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | May 01, 2019 | Jan. 15, 2019 | Dec. 10, 2018 | Jun. 30, 2019 |
Rent expense | $ 1,350 | |||
Judgment Settlement Agreement [Member] | ||||
Monthly repayment of debt | $ 15,000 | |||
Debt instrument final payment | $ 195,000 | |||
Debt payment terms description | Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. | |||
Debt maturity date | Mar. 31, 2020 | |||
Judgement Settlement Agreement [Member] | ||||
Debt payment terms description | Under the terms of the Judgment Settlement Agreement, the Company is required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 due and payable in March of 2020. | |||
Outstanding debt obligation | $ 570,660 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Disposal Groups, Including Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Total Current Liabilities | $ 82,795 | $ 163,976 |
Cash | 33,996 | 261 |
Accounts receivable, net | 2,526,155 | |
Prepaid expenses | 8,820 | |
Total Current Assets | 2,568,971 | 261 |
Property and equipment, net | 11,048 | |
Goodwill | 6,020 | |
Intangible asset - purchased software, net | 3,025,801 | |
Other assets | 3,058 | 800 |
Total Assets | 5,614,898 | 1,061 |
Accounts payable | 366,274 | 421,056 |
Accrued expenses | 3,368,801 | 1,273,569 |
Due to related parties | 65,459 | 226,045 |
Notes payable to officers | 25,251 | 777,912 |
Convertible notes payable, net of discount | 2,351 | |
Notes payable to director and investor | 133,274 | |
Liabilities in arrears with convertible features | 109,000 | 997,698 |
Liabilities in arrears - judgement settlement agreement (Note 9) | 855,660 | |
Derivative liability | 133,669 | |
Total Current Liabilities | 5,009,260 | 3,993,530 |
Revenue | 2,500,000 | |
Cost of revenue | ||
Gross Profit | 2,500,000 | |
General and administrative expenses | 4,265,886 | 735,026 |
Operating loss | (1,765,886) | (735,026) |
Interest expense | (210,594) | (246,162) |
Loss on change in fair value of derivative liability | (30,508) | |
Initial derivative expense | (25,161) | |
Amortization of debt discount | (2,260) | |
Amortization of deferred financing costs | (90) | |
Gain on extinguishment of debt | 60,398 | 1,107,922 |
Total Other Income (Expense) | (208,215) | 861,760 |
Income (Loss) before income taxes | (1,974,101) | 126,734 |
Income taxes | ||
Net income (loss) | (1,974,101) | 126,734 |
Jump Line [Member] | ||
Cash | 33,996 | 261 |
Accounts receivable, net | 2,526,155 | |
Prepaid expenses | 8,820 | |
Total Current Assets | 2,568,971 | 261 |
Property and equipment, net | 11,048 | |
Goodwill | 6,020 | |
Intangible asset - purchased software, net | 3,025,801 | |
Other assets | 3,058 | 800 |
Total Assets | 5,614,898 | 1,061 |
Accounts payable | 449,069 | 545,564 |
Accrued expenses | 3,368,801 | 1,273,569 |
Due to related parties | 65,459 | 226,045 |
Notes payable to officers | 25,251 | 777,912 |
Convertible notes payable, net of discount | 2,351 | |
Notes payable to director and investor | 133,274 | |
Note payable to finance company | 39,468 | |
Liabilities in arrears with convertible features | 109,000 | 997,698 |
Liabilities in arrears - judgement settlement agreement (Note 9) | 855,660 | |
Derivative liability | 133,669 | |
Total Current Liabilities | 5,009,260 | 3,829,554 |
Revenue | 2,500,000 | |
Cost of revenue | ||
Gross Profit | 2,500,000 | |
General and administrative expenses | 4,265,886 | 757,035 |
Operating loss | (1,765,886) | (757,035) |
Interest expense | (222,102) | (288,119) |
Loss on change in fair value of derivative liability | (30,508) | |
Initial derivative expense | (25,161) | |
Amortization of debt discount | (2,260) | |
Amortization of deferred financing costs | (90) | |
Gain on extinguishment of debt | 90,846 | 1,358,492 |
Other income | 566 | |
Total Other Income (Expense) | (189,275) | 1,070,939 |
Income (Loss) before income taxes | (1,955,161) | 313,904 |
Income taxes | ||
Net income (loss) | (1,955,161) | 313,904 |
Discontinued Operations [Member] | Jump Line [Member] | ||
Cash | ||
Accounts receivable, net | ||
Prepaid expenses | ||
Total Current Assets | ||
Property and equipment, net | ||
Goodwill | ||
Intangible asset - developed software, net | ||
Other assets | ||
Total Assets | ||
Accounts payable | 82,795 | 124,508 |
Accrued expenses | ||
Due to related parties | ||
Notes payable to officers | ||
Convertible notes payable, net | ||
Notes payable to director and investor | ||
Note payable to finance company | 39,468 | |
Liabilities in arrears with convertible features | ||
Liabilities in arrears - judgement settlement agreement (Note 9) | ||
Derivative liability | ||
Total Current Liabilities | 82,795 | 306,171 |
Revenue | ||
Cost of revenue | ||
Gross Profit | ||
General and administrative expenses | 22,009 | |
Operating loss | (22,009) | |
Interest expense | (11,508) | (41,957) |
Loss on change in fair value of derivative liability | ||
Initial derivative expense | ||
Amortization of debt discount | ||
Amortization of deferred financing costs | ||
Gain on acquisition of business | ||
Gain on extinguishment of debt | 30,448 | 250,570 |
Other income | 566 | |
Total Other Income (Expense) | 18,940 | 209,179 |
Income (Loss) before income taxes | 18,940 | 187,170 |
Income taxes | ||
Net income (loss) | 18,940 | 187,170 |
Continuing Operations [Member] | Jump Line [Member] | ||
Cash | 33,996 | 261 |
Accounts receivable, net | 2,526,155 | |
Prepaid expenses | 8,820 | |
Total Current Assets | 2,568,971 | 261 |
Property and equipment, net | 11,048 | |
Goodwill | 6,020 | |
Intangible asset - purchased software, net | 3,025,801 | |
Other assets | 3,058 | 800 |
Total Assets | 5,614,898 | 1,061 |
Accounts payable | 366,274 | 421,056 |
Accrued expenses | 3,368,801 | 1,273,569 |
Due to related parties | 65,459 | 226,045 |
Notes payable to officers | 25,251 | 777,912 |
Convertible notes payable, net of discount | 2,351 | |
Notes payable to director and investor | 133,274 | |
Note payable to finance company | ||
Liabilities in arrears with convertible features | 109,000 | 997,698 |
Liabilities in arrears - judgement settlement agreement (Note 9) | 855,660 | |
Derivative liability | 133,669 | |
Total Current Liabilities | 4,926,465 | 163,976 |
Revenue | 2,500,000 | |
Cost of revenue | ||
Gross Profit | 2,500,000 | |
General and administrative expenses | 4,265,886 | 735,026 |
Operating loss | (1,765,886) | (735,026) |
Interest expense | (210,594) | (246,162) |
Loss on change in fair value of derivative liability | (30,508) | |
Initial derivative expense | (25,161) | |
Amortization of debt discount | (2,260) | |
Amortization of deferred financing costs | (90) | |
Gain on extinguishment of debt | 60,398 | 1,107,922 |
Other income | ||
Total Other Income (Expense) | (208,215) | 861,760 |
Income (Loss) before income taxes | (1,974,101) | 126,734 |
Income taxes | ||
Net income (loss) | $ (1,974,101) | $ 126,734 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Sep. 27, 2019 | Sep. 24, 2019 | Sep. 09, 2019 | Sep. 05, 2019 | Jul. 30, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 04, 2019 | Aug. 27, 2019 | May 17, 2019 | Mar. 21, 2019 | Jan. 04, 2019 | Jun. 30, 2018 |
Value of common stock shares issued for services | $ 575,000 | ||||||||||||
Common stock, shares authorized | 25,000,000 | 125,000,000,000 | 125,000,000,000 | 125,000,000,000 | 25,000,000 | ||||||||
Subsequent Event [Member] | |||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||||
Subsequent Event [Member] | Board of Directors [Member] | |||||||||||||
Common stock, shares authorized | 100,000,000 | ||||||||||||
Subsequent Event [Member] | Related Parties [Member] | |||||||||||||
Number of common stock shares issued for services | 64,800 | ||||||||||||
Value of common stock shares issued for services | $ 16,200 | ||||||||||||
Subsequent Event [Member] | Power Up Lending Group [Member] | Securities Purchase Agreement [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Debt interest rate | 8.00% | 8.00% | |||||||||||
Debt instrument principal amount | $ 53,000 | $ 53,000 | |||||||||||
Debt maturity date | Sep. 5, 2020 | Jul. 30, 2020 | |||||||||||
Proceeds from debt | $ 46,800 | $ 50,000 | |||||||||||
Repayment of promissory note payable | 3,000 | $ 3,000 | |||||||||||
Subsequent Event [Member] | Transfer Agent [Member] | Securities Purchase Agreement [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Repayment of promissory note payable | $ 3,200 | ||||||||||||
Subsequent Event [Member] | Accredited Investors [Member] | Securities Purchase Agreement [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt instrument principal amount | $ 124,200 | ||||||||||||
Debt maturity date | Sep. 24, 2020 | ||||||||||||
Proceeds from debt | $ 112,000 | ||||||||||||
Repayment of promissory note payable | $ 3,000 | ||||||||||||
Original issue discounts | $ 9,200 |