Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jan. 01, 2021 | Dec. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | MPHASE TECHNOLOGIES INC | ||
Entity Central Index Key | 0000825322 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6,700,000 | ||
Entity Common Stock, Shares Outstanding | 75,763,376 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Current Assets | ||
Cash | $ 142,413 | $ 33,996 |
Accounts receivable, net | 14,048,095 | 2,526,155 |
Prepaid expenses | 4,477 | 8,820 |
Other assets | 30,879 | |
Total Current Assets | 14,225,864 | 2,568,971 |
Property and equipment, net | 32,669 | 11,048 |
Goodwill | 3,636 | 6,020 |
Intangible asset - purchased software, net | 2,835,117 | 3,025,801 |
Other assets | 11,670 | 3,058 |
Total Assets | 17,108,956 | 5,614,898 |
Current Liabilities | ||
Accounts payable | 7,897,887 | 366,274 |
Accrued expenses | 1,123,842 | 3,368,801 |
Contract liabilities | 219,652 | |
Due to related parties | 84,485 | 65,459 |
Notes payable to officers | 26,818 | 25,251 |
Notes payable | 20,469 | |
Convertible notes payable, net | 189,641 | 2,351 |
Current portion, liabilities in arrears with convertible features | 109,000 | 109,000 |
Current portion, liabilities in arrears - judgement settlement agreement (Note 10) | 771,702 | 855,660 |
Derivative liability | 897,631 | 133,669 |
Liabilities of discontinued operations | 82,795 | 82,795 |
Total Current Liabilities | 11,423,922 | 5,009,260 |
Notes payable, net of current portion | 167,459 | |
Total Liabilities | 11,591,381 | 5,009,260 |
Commitments and Contingencies (Note 16) | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value; 1,000 shares authorized and 1,000 shares issued and outstanding at June 30, 2020 and 2019 | 10 | 10 |
Common stock, $0.01 par value; 100,000,000 shares authorized and 19,318,679 shares issued and 19,174,492 outstanding at June 30, 2020, and 11,689,078 shares issued and outstanding at June 30, 2019 | 191,745 | 116,890 |
Additional paid-in-capital | 231,984,704 | 214,007,203 |
Common stock to be issued | 955,466 | 115,388 |
Accumulated other comprehensive income | 113,070 | |
Accumulated deficit | (227,727,420) | (213,633,853) |
Total Stockholders' Equity | 5,517,575 | 605,638 |
Total Liabilities and Stockholders' Equity | $ 17,108,956 | $ 5,614,898 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 10, 2020 | Jun. 09, 2020 | Sep. 04, 2019 | Aug. 27, 2019 | Aug. 26, 2019 | Jun. 30, 2019 | Mar. 21, 2019 | Mar. 20, 2019 | Mar. 18, 2019 | Mar. 17, 2019 | Jan. 04, 2019 |
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 | 1,000 | ||||||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | ||||||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Common stock, shares authorized | 100,000,000 | 250,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 25,000,000 | 100,000,000 | 125,000,000,000 | 25,000,000 | 25,000,000 | 125,000,000,000 | 125,000,000,000 |
Common stock, shares issued | 19,318,679 | 11,689,078 | ||||||||||
Common stock, shares outstanding | 19,174,492 | 11,689,078 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Loss - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 30,276,422 | $ 2,500,000 |
Cost of revenue | 22,579,544 | |
Gross Profit | 7,696,878 | 2,500,000 |
Operating Expenses: | ||
Software development costs | 991,928 | |
Salaries and benefits | 17,585,981 | 4,022,909 |
General and administrative expenses | 1,695,200 | 242,977 |
Total Operating Expenses | 20,273,109 | 4,265,886 |
Operating loss | (12,576,231) | (1,765,886) |
Other Income (Expense): | ||
Interest expense | (219,589) | (210,594) |
Gain (loss) on change in fair value of derivative liability | 1,584,102 | (30,508) |
Initial derivative expense | (1,610,913) | (25,161) |
Amortization of debt discounts, deferred financing costs, and original issue discounts | (899,491) | (2,350) |
(Loss) gain on extinguishment of debt | (363,319) | 60,398 |
Loss on asset disposal | (8,126) | |
Total Other Income (Expense) | (1,517,336) | (208,215) |
Loss from continuing operations before income taxes | (14,093,567) | (1,974,101) |
Income taxes | ||
Loss from continuing operations | (14,093,567) | (1,974,101) |
Discontinued operations (Note 17) | ||
Income from discontinued operations | 18,940 | |
Net loss | (14,093,567) | (1,955,161) |
Other comprehensive loss: | ||
Unrealized gain on foreign currency translation adjustment | 113,070 | |
Comprehensive loss | $ (13,980,497) | $ (1,955,161) |
Loss per common share: | ||
Loss from continuing operations per common share - basic and diluted | $ (1.08) | $ (0.23) |
Income from discontinued operations per common share - basic and diluted | 0 | |
Loss per common share - basic and diluted | $ (1.08) | $ (0.23) |
Weighted average shares outstanding - basic and diluted | 13,052,590 | 8,505,508 |
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] | Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total |
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 | $ 6,400 | 153,600 | 160,000 | ||||
Issuance of common stock to accredited investors in private placements, shares | 640,000 | ||||||
Beneficial conversion feature interest expense charged to additional paid in capital | 91,177 | 91,177 | |||||
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 | 3,898,733 | |||||
Warrants earned under employment contract | 2,492,697 | $ 2,492,697 | |||||
Reversal of accrued fees from private placements to accredited investors | 7,500 | 7,500 | |||||
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 | ||||||
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 | |||||
Issuance of common stock to accredited investors in private placements | $ 11,296 | 368,704 | (33,000) | 347,000 | |||
Issuance of common stock to accredited investors in private placements, shares | 1,129,577 | ||||||
Common Stock to be issued for CloseComms transaction | 955,466 | 955,466 | |||||
Issuance of common stock for accrued services | $ 620 | 45,880 | 46,500 | ||||
Issuance of common stock for accrued services, shares | 62,000 | ||||||
Issuance of common stock for the conversion of related party debts and strategic vendor payables | $ 219,517 | ||||||
Issuance of common stock for the conversion of related party debts and strategic vendor payables, shares | 294,654 | ||||||
Warrants earned under employment contract | 16,202,529 | $ 16,202,529 | |||||
Reversal of accrued fees from private placements to accredited investors | |||||||
Restricted shares issued under employment contract | $ 1,158 | 148,448 | 149,606 | ||||
Restricted shares issued under employment contract, shares | 115,818 | ||||||
Issuance of common stock for services related to private placements | $ 110 | (110) | |||||
Issuance of common stock for services related to private placements, shares | 11,003 | ||||||
Issuance of common stock for conversions of convertible promissory notes | $ 58,724 | 995,480 | 1,054,204 | ||||
Issuance of common stock for conversions of convertible promissory notes, shares | 5,872,362 | ||||||
Issuance of Common Stock for the conversion of Related Party debts and Strategic Vendor payables, net of reversals | $ 2,947 | 216,570 | (82,388) | 137,129 | |||
Issuance of Common Stock for the conversion of Related Party debts and Strategic Vendor payables, net of reversals,shares | 294,654 | ||||||
Other comprehensive income | 113,070 | 113,070 | |||||
Net loss | (14,093,567) | (14,093,567) | |||||
Balance at Jun. 30, 2020 | $ 10 | $ 191,745 | $ 231,984,704 | $ 955,466 | $ 113,070 | $ (227,727,420) | $ 5,517,575 |
Balance, shares at Jun. 30, 2020 | 1,000 | 19,174,492 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (14,093,567) | $ (1,955,161) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Stock-based compensation | 16,335,671 | 3,819,610 |
Initial derivative expense | 1,610,913 | 25,161 |
Depreciation and amortization | 929,924 | |
Amortization of debt discount, deferred financing costs, and original issue discount | 899,491 | 2,350 |
Loss (gain) on extinguishment of debt | 363,319 | (60,398) |
Allowance for foreign taxes | 145,129 | |
Loss on asset disposal | 8,126 | |
(Gain) loss on change in fair value of derivative liability | (1,584,102) | 30,508 |
Amortization of beneficial conversion feature | 91,177 | |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (11,521,940) | (2,500,000) |
Decrease (increase) in prepaid expenses | 4,343 | (1,332) |
Increase in other assets | (39,491) | (2,258) |
Increase in contract liabilities | 219,652 | |
Increase in accounts payable and accrued expenses | 5,378,498 | 346,373 |
Net cash used in operating activities | (1,344,033) | (203,970) |
Cash flows from investing activities: | ||
Cash acquired in CloseComms asset acquisition | 70,000 | |
Capital expenditures | (553) | |
Payments toward Travel Buddhi purchased software intangible | (55,000) | |
Capitalized software development costs | (4,852) | |
Net cash provided by (used in) investing activities | 69,447 | (59,852) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes payable, net | 1,116,800 | 53,000 |
Proceeds from sale of common stock, net of finder's fees | 347,000 | 193,000 |
Proceeds from notes payable | 187,333 | |
Proceeds from notes payable to related parties | 32,800 | 144,557 |
Repayments of notes payable to related parties | (32,000) | |
Repayments under settlement agreement | (120,000) | (93,000) |
Repayments of convertible notes payable | (262,000) | |
Net cash provided by financing activities | 1,269,933 | 297,557 |
Effect of foreign exchange rate changes on cash | 113,070 | |
Net increase in cash | 108,417 | 33,735 |
Cash at beginning of year | 33,996 | 261 |
Cash at end of year | 142,413 | 33,996 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 118,596 | |
Cash paid for taxes | ||
Supplemental disclosure of non-cash operating activities: | ||
Initial fair value of derivative liability recorded as debt discount | 1,115,000 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Value | $ 955,466 | |
Shares | 2,666,666 | |
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 | |
Payment of vendor payables by former officer related party | 15,252 | |
Reversal of Common Stock to be issued for the conversion of strategic vendor payables | 8,725 | |
Reversal of accrued fees from private placements to accredited investors | 7,500 | |
Issuance of Common Stock for accrued services | ||
Value | $ 46,500 | $ 575,000 |
Shares | 62,000 | 1,150,000 |
Value | $ 219,517 | $ 1,801,057 |
Shares | 294,654 | 3,898,733 |
Issuance of Common Stock for services related to private placements | ||
Value | $ 11,250 | |
Shares | 11,003 | |
Issuance of Common Stock for conversions of convertible promissory notes and accrued interest | ||
Value | $ 1,054,204 | |
Shares | 5,872,362 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Nature of Business | NOTE 1: ORGANIZATION AND NATURE OF BUSINESS Organization and Nature of Business mPhase Technologies, Inc., including its wholly-owned subsidiaries, are collectively referred to herein as “mPhase,” “XDSL,” “Company,” “us,” or “we.” We were incorporated in the state of New Jersey during 1979 under the name Tecma Laboratory, Inc. During 1987, we changed our name to Tecma Laboratories, Inc. As Tecma Laboratories, Inc., we were primarily engaged in the research, development and exploration of products in the skin care field. On February 17, 1997, we acquired Lightpaths, Inc., a Delaware corporation, which was engaged in the development of telecommunications products incorporating DSL technology, and we changed our name to Lightpaths TP Technologies, Inc. On May 5, 1997, we completed a reverse merger with Lightpaths TP Technologies, Inc. and thereafter changed our name to mPhase Technologies, Inc. on June 2, 1997. From inception through June 30, 2010, we focused much of our efforts in the commercial deployment of our TV+ products for delivery of broadcast IPTV, and DSL component products which include POTS splitters. Beginning in 2004, we added a new line of power cell batteries and electronic sensors (magnetometers) being developed through the use of nano-technology. As of June 30, 2010, we discontinued our TV+ line of products as well as our electronic sensor products. Beginning June 30, 2010, we shifted our 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, we 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. Presently, we are pursuing strategic alternatives to best monetize our patent portfolio, including partnering to exploit opportunities for our drug delivery system. We are seeking 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 our smart nano-battery applications. On January 11, 2019, we underwent a major change in management and control. New management is positioning us to be a technology leader in artificial intelligence and machine learning while enabling a more rapid commercial development of our patent portfolio and other intellectual property. We believe there are significant opportunities to embed artificial intelligence and machine learning into business operations, platform architectures, business services, and customer experiences, whereby our goal is to generate significant revenue from our artificial intelligence and machine learning technologies. On February 15, 2019, we acquired Travel Buddhi, a software platform to enhance travel via ultra-customization tools that tailor a planned trip experience in ways not previously available. On June 30, 2019, we 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. This acquisition has been integrated into our international operations and as expected, has driven revenue growth and innovation. On May 11, 2020, we acquired CloseComms, a patented, software application platform that can be integrated into a retail customer’s existing Wi-Fi infrastructure, giving the retailer important customer data and enabling AI-enhanced, targeted promotions to drive store traffic and sales. Impact of COVID-19 Pandemic A novel strain of coronavirus, COVID-19, surfaced during December 2019 and has spread around the world, including to the United States. During March 2020, COVID-19 was declared a pandemic by the World Health Organization. During certain periods of the pandemic thus far, a number of U.S. states and various countries throughout the world had been under governmental orders requiring that all workers remain at home unless their work was critical, essential, or life-sustaining. As a result of these governmental orders, the Company temporarily closed its domestic and international offices and required all of its employees to work remotely. Although these temporary office closures created minor disruption to the Company’s business operations, such disruptions to date have not been significant. The full impact of the COVID-19 pandemic on the Company’s financial condition and results of operations will depend on future developments, such as the ultimate duration and scope of the pandemic, its impact on the Company’s employees, customers, and vendors, in addition to how quickly normal economic conditions and operations resume and whether the pandemic impacts other risks disclosed in Item 1A “Risk Factors” within this Annual Report on Form 10-K. Even after the pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred as a result of the pandemic. Therefore, the Company cannot reasonably estimate the impact at this time. The Company continues to actively monitor the pandemic and may determine to take further actions that alter its business operations as may be required by federal, state, or local authorities or that it determines are in the best interests of its employees, customers, vendors, and shareholders. |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2: GOING CONCERN The accompanying consolidated financial statements have been prepared 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 net losses of $14,093,567 and $1,955,161 and has used cash in operating activities of $1,344,033 and $203,970 for the years ended June 30, 2020 and 2019, respectively. At June 30, 2020, the Company had a working capital surplus of $2,801,942, and an accumulated deficit of $227,727,420. 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. 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. The Company’s ability to raise additional capital will also be impacted by the recent COVID-19 pandemic, which such ability is highly uncertain, cannot be predicted, and could have an adverse effect on the Company’s business and financial condition. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation and Presentation The consolidated financial statements for the years ended June 30, 2020 and 2019, 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. mPower Technologies, Inc. is a New Jersey corporation and a wholly-owned consumer products subsidiary of mPhase Technologies, Inc. As this subsidiary had its last significant sale of Jump products during the first quarter of fiscal 2017, this product line is reflected as discontinued operations within these consolidated financial statements. Reclassifications Certain reclassifications of prior year amounts have been made to enhance comparability with the current year’s consolidated financial statements, including, but not limited to, presentation of certain items within the consolidated statements of operations and comprehensive loss, consolidated statements of cash flows, and certain notes to the consolidated financial statements. Foreign Currency Translation and Transactions The functional currencies of our operations in India and the United Kingdom are the Indian Rupee (“INR”) and the British Pound (“GBP”), respectively. 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 investments in our Indian and United Kingdom operations are recorded at the historical rates and the resulting foreign currency translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income within stockholders’ equity in accordance with ASC 220 – Comprehensive Income. 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. The exchange rates used to translate amounts in INR (beginning March 19, 2019) and GBP (beginning May 11, 2020) into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: June 30, 2020 June 30, 2019 Period-end INR: USD exchange rate $ 0.01329 $ 0.01453 Period-end GBP: USD exchange rate $ 1.23244 $ - Income statement: June 30, 2020 June 30, 2019 Average Annual INR: USD exchange rate $ 0.01386 $ 0.01456 Average Annual GBP: USD exchange rate $ 1.23680 $ - Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. 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, estimated useful lives of finite-lived intangible assets, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the deferred tax asset valuation allowance. Segment Reporting Although the Company has a number of operating divisions, separate segment data has not been presented, as they meet the criteria for aggregation as permitted by ASC Topic 280, Segment Reporting 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 four 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, 2020 and 2019, this one customer accounted for approximately 100% and 100% of our total revenue, respectively. At June 30, 2020 and 2019, this one customer accounted for approximately 100% and 99% of our total accounts receivable, respectively. Supplier Risk Agreements which potentially subject the Company to concentrations of supplier risk consist principally of one supplier agreement. For the year ended June 30, 2020, this one supplier accounted for approximately 100% of our total cost of revenue. At June 30, 2020, this one supplier accounted for approximately 95% of our total accounts payable. As this supplier agreement was entered into during the year ended June 30, 2020, there were no transactions with this supplier during the year ended June 30, 2019. 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, 2020 or 2019. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) limit. At June 30, 2020 and 2019, the Company’s cash balances did not exceed the FDIC limit. 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. Additionally, to date, the Company has entered into three separate tri-party settlement and offset agreements with its largest customer and largest vendor, whereby the Company’s largest customer has agreed to direct funds due the Company for certain outstanding invoices, to the Company’s largest vendor to satisfy payment on behalf of the Company for certain outstanding invoices. To date, the aggregate amount of the three tri-party settlement and offset agreements has totaled $22,500,000. At June 30, 2020 and 2019, the Company determined there was no requirement for an allowance for doubtful accounts. 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. The estimated useful lives range from 3 to 7 years based upon asset class. When an asset is retired, sold or impaired, the resulting gain or loss is reflected in earnings. The Company incurred depreciation expense of $6,020 for the year ended June 30, 2020. The Company did not incur depreciation expense for the year ended June 30, 2019. 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, 2020 and 2019, 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, if any. On June 30, 2020, we performed our annual evaluation of goodwill impairment and determined that the estimated fair value of our reporting unit exceeded 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, 2020, and 2019, 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, 2020 and 2019. 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, 2020, the book value of purchased and developed technology software of $3,759,021, included three technology platforms, a machine learning platform and two artificial intelligence platforms. For the year ended June 30, 2020, the Company incurred amortization expense of $923,904. For the year ended June 30, 2019, there was no amortization of either purchased technology platform. 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. At June 30, 2020, the Company had a Level 3 financial instrument related to its derivative liability. Revenue Recognition The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. Revenue is derived from the sale of artificial intelligence and machine learning focused technology products and related services. 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 8). Contract liabilities include amounts billed to customers in excess of revenue recognized and are presented as contract liabilities on the consolidated balance sheets (see Note 8). A contract asset is recognized for incremental costs to obtain a customer contract that are recoverable, otherwise such incremental costs are expensed as incurred. Cost of Revenue Cost of revenue represents the cost of the artificial intelligence and machine learning focused technology products and related services sold during the periods presented. Share-Based Compensation The Company computes share based payments in accordance with the provisions of ASC Topic 718, Compensation – Stock Compensation Restricted stock awards are granted at the discretion of the compensation committee of the board of directors of the Company (the “Board of Directors”). These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of the Company’s common stock on the grant date. The Company estimates the fair value of stock options and warrants by using the Black-Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s common stock over the expected term of the option. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505–50, “Equity Based Payments to Non–Employees.” The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily determinable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. 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 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 using the effective interest method. 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 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, 2020, 2019, 2018, and 2017 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, 2020 and 2019. 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 years ended June 30, 2020 and 2019, as we incurred a net loss for such periods. At June 30, 2020, there were outstanding warrants to purchase up to 37,390,452 shares of the Company’s common stock, notes payable with convertible features that if converted, would total 2,529,007 shares of the Company’s common stock, 2,666,666 shares of the Company’s common stock to be issued in conjunction with the CloseComms acquisition, and 115,817 restricted shares of the Company’s common stock to be issued upon vesting pursuant to the terms of an employment agreement with its Chief Financial Officer. 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. Modification/Extinguishment of Debt In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss. Recently Adopted Accounting Standards Effective July 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases Revenue Recognition Revenue from Contracts with Customers Leases Leases Effective July 1, 2019, the Company adopted ASU 2017-11, Update to Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Recently Issued Accounting Standards Not Yet Adopted During August 2020, the FASB issued ASU 2020-06, to modify and simplify the application of U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. The standard is effective for the Company as of July 1, 2024, with early adoption permitted. The Company is reviewing the impact of this guidance on its consolidated financial statements. During August 2018, the FASB issued ASU 2018-13, Fair Value Measurement 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, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4: PROPERTY AND EQUIPMENT At June 30, 2020 and 2019, the Company’s property and equipment consist of the following: June 30, 2020 2019 Computer equipment $ 135,360 $ 110,331 Research and development equipment 48,383 48,383 Furniture and fixtures 52,025 51,835 Property and equipment, at cost 235,768 210,549 Less: accumulated depreciation (203,099 ) (199,501 ) Property and equipment, net $ 32,669 $ 11,048 The Company recorded $6,020 of depreciation expense for the year ended June 30, 2020. The Company did not record any depreciation expense for the year ended June 30, 2019. There was no property and equipment impairments recorded for the years ended June 30, 2020 and 2019. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Jun. 30, 2020 | |
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. This acquisition has been integrated into our international operations and as expected, has driven 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 acquired intangible asset – developed software was recognized at fair value as of the acquisition date and subject to a useful life of 3 years. 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 year ended June 30, 2019. There were no acquisition-related costs incurred by the Company for the year ended June 30, 2020. The revenue and net loss of the combined entity had the acquisition date been July 1, 2018, are as follows for the year ended June 30, 2019: Supplemental pro forma: Revenue $ 4,554,594 Net loss $ (2,959,165 ) 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. For the year ended June 30, 2020, supplemental pro forma amounts are not presented as the actual consolidated financial results of the Company include the financial results of Alpha Predictions for such period. |
Other Acquisitions
Other Acquisitions | 12 Months Ended |
Jun. 30, 2020 | |
Other Acquisitions | |
Other Acquisitions | NOTE 6: OTHER ACQUISITIONS On May 11, 2020, the Company entered into an Asset Purchase Agreement to acquire all assets owned, used or held in connection with the business, other than excluded assets and assumed certain liabilities of CloseComms Limited (“CloseComms”), in exchange for 2,666,666 shares of the Company’s restricted common stock valued at $955,466. The most substantial acquired asset was a patented, software application platform that can be integrated into a retail customer’s existing Wi-Fi infrastructure, giving the retailer important customer data and enabling AI-enhanced, targeted promotions to drive store traffic and sales. Other acquired assets included cash and computer and office equipment, while assumed liabilities included certain compensation related liabilities attributed to engaging the operational team on a consulting basis for a minimum of one (1) year. At June 30, 2020, the CloseComms technology platform has not been placed in service, but is expected to be during fiscal year 2021. Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the operations of CloseComms and the related agreements to determine if the Company acquired a business or acquired assets. The gross assets include the intellectual property (the patented, software application platform - determined to be a single intangible asset), cash, and computer and office equipment. The Company concluded that substantially all of the fair values of the gross assets acquired is not concentrated in a single identifiable asset or group of similar identifiable assets. The Company considered the criteria in 805-10-55 to determine whether the set includes both inputs and a substantive process that together significantly contribute to the ability to create outputs. The Company determined the assets acquired and liabilities assumed is not a business because: 1) the Company did not acquire a workforce that is critical to generating outputs as the CloseComms workforce was not acquired, and 2) there were no acquired critical processes, including any critical processes to generate revenue. Accordingly, the transaction was not considered a business. The relative fair value of the assets acquired and liabilities assumed, were based on management’s estimates of the fair values on May 11, 2020. The following table summarizes the consideration paid and based upon the purchase price allocation, the estimated relative fair value of the assets acquired and liabilities assumed at the acquisition date: Consideration 2,666,666 shares of mPhase Technologies, Inc. common stock to be issued valued at $0.3583 per share $ 955,466 Fair value of total consideration transferred 955,466 Recognized amounts of identifiable assets acquired and liabilities assumed Cash 70,000 Property and equipment 35,956 Intangible asset – purchased software 954,918 Accounts payable (2,667 ) Other current liabilities (102,7413 ) Total acquired net assets $ 955,466 On February 15, 2019, the Company acquired the Travel Buddhi developed software for $115,281, which 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, 2020. At June 30, 2020, the Travel Buddhi technology platform has not been placed in service, but is expected to be during fiscal year 2021. For each of these acquisitions, all assets have been recorded at fair value for both book and tax purposes, and therefore no deferred taxes have been recorded in regard to either acquisition. |
Intangible Asset - Purchased So
Intangible Asset - Purchased Software, Net | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset - Purchased Software, Net | NOTE 7: INTANGIBLE ASSET – PURCHASED SOFTWARE, NET Intangible asset – Purchased Software, net, is comprised of the following at: June 30, 2020 2019 Purchased software $ 3,759,021 $ 3,025,801 Less: accumulated amortization (923,904 ) - Purchased software, net $ 2,835,117 $ 3,025,801 Intangible asset – Purchased Software consists of the following three developed software technologies: Alpha Predictions purchased software $ 1,772,312 Travel Buddhi purchased software 113,099 CloseComms purchased software 949,706 Total purchased software $ 2,835,117 The Alpha Predictions developed software was acquired as further described in Note 5. The Travel Buddhi and CloseComms developed software were acquired as further described in Note 6. At June 30, 2020, the Travel Buddhi and CloseComms technology platforms have not been placed in service, but are expected to be during fiscal year 2021. 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. The Company recorded $923,904 of amortization expense for the year ended June 30, 2020. The Company did not record any amortization expense for the year ended June 30, 2019. Future amortization expense related to the existing net carrying amount of developed software at June 30, 2020 is expected to be as follows: Fiscal year 2021 $ 1,063,290 Fiscal year 2022 1,240,425 Fiscal year 2023 354,268 Fiscal year 2024 177,134 $ 2,835,117 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | NOTE 8: REVENUE FROM CONTRACTS WITH CUSTOMERS The following table presents our revenue disaggregated by category and primary geographic regions within our single reporting segment: For the Year Ended June 30, 2020 2019 Categories: Subscription $ 24,720,000 $ - Service and support 3,515,438 - Application development and implementation 2,040,984 - Technology platform (one-time instance sale) - 2,500,000 Total revenue $ 30,276,422 $ 2,500,000 Primary Geographic Regions: India 100 % 100 % 100 % 100 % The following table presents our long-lived assets by primary geographic regions within our single reporting segment: For the Year Ended June 30, 2020 2019 India $ 1,901,040 $ 3,045,927 United Kingdom 982,052 - Total long-lived assets $ 2,883,092 $ 3,045,927 For the years ended June 30, 2020 and 2019, the Company was subject to revenue concentration risk as one customer accounted for approximately 100% and 100% of our total revenue, respectively. Subscription and Application Development and Implementation Revenue The Company recognizes revenue when, or as, it satisfies a performance obligation to a customer. The Company primarily has one performance obligation, which includes the combined promise to develop, implement, and license customized software. Payment terms for the software include one-time application development and implementation fees, which are generally billed on a time-and-materials basis over the development and implementation period, plus fixed license subscription fees, which may either be billed in full upfront or in monthly installments over the license period, which is generally three years. All of these fees are allocated to the single performance obligation of providing software to the customer. The performance obligation is fully satisfied at the point in time when the customer has taken control of the completed software, which is when physical possession of the software has transferred to the customer, the customer is able to use and benefit from the software, and the contractual license period has begun. Since the Company has no further obligation to the customer once control of the software has transferred, the Company recognizes revenue in full for all of the development and implementation fees at that point in time. Subscription fees are also recognized when control of the software has transferred to the customer but only to the extent such fees are contractually guaranteed to the Company. Any future monthly subscription fees that the Company would not have a contractually guaranteed right to collect in the event of early termination of the contract are instead recognized as revenue on a straight-line basis over the license period. Service and Support Revenue Certain contracts also contain a second performance obligation for service and support. This performance obligation includes the promise to provide future updates, upgrades, and enhancements to the software over the license period, if and when they occur. Service and support fees are fixed as a percentage of total contract value and billed in monthly installments over the license period. The Company recognizes service and support fee revenue over time, on a straight-line basis over the license period, as the customer receives such services on a generally uniform basis throughout the license period. Allocation of the Transaction Price Prices allocated to each performance obligation generally correspond with the contractually stated prices, since they equal standalone selling price. In some cases, services may be discounted, which requires the company to allocate the transaction price based on relative standalone selling price. The Company estimates standalone selling price based on comparable industry practices and the costs and margins involved in providing services to its customers. Contract Liabilities Contract liabilities include amounts billed to the customer in excess of revenue recognized and are presented as contract liabilities on the consolidated balance sheets. At June 30, 2020 contract liabilities totaled $219,652. At June 30, 2019 there were no contract liabilities. The following table presents a reconciliation of the contract liabilities from June 30, 2019 to June 30, 2020: June 30, 2019 $ - Contract liability deferral 254,732 Amortization of contract liability to revenue (35,080 ) June 30, 2020 $ 219,652 Practical Expedient The Company has elected a practical expedient to omit certain disclosures about the transaction price allocated to remaining performance obligations for contracts with terms of one year or less. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 9: ACCRUED EXPENSES Accrued expenses is comprised of the following at: June 30, 2020 2019 Accrued interest $ 118,161 $ 104,179 Accrued wages 485,647 208,353 Other expenses 520,034 150,601 Accrued payment for acquired technology intangible asset - 2,905,668 Total accrued expenses $ 1,123,842 $ 3,368,801 |
Notes Payable
Notes Payable | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 10: NOTES PAYABLE Notes payable is comprised of the following: June 30, 2020 2019 Note payable, SBA – Paycheck Protection Program [1] $ 33,388 $ - Note payable, SBA – Economic Injury Disaster Loan [2] 154,540 - Note payable, John Fife (dba St. George Investors)/Judgment Settlement Agreement [3] 771,702 855,660 Total notes payable $ 959,630 $ 855,660 Less: current portion of notes payable (792,171 ) (855,660 ) Long-term portion of notes payable $ 167,459 $ - [1] [2] [3] |
Convertible Debt Arrangements
Convertible Debt Arrangements | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Debt Arrangements | NOTE 11: CONVERTIBLE DEBT ARRANGEMENTS JMJ Financial At June 30, 2020 and 2019, the amount recorded in current liabilities for the one convertible note and accrued interest thereon due to JMJ Financial was $209,330 and $193,287, respectively. During the fiscal years ended June 30, 2020 and 2019 the Company recorded $16,043 and $14,766, respectively of interest for the outstanding convertible note. At June 30, 2020 and 2019, the aggregate remaining amount of convertible securities held by JMJ could be converted into 10,466 and 9,664 shares, respectively, with a conversion price of $20. 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. Accredited Investors On June 19, 2019, the Company entered into a securities purchase agreement with an accredited investor (“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 net 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 the variable conversion 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 were being amortized over the term of the note. During December 2019, the Company paid-off the aggregate balance of the convertible promissory note, including accrued interest and prepayment amount. On July 30, 2019, the Company entered into a securities purchase agreement with an accredited investor (“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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $116,014, deferred financing costs of $3,000 and debt discount of $50,000. The deferred financing costs and debt discount were being amortized over the term of the note. During January 2020, the Company paid-off the aggregate balance of the convertible promissory note, including accrued interest and prepayment amount. On August 23, 2019, the Company issued a 6% convertible promissory note to an accredited investor in the principal amount of $5,000 with a maturity date of August 23, 2020. This convertible debenture converts at a price of $0.25 per share. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $5,000 and $270, respectively. On September 5, 2019, the Company entered into a securities purchase agreement with an accredited investor (“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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $104,860, deferred financing costs of $3,000 and debt discount of $50,000. The deferred financing costs and debt discount were being amortized over the term of the note. During February 2020, the Company paid-off the aggregate balance of the convertible promissory note, including accrued interest and prepayment amount. On September 24, 2019, the Company entered into a securities purchase agreement 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $208,335, original issue discount of $9,200, deferred financing costs of $3,000 and debt discount of $112,000. The original issue discount, deferred financing costs and debt discount were being amortized over the term of the note. On various dates through June 30, 2020, an aggregate of $124,200 of the outstanding principal and $5,228 of accrued interest was converted into an aggregate of 883,593 shares of the Company’s common stock, fully satisfying this obligation. The Company recorded a loss on extinguishment of debt of $53,123 as a result of the Company issuing shares of its common stock to satisfy this obligation. On December 2, 2019, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $200,000 (including a $7,500 original issue discount) to the Lender with a maturity date of December 2, 2020. On December 2, 2019, the Company received net proceeds in the amount of $182,500 as a result of $10,000 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at the greater of (i) $0.50 per share or (ii) 60% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $588,000, original issue discount of $7,500, deferred financing costs of $10,000 and debt discount of $182,500. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. On April 21, 2020, the Company entered into Amendment #1 to this convertible note amending the conversion price. As a result of this amendment, the fair value of the conversion feature increased by $211,803. On various dates through June 30, 2020, an aggregate of $175,000 of the outstanding principal and $7,499 of accrued interest was converted into an aggregate of 2,717,417 shares of the Company’s common stock. The Company recorded a loss on extinguishment of debt of $148,306 as a result of the Company issuing shares of its common stock to satisfy the converted portion of this obligation. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $25,000 and $1,138, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs, and debt discount was $14,452. On December 2, 2019, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $78,000 to the Lender with a maturity date of December 2, 2020. On December 4, 2019, the Company received net proceeds in the amount of $75,000 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $256,855, deferred financing costs of $3,000 and debt discount of $75,000. The deferred financing costs and debt discount were being amortized over the term of the note. During June 2020, the Company paid-off the aggregate balance of the convertible promissory note, including accrued interest and prepayment amount. On December 2, 2019, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $135,000 (including a $6,750 original issue discount) to the Lender with a maturity date of December 2, 2020. On December 3, 2019, the Company received net proceeds in the amount of $122,000 as a result of $6,250 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at the greater of (i) $0.50 per share or (ii) 60% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $396,900, original issue discount of $6,750, deferred financing costs of $6,250 and debt discount of $122,000. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. On April 21, 2020, the Company entered into Amendment #1 to this convertible note amending the conversion price. As a result of this amendment, the fair value of the conversion feature increased by $142,967. On various dates through June 30, 2020, an aggregate of $85,000 of the outstanding principal and $3,736 of accrued interest was converted into an aggregate of 982,375 shares of the Company’s common stock. The Company recorded a loss on extinguishment of debt of $7,235 as a result of the Company issuing shares of its common stock to satisfy the converted portion of this obligation. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $50,000 and $2,331, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs, and debt discount was $28,904. On December 17, 2019, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $81,000 (including a $6,000 original issue discount) to the Lender with a maturity date of December 17, 2020. On December 17, 2019, the Company received net proceeds in the amount of $73,500 as a result of $1,500 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $204,986, original issue discount of $6,000, deferred financing costs of $1,500 and debt discount of $73,500. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. On various dates through June 30, 2020, an aggregate of $71,000 of the outstanding principal was converted into an aggregate of 1,288,977 shares of the Company’s common stock. The Company recorded a gain on extinguishment of debt of $10,072 as a result of the Company issuing shares of its common stock to satisfy the converted portion of this obligation. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $10,000 and $3,415, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs, and debt discount was $5,370. On January 9, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $110,000 (including a $5,000 original issue discount) to the Lender with a maturity date of January 9, 2021. On January 13, 2020, the Company received net proceeds in the amount of $100,000 as a result of $5,000 being paid to reimburse the Lender for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at a price of $0.50 per share, however, in the event the closing bid price of the Company’s common stock is less than $0.70 per share on any day while this convertible promissory note is outstanding, this convertible debenture will convert at 60% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $217,338, original issue discount of $5,000, deferred financing costs of $5,000 and debt discount of $100,000. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $110,000 and $4,195, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs and debt discount was $52,137. On January 21, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $68,000 to the Lender with a maturity date of January 21, 2021. On January 23, 2020, the Company received net proceeds in the amount of $65,000 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $127,475, deferred financing costs of $3,000 and debt discount of $65,000. The deferred financing costs and debt discount are being amortized over the term of the note. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $68,000 and $2,414, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount was $30,181. On February 24, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $53,000 to the Lender with a maturity date of February 24, 2021. On February 26, 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $85,377, deferred financing costs of $3,000 and debt discount of $50,000. The deferred financing costs and debt discount are being amortized over the term of the note. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $53,000 and $1,487, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount was $18,586. On March 3, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $63,000 to the Lender with a maturity date of March 3, 2021. On March 5, 2020, the Company received net proceeds in the amount of $60,000 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $95,397, deferred financing costs of $3,000 and debt discount of $60,000. The deferred financing costs and debt discount are being amortized over the term of the note. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $63,000 and $1,657, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount was $20,712. On June 2, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $78,000 to the Lender with a maturity date of June 2, 2021. On June 3, 2020, the Company received net proceeds in the amount of $75,000 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $141,925, 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. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $78,000 and $496, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount was $6,197. On June 12, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender”) and issued an 8% convertible promissory note in the principal amount of $103,000 to the Lender with a maturity date of June 12, 2021. On June 16, 2020, the Company received net proceeds in the amount of $100,000 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. This convertible debenture converts at 62% of the lowest trading price during the 20 days prior to conversion. Due to the variable conversion 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 $182,451, deferred financing costs of $3,000 and debt discount of $100,000. The deferred financing costs and debt discount are being amortized over the term of the note. At June 30, 2020, the aggregate balance of the convertible promissory note and accrued interest was $103,000 and $429, respectively. At June 30, 2020, the aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount was $8,101. At June 30, 2020 and June 30, 2019, there was $565,000 and $78,000 of convertible notes payable outstanding, net of discounts of $375,359 and $75,649, respectively. During the year ended June 30, 2020 and 2019, amortization of original issue discount, deferred financing costs, and debt discounts amounted to $899,491 and $2,350, respectively. During the year ended June 30, 2020, $477,763 of convertible notes, including fees and interest, were converted into 5,872,362 shares of the Company’s common stock. During the year ended June 30, 2019, there were no conversions of convertible notes into shares of the Company’s common stock. At June 30, 2020, the Company was in compliance with the terms of the Accredited Investors convertible promissory notes. Notes payable under convertible debt and debenture agreements, net is comprised of the following: June 30, 2020 2019 JMJ Financial $ 109,000 $ 109,000 Accredited Investors 565,000 78,000 Unamortized OID, deferred financings costs, and debt discounts (375,359 ) (75,649 ) Total convertible debt arrangements, net $ 298,641 $ 111,351 At June 30, 2020 and 2019, the outstanding balances are reflected as current liabilities within our consolidated balance sheets. At June 30, 2020 and 2019, accrued interest on these convertible notes of $116,619 and $84,475, respectively, is included within accrued expenses of the consolidated balance sheets. |
Derivative Liability
Derivative Liability | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 12: 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, 2020: Conversion 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 Initial fair value of derivative liability recorded as debt discount 1,115,000 Initial fair value of derivative liability charged to other expense 1,610,913 Gain on change in fair value included in earnings (1,961,951 ) June 30, 2020 $ 897,631 Total derivative liability at June 30, 2020 and 2019 amounted to $897,631 and $133,669, respectively. The change in fair value included in earnings of $1,961,951 is due in part to the quoted market price of the Company’s common stock decreasing from $0.85 at June 30, 2019 to $0.08 at June 30, 2020, coupled with substantially reduced conversion prices due to the effect of “ratchet” provisions incorporated within the convertible notes payable. The Company used the following range of assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with binomial simulations at June 30, 2020: Expected volatility 195.3% - 250.8 % Expected term 5.1 – 11.4 months Risk-free interest rate 0.16% - 0.18 % Stock price $ 0.08 The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company. At June 30, 2020, the Company did not have any derivative instruments that were designated as hedges. Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of June 30, 2020 and 2019: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability, June 30, 2020 $ - $ - $ 897,631 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability, June 30, 2019 $ - $ - $ 133,669 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 13: STOCKHOLDERS’ EQUITY At June 30, 2020, 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 19,318,679 shares are issued, 19,174,492 shares are outstanding and 2,666,666 shares are to be issued at June 30, 2020, 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, 2020. 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 125,000,000,000 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. On June 10, 2020, 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 250,000,000 shares from 100,000,000 shares. On July 14, 2020, the Company filed a Certificate of Amendment to its Certificate of Incorporation to increase its authorized common stock from 100,000,000 shares to 250,000,000 shares. On August 3, 2020, 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 500,000,000 shares from 250,000,000 shares. On August 4, 2020, the Company filed a Certificate of Amendment to its Certificate of Incorporation to increase its authorized common stock from 250,000,000 shares to 500,000,000 shares. Common Stock Private Placements During the year ended June 30, 2020, the Company received $347,000 of net proceeds from the issuance of 1,129,577 shares of common stock in private placements with accredited investors. During the year ended June 30, 2020, the Company issued 11,003 shares of common stock valued at $11,250 for finder’s services related to certain of these 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. Stock Award Payable During the year ended June 30, 2020, the Company did not issue any shares of common stock to former officers, outside directors, or strategic consultants. 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. The $575,000 was included in accrued expenses at June 30, 2018. Stock Based Compensation – Common Stock Grants During the year ended June 30, 2020, the Company issued 231,635 restricted shares of its common stock to Mr. Cutchens, the Company’s Chief Financial Officer, which were granted on June 1, 2019 (the “Grant Date”), pursuant to the terms of an employment agreement with the Company. The restricted shares of common stock vest 25% on the six-month, 1 year, 2 year, and 3 year anniversaries of the Grant Date. At June 30, 2020, 115,818 shares of common stock have vested and 115,817 shares remain unvested. During the years ended June 30, 2020 and 2019, the Company recorded $133,142 and $16,464, respectively, of stock-based compensation expense related to the vested portion of this award. During the year ended June 30, 2019, the Company issued 2,620,899 shares of its common stock to Mr. Bhatnagar, the Company’s President and Chief Executive Officer, which were granted on January 11, 2019 (the “Grant Date”), pursuant to the terms of an employment agreement and related transition agreement with the Company. The shares of common stock were immediately vested and the Company recorded $1,310,449 of stock-based compensation expense during the year ended June 30, 2019. Conversion of Service Fees During the year ended June 30, 2020, the Company issued 62,000 shares of common stock, valued at $46,500, to a former officer who provided services to the Company. During the year ended June 30, 2020, the Company issued 294,654 shares of 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 $219,517. During the 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. Conversion of Debt Securities During the year ended June 30, 2020, $477,763 of convertible notes, including fees and interest, were converted into 5,872,362 shares of the Company’s common stock by accredited investors, valued at $1,054,204. During the year ended June 30, 2019, there were no conversions of convertible notes into shares of the Company’s common stock. Reserved Shares – Common Stock At June 30, 2020, the convertible promissory notes entered into with accredited investors require the Company to reserve approximately 87,000,000 shares of its Common Stock for potential future conversions under such instruments. At June 30, 2020, 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. 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 For the year ended June 30, 2020, as the Company’s revenue exceeded $30,000,000, Mr. Bhatnagar earned the remaining warrants to acquire 32,405,058 shares of the Company’s common stock under the provisions of the Warrant Agreement. 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, 2020, Mr. Bhatnagar has earned the maximum available warrants to acquire 37,390,452 shares of the Company’s common stock under the provisions of the Warrant Agreement. For the years ended June 30, 2020 and 2019, the Company recognized $16,202,529 and $2,492,697, respectively, of stock-based compensation expense related to the earned warrants. 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 the years ended June 30, 2020 and 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, 2020: Warrants Weighted Exercise Price Intrinsic Outstanding, June 30, 2019 4,985,394 $ 0.50 $ - Warrants earned 32,405,058 0.50 - Warrants forfeited - - - Outstanding, June 30, 2020 37,390,452 $ 0.50 $ - Common stock issuable upon exercise of warrants 37,390,452 $ 0.50 $ - Common Stock Issuable Upon Exercise of Common Stock Issuable Upon Range of Prices Number Weighted Weighted Number Weighted $ 0.50 37,390,452 4.30 $ 0.50 37,390,452 $ 0.50 37,390,452 4.30 $ 0.50 37,390,452 $ 0.50 The following table sets forth common stock purchase warrants outstanding at June 30, 2019: Warrants Weighted Exercise Price Intrinsic 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 Common Stock Issuable Upon Range of Prices Number Weighted Weighted Number Weighted $ 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”). On October 9, 2019, the Company amended the governing Reserve Agreement dated January 11, 2019, whereby the termination date was extended to March 31, 2020, upon which date any unsold shares in the Reserve Account shall be returned to the Company and cancelled. At March 31, 2020, 315,949 shares of common stock remained unsold from the initial Settlement Reserve to settle prior liabilities and 185,063, shares of common stock remained unsold from the Funding Reserve to fund continuing operations as follows: Settlement 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 March 31, 2020 (1,590,811 ) (314,937 ) Shares of Common Stock unsold at March 31, 2020 315,949 185,063 Prior Liabilities – Settlement Reserve 1,967,960 shares of the Company’s common stock were 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 March 31, 2020, 315,949 unissued shares were cancelled. 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 March 31, 2020, 185,063 unissued shares were cancelled. 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 tradable, and have a nominal liquidation value. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 14: RELATED PARTY TRANSACTIONS Microphase Corporation At June 30, 2020, 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 During the year ended June 30, 2020, there were no transactions that occurred with this former director. During the year ended June 30, 2019, 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. In addition, 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 year ended June 30, 2019, the Company recognized $1,959 of accrued interest on this loan. During the year ended June 30, 2020, there was no interest recognized for this loan. Transactions With Officers Note Payable Issuances 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 years ended June 30, 2020 and 2019, the officers and former officers advanced $48,052 and $144,507 to provide working capital to the Company and $4,792 and $15,467 has been charged for interest on loans from officers and former officers. At June 30, 2020 and 2019, these outstanding notes including accrued interest totaled $78,758 and $58,165, respectively. At June 30, 2020, these promissory notes are not convertible into shares of the Company common stock. Common Stock Issuances During the year ended June 30, 2020, the Company issued 231,635 restricted shares of its common stock to Mr. Cutchens, the Company’s Chief Financial Officer, which were granted on June 1, 2019 (the “Grant Date”), pursuant to the terms of an employment agreement with the Company. The restricted shares of common stock vest 25% on the six-month, 1 year, 2 year, and 3 year anniversaries of the Grant Date. At June 30, 2020, 115,818 shares of common stock have vested and 115,817 shares remain unvested. During the years ended June 30, 2020 and 2019, the Company recorded $133,142 and $16,464, respectively, of stock-based compensation expense related to the vested portion of this award. During the year ended June 30, 2020, the Company incurred $15,500 of expense related to legal and consulting services provided by Mr. Smiley, the Company’s former Chief Financial Officer and legal counsel. During October 2019, the entire balance of $15,500 was converted into 62,000 shares of common stock. During the year ended June 30, 2019, the Company issued 2,620,899 shares of its common stock to Mr. Bhatnagar, the Company’s President and Chief Executive Officer, which were granted on January 11, 2019 (the “Grant Date”), pursuant to the terms of an employment agreement and related transition agreement with the Company. The shares of common stock were immediately vested and the Company recorded $1,310,449 of stock-based compensation expense during the year ended June 30, 2019. During the 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. Additionally, during the year ended June 30, 2019, three former officers of the Company, Mr. Biderman as a former outside director, and certain strategic consultants, who provided services to the Company, received a total of 1,150,000 shares of common stock, which were valued at $0.50 or $575,000, based on the closing price of the Company’s common stock on September 24, 2018, and was included in accrued expenses at June 30, 2018. Furthermore, during the 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. 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, 2020, there is no deferred charges for beneficial conversion feature interest expense remaining. Office Lease 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, Verus International, Inc., whereby Mr. Bhatnagar is also the Chairman and Chief Executive Officer. The lease term with the related party is a month-to-month arrangement. For the years ended June 30, 2020 and 2019, $16,200 and $7,621, respectively, was recognized as rent expense under the terms of this month-to-month arrangement. At June 30, 2020 and 2019, $23,821 and $7,621, respectively, was accrued as payable to the related party. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15: 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, 2020 and 2019 was $0. At June 30, 2020 and 2019, the difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows: June 30, 2020 2019 Statutory federal rate 21.0 % (21.0 )% State income tax rate, net of federal benefit 6.5 % (7.2 )% Permanent differences, including stock based compensation and beneficial conversion interest expense (0.1 )% 28.9 % Change in valuation allowance (27.4 )% (0.7 )% Effective tax rate - % - % At June 30, 2020 and 2019, the Company’s deferred tax assets were as follows: June 30, 2020 2019 Deferred tax assets Federal and state net operating loss carry forward $ 23,838,735 $ 26,156,755 Deferred stock warrants 5,157,262 - Other temporary differences 509,789 - Total deferred tax asset 29,505,786 26,156,755 Net deferred tax asset 29,505,786 26,156,755 Less: valuation allowance (29,505,786 ) (26,156,755 ) $ - $ - Valuation Allowance 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 increased by $3,349,031 during the fiscal year ended June 30, 2020, of which $3,009,116 of the increase relates to the calculation of the current fiscal year tax provision and $339,915 is a result of prior year adjustments and net operating loss expirations. The valuation allowance decreased by $1,515,310 during the fiscal year ended June 30, 2019, as a result of a reduction in the total NOL carry forwards due to expiring loss years. Other Income Tax Related Items At June 30, 2020 and 2019, the Company has federal net operating loss carryforwards of approximately $87,000,000 and $105,000,000, respectively. Net operating loss carryforwards generated before January 1, 2018 will expire through 2037. 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, 2020 and 2019, 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, 2020 and 2019. Enacted in late 2017, the Tax Cut and Jobs Act (“TCJA”) imposed a one-time tax on earnings held outside the United States (“U.S.”). The Company did not have any earnings subject to this tax. Beginning in 2018, earnings generated outside the U.S. are not subject to U.S. tax when repatriated. If the Company engages in certain business activities, non-U.S. earnings may be required to be include in the income of the U.S. parent company. The TCJA added rules that require the U.S. parent company to include in income certain low taxed income. These so called Global Intangible Low-Taxed Income (“GILTI”) rules are not applicable to the Company. During May 2020, the Company received $33,332 under the Small Business Administration’s Paycheck Protection Program (“PPP Loan”) created as part of the recently enacted CARES Act administered by the Small Business Administration (“SBA”). Certain amounts of the loan may be forgiven if they are used towards qualifying expenses as described in the CARES Act. In the event that forgiveness is applied for, an adjustment will be necessary for tax purposes to disallow for any expenses the loan was used towards in the period in which forgiveness occurs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16: 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 was required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 which was due and payable in March of 2020. The Company made all required payments with the exception of the final payment of $195,000 which was due and payable in March of 2020. On August 17, 2020, the Company entered into a second amendment (the “Second Amendment”) to the Judgement Settlement Agreement, whereby the Company issued a convertible promissory note in the principal amount of $300,000 (the “Note”) to repay the amounts still outstanding under the Judgment Settlement Agreement. The Note matures on August 17, 2021, bears interest at a rate of 10% per annum, requires certain monthly minimum cash payments as specified in the Note, and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note. The Note may be prepaid by the Company at any time prior to maturity without penalty. 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 to be immediately due and payable by the Company. The ultimate final payment amount is expected to be less than the liability balance of $771,702 presented as liabilities in arrears – judgement settlement agreement on the consolidated balance sheets (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 13). 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 was required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 which was due and payable in March of 2020. The Company made all required payments with the exception of the final payment of $195,000 which was due and payable in March of 2020. On August 17, 2020, the Company entered into a second amendment (the “Second Amendment”) to the Judgement Settlement Agreement, whereby the Company issued a convertible promissory note in the principal amount of $300,000 (the “Note”) to repay the amounts still outstanding under the Judgment Settlement Agreement. The Note matures on August 17, 2021, bears interest at a rate of 10% per annum, requires certain monthly minimum cash payments as specified in the Note, and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note. The Note may be prepaid by the Company at any time prior to maturity without penalty. 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 to be immediately due and payable by the Company. The ultimate final payment amount is expected to be less than the liability balance of $771,702 presented as liabilities in arrears – judgement settlement agreement on the consolidated balance sheets (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 $440,000. Amounts Contingent upon Certain Terms of Change in Control Agreements Effective January 11, 2019 To the extent the Company does not eliminate the certain liabilities within six months of the effective date as stated within the Transition Agreement, 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. On July 15, 2020, immediately prior to the Company’s entry into an Exchange Agreement with Mr. Bhatnagar, it was determined that 5,650,708 additional warrants (the “Additional Warrants”) to purchase the Company’s Common Stock were due to and issued to Mr. Bhatnagar in accordance with the terms and conditions of the Transition Agreement. However, the Additional Warrants were immediately cancelled and terminated with the intention of mitigating potential liabilities arising from certain issuances of the Company’s Common Stock below the minimum price of $0.50 per share as stated within the Transition Agreement. 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. At June 30, 2020, as Mr. Bhatnagar has earned the maximum available warrants to acquire 37,390,452 shares of the Company’s common stock under the provisions of the Warrant Agreement, any acceleration provisions within the Change in Control Agreements are no longer applicable. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 17: 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, 2020 and 2019. The assets and liabilities associated with discontinued operations included in our Consolidated Balance Sheets were as follows: June 30, 2020 June 30, 2019 Discontinued Continuing Total Discontinued Continuing Total Assets Current Assets Cash $ - $ 142,413 $ 142,413 $ - $ 33,996 $ 33,996 Accounts receivable, net - 14,048,095 14,048,095 - 2,526,155 2,526,155 Prepaid expenses - 4,477 4,477 - 8,820 8,820 Other assets - 30,879 30,879 - - - Total Current Assets - 14,225,864 14,225,864 - 2,568,971 2,568,971 Property and equipment, net - 32,669 32,669 - 11,048 11,048 Goodwill - 3,636 3,636 - 6,020 6,020 Intangible asset – purchased software, net - 2,835,117 2,835,117 - 3,025,801 3,025,801 Other assets - 11,670 11,670 - 3,058 3,058 Total Assets $ - $ 17,108,956 $ 17,108,956 $ - $ 5,614,898 $ 5,614,898 Liabilities Current Liabilities Accounts payable $ 82,795 $ 7,897,887 $ 7,980,682 $ 82,795 $ 366,274 $ 449,069 Accrued expenses - 1,123,842 1,123,842 - 3,368,801 3,368,801 Contract liabilities - 219,652 219,652 - - - Due to related parties - 84,485 84,485 - 65,459 65,459 Notes payable to officer - 26,818 26,818 - 25,251 25,251 Notes payable - 20,469 20,469 - - - Convertible notes payable, net - 189,641 189,641 - 2,351 2,351 Liabilities in arrears with convertible features - 109,000 109,000 - 109,000 109,000 Liabilities in arrears - judgement settlement agreement - 771,702 771,702 - 855,660 855,660 Derivative liability - 897,631 897,631 - 133,669 133,669 Total Current Liabilities $ 82,795 $ 11,341,127 $ 11,423,922 $ 82,795 $ 4,926,465 $ 5,009,260 During the fiscal year ended June 30, 2020, there was no revenue or expenses associated with the discontinued operations of our Jump line of products. During the fiscal year ended June 30, 2019, the revenue and expenses associated with the discontinued operations included in our Consolidated Statements of Operations were as follows: 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 Operating loss - (1,765,886 ) (1,765,886 ) Other Income (Expense): Interest expense (11,508 ) (210,594 ) (222,102 ) 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 Other income - - - Total Other Income (Expense) 18,940 (208,215 ) (189,275 ) Income (Loss) before income taxes 18,940 (1,974,101 ) (1,955,161 ) Income taxes - - - Net income (loss) $ 18,940 $ (1,974,101 ) $ (1,955,161 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18: SUBSEQUENT EVENTS Subsequent to June 30, 2020, an aggregate of $288,182 of principal, accrued interest, and fees have been converted into 16,331,766 shares of the Company’s common stock. On July 13, 2020, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Rights Agreement”) with White Lion Capital, LLC (the “Investor”) pursuant to which the Investor agreed to invest up to three million dollars ($3,000,000) to purchase the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a purchase price of 95% of the market price of the Company’s Common Stock during a valuation period as defined in the Purchase Agreement. The shares of Common Stock to be issued and sold to the Investor pursuant to the Purchase Agreement were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder. The Rights Agreement was an inducement to the Investor to execute and deliver the Purchase Agreement, whereby the Company agreed to provide certain registration rights under the Securities Act with respect to the shares of Common Stock issuable for Investor’s investment pursuant to the Purchase Agreement. The Purchase Agreement terminates on the earlier of (i) December 31, 2022, (ii) the date on which the Investor has purchased three million dollars ($3,000,000) of the Company’s common stock, (iii) at such time that the registration statement agreed to in the Rights Agreement is no longer in effect, (iv) upon Investor’s material breach of contract, (v) in the event a voluntary or involuntary bankruptcy petition is filed concerning the Company; or, (vi) if a Custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors. Furthermore, on July 13, 2020, the Company entered into a consulting, public relations, and marketing agreement whereby the Company issued 200,000 restricted shares of its common stock for services to be performed during the agreement period of July 15, 2020 through October 15, 2020. On July 14, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, to increase its authorized common stock from 100,000,000 shares to 250,000,000 shares. On July 15, 2020, the Company entered into an exchange agreement (the “Exchange Agreement”) with its Chief Executive Officer, Anshu Bhatnagar (“Holder”), whereby earned and issued warrants to purchase 37,390,452 shares of the Company’s Common Stock (the “Cancelled Warrants”) pursuant to the terms of that certain Transition Agreement (the “Transition Agreement”) and Warrant Agreement (the “Warrant Agreement”) each between the Company and Holder and dated as of January 11, 2019 were forfeited and exchanged for (i) 37,390,452 shares of the Company’s Common Stock (the “Shares”) and (ii) the cancellation and termination of the Transition Agreement and Warrant Agreement. The Cancelled Warrants had an exercise price of $0.50 per share and were not subject to expiration. Such Exchange Agreement is intended to make the Company’s capitalization more attractive to potential investors and to remove the uncertainty associated with any future grants of warrants under the Transition Agreement and Warrant Agreement, although there can be no assurance of any future investments on terms that are attractive to the Company, or at all. Immediately prior to the Company’s entry into the Exchange Agreement, it was determined that 5,650,708 additional warrants (the “Additional Warrants”) to purchase the Company’s Common Stock were due to and issued to the Holder in accordance with the terms and conditions of the Transition Agreement as the Transition Agreement required certain liabilities to be eliminated by the prior management team within six months of the Transition Agreement’s effective date of January 11, 2019. However, the Additional Warrants were immediately cancelled and terminated with the intention of mitigating potential liabilities arising from certain issuances of the Company’s Common Stock below the minimum price of $0.50 per share as stated within the Transition Agreement. The Shares to be issued and sold to the Holder pursuant to the Exchange Agreement were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On July 24, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor pursuant to which the Company issued and sold a convertible promissory note in the principal amount of $105,000 (including a $5,000 original issuance discount) (the “Note”). The closing of the transaction contemplated by the Securities Purchase Agreement occurred on July 27, 2020, the date the Company received net proceeds in the amount of $95,000 as a result of $5,000 being paid to reimburse the accredited investor for legal fees incurred with respect to the Securities Purchase Agreement and the Note. The Note matures on July 24, 2021, bears interest at a rate of 8% per annum (increasing to 24% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. On July 31, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor pursuant to which the Company issued and sold a convertible promissory note in the principal amount of $68,000 (the “Note”). The closing of the transaction contemplated by the Securities Purchase Agreement occurred on August 6, 2020, the date the Company received net proceeds in the amount of $65,000 as a result of $3,000 being paid to reimburse the accredited investor for legal fees incurred with respect to the Securities Purchase Agreement and the Note. The Note matures on July 31, 2021, bears interest at a rate of 8% per annum (increasing to 22% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. On August 4, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, to increase its authorized common stock from 250,000,000 shares to 500,000,000 shares. On August 14, 2020, the Company filed a preliminary registration statement in accordance with the registration rights agreement entered into with White Lion Capital, LLC on July 13, 2020. On October 13, 2020, the preliminary registration statement was withdrawn. On August 17, 2020, the Company entered into a second amendment (the “Second Amendment”) to the Judgement Settlement Agreement dated December 10, 2018 (the “Settlement Agreement”) with John M. Fife, an individual (“Lender”) whereby the Company issued a convertible promissory note in the principal amount of $300,000 (the “Note”) to repay the amounts still outstanding under the Settlement Agreement. The Note matures on August 17, 2021, bears interest at a rate of 10% per annum, requires certain monthly minimum cash payments as specified in the Note, and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note. The Note may be prepaid by the Company at any time prior to maturity without penalty. On August 19, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor pursuant to which the Company issued and sold a convertible promissory note in the principal amount of $99,225 (including a $4,725 original issuance discount) (the “Note”). The closing of the transaction contemplated by the Securities Purchase Agreement occurred on August 20, 2020, the date the Company received net proceeds in the amount of $90,000 as a result of $4,500 being paid to reimburse the accredited investor for legal fees incurred with respect to the Securities Purchase Agreement and the Note. The Note matures on August 19, 2021, bears interest at a rate of 8% per annum (increasing to 24% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. On August 19, 2020, the Board of Directors (the “Board”) of the Company approved the appointment of RBSM, LLP (“RBSM”) as the Company’s independent registered public account firm to audit its consolidated financial statements for the fiscal year ending June 30, 2020, with such appointment effective as of August 19, 2020. RBSM replaces Assurance Dimensions, Inc. (“Assurance Dimensions”) who resigned as the Company’s independent registered public accounting firm effective as of August 19, 2020. On August 20, 2020, the Company prepaid a convertible promissory note, including principal, accrued interest, and prepayment amount as set forth within such convertible promissory note dated February 24, 2020. The convertible promissory note in the principal amount of $53,000 was issued and sold by the Company to an accredited investor under a securities purchase agreement dated February 24, 2020. On August 20, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor pursuant to which the Company issued and sold a convertible promissory note in the principal amount of $63,000 (the “Note”). The closing of the transaction contemplated by the Securities Purchase Agreement occurred on August 21, 2020, the date the Company received net proceeds in the amount of $60,000 as a result of $3,000 being paid to reimburse the accredited investor for legal fees incurred with respect to the Securities Purchase Agreement and the Note. The Note matures on August 20, 2021, bears interest at a rate of 8% per annum (increasing to 22% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. On August 27, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor pursuant to which the Company issued and sold a convertible promissory note in the principal amount of $105,000 (including a $5,000 original issuance discount) (the “Note”). The closing of the transaction contemplated by the Securities Purchase Agreement occurred on August 28, 2020, the date the Company received net proceeds in the amount of $96,000 as a result of $4,000 being paid to reimburse the accredited investor for legal and due diligence fees incurred with respect to the Securities Purchase Agreement and the Note. The Note matures on August 27, 2021, bears interest at a rate of 8% per annum (increasing to 24% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. On August 28, 2020, the Company prepaid a convertible promissory note, including principal, accrued interest, and prepayment amount as set forth within such convertible promissory note dated March 3, 2020. The convertible promissory note in the principal amount of $63,000 was issued and sold by the Company to an accredited investor under a securities purchase agreement dated March 3, 2020. On August 31, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor pursuant to which the Company issued and sold a convertible promissory note in the principal amount of $68,000 (the “Note”). The closing of the transaction contemplated by the Securities Purchase Agreement occurred on September 1, 2020, the date the Company received net proceeds in the amount of $65,000 as a result of $3,000 being paid to reimburse the accredited investor for legal fees incurred with respect to the Securities Purchase Agreement and the Note. The Note matures on August 31, 2021, bears interest at a rate of 8% per annum (increasing to 22% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company’s common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. On October 22, 2020, the Company received a notice of event of default and demand letter (“Demand Letter”) from a promissory note holder ( the “Note Holder”). The promissory note was issued on November 1, 2019, in the original principal amount of $40,739.31, accrued interest at a rate of 6% per annum, and matured on April 18, 2020. The Demand Letter stated an aggregate of $51,940.09 of principal and interest was immediately due. The promissory note does not have a convertible feature and is not convertible into shares of the Company’s common stock. Additionally, the promissory note does not contain any cross-default provisions with any other promissory notes issued by the Company. The Company expects to work with the Note Holder to negotiate a repayment structure whereby the Company can repay the Note Holder the balance due as quickly as possible based upon its available capital. On December 7, 2020, the Board of Directors (the “Board”) of the Company approved the dismissal RBSM, LLP (“RBSM”) as the Company’s independent registered public account firm to audit its consolidated financial statements for the fiscal year ending June 30, 2020, with such dismissal effective as of December 7, 2020. On December 8, 2020, the Board of the Company approved the appointment of Boyle, CPA, LLC (“Boyle CPA”) as the Company’s independent registered public account firm to audit its consolidated financial statements for the fiscal year ending June 30, 2020, with such appointment effective as of December 8, 2020. Boyle CPA replaces RBSM who was dismissed as the Company’s independent registered public accounting firm effective as of December 7, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation The consolidated financial statements for the years ended June 30, 2020 and 2019, 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. mPower Technologies, Inc. is a New Jersey corporation and a wholly-owned consumer products subsidiary of mPhase Technologies, Inc. As this subsidiary had its last significant sale of Jump products during the first quarter of fiscal 2017, this product line is reflected as discontinued operations within these consolidated financial statements. |
Reclassifications | Reclassifications Certain reclassifications of prior year amounts have been made to enhance comparability with the current year’s consolidated financial statements, including, but not limited to, presentation of certain items within the consolidated statements of operations and comprehensive loss, consolidated statements of cash flows, and certain notes to the consolidated financial statements. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currencies of our operations in India and the United Kingdom are the Indian Rupee (“INR”) and the British Pound (“GBP”), respectively. 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 investments in our Indian and United Kingdom operations are recorded at the historical rates and the resulting foreign currency translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income within stockholders’ equity in accordance with ASC 220 – Comprehensive Income. 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. The exchange rates used to translate amounts in INR (beginning March 19, 2019) and GBP (beginning May 11, 2020) into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: June 30, 2020 June 30, 2019 Period-end INR: USD exchange rate $ 0.01329 $ 0.01453 Period-end GBP: USD exchange rate $ 1.23244 $ - Income statement: June 30, 2020 June 30, 2019 Average Annual INR: USD exchange rate $ 0.01386 $ 0.01456 Average Annual GBP: USD exchange rate $ 1.23680 $ - Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. |
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, estimated useful lives of finite-lived intangible assets, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the deferred tax asset valuation allowance. |
Segment Reporting | Segment Reporting Although the Company has a number of operating divisions, separate segment data has not been presented, as they meet the criteria for aggregation as permitted by ASC Topic 280, Segment Reporting |
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 four 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, 2020 and 2019, this one customer accounted for approximately 100% and 100% of our total revenue, respectively. At June 30, 2020 and 2019, this one customer accounted for approximately 100% and 99% of our total accounts receivable, respectively. Supplier Risk Agreements which potentially subject the Company to concentrations of supplier risk consist principally of one supplier agreement. For the year ended June 30, 2020, this one supplier accounted for approximately 100% of our total cost of revenue. At June 30, 2020, this one supplier accounted for approximately 95% of our total accounts payable. As this supplier agreement was entered into during the year ended June 30, 2020, there were no transactions with this supplier during the year ended June 30, 2019. |
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, 2020 or 2019. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) limit. At June 30, 2020 and 2019, the Company’s cash balances did not exceed the FDIC limit. |
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. Additionally, to date, the Company has entered into three separate tri-party settlement and offset agreements with its largest customer and largest vendor, whereby the Company’s largest customer has agreed to direct funds due the Company for certain outstanding invoices, to the Company’s largest vendor to satisfy payment on behalf of the Company for certain outstanding invoices. To date, the aggregate amount of the three tri-party settlement and offset agreements has totaled $22,500,000. At June 30, 2020 and 2019, the Company determined there was no requirement for an allowance for doubtful accounts. |
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. The estimated useful lives range from 3 to 7 years based upon asset class. When an asset is retired, sold or impaired, the resulting gain or loss is reflected in earnings. The Company incurred depreciation expense of $6,020 for the year ended June 30, 2020. The Company did not incur depreciation expense for the year ended June 30, 2019. |
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, 2020 and 2019, 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, if any. On June 30, 2020, we performed our annual evaluation of goodwill impairment and determined that the estimated fair value of our reporting unit exceeded 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, 2020, and 2019, 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, 2020 and 2019. |
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, 2020, the book value of purchased and developed technology software of $3,759,021, included three technology platforms, a machine learning platform and two artificial intelligence platforms. For the year ended June 30, 2020, the Company incurred amortization expense of $923,904. For the year ended June 30, 2019, there was no amortization of either purchased technology platform. |
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. At June 30, 2020, the Company had a Level 3 financial instrument related to its derivative liability. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. Revenue is derived from the sale of artificial intelligence and machine learning focused technology products and related services. 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 8). Contract liabilities include amounts billed to customers in excess of revenue recognized and are presented as contract liabilities on the consolidated balance sheets (see Note 8). A contract asset is recognized for incremental costs to obtain a customer contract that are recoverable, otherwise such incremental costs are expensed as incurred. |
Cost of Revenue | Cost of Revenue Cost of revenue represents the cost of the artificial intelligence and machine learning focused technology products and related services sold during the periods presented. |
Share-Based Compensation | Share-Based Compensation The Company computes share based payments in accordance with the provisions of ASC Topic 718, Compensation – Stock Compensation Restricted stock awards are granted at the discretion of the compensation committee of the board of directors of the Company (the “Board of Directors”). These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of the Company’s common stock on the grant date. The Company estimates the fair value of stock options and warrants by using the Black-Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s common stock over the expected term of the option. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505–50, “Equity Based Payments to Non–Employees.” The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily determinable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. |
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 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 using the effective interest method. |
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 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, 2020, 2019, 2018, and 2017 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, 2020 and 2019. |
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 years ended June 30, 2020 and 2019, as we incurred a net loss for such periods. At June 30, 2020, there were outstanding warrants to purchase up to 37,390,452 shares of the Company’s common stock, notes payable with convertible features that if converted, would total 2,529,007 shares of the Company’s common stock, 2,666,666 shares of the Company’s common stock to be issued in conjunction with the CloseComms acquisition, and 115,817 restricted shares of the Company’s common stock to be issued upon vesting pursuant to the terms of an employment agreement with its Chief Financial Officer. 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. |
Modification/Extinguishment of Debt | Modification/Extinguishment of Debt In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective July 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases Revenue Recognition Revenue from Contracts with Customers Leases Leases Effective July 1, 2019, the Company adopted ASU 2017-11, Update to Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted During August 2020, the FASB issued ASU 2020-06, to modify and simplify the application of U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. The standard is effective for the Company as of July 1, 2024, with early adoption permitted. The Company is reviewing the impact of this guidance on its consolidated financial statements. During August 2018, the FASB issued ASU 2018-13, Fair Value Measurement 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Foreign Currencies Translation Exchange Rate | The exchange rates used to translate amounts in INR (beginning March 19, 2019) and GBP (beginning May 11, 2020) into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: June 30, 2020 June 30, 2019 Period-end INR: USD exchange rate $ 0.01329 $ 0.01453 Period-end GBP: USD exchange rate $ 1.23244 $ - Income statement: June 30, 2020 June 30, 2019 Average Annual INR: USD exchange rate $ 0.01386 $ 0.01456 Average Annual GBP: USD exchange rate $ 1.23680 $ - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | At June 30, 2020 and 2019, the Company’s property and equipment consist of the following: June 30, 2020 2019 Computer equipment $ 135,360 $ 110,331 Research and development equipment 48,383 48,383 Furniture and fixtures 52,025 51,835 Property and equipment, at cost 235,768 210,549 Less: accumulated depreciation (203,099 ) (199,501 ) Property and equipment, net $ 32,669 $ 11,048 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Schedule of Revenue and Net Loss of the Acquisitions | The revenue and net loss of the combined entity had the acquisition date been July 1, 2018, are as follows for the year ended June 30, 2019: Supplemental pro forma: Revenue $ 4,554,594 Net loss $ (2,959,165 ) |
Alpha Predictions LLP [Member] | |
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 |
Other Acquisitions (Tables)
Other Acquisitions (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Other Acquisitions | |
Schedule of Assets Acquired and Liabilities Assumed Recognized | The following table summarizes the consideration paid and based upon the purchase price allocation, the estimated relative fair value of the assets acquired and liabilities assumed at the acquisition date: Consideration 2,666,666 shares of mPhase Technologies, Inc. common stock to be issued valued at $0.3583 per share $ 955,466 Fair value of total consideration transferred 955,466 Recognized amounts of identifiable assets acquired and liabilities assumed Cash 70,000 Property and equipment 35,956 Intangible asset – purchased software 954,918 Accounts payable (2,667 ) Other current liabilities (102,7413 ) Total acquired net assets $ 955,466 |
Intangible Asset - Purchased _2
Intangible Asset - Purchased Software, Net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Asset | Intangible asset – Purchased Software, net, is comprised of the following at: June 30, 2020 2019 Purchased software $ 3,759,021 $ 3,025,801 Less: accumulated amortization (923,904 ) - Purchased software, net $ 2,835,117 $ 3,025,801 |
Schedule of Intangible Asset by Developed Software | Intangible asset – Purchased Software consists of the following three developed software technologies: Alpha Predictions purchased software $ 1,772,312 Travel Buddhi purchased software 113,099 CloseComms purchased software 949,706 Total purchased software $ 2,835,117 |
Schedule of Future Amortization Expense | Future amortization expense related to the existing net carrying amount of developed software at June 30, 2020 is expected to be as follows: Fiscal year 2021 $ 1,063,290 Fiscal year 2022 1,240,425 Fiscal year 2023 354,268 Fiscal year 2024 177,134 $ 2,835,117 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Category | The following table presents our revenue disaggregated by category and primary geographic regions within our single reporting segment: For the Year Ended June 30, 2020 2019 Categories: Subscription $ 24,720,000 $ - Service and support 3,515,438 - Application development and implementation 2,040,984 - Technology platform (one-time instance sale) - 2,500,000 Total revenue $ 30,276,422 $ 2,500,000 Primary Geographic Regions: India 100 % 100 % 100 % 100 % |
Schedule of Long-lived Assets | The following table presents our long-lived assets by primary geographic regions within our single reporting segment: For the Year Ended June 30, 2020 2019 India $ 1,901,040 $ 3,045,927 United Kingdom 982,052 - Total long-lived assets $ 2,883,092 $ 3,045,927 |
Schedule of Reconciliation of the Contract Liabilities | The following table presents a reconciliation of the contract liabilities from June 30, 2019 to June 30, 2020: June 30, 2019 $ - Contract liability deferral 254,732 Amortization of contract liability to revenue (35,080 ) June 30, 2020 $ 219,652 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses is comprised of the following at: June 30, 2020 2019 Accrued interest $ 118,161 $ 104,179 Accrued wages 485,647 208,353 Other expenses 520,034 150,601 Accrued payment for acquired technology intangible asset - 2,905,668 Total accrued expenses $ 1,123,842 $ 3,368,801 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable is comprised of the following: June 30, 2020 2019 Note payable, SBA – Paycheck Protection Program [1] $ 33,388 $ - Note payable, SBA – Economic Injury Disaster Loan [2] 154,540 - Note payable, John Fife (dba St. George Investors)/Judgment Settlement Agreement [3] 771,702 855,660 Total notes payable $ 959,630 $ 855,660 Less: current portion of notes payable (792,171 ) (855,660 ) Long-term portion of notes payable $ 167,459 $ - [1] [2] [3] |
Convertible Debt Arrangements (
Convertible Debt Arrangements (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 JMJ Financial $ 109,000 $ 109,000 Accredited Investors 565,000 78,000 Unamortized OID, deferred financings costs, and debt discounts (375,359 ) (75,649 ) Total convertible debt arrangements, net $ 298,641 $ 111,351 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
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, 2020: Conversion 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 Initial fair value of derivative liability recorded as debt discount 1,115,000 Initial fair value of derivative liability charged to other expense 1,610,913 Gain on change in fair value included in earnings (1,961,951 ) June 30, 2020 $ 897,631 |
Schedule of Derivative Assumptions | The Company used the following range of assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with binomial simulations at June 30, 2020: Expected volatility 195.3% - 250.8 % Expected term 5.1 – 11.4 months Risk-free interest rate 0.16% - 0.18 % Stock price $ 0.08 |
Schedule of Fair Value On Recurring Basis Derivative Liability | Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of June 30, 2020 and 2019: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability, June 30, 2020 $ - $ - $ 897,631 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability, June 30, 2019 $ - $ - $ 133,669 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Assumptions Used | The following assumptions were utilized during the years ended June 30, 2020 and 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, 2020: Warrants Weighted Exercise Price Intrinsic Outstanding, June 30, 2019 4,985,394 $ 0.50 $ - Warrants earned 32,405,058 0.50 - Warrants forfeited - - - Outstanding, June 30, 2020 37,390,452 $ 0.50 $ - Common stock issuable upon exercise of warrants 37,390,452 $ 0.50 $ - The following table sets forth common stock purchase warrants outstanding at June 30, 2019: Warrants Weighted Exercise Price Intrinsic 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 Common Stock Issuable Upon Range of Prices Number Weighted Weighted Number Weighted $ 0.50 37,390,452 4.30 $ 0.50 37,390,452 $ 0.50 37,390,452 4.30 $ 0.50 37,390,452 $ 0.50 Common Stock Issuable Upon Exercise of Common Stock Issuable Upon Range of Prices Number Weighted Weighted Number Weighted $ 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 | At March 31, 2020, 315,949 shares of common stock remained unsold from the initial Settlement Reserve to settle prior liabilities and 185,063, shares of common stock remained unsold from the Funding Reserve to fund continuing operations as follows: Settlement 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 March 31, 2020 (1,590,811 ) (314,937 ) Shares of Common Stock unsold at March 31, 2020 315,949 185,063 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of Effective Income Tax Rates | At June 30, 2020 and 2019, the difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows: June 30, 2020 2019 Statutory federal rate 21.0 % (21.0 )% State income tax rate, net of federal benefit 6.5 % (7.2 )% Permanent differences, including stock based compensation and beneficial conversion interest expense (0.1 )% 28.9 % Change in valuation allowance (27.4 )% (0.7 )% Effective tax rate - % - % |
Schedule of Deferred Tax Assets and Liability | At June 30, 2020 and 2019, the Company’s deferred tax assets were as follows: June 30, 2020 2019 Deferred tax assets Federal and state net operating loss carry forward $ 23,838,735 $ 26,156,755 Deferred stock warrants 5,157,262 - Other temporary differences 509,789 - Total deferred tax asset 29,505,786 26,156,755 Net deferred tax asset 29,505,786 26,156,755 Less: valuation allowance (29,505,786 ) (26,156,755 ) $ - $ - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
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, 2020 June 30, 2019 Discontinued Continuing Total Discontinued Continuing Total Assets Current Assets Cash $ - $ 142,413 $ 142,413 $ - $ 33,996 $ 33,996 Accounts receivable, net - 14,048,095 14,048,095 - 2,526,155 2,526,155 Prepaid expenses - 4,477 4,477 - 8,820 8,820 Other assets - 176,008 176,008 - - - Total Current Assets - 14,370,993 14,370,993 - 2,568,971 2,568,971 Property and equipment, net - 32,669 32,669 - 11,048 11,048 Goodwill - 3,636 3,636 - 6,020 6,020 Intangible asset – purchased software, net - 2,835,117 2,835,117 - 3,025,801 3,025,801 Other assets - 11,670 11,670 - 3,058 3,058 Total Assets $ - $ 17,254,085 $ 17,254,085 $ - $ 5,614,898 $ 5,614,898 Liabilities Current Liabilities Accounts payable $ 82,795 $ 7,897,887 $ 7,980,682 $ 82,795 $ 366,274 $ 449,069 Accrued expenses - 1,123,842 1,123,842 - 3,368,801 3,368,801 Contract liabilities - 219,652 219,652 - - - Due to related parties - 84,485 84,485 - 65,459 65,459 Notes payable to officer - 26,818 26,818 - 25,251 25,251 Notes payable - 20,469 20,469 - - - Convertible notes payable, net - 189,641 189,641 - 2,351 2,351 Liabilities in arrears with convertible features - 109,000 109,000 - 109,000 109,000 Liabilities in arrears - judgement settlement agreement - 771,702 771,702 - 855,660 855,660 Derivative liability - 897,631 897,631 - 133,669 133,669 Total Current Liabilities $ 82,795 $ 11,341,127 $ 11,423,922 $ 82,795 $ 4,926,465 $ 5,009,260 |
Schedule of Revenue and Expenses Discontinued Operations | During the fiscal year ended June 30, 2019, the revenue and expenses associated with the discontinued operations included in our Consolidated Statements of Operations were as follows: 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 Operating loss - (1,765,886 ) (1,765,886 ) Other Income (Expense): Interest expense (11,508 ) (210,594 ) (222,102 ) 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 Other income - - - Total Other Income (Expense) 18,940 (208,215 ) (189,275 ) Income (Loss) before income taxes 18,940 (1,974,101 ) (1,955,161 ) Income taxes - - - Net income (loss) $ 18,940 $ (1,974,101 ) $ (1,955,161 ) |
Organization and Nature of Bu_2
Organization and Nature of Business (Details Narrative) | Jun. 30, 2019 |
Alpha Predictions LLP [Member] | |
Business acquisition, percentage of voting interests acquired | 99.00% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss incurred | $ (14,093,567) | $ (1,955,161) |
Net cash used in operating activities | 1,344,033 | 203,970 |
Working capital | (2,801,942) | |
Accumulated deficit | $ (227,727,420) | $ (213,633,853) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Concentration risk, percentage | 100.00% | 100.00% |
Cash and cash equivalents | ||
Aggregate settlement amount | 22,500,000 | |
Allowance for doubtful account receivable | ||
Depreciation expense | 929,924 | |
Impairment of long lived assets | ||
Intangible asset - purchased software, net | $ 2,835,117 | 3,025,801 |
Amortization expense of intangible assets | ||
Income tax examination, likelihood of unfavourable settlement | Greater than 50 percent | |
CloseComms Acquisition [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 2,666,666 | |
Restricted Shares [Member] | Employment Agreement [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 115,817 | |
Third Party and Former Officer [Member] | Note Payable [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 2,529,007 | 232,750 |
Common Stock [Member] | Third Party and Former Officer [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 37,390,452 | 4,985,394 |
Technology Platforms [Member] | ||
Capitalized software development costs | $ 3,759,021 | |
Amortization expense of capitalized software development costs | $ 923,904 | |
Patents and Licenses [Member] | ||
Finite-lived intangible asset, useful life | 5 years | |
Intangible asset - purchased software, net | $ 214,383 | 214,383 |
Amortization expense of intangible assets | ||
Minimum [Member] | ||
Property and equipment, estimated useful life | P3Y | |
Maximum [Member] | ||
Property and equipment, estimated useful life | P7Y | |
Cost of Revenue [Member] | One Supplier [Member] | ||
Concentration risk, percentage | 100.00% | |
Accounts Payable [Member] | One Supplier [Member] | ||
Concentration risk, percentage | 95.00% | |
One Customer [Member] | Revenue [Member] | ||
Concentration risk, percentage | 100.00% | 100.00% |
One Customer [Member] | Accounts Receivable [Member] | ||
Concentration risk, percentage | 100.00% | 99.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Foreign Currencies Translation Exchange Rate (Details) | Jun. 30, 2020 | Jun. 30, 2019 |
Period-end INR [Member] | ||
Foreign currency translation exchange rate | 0.01329 | 0.01453 |
Period-end GBP [Member] | ||
Foreign currency translation exchange rate | 1.23244 | |
Average Annual INR [Member] | ||
Foreign currency translation exchange rate | 0.01386 | 0.01456 |
Average Annual GBP [Member] | ||
Foreign currency translation exchange rate | 1.23680 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 6,020 | |
Property and equipment impairments |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Property and equipment, at cost | $ 235,768 | $ 210,549 |
Less: accumulated depreciation | (203,099) | (199,501) |
Property and equipment, net | 32,669 | 11,048 |
Computer Equipment [Member] | ||
Property and equipment, at cost | 135,360 | 110,331 |
Research and Development Equipment [Member] | ||
Property and equipment, at cost | 48,383 | 48,383 |
Furniture and Fixtures [Member] | ||
Property and equipment, at cost | $ 52,025 | $ 51,835 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill | $ 3,636 | $ 6,020 |
Acquisition-related costs | ||
Intangible Asset- Developed Software [Member] | ||
Intangible Asset, estimated useful life | 3 years | |
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 ($) | May 11, 2020 | Jun. 30, 2019 | Jun. 30, 2020 |
Business Combinations [Abstract] | |||
Cash | $ 955,466 | $ 1,438 | |
Fair value of total consideration transferred | 955,466 | 1,438 | |
Cash | 70,000 | 3,127 | |
Accounts receivable | 26,155 | ||
Prepaid expenses | 7,488 | ||
Property and equipment | 35,956 | 11,048 | |
Intangible asset - purchased software | 954,918 | 2,905,668 | |
Accounts payable | (2,667) | (26,067) | |
Accrued expenses and other current liabilities | (2,924,288) | ||
Income tax provision, current | (7,713) | ||
Total identifiable net assets | $ 955,466 | (4,582) | |
Goodwill | $ 6,020 | $ 3,636 |
Business Acquisition - Schedu_2
Business Acquisition - Schedule of Revenue and Net Loss of the Acquisitions (Details) | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Business Combinations [Abstract] | |
Revenue | $ 4,554,594 |
Net loss | $ (2,959,165) |
Other Acquisitions (Details Nar
Other Acquisitions (Details Narrative) - USD ($) | May 11, 2020 | Mar. 11, 2020 | Feb. 15, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Number of restricted shares for common stock | 2,666,666 | ||||
Restricted shares for common stock, value | $ 149,606 | ||||
Asset acquisition | $ 553 | ||||
Travel Buddhi Developed Software [Member] | |||||
Asset acquisition | $ 115,281 | 55,000 | |||
Asset purchase price remaining outstanding amount | $ 60,281 | ||||
Asset Purchase Agreement [Member] | |||||
Number of restricted shares for common stock | 2,666,666 | ||||
Restricted shares for common stock, value | $ 955,466 |
Other Acquisitions - Schedule o
Other Acquisitions - Schedule of Assets Acquired and Liabilities Assumed Recognized (Details) - USD ($) | May 11, 2020 | Jun. 30, 2019 |
Other Acquisitions | ||
2,666,666 shares of mPhase Technologies, Inc. common stock to be issued valued at $0.3583 per share | $ 955,466 | $ 1,438 |
Fair value of total consideration transferred | 955,466 | 1,438 |
Cash | 70,000 | 3,127 |
Property and equipment | 35,956 | 11,048 |
Intangible asset - purchased software | 954,918 | 2,905,668 |
Accounts payable | (2,667) | (26,067) |
Other current liabilities | (1,027,413) | |
Total acquired net assets | $ 955,466 | $ (4,582) |
Other Acquisitions - Schedule_2
Other Acquisitions - Schedule of Assets Acquired and Liabilities Assumed Recognized (Details) (Parenthetical) | May 11, 2020$ / sharesshares |
Other Acquisitions | |
Number of shares issued on restricted shares, shares | shares | 2,666,666 |
Shares issued price per share | $ / shares | $ 0.3583 |
Intangible Asset - Purchased _3
Intangible Asset - Purchased Software, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Amortization expense related to purchased software | ||
Developed Software [Member] | ||
Amortized of straight line term | 3 years | |
Amortization expense related to purchased software | $ 923,904 |
Intangible Asset - Purchased _4
Intangible Asset - Purchased Software, Net - Schedule of Intangible Asset (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Purchased software | $ 3,759,021 | $ 3,025,801 |
Less: accumulated amortization | (923,904) | |
Intangible asset - purchased software, net | $ 2,835,117 | $ 3,025,801 |
Intangible Asset - Purchased _5
Intangible Asset - Purchased Software, Net - Schedule of Intangible Asset by Developed Software (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Total purchased software | $ 2,835,117 | $ 3,025,801 |
Alpha Predictions Purchased Software [Member] | ||
Total purchased software | 1,772,312 | |
Travel Buddhi Purchased Software [Member] | ||
Total purchased software | 113,099 | |
CloseComms purchased software [Member] | ||
Total purchased software | $ 949,706 |
Intangible Asset - Purchased _6
Intangible Asset - Purchased Software, Net - Schedule of Future Amortization Expense (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Fiscal year 2021 | $ 1,063,290 | |
Fiscal year 2022 | 1,240,425 | |
Fiscal year 2023 | 354,268 | |
Fiscal year 2024 | 177,134 | |
Intangible asset - purchased software, net | $ 2,835,117 | $ 3,025,801 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Concentration risk percentage | 100.00% | 100.00% |
Contract liabilities | $ 219,652 | |
One Customer [Member] | Sales Revenue [Member] | ||
Concentration risk percentage | 100.00% | 100.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Revenue Disaggregated by Category (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Total revenue | $ 30,276,422 | $ 2,500,000 |
Concentration risk percentage | 100.00% | 100.00% |
India [Member] | ||
Concentration risk percentage | 100.00% | 100.00% |
Subscription [Member] | ||
Total revenue | $ 24,720,000 | |
Service and Support [Member] | ||
Total revenue | 3,515,438 | |
Application Development and Implementation [Member] | ||
Total revenue | 2,040,984 | |
Technology platform (one-time instance sale) | ||
Total revenue | $ 2,500,000 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Long-lived Assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Total long-lived assets | $ 2,883,092 | $ 3,045,927 |
India [Member] | ||
Total long-lived assets | 1,901,040 | 3,045,927 |
United Kingdom [Member] | ||
Total long-lived assets | $ 982,052 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Reconciliation of the Contract Liabilities (Details) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Begining balance, contract liabilities | |
Contract liability deferral | 254,732 |
Amortization of contract liability to revenue | (35,080) |
Ending balance, contract liabilities | $ 219,652 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 118,161 | $ 104,179 |
Accrued wages | 485,647 | 208,353 |
Other expenses | 520,034 | 150,601 |
Accrued payment for acquired technology intangible asset | 2,905,668 | |
Total accrued expenses | $ 1,123,842 | $ 3,368,801 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Jun. 30, 2020 | May 28, 2020 | Apr. 28, 2020 | Jun. 30, 2019 | |||
Total notes payable | $ 959,630 | $ 855,660 | |||||
Less: current portion of notes payable | 20,469 | ||||||
Long-term portion of notes payable | 167,459 | ||||||
Notes Payable One [Member] | |||||||
Total notes payable | 33,388 | [1] | $ 33,333 | [1] | |||
Less: current portion of notes payable | 18,381 | ||||||
Long-term portion of notes payable | 15,007 | ||||||
Notes Payable Two [Member] | |||||||
Total notes payable | 154,540 | [2] | $ 150,000 | [2] | |||
Less: current portion of notes payable | 149,078 | ||||||
Long-term portion of notes payable | 5,462 | ||||||
Notes Payable Three [Member] | |||||||
Total notes payable | [3] | $ 771,702 | $ 855,660 | ||||
[1] | Effective April 28, 2020, the Company entered into a promissory note with an approved lender in the principal amount of $33,333. The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and the terms of the Paycheck Protection Program of the U.S. Small Business Administration's 7(a) Loan Program. The note accrues interest for the first six months following the issuance date at a rate of 1% per annum, (increasing to 6% per annum upon the occurrence of an Event of Default (as defined in the note)), and beginning November 28, 2020, requires 18 monthly payments of $1,876 each, consisting of principal and interest until paid in full on April 28, 2022. The note may be prepaid by the Company at any time prior to the maturity date with no prepayment penalties. Additionally, any portion of the note up to the entire principal and accrued interest balance may be forgiven in the event the Company satisfies certain requirements as determined by the CARES Act. The Company expects to satisfy the requirements for forgiveness of the entire principal and accrued interest balance and will apply for such forgiveness by the deadline. At June 30, 2020, $15,007 was recorded as a current liability within notes payable and $18,381 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. | ||||||
[2] | Effective May 28, 2020, the Company entered into a promissory note and security agreement with the U.S. Small Business Administration ("SBA") in the principal amount of $150,000. The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and the terms of the COVID-19 Economic Injury Disaster Loan ("EIDL") program of the U.S. Small Business Administration's EIDL Program. The note accrues interest at a rate of 3.75% per annum, and beginning May 28, 2021, requires monthly payments of $731 each, consisting of principal and interest until paid in full on May 28, 2050. The note may be prepaid by the Company at any time prior to the maturity date with no prepayment penalties. Additionally, this promissory note is collateralized by certain of the Company's property as specified within the security agreement. Furthermore, on June 4, 2020, the Company received $4,000 from the SBA, which it is currently working to obtain details from the SBA regarding this amount. As such, at June 30, 2020, the Company recorded this amount as a current liability. At June 30, 2020, $5,462 was recorded as a current liability within notes payable and $149,078 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. | ||||||
[3] | 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 was required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 which was due and payable in March of 2020. The Company made all required payments with the exception of the final payment of $195,000 which was due and payable in March of 2020. On August 17, 2020, the Company entered into a second amendment (the "Second Amendment") to the Judgement Settlement Agreement, whereby the Company issued a convertible promissory note in the principal amount of $300,000 (the "Note") to repay the amounts still outstanding under the Judgment Settlement Agreement. The Note matures on August 17, 2021, bears interest at a rate of 10% per annum, requires certain monthly minimum cash payments as specified in the Note, and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note. The Note may be prepaid by the Company at any time prior to maturity without penalty. 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 to be immediately due and payable by the Company. The ultimate final payment amount is expected to be less than the liability balance of $771,702 presented as liabilities in arrears - judgement settlement agreement on the consolidated balance sheets. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Aug. 17, 2020 | Jun. 04, 2020 | May 28, 2020 | Apr. 28, 2020 | Dec. 10, 2018 | Nov. 20, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Total notes payable | $ 959,630 | $ 855,660 | ||||||||
Notes payable net of current | 167,459 | |||||||||
Notes payable current | $ 20,469 | |||||||||
Debt converted into shares | 5,872,362 | |||||||||
Proceeds from notes payable | $ 187,333 | |||||||||
Subsequent Event [Member] | ||||||||||
Debt converted into shares | 16,331,766 | |||||||||
Judgment Settlement Agreement [Member] | ||||||||||
Debt payment terms description | Under the terms of the Judgment Settlement Agreement, the Company was required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 which was due and payable in March of 2020. The Company made all required payments with the exception of the final payment of $195,000 which was due and payable in March of 2020. | |||||||||
Debt instrument, periodic payment | $ 15,000 | |||||||||
Debt instrument maturity date | Mar. 31, 2020 | |||||||||
Judgment Settlement Agreement [Member] | Subsequent Event [Member] | ||||||||||
Debt instrument maturity date | Aug. 17, 2021 | |||||||||
Judgement Settlement Agreement [Member] | ||||||||||
Debt final payments | $ 195,000 | |||||||||
Judgement Settlement Agreement [Member] | Convertible Promissory Note [Member] | Subsequent Event [Member] | ||||||||||
Total notes payable | $ 300,000 | |||||||||
Debt instruement interest rate | 10.00% | |||||||||
Debt instrument maturity date | Aug. 17, 2021 | |||||||||
Default amount includes principal and interest | $ 771,702 | |||||||||
Notes Payable One [Member] | ||||||||||
Total notes payable | $ 33,333 | 33,388 | [1] | [1] | ||||||
Debt instruement interest rate | 1.00% | |||||||||
Debt payment terms description | The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and the terms of the Paycheck Protection Program of the U.S. Small Business Administration's 7(a) Loan Program. The note accrues interest for the first six months following the issuance date at a rate of 1% per annum, (increasing to 6% per annum upon the occurrence of an Event of Default (as defined in the note)), and beginning November 28, 2020, requires 18 monthly payments of $1,876 each, consisting of principal and interest until paid in full on April 28, 2022. | |||||||||
Debt instrument, periodic payment | $ 1,876 | |||||||||
Debt instrument maturity date | Apr. 28, 2022 | |||||||||
Notes payable net of current | 15,007 | |||||||||
Notes payable current | 18,381 | |||||||||
Notes Payable Two [Member] | ||||||||||
Total notes payable | $ 150,000 | 154,540 | [2] | [2] | ||||||
Debt instruement interest rate | 3.75% | |||||||||
Debt payment terms description | The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and the terms of the COVID-19 Economic Injury Disaster Loan ("EIDL") program of the U.S. Small Business Administration's EIDL Program. The note accrues interest at a rate of 3.75% per annum, and beginning May 28, 2021, requires monthly payments of $731 each, consisting of principal and interest until paid in full on May 28, 2050 | |||||||||
Debt instrument, periodic payment | $ 731 | |||||||||
Debt instrument maturity date | May 28, 2050 | |||||||||
Notes payable net of current | 5,462 | |||||||||
Notes payable current | $ 149,078 | |||||||||
Proceeds from notes payable | $ 4,000 | |||||||||
[1] | Effective April 28, 2020, the Company entered into a promissory note with an approved lender in the principal amount of $33,333. The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and the terms of the Paycheck Protection Program of the U.S. Small Business Administration's 7(a) Loan Program. The note accrues interest for the first six months following the issuance date at a rate of 1% per annum, (increasing to 6% per annum upon the occurrence of an Event of Default (as defined in the note)), and beginning November 28, 2020, requires 18 monthly payments of $1,876 each, consisting of principal and interest until paid in full on April 28, 2022. The note may be prepaid by the Company at any time prior to the maturity date with no prepayment penalties. Additionally, any portion of the note up to the entire principal and accrued interest balance may be forgiven in the event the Company satisfies certain requirements as determined by the CARES Act. The Company expects to satisfy the requirements for forgiveness of the entire principal and accrued interest balance and will apply for such forgiveness by the deadline. At June 30, 2020, $15,007 was recorded as a current liability within notes payable and $18,381 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. | |||||||||
[2] | Effective May 28, 2020, the Company entered into a promissory note and security agreement with the U.S. Small Business Administration ("SBA") in the principal amount of $150,000. The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and the terms of the COVID-19 Economic Injury Disaster Loan ("EIDL") program of the U.S. Small Business Administration's EIDL Program. The note accrues interest at a rate of 3.75% per annum, and beginning May 28, 2021, requires monthly payments of $731 each, consisting of principal and interest until paid in full on May 28, 2050. The note may be prepaid by the Company at any time prior to the maturity date with no prepayment penalties. Additionally, this promissory note is collateralized by certain of the Company's property as specified within the security agreement. Furthermore, on June 4, 2020, the Company received $4,000 from the SBA, which it is currently working to obtain details from the SBA regarding this amount. As such, at June 30, 2020, the Company recorded this amount as a current liability. At June 30, 2020, $5,462 was recorded as a current liability within notes payable and $149,078 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. |
Convertible Debt Arrangements_2
Convertible Debt Arrangements (Details Narrative) | Jun. 16, 2020USD ($) | Jun. 12, 2020USD ($)Integer | Jun. 03, 2020USD ($) | Jun. 02, 2020USD ($)Integer | Apr. 21, 2020USD ($) | Apr. 21, 2020USD ($) | Mar. 05, 2020USD ($) | Mar. 03, 2020USD ($)Integer | Feb. 26, 2020USD ($) | Feb. 24, 2020USD ($)Integer | Jan. 23, 2020USD ($) | Jan. 21, 2020USD ($)Integer | Jan. 13, 2020USD ($) | Jan. 09, 2020USD ($)Integer$ / shares | Dec. 17, 2019USD ($)Integer | Dec. 04, 2019USD ($) | Dec. 03, 2019USD ($) | Dec. 02, 2019USD ($)Integer$ / shares | Dec. 02, 2019USD ($)Integer$ / shares | Sep. 24, 2019USD ($)Integer | Sep. 09, 2019USD ($) | Sep. 05, 2019USD ($)Integer | Aug. 23, 2019USD ($) | Jul. 30, 2019USD ($)Integer | Jun. 19, 2019USD ($)Integer | Apr. 10, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares |
Convertible notes payable | $ 565,000 | $ 78,000 | ||||||||||||||||||||||||||
Debt conversion of shares | shares | 5,872,362 | |||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.08 | $ 0.85 | ||||||||||||||||||||||||||
Debt principal amount | $ 288,182 | |||||||||||||||||||||||||||
Gain (loss)on extinguishment debt | (363,319) | $ 60,398 | ||||||||||||||||||||||||||
Proceeds from debt | 1,116,800 | 53,000 | ||||||||||||||||||||||||||
Default amount on convertible note | 477,763 | |||||||||||||||||||||||||||
Derivative liability | 897,631 | 133,669 | ||||||||||||||||||||||||||
Amortization of original issue discount, deferred financing costs, and debt discount | 899,491 | 2,350 | ||||||||||||||||||||||||||
Convertible notes | 298,641 | 111,351 | ||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 116,619 | 84,475 | ||||||||||||||||||||||||||
Debt discount | 375,359 | 75,649 | ||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | $ 2,717,417 | $ 2,717,417 | ||||||||||||||||||||||||||
Accrued interest | $ 7,499 | $ 7,499 | ||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.50 | $ 0.50 | $ 0.50 | |||||||||||||||||||||||||
Repayments of debt | $ 4,200 | |||||||||||||||||||||||||||
Debt principal amount | $ 103,000 | $ 78,000 | $ 63,000 | $ 53,000 | $ 68,000 | $ 110,000 | $ 81,000 | $ 200,000 | $ 200,000 | $ 124,200 | $ 78,000 | |||||||||||||||||
Debt interest rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||||||||||||||
Debt maturity date | Jun. 12, 2021 | Jun. 2, 2021 | Mar. 3, 2021 | Feb. 24, 2021 | Jan. 21, 2021 | Jan. 9, 2021 | Dec. 17, 2020 | Dec. 2, 2020 | Sep. 24, 2020 | Jun. 19, 2020 | ||||||||||||||||||
Proceeds from debt | $ 100,000 | $ 75,000 | $ 60,000 | $ 50,000 | $ 65,000 | $ 100,000 | $ 73,500 | $ 182,500 | $ 45,800 | |||||||||||||||||||
Default amount on convertible note | 25,000 | |||||||||||||||||||||||||||
Payment to reimburse amount | $ 3,000 | $ 3,000 | $ 3,000 | $ 3,000 | $ 3,000 | $ 5,000 | $ 1,500 | $ 10,000 | $ 3,000 | $ 3,000 | ||||||||||||||||||
Debt conversion percentage | 62.00% | 62.00% | 62.00% | 62.00% | 62.00% | 60.00% | 62.00% | 60.00% | 62.00% | 62.00% | ||||||||||||||||||
Conversion trading days | Integer | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | ||||||||||||||||||
Derivative liability | $ 182,451 | $ 141,925 | $ 95,397 | $ 85,377 | $ 127,475 | $ 217,338 | $ 204,986 | $ 588,000 | $ 588,000 | $ 208,335 | $ 103,161 | |||||||||||||||||
Deferred financing cost | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | 5,000 | 1,500 | 10,000 | 10,000 | 3,000 | 3,000 | |||||||||||||||||
Debt discount | $ 100,000 | $ 75,000 | $ 60,000 | $ 50,000 | $ 65,000 | 100,000 | 73,500 | 182,500 | 182,500 | 112,000 | $ 75,000 | |||||||||||||||||
Debt original issued discount | $ 5,000 | $ 6,000 | 7,500 | $ 9,200 | ||||||||||||||||||||||||
Conversion feature increased | $ 211,803 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note One [Member] | ||||||||||||||||||||||||||||
Debt principal amount | $ 53,000 | |||||||||||||||||||||||||||
Debt interest rate | 8.00% | |||||||||||||||||||||||||||
Debt maturity date | Jul. 30, 2020 | |||||||||||||||||||||||||||
Proceeds from debt | $ 50,000 | |||||||||||||||||||||||||||
Payment to reimburse amount | $ 3,000 | |||||||||||||||||||||||||||
Debt conversion percentage | 62.00% | |||||||||||||||||||||||||||
Conversion trading days | Integer | 20 | |||||||||||||||||||||||||||
Derivative liability | $ 116,014 | |||||||||||||||||||||||||||
Deferred financing cost | 3,000 | |||||||||||||||||||||||||||
Debt discount | $ 50,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 6% Convertible Promissory Note One [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 5,000 | |||||||||||||||||||||||||||
Accrued interest | 270 | |||||||||||||||||||||||||||
Debt principal amount | $ 5,000 | |||||||||||||||||||||||||||
Debt interest rate | 6.00% | |||||||||||||||||||||||||||
Debt maturity date | Aug. 23, 2020 | |||||||||||||||||||||||||||
Debt conversion percentage | 25.00% | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Two [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 883,593 | |||||||||||||||||||||||||||
Accrued interest | 5,228 | |||||||||||||||||||||||||||
Repayments of debt | $ 3,200 | |||||||||||||||||||||||||||
Debt principal amount | $ 53,000 | 124,200 | ||||||||||||||||||||||||||
Gain (loss)on extinguishment debt | 53,123 | |||||||||||||||||||||||||||
Debt interest rate | 8.00% | |||||||||||||||||||||||||||
Debt maturity date | Sep. 5, 2020 | |||||||||||||||||||||||||||
Proceeds from debt | 46,800 | |||||||||||||||||||||||||||
Payment to reimburse amount | $ 3,000 | |||||||||||||||||||||||||||
Debt conversion percentage | 62.00% | |||||||||||||||||||||||||||
Conversion trading days | Integer | 20 | |||||||||||||||||||||||||||
Derivative liability | $ 104,860 | |||||||||||||||||||||||||||
Deferred financing cost | 3,000 | |||||||||||||||||||||||||||
Debt discount | $ 50,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Three [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 25,000 | |||||||||||||||||||||||||||
Accrued interest | 1,138 | |||||||||||||||||||||||||||
Debt principal amount | 175,000 | |||||||||||||||||||||||||||
Gain (loss)on extinguishment debt | 148,306 | |||||||||||||||||||||||||||
Convertible notes | 14,452 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Six [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 10,000 | |||||||||||||||||||||||||||
Accrued interest | 3,415 | |||||||||||||||||||||||||||
Debt principal amount | 71,000 | |||||||||||||||||||||||||||
Gain (loss)on extinguishment debt | 10,072 | |||||||||||||||||||||||||||
Default amount on convertible note | 1,288,977 | |||||||||||||||||||||||||||
Convertible notes | 5,370 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Seven [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 110,000 | |||||||||||||||||||||||||||
Accrued interest | $ 4,195 | |||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.70 | |||||||||||||||||||||||||||
Convertible notes | $ 52,137 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Eight [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 68,000 | |||||||||||||||||||||||||||
Accrued interest | 2,414 | |||||||||||||||||||||||||||
Convertible notes | 30,181 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Nine [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 53,000 | |||||||||||||||||||||||||||
Accrued interest | 1,487 | |||||||||||||||||||||||||||
Convertible notes | 18,586 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note Ten [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 63,000 | |||||||||||||||||||||||||||
Accrued interest | 1,657 | |||||||||||||||||||||||||||
Convertible notes | 20,712 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note 11 [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 78,000 | |||||||||||||||||||||||||||
Accrued interest | 496 | |||||||||||||||||||||||||||
Convertible notes | 6,197 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | 8% Convertible Promissory Note twelve [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 103,000 | |||||||||||||||||||||||||||
Accrued interest | 429 | |||||||||||||||||||||||||||
Convertible notes | 8,101 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor One [Member] | 8% Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Debt principal amount | $ 78,000 | $ 78,000 | ||||||||||||||||||||||||||
Debt interest rate | 8.00% | 8.00% | ||||||||||||||||||||||||||
Debt maturity date | Dec. 2, 2020 | |||||||||||||||||||||||||||
Proceeds from debt | $ 75,000 | |||||||||||||||||||||||||||
Payment to reimburse amount | $ 3,000 | |||||||||||||||||||||||||||
Debt conversion percentage | 62.00% | |||||||||||||||||||||||||||
Conversion trading days | Integer | 20 | |||||||||||||||||||||||||||
Derivative liability | $ 256,855 | $ 256,855 | ||||||||||||||||||||||||||
Deferred financing cost | 3,000 | 3,000 | ||||||||||||||||||||||||||
Debt discount | 75,000 | 75,000 | ||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Two [Member] | 8% Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 135,000 | 135,000 | ||||||||||||||||||||||||||
Accrued interest | $ 3,736 | $ 3,736 | ||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||||||||||||||
Debt interest rate | 8.00% | 8.00% | ||||||||||||||||||||||||||
Debt maturity date | Dec. 2, 2020 | |||||||||||||||||||||||||||
Proceeds from debt | $ 122,000 | |||||||||||||||||||||||||||
Payment to reimburse amount | $ 6,250 | |||||||||||||||||||||||||||
Debt conversion percentage | 60.00% | |||||||||||||||||||||||||||
Conversion trading days | Integer | 20 | |||||||||||||||||||||||||||
Derivative liability | $ 396,900 | $ 396,900 | ||||||||||||||||||||||||||
Deferred financing cost | 6,250 | 6,250 | ||||||||||||||||||||||||||
Debt discount | $ 122,000 | 122,000 | ||||||||||||||||||||||||||
Debt original issued discount | $ 6,750 | |||||||||||||||||||||||||||
Conversion feature increased | $ 142,967 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Two [Member] | 8% Convertible Promissory Note Five [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 50,000 | |||||||||||||||||||||||||||
Accrued interest | 2,331 | |||||||||||||||||||||||||||
Debt principal amount | 85,000 | |||||||||||||||||||||||||||
Gain (loss)on extinguishment debt | 7,235 | |||||||||||||||||||||||||||
Default amount on convertible note | 982,375 | |||||||||||||||||||||||||||
Conversion feature increased | 28,904 | |||||||||||||||||||||||||||
JMJ Financial [Member] | ||||||||||||||||||||||||||||
Convertible notes payable | 209,330 | 193,287 | ||||||||||||||||||||||||||
Accrued interest | $ 16,043 | $ 14,766 | ||||||||||||||||||||||||||
Debt conversion of shares | shares | 10,466 | 9,664 | ||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 20 | $ 20 | ||||||||||||||||||||||||||
Convertible notes | $ 109,000 | $ 109,000 | ||||||||||||||||||||||||||
M.H. Investment Trust II [Member] | ||||||||||||||||||||||||||||
Accrued interest | $ 3,737 | |||||||||||||||||||||||||||
Repayments of debt | 3,000 | |||||||||||||||||||||||||||
Debt principal amount | 3,333 | |||||||||||||||||||||||||||
Gain (loss)on extinguishment debt | $ 4,070 |
Convertible Debt Arrangements -
Convertible Debt Arrangements - Schedule of Notes Payable Under Convertible Debt and Debenture Agreements, Net (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Total convertible debt arrangements, net | $ 298,641 | $ 111,351 |
JMJ Financial [Member] | ||
Total convertible debt arrangements, net | 109,000 | 109,000 |
Accredited Investors [Member] | ||
Total convertible debt arrangements, net | 565,000 | 78,000 |
Unamortized OID, Deferred Financings Costs, and Debt Discounts [Member] | ||
Total convertible debt arrangements, net | $ (375,359) | $ (75,649) |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 897,631 | $ 133,669 |
Gain on change in fair value of derivative liability | $ 1,584,102 | $ (30,508) |
Conversion price per share | $ 0.08 | $ 0.85 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Reconciliation of the Derivative Liability (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability, beginning balance | $ 133,669 | |
Initial fair value of derivative liability recorded as debt discount | 1,115,000 | 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 | 1,610,913 | 25,161 |
Gain/Loss on change in fair value included in earnings | (1,961,951) | 30,508 |
Derivative liability, ending balance | $ 897,631 | $ 133,669 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Assumptions (Details) | 12 Months Ended |
Jun. 30, 2020$ / shares | |
Expected Volatility [Member] | Minimum [Member] | |
Fair value of measurement percentage | 195.3 |
Expected Volatility [Member] | Maximum [Member] | |
Fair value of measurement percentage | 250.8 |
Expected Term [Member] | Minimum [Member] | |
Fair value of measurement of term | 5 years 1 month 6 days |
Expected Term [Member] | Maximum [Member] | |
Fair value of measurement of term | 11 years 4 months 24 days |
Risk-free Interest Rate [Member] | Minimum [Member] | |
Fair value of measurement percentage | 0.16 |
Risk-free Interest Rate [Member] | Maximum [Member] | |
Fair value of measurement percentage | 0.18 |
Stock Price [Member] | |
Stock price | $ 0.08 |
Derivative Liability - Schedu_3
Derivative Liability - Schedule of Fair Value On Recurring Basis Derivative Liability (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Derivative liability | $ 897,631 | $ 133,669 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Derivative liability | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Derivative liability | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Derivative liability | $ 897,631 | $ 133,669 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | May 11, 2020$ / sharesshares | Jun. 30, 2019$ / sharesshares | May 22, 2019 | Dec. 31, 2018$ / sharesshares | Sep. 24, 2018USD ($)$ / sharesshares | Nov. 20, 2020shares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Aug. 04, 2020shares | Aug. 03, 2020shares | Jul. 14, 2020shares | Jun. 10, 2020shares | Jun. 09, 2020shares | Mar. 31, 2020shares | Sep. 04, 2019shares | Aug. 27, 2019shares | Aug. 26, 2019shares | Mar. 21, 2019$ / sharesshares | Mar. 20, 2019shares | Mar. 18, 2019shares | Mar. 17, 2019shares | Jan. 11, 2019shares | Jan. 04, 2019shares | Jun. 30, 2018USD ($) |
Classes of stock, shares authorized | 100,001,000 | |||||||||||||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 250,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 25,000,000 | 125,000,000,000 | 25,000,000 | 25,000,000 | 125,000,000,000 | 125,000,000,000 | |||||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||||||||
Common stock, shares issued | 11,689,078 | 19,318,679 | 11,689,078 | |||||||||||||||||||||
Common stock, shares outstanding | 11,689,078 | 19,174,492 | 11,689,078 | |||||||||||||||||||||
Common stock to be issued, shares | 2,666,666 | |||||||||||||||||||||||
Preferred stock, shares authorized | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||||||||||
Preferred stock, shares issued | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||
Stockholders' equity, reverse stock split | 1-for-5,000 | |||||||||||||||||||||||
Proceeds from sale of common stock | $ | $ 347,000 | $ 193,000 | ||||||||||||||||||||||
Share issued price per share | $ / shares | $ 0.3583 | |||||||||||||||||||||||
Issuance of common stock for services | $ | $ 46,500 | $ 575,000 | ||||||||||||||||||||||
Number of shares issued on restricted shares, shares | 2,666,666 | |||||||||||||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants, shares | 294,654 | 3,898,733 | ||||||||||||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants | $ | $ 219,517 | $ 1,801,057 | ||||||||||||||||||||||
Coomon stock to be issued for conversion of related party debts and strategic consultants, shares | 329,553 | |||||||||||||||||||||||
Debt conversion, converted instrument, amount | $ | $ 477,763 | |||||||||||||||||||||||
Debt conversion, converted instrument, common stock issued | 5,872,362 | |||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 87,000,000 | |||||||||||||||||||||||
Treasury stock, common, shares | 7,202 | |||||||||||||||||||||||
Revenue | $ | $ 30,276,422 | 2,500,000 | ||||||||||||||||||||||
Stock-based compensation | $ | $ 16,335,671 | $ 3,819,610 | ||||||||||||||||||||||
Conversion percentage | 0.75 | 0.75 | ||||||||||||||||||||||
Issuance of common stock for conversions of convertible promissory notes | $ | $ 1,054,204 | |||||||||||||||||||||||
Share-based payment award, options, vested, number of shares | 115,818 | |||||||||||||||||||||||
Share-based payment award, options, nonvested, number of shares | 115,817 | |||||||||||||||||||||||
Officer's And Director - Conversion Share Reserve [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 532,040 | 532,040 | 532,040 | |||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 75 | |||||||||||||||||||||||
Conversion percentage | 0.75 | |||||||||||||||||||||||
Prior Liabilities - Settlement Reserve [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 1,967,960 | 1,967,960 | 315,949 | |||||||||||||||||||||
Continuing Operations Share Reserve [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 185,063 | |||||||||||||||||||||||
Settlement and New Funding Share Reserves [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 3,000,000 | 3,000,000 | ||||||||||||||||||||||
Settlement and New Funding Share Reserves [Member] | Settlement Reserve [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 1,967,960 | 1,967,960 | ||||||||||||||||||||||
Settlement and New Funding Share Reserves [Member] | Funding Reserve [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 500,000 | 500,000 | ||||||||||||||||||||||
Settlement and New Funding Share Reserves [Member] | Prior Liabilities - Settlement Reserve [Member] | ||||||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 315,949 | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
Mr. Biderman [Member] | ||||||||||||||||||||||||
Issuance of common stock to accredited investors in private placements | 200,000 | |||||||||||||||||||||||
Three Officers [Member] | ||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 0.50 | |||||||||||||||||||||||
Issuance of common stock for services, shares | 1,150,000 | |||||||||||||||||||||||
Issuance of common stock for services | $ | $ 575,000 | |||||||||||||||||||||||
Accrued expenses | $ | $ 575,000 | |||||||||||||||||||||||
Mr. Cutchens [Member] | ||||||||||||||||||||||||
Number of shares issued on restricted shares, shares | 231,635 | |||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights description | The restricted shares of common stock vest 25% on the six-month, 1 year, 2 year, and 3 year anniversaries of the Grant Date. | |||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 25.00% | |||||||||||||||||||||||
Stock-based compensation expense related to award vested | $ | $ 133,142 | $ 16,464 | ||||||||||||||||||||||
Mr. Bhatnagar [Member] | ||||||||||||||||||||||||
Issuance of common stock to accredited investors in private placements | 2,620,899 | |||||||||||||||||||||||
Stock-based compensation expense related to award vested | $ | $ 1,310,449 | |||||||||||||||||||||||
Class of warrant number of securities called by warrants | 4,985,394 | 32,405,058 | 4,985,394 | |||||||||||||||||||||
Mr. Bhatnagar [Member] | Warrant Agreement - Earned Warrants [Member] | ||||||||||||||||||||||||
Purchase price of common stock, percent | 4.00% | |||||||||||||||||||||||
Revenue | $ | $ 1,000,000 | |||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 0.50 | |||||||||||||||||||||||
Warrants exceed percentage of fully diluted common stock | 80.00% | |||||||||||||||||||||||
Stock-based compensation | $ | $ 16,202,529 | |||||||||||||||||||||||
Mr. Bhatnagar [Member] | Warrant Agreement - Accelerated Warrants [Member] | ||||||||||||||||||||||||
Revenue | $ | $ 2,500,000 | |||||||||||||||||||||||
Warrants exceed percentage of fully diluted common stock | 80.00% | |||||||||||||||||||||||
Acquire maximum 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 | $ | $ 2,492,697 | |||||||||||||||||||||||
Mr. Bhatnagar [Member] | Warrant Agreement - Accelerated Warrants [Member] | Maximum [Member] | ||||||||||||||||||||||||
Issuance of common stock to accredited investors in private placements | 37,390,452 | |||||||||||||||||||||||
Revenue | $ | $ 30,000,000 | |||||||||||||||||||||||
Former Officers [Member] | ||||||||||||||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants, shares | 62,000 | |||||||||||||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants | $ | $ 46,500 | |||||||||||||||||||||||
Officers [Member] | ||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||||||||||
Issuance of common stock for conversion of related party debts and strategic consultants | $ | $ 1,883,445 | |||||||||||||||||||||||
Coomon stock to be issued for conversion of related party debts and strategic consultants, shares | 329,553 | |||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||
Issuance of common stock to accredited investors in private placements | 1,129,577 | 640,000 | ||||||||||||||||||||||
Issuance of common stock for services, shares | 62,000 | 1,150,000 | ||||||||||||||||||||||
Issuance of common stock for services | $ | $ 620 | $ 11,500 | ||||||||||||||||||||||
Number of shares issued on restricted shares, shares | 115,818 | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
Issuance of common stock for conversions of convertible promissory notes | $ | $ 58,724 | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
Common Stock [Member] | Strategic Consultants [Member] | ||||||||||||||||||||||||
Issuance of common stock for services, shares | 150,000 | |||||||||||||||||||||||
Issuance of common stock for services | $ | $ 75,000 | |||||||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||||||
Proceeds from sale of common stock | $ | $ 347,000 | $ 193,000 | ||||||||||||||||||||||
Issuance of common stock to accredited investors in private placements | 1,129,577 | 640,000 | ||||||||||||||||||||||
Private placement, finder fees, shares | 11,003 | |||||||||||||||||||||||
Private placement, finder fees | $ | $ 11,250 | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
Private Placement [Member] | Common Stock [Member] | ||||||||||||||||||||||||
Issuance of common stock to accredited investors in private placements | 132,000 | |||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||
Common stock, shares authorized | 500,000,000 | 250,000,000 | 250,000,000 | |||||||||||||||||||||
Debt conversion, converted instrument, common stock issued | 16,331,766 | |||||||||||||||||||||||
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 - Schedule
Stockholders' Equity - Schedule of Assumptions Used (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Expected volatility | 2177977.00% |
Weighted-average volatility | 2177977.00% |
Expected dividends | 0.00% |
Expected term (in years) | 5 years |
Risk-free rate | 2.52% |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Common Stock Purchase Warrants Outstanding (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Equity [Abstract] | ||
Warrants outstanding, beginning balance | 4,985,394 | |
Warrants earned | 32,405,058 | 4,985,394 |
Warrants forfeited | ||
Warrants outstanding, ending balance | 37,390,452 | 4,985,394 |
Common stock issuable upon exercise of warrants outstanding | 37,390,452 | 4,985,394 |
Weighted average exercise price warrants outstanding, beginning balance | $ 0.50 | |
Weighted average exercise price warrants earned | 0.50 | 0.50 |
Weighted average exercise price warrants forfeited | ||
Weighted average exercise price warrants outstanding, ending balance | 0.50 | 0.50 |
Common stock issuable upon exercise of warrants, outstanding weighted average exercise price | $ 0.50 | $ 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 - Schedu_3
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable by Exercise Price Range (Details) - $ / shares | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Common stock issuable upon exercise of warrants outstanding number | 37,390,452 | 4,985,394 | |
Warrants [Member] | |||
Common stock issuable upon exercise of warrants outstanding number | 37,390,452 | 4,985,394 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 4 years 3 months 19 days | 4 years 9 months | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.50 | $ 0.50 | |
Common stock issuable upon warrants exercisable number | 37,390,452 | 4,985,394 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.50 | $ 0.50 | |
Warrants [Member] | Exercise Price Range [Member] | |||
Common stock issuable upon exercise of warrants outstanding, range of exercise price | $ 0.50 | $ 0.50 | |
Common stock issuable upon exercise of warrants outstanding number | 37,390,452 | 4,985,394 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 4 years 3 months 19 days | 4 years 9 months | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.50 | $ 0.50 | |
Common stock issuable upon warrants exercisable number | 37,390,452 | 4,985,394 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.50 | $ 0.50 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Common Stock Available for Funding Reserve (Details) | 12 Months Ended |
Jun. 30, 2020shares | |
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 March 31, 2020 | (1,590,811) |
Shares of Common Stock unsold at March 31, 2020 | 315,949 |
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 March 31, 2020 | (314,937) |
Shares of Common Stock unsold at March 31, 2020 | 185,063 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Common Stock Available for Funding Reserve (Details) (Parenthetical) | Dec. 31, 2018 | Jun. 30, 2020 |
Equity [Abstract] | ||
Conversion percentage | 0.75 | 0.75 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 11, 2020 | May 01, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Oct. 02, 2018 |
Number of common stock shares issued, value | $ 347,000 | $ 160,000 | |||
Debt converted into shares, amount | $ 477,763 | ||||
Debt converted into shares | 5,872,362 | ||||
Outstanding amount | $ 959,630 | 855,660 | |||
Number of shares issued on restricted shares, shares | 2,666,666 | ||||
Issuance of common stock for conversion of related party debts and strategic consultants | $ 219,517 | $ 1,801,057 | |||
Issuance of common stock for conversion of related party debts and strategic consultants, shares | 294,654 | 3,898,733 | |||
Common stock to be issued for conversion of related party debts and strategic consultants, shares | 329,553 | ||||
Shares issued price per shares | $ 0.3583 | ||||
Amortization of deferred compensation and beneficial conversion interest expense | $ 91,177 | ||||
Rent expense | $ 1,350 | $ 16,200 | 7,621 | ||
Share-based Payment Award, Options, Vested, Number of Shares | 115,818 | ||||
Share-based Payment Award, Options, Nonvested, Number of Shares | 115,817 | ||||
Accrued payable to related party | $ 23,821 | $ 7,621 | |||
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 | ||||
Accrued fees | |||||
Officers [Member] | |||||
Number of common stock shares issued, value | 575,000 | ||||
Debt interest rate | 6.00% | ||||
Loan from officers | $ 48,052 | 144,507 | |||
Interest on loans | 4,792 | 15,467 | |||
Outstanding amount | 78,758 | $ 58,165 | |||
Issuance of common stock for conversion of related party debts and strategic consultants | $ 1,883,445 | ||||
Common stock to be issued for conversion of related party debts and strategic consultants, shares | 329,553 | ||||
Shares issued price per shares | $ 0.50 | ||||
Mr. Cutchens [Member] | |||||
Number of shares issued on restricted shares, shares | 231,635 | ||||
Share-based compensation arrangement by share-based payment award, award vesting rights description | The restricted shares of common stock vest 25% on the six-month, 1 year, 2 year, and 3 year anniversaries of the Grant Date. | ||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 25.00% | ||||
Stock-based compensation expense related to award vested | $ 133,142 | $ 16,464 | |||
Mr. Smiley [Member] | |||||
Debt converted into shares, amount | $ 15,500 | ||||
Debt converted into shares | 62,000 | ||||
Legal and consulting expenses | $ 15,500 | ||||
Rent expense | 9,000 | ||||
Mr. Bhatnagar [Member] | |||||
Number of common stock shares issued | 2,620,899 | ||||
Stock-based compensation expense related to award vested | $ 1,310,449 | ||||
Microphase Corporation [Member] | |||||
Company owed amount | $ 32,545 | ||||
Eagle Strategic Advisors [Member] | Mr. Biderman [Member] | |||||
Debt converted into shares, amount | $ 186,000 | ||||
Debt converted into shares | 372,000 | ||||
Palladium Capital 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 ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income tax provision | |||
Increased in valuation allowance | 3,349,031 | 1,515,310 | |
Increased in valuation allowance related to current tax provision | 3,009,116 | ||
Increased in valuation allowance related to prior year adjustments and net operating expirations | 339,915 | ||
Federal net operating loss carryforwards | $ 87,000,000 | $ 105,000,000 | |
Net operating loss carryforwards expiration | Dec. 31, 2037 | ||
Paycheck Protection Program (PPP Loan) [Member] | |||
Proceeds from loan | $ 33,332 |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Income Tax Rates (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal rate | 21.00% | (21.00%) |
State income tax rate, net of federal benefit | 6.50% | (7.20%) |
Permanent differences, including stock based compensation and beneficial conversion interest expense | (0.10%) | 28.90% |
Change in valuation allowance | (27.40%) | (0.70%) |
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, 2020 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Federal and state net operating loss carry forward | $ 23,838,735 | $ 26,156,755 |
Deferred stock warrants | 5,157,262 | |
Other temporary differences | 509,789 | |
Total deferred tax asset | 29,505,786 | 26,156,755 |
Net deferred tax asset | 29,505,786 | 26,156,755 |
Less: valuation allowance | (29,505,786) | (26,156,755) |
Deferred tax assets, net |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 17, 2020 | Jul. 15, 2020 | May 01, 2019 | Dec. 10, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Nov. 20, 2020 | Mar. 21, 2019 |
Rent expense | $ 1,350 | $ 16,200 | $ 7,621 | |||||
Debt principal amount | $ 288,182 | |||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Mr. Bhatnagar [Member] | ||||||||
Class of warrant number of securities called by warrants | 32,405,058 | 4,985,394 | ||||||
Number of common stock shares issued | 2,620,899 | |||||||
Subsequent Event [Member] | ||||||||
Debt principal amount | $ 288,182 | |||||||
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 was required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 which was due and payable in March of 2020. The Company made all required payments with the exception of the final payment of $195,000 which was due and payable in March of 2020. | |||||||
Debt maturity date | Mar. 31, 2020 | |||||||
Judgment Settlement Agreement [Member] | Subsequent Event [Member] | ||||||||
Debt maturity date | Aug. 17, 2021 | |||||||
Debt principal amount | $ 300,000 | |||||||
Bears interest rate | 10.00% | |||||||
Common stock, par value | $ 0.01 | |||||||
Judgement Settlement Agreement [Member] | ||||||||
Debt instrument final payment | $ 195,000 | |||||||
Remaining liabilities of long term debt | 771,702 | |||||||
Judgment Settlement Agreement One [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 was required to pay $15,000 per month from January 15, 2019 through and including February 15, 2020, with a final payment of $195,000 which was due and payable in March of 2020. The Company made all required payments with the exception of the final payment of $195,000 which was due and payable in March of 2020. | |||||||
Debt maturity date | Mar. 31, 2020 | |||||||
Loss on contingency sought value | 440,000 | |||||||
Judgment Settlement Agreement One [Member] | Mr. Bhatnagar [Member] | ||||||||
Debt instrument final payment | 195,000 | |||||||
Remaining liabilities of long term debt | $ 771,702 | |||||||
Warrant exercise price | $ 0.25 | |||||||
Class of warrant number of securities called by warrants | 37,390,452 | |||||||
Judgment Settlement Agreement One [Member] | Subsequent Event [Member] | ||||||||
Debt principal amount | $ 300,000 | |||||||
Bears interest rate | 10.00% | |||||||
Common stock, par value | $ 0.01 | |||||||
Judgment Settlement Agreement One [Member] | Subsequent Event [Member] | Mr. Bhatnagar [Member] | ||||||||
Warrant exercise price | $ 0.50 | |||||||
Number of common stock shares issued | 5,650,708 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Disposal Groups, Including Discontinued Operations (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Notes payable | $ 959,630 | $ 855,660 |
Total Current Liabilities | 82,795 | 82,795 |
Jump Line [Member] | ||
Cash | 142,413 | 33,996 |
Accounts receivable, net | 14,048,095 | 2,526,155 |
Prepaid expenses | 4,477 | 8,820 |
Other assets | 30,879 | |
Total Current Assets | 14,225,864 | 2,568,971 |
Property and equipment, net | 32,669 | 11,048 |
Goodwill | 3,636 | 6,020 |
Intangible asset - purchased software, net | 2,835,117 | 3,025,801 |
Other assets | 11,670 | 3,058 |
Total Assets | 17,108,956 | 5,614,898 |
Accounts payable | 7,980,682 | 449,069 |
Accrued expenses | 1,123,842 | 3,368,801 |
Contract liabilities | 219,652 | |
Due to related parties | 84,485 | 65,459 |
Notes payable to officers | 26,818 | 25,251 |
Notes payable | 20,469 | |
Convertible notes payable, net | 189,641 | 2,351 |
Liabilities in arrears with convertible features | 109,000 | 109,000 |
Liabilities in arrears - judgement settlement agreement (Note 7) | 771,702 | 855,660 |
Derivative liability | 897,631 | 133,669 |
Total Current Liabilities | 11,423,922 | 5,009,260 |
Discontinued Operations [Member] | Jump Line [Member] | ||
Cash | ||
Accounts receivable, net | ||
Prepaid expenses | ||
Other assets | ||
Total Current Assets | ||
Property and equipment, net | ||
Goodwill | ||
Intangible asset - purchased software, net | ||
Other assets | ||
Total Assets | ||
Accounts payable | 82,795 | 82,795 |
Accrued expenses | ||
Contract liabilities | ||
Due to related parties | ||
Notes payable to officers | ||
Convertible notes payable, net | ||
Liabilities in arrears with convertible features | ||
Liabilities in arrears - judgement settlement agreement (Note 7) | ||
Derivative liability | ||
Total Current Liabilities | 82,795 | 82,795 |
Continuing Operations [Member] | Jump Line [Member] | ||
Cash | 142,413 | 33,996 |
Accounts receivable, net | 14,048,095 | 2,526,155 |
Prepaid expenses | 4,477 | 8,820 |
Other assets | 30,879 | |
Total Current Assets | 14,225,864 | 2,568,971 |
Property and equipment, net | 32,669 | 11,048 |
Goodwill | 3,636 | 6,020 |
Intangible asset - purchased software, net | 2,835,117 | 3,025,801 |
Other assets | 11,670 | 3,058 |
Total Assets | 17,108,956 | 5,614,898 |
Accounts payable | 7,897,887 | 366,274 |
Accrued expenses | 1,123,842 | 3,368,801 |
Contract liabilities | 219,652 | |
Due to related parties | 84,485 | 65,459 |
Notes payable to officers | 26,818 | 25,251 |
Notes payable | 20,469 | |
Convertible notes payable, net | 189,641 | 2,351 |
Liabilities in arrears with convertible features | 109,000 | 109,000 |
Liabilities in arrears - judgement settlement agreement (Note 7) | 771,702 | 855,660 |
Derivative liability | 897,631 | 133,669 |
Total Current Liabilities | $ 11,341,127 | $ 4,926,465 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Revenue and Expenses Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | $ 2,500,000 | |
Cost of revenue | ||
Gross Profit | 2,500,000 | |
General and administrative expenses | 4,265,886 | |
Operating loss | (1,765,886) | |
Interest expense | (222,102) | |
Loss on change in fair value of derivative liability | $ 1,584,102 | (30,508) |
Initial derivative expense | $ (1,610,913) | (25,161) |
Amortization of debt discount | (2,260) | |
Amortization of deferred financing costs | (90) | |
Gain on extinguishment of debts | 90,846 | |
Other income | ||
Total Other Income (Expense) | (189,275) | |
Income (loss) before income taxes | (1,955,161) | |
Income taxes | ||
Net income (loss) | (1,955,161) | |
Discontinued Operations [Member] | ||
Revenue | ||
Cost of revenue | ||
Gross Profit | ||
General and administrative expenses | ||
Operating loss | ||
Interest expense | (11,508) | |
Loss on change in fair value of derivative liability | ||
Initial derivative expense | ||
Amortization of debt discount | ||
Amortization of deferred financing costs | ||
Gain on extinguishment of debts | 30,448 | |
Other income | ||
Total Other Income (Expense) | 18,940 | |
Income (loss) before income taxes | 18,940 | |
Income taxes | ||
Net income (loss) | 18,940 | |
Continuing Operations [Member] | ||
Revenue | 2,500,000 | |
Cost of revenue | ||
Gross Profit | 2,500,000 | |
General and administrative expenses | 4,265,886 | |
Operating loss | (1,765,886) | |
Interest expense | (210,594) | |
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 debts | 60,398 | |
Other income | ||
Total Other Income (Expense) | (208,215) | |
Income (loss) before income taxes | (1,974,101) | |
Income taxes | ||
Net income (loss) | $ (1,974,101) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 22, 2020 | Aug. 27, 2020 | Aug. 20, 2020 | Aug. 19, 2020 | Aug. 17, 2020 | Jul. 31, 2020 | Jul. 24, 2020 | Jul. 15, 2020 | Jul. 13, 2020 | Jan. 11, 2019 | Dec. 10, 2018 | Aug. 31, 2020 | Nov. 20, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 14, 2022 | Aug. 28, 2020 | Aug. 04, 2020 | Aug. 03, 2020 | Jul. 14, 2020 | Jun. 10, 2020 | Jun. 09, 2020 | Sep. 04, 2019 | Aug. 27, 2019 | Aug. 26, 2019 | Mar. 21, 2019 | Mar. 20, 2019 | Mar. 18, 2019 | Mar. 17, 2019 | Jan. 04, 2019 |
Debt principal amount | $ 288,182 | |||||||||||||||||||||||||||||
Debt converted into shares | 5,872,362 | |||||||||||||||||||||||||||||
Authorized common stock | 100,000,000 | 100,000,000 | 250,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 25,000,000 | 125,000,000,000 | 25,000,000 | 25,000,000 | 125,000,000,000 | 125,000,000,000 | ||||||||||||||||||
Proceeds from debt | $ 1,116,800 | $ 53,000 | ||||||||||||||||||||||||||||
Conversion price per share | $ 0.08 | $ 0.85 | ||||||||||||||||||||||||||||
Additional Warrants [Member] | ||||||||||||||||||||||||||||||
Description of warrant exchange agreement | The Cancelled Warrants had an exercise price of $0.50 per share and were not subject to expiration. Such Exchange Agreement is intended to make the Company's capitalization more attractive to potential investors and to remove the uncertainty associated with any future grants of warrants under the Transition Agreement and Warrant Agreement, although there can be no assurance of any future investments on terms that are attractive to the Company, or at all. Immediately prior to the Company's entry into the Exchange Agreement, it was determined that 5,650,708 additional warrants (the "Additional Warrants") to purchase the Company's Common Stock were due to and issued to the Holder in accordance with the terms and conditions of the Transition Agreement as the Transition Agreement required certain liabilities to be eliminated by the prior management team within six months of the Transition Agreement's effective date of January 11, 2019. However, the Additional Warrants were immediately cancelled and terminated with the intention of mitigating potential liabilities arising from certain issuances of the Company's Common Stock below the minimum price of $0.50 per share as stated within the Transition Agreement. | |||||||||||||||||||||||||||||
Judgment Settlement Agreement One [Member] | ||||||||||||||||||||||||||||||
Debt maturity date | Mar. 31, 2020 | |||||||||||||||||||||||||||||
Aggregate of principal and interest | $ 15,000 | |||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||
Number of stock issued for services | 62,000 | 1,150,000 | ||||||||||||||||||||||||||||
Amended and Restated Certificate of Incorporation [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||
Authorized common stock | 100,000,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 288,182 | |||||||||||||||||||||||||||||
Debt converted into shares | 16,331,766 | |||||||||||||||||||||||||||||
Authorized common stock | 500,000,000 | 250,000,000 | 250,000,000 | |||||||||||||||||||||||||||
Subsequent Event [Member] | Event of Default and Demand Letter [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 40,739 | |||||||||||||||||||||||||||||
Debt maturity date | Apr. 18, 2020 | |||||||||||||||||||||||||||||
Debt interest rate | 6.00% | |||||||||||||||||||||||||||||
Debt instrument description | The Company received a notice of event of default and demand letter ("Demand Letter") from a promissory note holder ( the "Note Holder"). The promissory note was issued on November 1, 2019, in the original principal amount of $40,739.31, accrued interest at a rate of 6% per annum, and matured on April 18, 2020. The Demand Letter stated an aggregate of $51,940.09 of principal and interest was immediately due. The promissory note does not have a convertible feature and is not convertible into shares of the Company's common stock. Additionally, the promissory note does not contain any cross-default provisions with any other promissory notes issued by the Company. The Company expects to work with the Note Holder to negotiate a repayment structure whereby the Company can repay the Note Holder the balance due as quickly as possible based upon its available capital. | |||||||||||||||||||||||||||||
Aggregate of principal and interest | $ 51,940 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Accredited Investors [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 63,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | The Purchase Agreement [Member] | ||||||||||||||||||||||||||||||
Purchase of the investor on specific date | $ 3,000,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Exchange Agreement [Member] | Cancelled Warrants [Member] | ||||||||||||||||||||||||||||||
Issued purchase of warrants | $ 37,390,452 | |||||||||||||||||||||||||||||
Forfeited and exchanged for shares | $ 37,390,452 | |||||||||||||||||||||||||||||
Warrant exercise price per shares | $ 0.50 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 105,000 | |||||||||||||||||||||||||||||
Debt original issued discount | 5,000 | |||||||||||||||||||||||||||||
Proceeds from debt | 95,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Accredited Investors [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 105,000 | $ 53,000 | $ 99,225 | $ 68,000 | $ 68,000 | |||||||||||||||||||||||||
Debt original issued discount | 5,000 | 4,725 | ||||||||||||||||||||||||||||
Proceeds from debt | 96,000 | 60,000 | 90,000 | 65,000 | 65,000 | |||||||||||||||||||||||||
Payment to reimburse amount | $ 4,000 | $ 3,000 | $ 4,500 | $ 3,000 | $ 5,000 | $ 3,000 | ||||||||||||||||||||||||
Debt maturity date | Aug. 27, 2021 | Aug. 20, 2021 | Aug. 19, 2021 | Jul. 31, 2021 | Jul. 24, 2021 | Aug. 31, 2021 | ||||||||||||||||||||||||
Debt interest rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | ||||||||||||||||||||||||
Debt instrument description | The Note matures on August 27, 2021, bears interest at a rate of 8% per annum (increasing to 24% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. | The Note matures on August 20, 2021, bears interest at a rate of 8% per annum (increasing to 22% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. | The Note matures on August 19, 2021, bears interest at a rate of 8% per annum (increasing to 24% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. | The Note matures on July 31, 2021, bears interest at a rate of 8% per annum (increasing to 22% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. | The Note matures on July 24, 2021, bears interest at a rate of 8% per annum (increasing to 24% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. | The Note matures on August 31, 2021, bears interest at a rate of 8% per annum (increasing to 22% per annum upon the occurrence of an Event of Default (as defined in the Note)) and is convertible into shares of the Company's common stock, par value $0.01 per share, at a conversion price as specified in the Note, subject to adjustment. The Note may be prepaid by the Company at any time prior to the 180th day after the issuance date of the Note with certain prepayment penalties as set forth therein. | ||||||||||||||||||||||||
Conversion price per share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||||||||||||
Subsequent Event [Member] | Judgement Settlement Agreement [Member] | John M. Fife [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 300,000 | |||||||||||||||||||||||||||||
Debt interest rate | 10.00% | |||||||||||||||||||||||||||||
Conversion price per share | $ 0.01 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Judgment Settlement Agreement One [Member] | ||||||||||||||||||||||||||||||
Debt principal amount | $ 300,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Judgment Settlement Agreement One [Member] | John M. Fife [Member] | ||||||||||||||||||||||||||||||
Debt maturity date | Aug. 17, 2021 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||
Purchase price of the market price | 9.50% | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Restricted Shares [Member] | ||||||||||||||||||||||||||||||
Number of stock issued for services | 200,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | White Lion Capital, LLC [Member] | ||||||||||||||||||||||||||||||
Issuance of purchase of company stock | $ 3,000,000 | |||||||||||||||||||||||||||||
Common stock par value | $ 0.01 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Amended and Restated Certificate of Incorporation [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||
Authorized common stock | 250,000,000 | |||||||||||||||||||||||||||||
Subsequent Event [Member] | Amended and Restated Certificate of Incorporation [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||
Authorized common stock | 250,000,000 | 500,000,000 |