Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2020 | Jan. 18, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | MPHASE TECHNOLOGIES INC | |
Entity Central Index Key | 0000825322 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
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 Common Stock, Shares Outstanding | 75,763,376 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Current Assets | ||
Cash | $ 46,514 | $ 142,413 |
Accounts receivable, net | 14,174,294 | 14,048,095 |
Prepaid expenses | 24,649 | 4,477 |
Other assets | 35,028 | 30,879 |
Total Current Assets | 14,280,485 | 14,225,864 |
Property and equipment, net | 29,407 | 32,669 |
Goodwill | 3,682 | 3,636 |
Intangible asset - purchased software, net | 2,687,340 | 2,835,117 |
Other assets | 11,434 | 11,670 |
Total Assets | 17,012,348 | 17,108,956 |
Current Liabilities | ||
Accounts payable | 6,011,034 | 7,897,887 |
Accrued expenses | 1,341,677 | 1,123,842 |
Contract liabilities | 263,652 | 219,652 |
Due to related parties | 85,274 | 84,485 |
Note payable to officer | 27,225 | 26,818 |
Convertible notes payable, net | 131,103 | 189,641 |
Liabilities in arrears with convertible features | 109,000 | 109,000 |
Liabilities in arrears - judgement settlement agreement (Note 6) | 765,247 | 771,702 |
Derivative liability | 1,009,850 | 897,631 |
Liabilities of discontinued operations | 82,795 | 82,795 |
Total Current Liabilities | 9,852,954 | 11,423,922 |
Notes payable, net of current portion | 163,358 | 167,459 |
Total Liabilities | 10,016,312 | 11,591,381 |
Commitments and Contingencies (Note 11) | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value; 1,000 shares authorized, issued and outstanding at September 30, 2020 and June 30, 2020 | 10 | 10 |
Common stock, $0.01 par value; 500,000,000 shares authorized, 73,212,527 shares issued and 73,096,710 shares outstanding at September 30, 2020, and 19,318,679 shares issued and 19,174,492 outstanding at June 30, 2020 | 730,968 | 191,745 |
Additional paid-in-capital | 232,324,611 | 231,984,704 |
Common stock to be issued | 955,466 | 955,466 |
Accumulated other comprehensive (loss) income | (8,093) | 113,070 |
Accumulated deficit | (227,006,926) | (227,727,420) |
Total Stockholders' Equity | 6,996,036 | 5,517,575 |
Total Liabilities and Stockholders' Equity | $ 17,012,348 | $ 17,108,956 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Aug. 04, 2020 | Aug. 03, 2020 | Jul. 14, 2020 | Jul. 13, 2020 | Jun. 30, 2020 | Sep. 04, 2019 | Sep. 03, 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 | ||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 250,000,000 | 250,000,000 | 100,000,000 | 500,000,000 | 100,000,000 | 25,000,000 |
Common stock, shares issued | 73,212,527 | 19,318,679 | ||||||
Common stock, shares outstanding | 73,096,710 | 19,174,492 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 7,586,864 | $ 7,569,612 |
Cost of revenue | 5,625,389 | 5,706,514 |
Gross Profit | 1,961,475 | 1,863,098 |
Operating Expenses: | ||
Software development costs | 1,203,614 | |
Salaries and benefits | 519,773 | 10,373,281 |
General and administrative expenses | 246,073 | 368,741 |
Total Operating Expenses | 765,846 | 11,945,636 |
Operating Income (Loss) | 1,195,629 | (10,082,538) |
Other (Expense) Income: | ||
Interest expense | (85,963) | (38,866) |
Amortization of debt discounts, deferred financings costs, and original issue discounts | (320,462) | (34,335) |
Initial derivative expense | (366,068) | (215,575) |
Gain on change in fair value of derivative liability | 266,088 | 65,803 |
Gain on extinguishment of debt | 31,240 | |
Total Other (Expense) Income | (475,135) | (222,973) |
Income (Loss) from continuing operations before income taxes | 720,494 | (10,305,511) |
Income taxes | ||
Net income (loss) | 720,494 | (10,305,511) |
Comprehensive income (loss): | ||
Unrealized (loss) gain on currency translation adjustment | (121,163) | 54,694 |
Comprehensive income (loss) | $ 599,331 | $ (10,250,817) |
Income (Loss) per common share: | ||
Income (loss) per common share - basic | $ .01 | $ (.85) |
Income (loss) per common share - diluted | $ .01 | $ (.85) |
Weighted average shares outstanding - basic | 63,215,776 | 12,117,849 |
Weighted average shares outstanding - diluted | 96,159,147 | 12,117,849 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid in Capital [Member] | Common Stock to be Issued [Member] | Accumulated Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
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 | $ 3,800 | 91,200 | (30,500) | 64,500 | |||
Issuance of common stock to accredited investors in private placements, shares | 380,000 | ||||||
Issuance of common stock for the conversion of related party debts and strategic vendor payables | $ 2,947 | 10,716 | (73,633) | ||||
Issuance of common stock for the conversion of related party debts and strategic vendor payables, shares | 294,654 | ||||||
Warrants earned under employment contract | 9,970,787 | 9,970,787 | |||||
Other comprehensive income | 54,694 | 54,694 | |||||
Net income loss | (10,305,511) | (10,305,511) | |||||
Balance at Sep. 30, 2019 | $ 10 | $ 123,637 | 224,139,906 | 11,225 | 54,694 | (223,939,364) | 390,108 |
Balance, shares at Sep. 30, 2019 | 1,000 | 12,363,732 | |||||
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 | |||||
Issuance of common stock for conversions of convertible promissory notes | $ 163,318 | 544,954 | 708,272 | ||||
Issuance of common stock for conversions of convertible promissory notes, shares | 16,331,766 | ||||||
Issuance of common stock for exchange of warrants | $ 373,905 | (220,604) | 153,301 | ||||
Issuance of common stock for exchange of warrants, shares | 37,390,452 | ||||||
Stock-based compensation for restricted shares under employment agreement | 10,737 | 10,737 | |||||
Issuance of Common Stock for vendor services | $ 2,000 | 4,820 | 6,820 | ||||
Issuance of Common Stock for vendor services, shares | 200,000 | ||||||
Other comprehensive income | (121,163) | (121,163) | |||||
Net income loss | 720,494 | 720,494 | |||||
Balance at Sep. 30, 2020 | $ 10 | $ 730,968 | $ 232,324,611 | $ 955,466 | $ (8,093) | $ (227,006,926) | $ 6,996,036 |
Balance, shares at Sep. 30, 2020 | 1,000 | 73,096,710 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 720,494 | $ (10,305,511) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Initial derivative expense | 366,068 | 215,575 |
Amortization of debt discounts, deferred financing costs, and original issue discounts | 320,462 | 34,335 |
Depreciation and amortization | 229,349 | 242,139 |
Stock-based compensation | 187,852 | 10,020,178 |
Gain on extinguishment of debt | (31,240) | |
Gain on change in fair value of derivative liability | (266,088) | (65,803) |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (7,626,199) | (5,276,947) |
(Increase) decrease in prepaid expenses | (19,060) | 6,611 |
Increase in other assets | (4,149) | (3,181) |
Increase in contract liabilities | 44,000 | |
Increase in accounts payable and accrued expenses | 5,772,173 | 4,887,451 |
Net cash used in operating activities | (306,368) | (191,370) |
Cash flows from investing activities: | ||
Capital expenditures | (968) | |
Net cash used in investing activities | (968) | |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes payable, net | 463,600 | 212,000 |
Proceeds from sale of common stock, net of finder's fees | 64,500 | |
Proceeds from notes payable to related parties | 10,700 | |
Repayments of notes payable to related parties | (7,000) | |
Repayments under settlement agreement | (15,000) | (45,000) |
Repayments of convertible notes payable | (116,000) | |
Net cash provided by financing activities | 332,600 | 235,200 |
Effect of foreign exchange rates changes on cash | (121,163) | 54,694 |
Net (decrease) increase in cash | (95,899) | 98,524 |
Cash at beginning of period | 142,413 | 33,996 |
Cash at end of period | 46,514 | 132,520 |
Supplemental disclosure: | ||
Cash paid for interest | 52,681 | |
Cash paid for taxes | ||
Supplemental disclosure of non-cash operating activities: | ||
Initial fair value of derivative liability recorded as debt discount | 463,600 | 212,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Value | $ 6,820 | |
Shares | 200,000 | |
Value | $ 73,663 | |
Shares | 294,654 | |
Value | $ 708,272 | |
Shares | 16,331,766 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Business and Basis of Presentation | NOTE 1: NATURE OF BUSINESS AND BASIS OF PRESENTATION 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.” The Company was incorporated in the state of New Jersey in 1979 under the name Tecma Laboratory, Inc. and has subsequently operated under Tecma Laboratories, Inc., and Lightpaths TP Technologies, Inc., until June 2, 1997 when the Company changed its name to mPhase Technologies, Inc. On January 11, 2019, the Company underwent a major change in management and control. New management of the Company is positioning the Company to be a technology leader in artificial intelligence and machine learning while enabling a more rapid commercial development of its patent portfolio and other intellectual property. The Company believes there are significant opportunities to embed artificial intelligence and machine learning into business operations, platform architectures, business services, and customer experiences, whereby its goal is to generate significant revenue from its artificial intelligence and machine learning technologies. On February 15, 2019, the Company 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, the Company acquired 99% of the outstanding common shares of Alpha Predictions LLP (“Alpha Predictions”). Alpha Predictions is an India-based technology company that has developed a suite of commercial data analysis products for use across multiple industries. The Company expects the acquisition to result in synergies with its other operating divisions, which will drive revenue growth and innovation. On May 11, 2020, the Company acquired CloseComms Limited (“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. Basis of Presentation The consolidated unaudited financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management, are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to rules and regulations of the Securities and Exchange Commission (the “SEC”); nevertheless, management of the Company believes that the disclosures herein are adequate to make the information presented not misleading. The consolidated unaudited financial statements for the three months ended September 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. These consolidated unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended June 30, 2020, contained in the Company’s Annual Report on Form 10-K filed with the SEC on January 5, 2021. The results of operations for the three months ended September 30, 2020, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2021. 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 the Company’s 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 | 3 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2: GOING CONCERN The accompanying unaudited 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 negative cash flows from operations of $306,368 for the three months ended September 30, 2020. At September 30, 2020, the Company had a working capital surplus of $4,427,531, and an accumulated deficit of $227,006,926. 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 report, without additional debt or equity financing. The unaudited 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 the 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 | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications Certain reclassifications of prior year amounts have been made to enhance comparability with the current year’s unaudited consolidated financial statements, including, but not limited to, presentation of certain items within the unaudited consolidated statements of operations and comprehensive income (loss), unaudited consolidated statements of cash flows, and certain notes to the unaudited 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. 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: September 30, 2020 June 30, 2020 Period-end INR: USD exchange rate $ 0.01357 $ 0.01329 Period-end GBP: USD exchange rate $ 1.28593 $ 1.23244 Income statement: September 30, 2020 2019 Average Annual INR: USD exchange rate $ 0.01343 $ 0.01437 Average Annual GBP: USD exchange rate $ 1.25861 $ - Use of Estimates The preparation of unaudited consolidated financial statements in conformity with U.S. 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 unaudited consolidated financial statements and reported amounts of revenues and expenses for 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, valuation of intangible assets, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the valuation reserve for income taxes. 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 maintains 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 three months ended September 30, 2020 and 2019, this one customer accounted for 100% and 99% of our total revenue, respectively. At September 30, 2020 and June 30, 2020, this one customer accounted for approximately 100% and 100% 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 three months ended September 30, 2020, this one supplier accounted for approximately 100% of our total cost of revenue and accounted for approximately 94% of our total accounts payable. For the three months ended September 30, 2019, this one supplier accounted for approximately 99% of our total cost of revenue and accounted for approximately 83% of our total accrued expenses. 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 September 30, 2020 and June 30, 2020. 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 September 30, 2020 and June 30, 2020, 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 September 30, 2020 and June 30, 2020, the Company determined there was no requirement for an allowance for doubtful accounts. 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, 2021, we will perform our annual evaluation of goodwill impairment to determine if the estimated fair value of the reporting unit exceeds its carrying value. Patents and licenses are capitalized when the Company determines there will be a future benefit derived from such assets and are stated at cost. Amortization is computed using the straight-line method over the estimated useful life of the asset, generally five years. As of September 30, 2020 and June 30, 2020, the book value of patents and licenses of $214,383, has been fully amortized and no amortization expense was recorded for the three months ended September 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. At September 30, 2020, the book value of purchased and developed technology of $3,835,077, included three technology platforms, a machine learning platform and two artificial intelligence platforms. For the three months ended September 30, 2020 and 2019, the Company incurred amortization expense of $223,833 and $242,139, respectively. 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 off 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 September 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 5). 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 5). A contract asset is recognized for incremental costs to obtain a customer contract that are recoverable, otherwise such incremental costs are expensed as incurred. Share-Based Compensation The Company computes share based payments in accordance with the provisions of ASC Topic 718, Compensation – Stock Compensation 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 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. At September 30, 2020, as we incurred net income for the period, dilutive shares included 32,943,371 shares of the Company’s common stock related to convertible promissory notes, assuming exercise of such warrants and conversion of such convertible promissory notes occurred at July 1, 2020, as the conversion price of the convertible promissory notes were less than the average market price of the Company’s common stock for the three months ended September 30, 2020. Additionally, for dilutive EPS purposes for the three months ended September 30, 2020, the assumed conversion of such convertible promissory notes at July 1, 2020, increased the net income amount used in the dilutive EPS computation by $455,673 as a result of the net impact of interest that would not have been incurred during the period as well as original issue discounts, deferred financing costs, debt discounts, and derivative liability balances that would not have been required at September 30, 2020. At September 30, 2020, there were 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, which were not included in computing dilutive EPS. For the three months ended September 30, 2019, basic and diluted EPS are computed using the same number of weighted average shares as we incurred a net loss. 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, 2020, the Company adopted Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement 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. 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 unaudited consolidated financial statements. |
Intangible Asset - Purchased So
Intangible Asset - Purchased Software, Net | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset - Purchased Software, Net | NOTE 4: INTANGIBLE ASSET – PURCHASED SOFTWARE, NET Intangible asset – Purchased Software, net, is comprised of the following at: September 30, June 30, 2020 2020 Purchased software $ 3,835,077 $ 3,759,021 Less: accumulated amortization (1,147,737 ) (923,904 ) Purchased software, net $ 2,687,340 $ 2,835,117 Intangible asset – Purchased Software consists of the following three software technologies: Alpha Predictions developed software $ 1,583,222 Travel Buddhi developed software 115,466 CloseComms developed software 988,653 Total developed software $ 2,687,340 The Alpha Predictions developed software was acquired on June 30, 2019, through the acquisition of 99% of the outstanding common shares of Alpha Predictions LLP, was valued at $2,905,668, and included all rights, software, and code of the technology platform. The Travel Buddhi developed software was acquired on February 15, 2019, for $115,281 and included all rights, software, and code of the technology platform. The CloseComms developed software was acquired on March 11, 2020, valued at $954,918, and included all rights, software, and code of the technology platform. At September 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 general and administration expenses within the unaudited consolidated statements of operations. For the three months ended September 30, 2020 and 2019, amortization expense was $223,833 and $242,139, respectively. Future amortization expense related to the existing net carrying amount of developed software at September 30, 2020 is expected to be as follows: Remainder of fiscal year 2021 $ 862,543 Fiscal year 2022 1,272,738 Fiscal year 2023 368,040 Fiscal year 2024 184,020 $ 2,687,340 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | NOTE 5: 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 Three Months Ended September 30, 2020 2019 Categories: Subscription $ 6,180,000 $ 6,180,000 Service and support 897,264 870,089 Application development and implementation 509,600 519,523 Total revenue $ 7,586,864 $ 7,569,612 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 Three Months Ended September 30, 2020 2019 India $ 1,714,711 $ 2,883,092 United Kingdom 1,017,152 - Total long-lived assets $ 2,731,863 $ 2,883,092 For the three months ended September 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 September 30, 2020 and June 30, 2020, contract liabilities totaled $263,652 and $219,652, respectively. The following table presents a reconciliation of the contract liabilities from June 30, 2020 to September 30, 2020: June 30, 2020 $ 219,652 Contract liability deferral 71,174 Amortization of contract liability to revenue (27,174 ) June 30, 2020 $ 263,652 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. |
Notes Payable
Notes Payable | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6: NOTES PAYABLE Notes payable is comprised of the following: September 30, June 30, 2020 2020 Note payable, SBA – Paycheck Protection Program [1] $ 33,472 $ 33,388 Note payable, SBA – Economic Injury Disaster Loan [2] 155,983 154,540 Note payable, John Fife (dba St. George Investors)/Judgment Settlement Agreement [3] 765,247 771,702 Total notes payable $ 954,702 $ 956,630 Less: current portion of notes payable (791,344 ) (792,171 ) Long-term portion of notes payable $ 163,358 $ 167,459 [1] [2] [3] |
Convertible Debt Arrangements
Convertible Debt Arrangements | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Debt Arrangements | NOTE 7: Convertible Debt Arrangements JMJ Financial At September 30, 2020 and June 30, 2020, the amount recorded in current liabilities for this one convertible note and accrued interest thereon due to JMJ Financial was $213,545 and $209,330, respectively. During the three months ended September 30, 2020 and 2019 the Company recorded $4,215 and $3,892, respectively of interest for the outstanding convertible note. As of September 30, 2020 and June 30, 2020, the aggregate remaining amount of convertible securities held by JMJ could be converted into 10,677 and 10,466 shares, respectively, with a conversion price of $20. Accredited Investors On July 24, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender 1”) and issued an 8% convertible promissory note in the principal amount of $105,000 (including a $5,000 original issue discount) to the Lender 1 with a maturity date of July 24, 2021. On July 27, 2020, the Company received net proceeds in the amount of $95,000 as a result of $5,000 being paid to reimburse the Lender 1 for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at 60% of the lowest closing 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 $175,000, original issue discount of $5,000, deferred financing costs of $5,000 and debt discount of $95,000. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. The aggregate balance of the convertible promissory note and accrued interest was $105,000 and $1,588, respectively, at September 30, 2020. The aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs and debt discount at September 30, 2020 was $19,849. On July 31, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender 2”) and issued an 8% convertible promissory note in the principal amount of $68,000 to the Lender 2 with a maturity date of July 31, 2021. On August 6, 2020, the Company received net proceeds in the amount of $65,000 as a result of $3,000 being paid to reimburse the Lender 2 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 $102,228, 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. The aggregate balance of the convertible promissory note and accrued interest was $68,000 and $924, respectively, at September 30, 2020. The aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount at September 30, 2020 was $11,551. On August 19, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender 3”) and issued an 8% convertible promissory note in the principal amount of $99,225 (including a $4,725 original issue discount) to the Lender 3 with a maturity date of August 19, 2021. On August 20, 2020, the Company received net proceeds in the amount of $90,000 as a result of $4,500 being paid to reimburse the Lender 3 for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at 60% of the lowest closing 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 $161,856, original issue discount of $4,725, deferred financing costs of $4,500 and debt discount of $86,400. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. The aggregate balance of the convertible promissory note and accrued interest was $99,225 and $935, respectively, at September 30, 2020. The aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs and debt discount at September 30, 2020 was $11,690. On August 20, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender 4”) and issued an 8% convertible promissory note in the principal amount of $63,000 to the Lender 4 with a maturity date of August 20, 2021. On August 21, 2020, the Company received net proceeds in the amount of $60,000 as a result of $3,000 being paid to reimburse the Lender 4 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 $101,996, 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. The aggregate balance of the convertible promissory note and accrued interest was $63,000 and $580, respectively, at September 30, 2020. The aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount at September 30, 2020 was $7,249. On August 27, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender 5”) and issued an 8% convertible promissory note in the principal amount of $105,000 (including a $5,000 original issue discount) to the Lender 5 with a maturity date of August 27, 2021. On August 28, 2020, the Company received net proceeds in the amount of $96,000 as a result of $4,000 being paid to reimburse the Lender 5 for legal and due diligence fees incurred with respect to this securities purchase agreement and convertible promissory note. This convertible debenture converts at the lower of i) $0.03 per share or ii) 62% of the lowest closing 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 $176,129, original issue discount of $5,000, deferred financing costs of $4,000 and debt discount of $92,200. The original issue discount, deferred financing costs and debt discount are being amortized over the term of the note. The aggregate balance of the convertible promissory note and accrued interest was $105,000 and $805, respectively, at September 30, 2020. The aggregate balance of the convertible promissory note, net of original issue discount, deferred financing costs and debt discount at September 30, 2020 was $10,068. On August 31, 2020, the Company entered into a securities purchase agreement with an accredited investor (“Lender 6”) and issued an 8% convertible promissory note in the principal amount of $68,000 to the Lender 6 with a maturity date of August 31, 2021. On September 1, 2020, the Company received net proceeds in the amount of $65,000 as a result of $3,000 being paid to reimburse the Lender 6 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 $112,459, 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. The aggregate balance of the convertible promissory note and accrued interest was $68,000 and $462, respectively, at September 30, 2020. The aggregate balance of the convertible promissory note, net of deferred financing costs and debt discount at September 30, 2020 was $5,775. During the three months ended September 30, 2020, the Company paid-off two outstanding convertible promissory notes with an aggregate balance, including accrued interest and prepayment amount of $168,691. At September 30, 2020 and June 30, 2020, there was $694,225 and $565,000 of convertible notes payable outstanding, net of discounts of $563,122 and $375,359, respectively. During the three months September 30, 2020 and 2019, amortization of original issue discount, deferred financing costs, and debt discounts amounted to $320,462 and $34,335, respectively. During the three months ended September 30, 2020, $288,182 of convertible notes, including fees and interest, were converted into 16,331,766 shares of the Company’s common stock. During the three months ended September 30, 2019, there were no conversions of convertible notes into shares of the Company’s common stock. At September 30, 2020, the Company was not in compliance with the terms of the Accredited Investors convertible promissory notes due to the Company being late in filing its Form 10-K for the year ended June 30, 2020. Notes payable under convertible debt and debenture agreements, net is comprised of the following: September 30, June 30, 2020 2020 JMJ Financial $ 109,000 $ 109,000 Accredited Investors 694,225 565,000 Unamortized OID, deferred financings costs, and debt discounts (563,122 ) (375,359 ) Total convertible debt arrangements, net $ 240,103 $ 298,641 At September 30, 2020 and June 30, 2020, the outstanding balances are reflected as current liabilities within our consolidated balance sheets. At September 30, 2020 and June 30, 2020, accrued interest on these convertible notes of $114,762 and $116,619, respectively, is included within accrued expenses of the consolidated balance sheets. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 8: 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 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, 2019 to September 30, 2020: Conversion feature derivative liability 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 Initial fair value of derivative liability recorded as debt discount 463,600 Initial fair value of derivative liability charged to other expense 366,068 Gain on change in fair value included in earnings (266,088 ) Derivative liability relieved by conversions of convertible promissory notes (451,361 ) September 30, 2020 $ 1,009,850 Total derivative liability at September 30, 2020 and June 30, 2020 amounted to $1,009,850 and $897,631, respectively. The change in fair value included in earnings of $266,088 is due in part to the quoted market price of the Company’s common stock decreasing from $0.08 at June 30, 2020 to $0.04 at September 30, 2020, coupled with decreased conversion prices due to the effect of “ratchet” provisions incorporated within the convertible notes payable. The Company used the following assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with binomial simulations at September 30, 2020: Expected volatility 239.7% - 296.5 % Expected term 8.0 months – 11.0 months Risk-free interest rate 0.12 % Stock price $0.04 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 September 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 September 30, 2020 and June 30, 2020: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability, September 30, 2020 $ - $ - $ 1,009.850 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 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 9: STOCKHOLDERS’ EQUITY At September 30, 2020, the total number of shares of all classes of stock that the Company shall have the authority to issue is 500,001,000 shares consisting of 500,000,000 shares of common stock, $0.01 par value per share, of which 73,212,527 are issued, 73,096,710 are outstanding, and 2,666,666 are to be issued, 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. 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 three months ended September 30, 2020, the Company did not issue any shares of common stock under any private placements with accredited investors. During the three months ended September 30, 2019, the Company received $64,500 of net proceeds from the issuance of 258,000 shares of common stock and 10,000 shares of common stock to be issued in private placements with accredited investors, incurring no finder’s fees. Stock Award Payable During the three months ended September 30, 2020 and 2019, the Company did not issue any shares of common stock to former officers, outside directors, or strategic consultants. Stock Based Compensation During the three months ended September 30, 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. For the three months ended September 30, 2020, the Company recorded $153,301 of stock-based compensation expense related to the Exchange Agreement. See Common Stock Warrants section below for further details of the warrants. Furthermore, during the three months ended September 30, 2020 and 2019, the Company recorded $10,737 and $49,391, respectively, of stock-based compensation expense related to a June 1, 2019 grant of 231,635 shares of common stock to Mr. Cutchens, the Company’s Chief Financial Officer, which vests 25% on the six month, 1 year, 2 year, and 3 year anniversaries of the grant date. Vendor Services During the three months ended September 30, 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. During the three months ended September 30, 2020 and 2019, the Company recorded $5,708 and $0, respectively, of expense. Conversion of Debt Securities During the three months ended September 30, 2020, $288,182 of convertible notes, including fees and interest, were converted into 16,331,766 shares of the Company’s common stock by accredited investors, valued at $708,272. During the three months ended September 30, 2019, there were no conversions of convertible notes into shares of the Company’s common stock. Reserved Shares At September 30, 2020, the convertible promissory notes entered into with the accredited investors require the Company to reserve approximately 297,000,000 shares of its common stock for potential future conversions under such instruments. At September 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 Exchange Agreement – Warrants Exchanged for Common Stock During the three months ended September 30, 2020, the Company entered into an 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. For the three months ended September 30, 2020, the Company recorded $153,301 of stock-based compensation expense related to the Exchange Agreement. Warrant Agreement – Earned Warrants Mr. Bhatnagar, the Company’s President and Chief Executive Officer, was 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 was equal to $0.50 per share, and he may not receive Earned Warrants to the extent that the number of Signing Shares (as defined in the Warrant Agreement) and Earned Warrants exceed 80% of the fully diluted common stock of the Company (“Warrant Cap”). For the three months ended September 30, 2019, since the Company’s revenue was $7,569,612, Mr. Bhatnagar earned warrants to acquire 19,941,573 shares of the Company’s common stock under the provisions of the Warrant Agreement. At September 30, 2019, under the current Warrant Cap, there remained approximately 12,500,000 shares of the Company’s common stock that Mr. Bhatnagar can earn. For the three months ended September 30, 2019, the Company recognized $9,970,787 of stock-based compensation expense related to the earned warrants. At September 30, 2019, there remained approximately $6,232,000 of stock-based compensation expense that the Company expects to recognize over the next six months. The Company estimated 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 used 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 was 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 was based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were utilized during the three months ended September 30, 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 September 30, 2019: Warrants Weighted Intrinsic Outstanding, June 30, 2019 4,985,394 $ 0.50 $ - Warrants earned 19,941,574 0.50 - Warrants forfeited - - - Outstanding, September 30, 2019 24,926,968 $ 0.50 $ - Common stock issuable upon exercise of warrants 24,926,968 $ 0.50 $ - Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Range of Number Weighted Weighted Number Weighted $ 0.50 24,926,968 4.96 $ 0.50 24,926,968 $ 0.50 24,926,968 4.96 $ 0.50 24,926,968 $ 0.50 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10: RELATED PARTY TRANSACTIONS Microphase Corporation At September 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. Transactions With Officers Note Payable Issuances At various points during past fiscal years certain officers and former 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 three months ended September 30, 2020 and 2019, the officers and former officers advanced $0 and $20,952, respectively, to provide working capital to the Company and $1,197 and $11,137 has been charged for interest on loans from officers and former officers. At September 30, 2020 and June 30, 2020, these outstanding notes including accrued interest totaled $79,955 and $78,758, respectively. At September 30, 2020, these promissory notes are not convertible into shares of the Company common stock. During the three months ended September 30, 2019, the Company incurred $10,500 of expense related to legal and consulting services provided by Mr. Smiley, the Company’s former CFO and legal counsel. During the three months ended September 30, 2020, the Company did not incur any expense or utilize any services by Mr. Smiley, the Company’s former CFO and legal counsel. 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. The lease term with the related party is a month-to-month arrangement. For the three months ended September 30, 2020 and 2019, $4,050 and $4,050, respectively, was recognized as rent expense under the terms of this month-to-month arrangement. At September 30, 2020 and June 30, 2020, $27,871 and $23,821, respectively, was accrued as payable to the related party. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11: COMMITMENTS AND CONTINGENCIES Commitments 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. 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 $765,247 presented as liabilities in arrears – judgement settlement agreement on the consolidated balance sheets (see Note 6). 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 9). 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 $765,247 presented as liabilities in arrears – judgement settlement agreement on the consolidated balance sheets (see Note 6). 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 $435,000. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 12: 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 three months ended September 30, 2020 and 2019. The assets and liabilities associated with discontinued operations included in our consolidated balance sheets at September 30, 2020 and June 30, 2020 were only accounts payable with a balance of $82,795 and $82,795, respectively. For the three months ended September 30, 2020 and 2019, there were no revenue or expenses associated with discontinued operations included in our consolidated statements of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13: SUBSEQUENT EVENTS On October 13, 2020, the Company withdrew its previously filed preliminary registration statement in accordance with the registration rights agreement entered into with White Lion Capital, LLC on July 13, 2020. 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 2, 2020, the Company issued 2,666,666 shares of its common stock in accordance with the Asset Purchase Agreement (“APA”) of its CloseComms acquisition. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications of prior year amounts have been made to enhance comparability with the current year’s unaudited consolidated financial statements, including, but not limited to, presentation of certain items within the unaudited consolidated statements of operations and comprehensive income (loss), unaudited consolidated statements of cash flows, and certain notes to the unaudited 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. 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: September 30, 2020 June 30, 2020 Period-end INR: USD exchange rate $ 0.01357 $ 0.01329 Period-end GBP: USD exchange rate $ 1.28593 $ 1.23244 Income statement: September 30, 2020 2019 Average Annual INR: USD exchange rate $ 0.01343 $ 0.01437 Average Annual GBP: USD exchange rate $ 1.25861 $ - |
Use of Estimates | Use of Estimates The preparation of unaudited consolidated financial statements in conformity with U.S. 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 unaudited consolidated financial statements and reported amounts of revenues and expenses for 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, valuation of intangible assets, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the valuation reserve for income taxes. |
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 maintains 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 three months ended September 30, 2020 and 2019, this one customer accounted for 100% and 99% of our total revenue, respectively. At September 30, 2020 and June 30, 2020, this one customer accounted for approximately 100% and 100% 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 three months ended September 30, 2020, this one supplier accounted for approximately 100% of our total cost of revenue and accounted for approximately 94% of our total accounts payable. For the three months ended September 30, 2019, this one supplier accounted for approximately 99% of our total cost of revenue and accounted for approximately 83% of our total accrued expenses. |
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 September 30, 2020 and June 30, 2020. 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 September 30, 2020 and June 30, 2020, 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 September 30, 2020 and June 30, 2020, the Company determined there was no requirement for an allowance for doubtful accounts. |
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, 2021, we will perform our annual evaluation of goodwill impairment to determine if the estimated fair value of the reporting unit exceeds its carrying value. Patents and licenses are capitalized when the Company determines there will be a future benefit derived from such assets and are stated at cost. Amortization is computed using the straight-line method over the estimated useful life of the asset, generally five years. As of September 30, 2020 and June 30, 2020, the book value of patents and licenses of $214,383, has been fully amortized and no amortization expense was recorded for the three months ended September 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. At September 30, 2020, the book value of purchased and developed technology of $3,835,077, included three technology platforms, a machine learning platform and two artificial intelligence platforms. For the three months ended September 30, 2020 and 2019, the Company incurred amortization expense of $223,833 and $242,139, respectively. |
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 off 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 September 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 5). 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 5). A contract asset is recognized for incremental costs to obtain a customer contract that are recoverable, otherwise such incremental costs are expensed as incurred. |
Share-Based Compensation | Share-Based Compensation The Company computes share based payments in accordance with the provisions of ASC Topic 718, Compensation – Stock Compensation |
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 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. At September 30, 2020, as we incurred net income for the period, dilutive shares included 32,943,371 shares of the Company’s common stock related to convertible promissory notes, assuming exercise of such warrants and conversion of such convertible promissory notes occurred at July 1, 2020, as the conversion price of the convertible promissory notes were less than the average market price of the Company’s common stock for the three months ended September 30, 2020. Additionally, for dilutive EPS purposes for the three months ended September 30, 2020, the assumed conversion of such convertible promissory notes at July 1, 2020, increased the net income amount used in the dilutive EPS computation by $455,673 as a result of the net impact of interest that would not have been incurred during the period as well as original issue discounts, deferred financing costs, debt discounts, and derivative liability balances that would not have been required at September 30, 2020. At September 30, 2020, there were 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, which were not included in computing dilutive EPS. For the three months ended September 30, 2019, basic and diluted EPS are computed using the same number of weighted average shares as we incurred a net loss. |
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, 2020, the Company adopted Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement |
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. 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 unaudited consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Sep. 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: September 30, 2020 June 30, 2020 Period-end INR: USD exchange rate $ 0.01357 $ 0.01329 Period-end GBP: USD exchange rate $ 1.28593 $ 1.23244 Income statement: September 30, 2020 2019 Average Annual INR: USD exchange rate $ 0.01343 $ 0.01437 Average Annual GBP: USD exchange rate $ 1.25861 $ - |
Intangible Asset - Purchased _2
Intangible Asset - Purchased Software, Net (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Asset | Intangible asset – Purchased Software, net, is comprised of the following at: September 30, June 30, 2020 2020 Purchased software $ 3,835,077 $ 3,759,021 Less: accumulated amortization (1,147,737 ) (923,904 ) Purchased software, net $ 2,687,340 $ 2,835,117 |
Schedule of Intangible Asset by Developed Software | Intangible asset – Purchased Software consists of the following three software technologies: Alpha Predictions developed software $ 1,583,222 Travel Buddhi developed software 115,466 CloseComms developed software 988,653 Total developed software $ 2,687,340 |
Schedule of Future Amortization Expense | Future amortization expense related to the existing net carrying amount of developed software at September 30, 2020 is expected to be as follows: Remainder of fiscal year 2021 $ 862,543 Fiscal year 2022 1,272,738 Fiscal year 2023 368,040 Fiscal year 2024 184,020 $ 2,687,340 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Category and Primary Geographic Regions | The following table presents our revenue disaggregated by category and primary geographic regions within our single reporting segment: For the Three Months Ended September 30, 2020 2019 Categories: Subscription $ 6,180,000 $ 6,180,000 Service and support 897,264 870,089 Application development and implementation 509,600 519,523 Total revenue $ 7,586,864 $ 7,569,612 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 Three Months Ended September 30, 2020 2019 India $ 1,714,711 $ 2,883,092 United Kingdom 1,017,152 - Total long-lived assets $ 2,731,863 $ 2,883,092 |
Schedule of Reconciliation of Contract Liabilities | The following table presents a reconciliation of the contract liabilities from June 30, 2020 to September 30, 2020: June 30, 2020 $ 219,652 Contract liability deferral 71,174 Amortization of contract liability to revenue (27,174 ) June 30, 2020 $ 263,652 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable is comprised of the following: September 30, June 30, 2020 2020 Note payable, SBA – Paycheck Protection Program [1] $ 33,472 $ 33,388 Note payable, SBA – Economic Injury Disaster Loan [2] 155,983 154,540 Note payable, John Fife (dba St. George Investors)/Judgment Settlement Agreement [3] 765,247 771,702 Total notes payable $ 954,702 $ 956,630 Less: current portion of notes payable (791,344 ) (792,171 ) Long-term portion of notes payable $ 163,358 $ 167,459 [1] [2] [3] |
Convertible Debt Arrangements (
Convertible Debt Arrangements (Tables) | 3 Months Ended |
Sep. 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: September 30, June 30, 2020 2020 JMJ Financial $ 109,000 $ 109,000 Accredited Investors 694,225 565,000 Unamortized OID, deferred financings costs, and debt discounts (563,122 ) (375,359 ) Total convertible debt arrangements, net $ 240,103 $ 298,641 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Reconciliation of 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, 2019 to September 30, 2020: Conversion feature derivative liability 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 Initial fair value of derivative liability recorded as debt discount 463,600 Initial fair value of derivative liability charged to other expense 366,068 Gain on change in fair value included in earnings (266,088 ) Derivative liability relieved by conversions of convertible promissory notes (451,361 ) September 30, 2020 $ 1,009,850 |
Schedule of Derivative Assumptions | The Company used the following assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with binomial simulations at September 30, 2020: Expected volatility 239.7% - 296.5 % Expected term 8.0 months – 11.0 months Risk-free interest rate 0.12 % Stock price $0.04 |
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 September 30, 2020 and June 30, 2020: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability, September 30, 2020 $ - $ - $ 1,009.850 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 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Assumptions Used | The following assumptions were utilized during the three months ended September 30, 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 September 30, 2019: Warrants Weighted Intrinsic Outstanding, June 30, 2019 4,985,394 $ 0.50 $ - Warrants earned 19,941,574 0.50 - Warrants forfeited - - - Outstanding, September 30, 2019 24,926,968 $ 0.50 $ - Common stock issuable upon exercise of warrants 24,926,968 $ 0.50 $ - |
Schedule of Warrants Outstanding and Exercisable by Exercise Price Range | Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Range of Number Weighted Weighted Number Weighted $ 0.50 24,926,968 4.96 $ 0.50 24,926,968 $ 0.50 24,926,968 4.96 $ 0.50 24,926,968 $ 0.50 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (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 ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net cash used in operating activities | $ 306,368 | $ 191,370 | |
Working capital | 4,427,531 | ||
Accumulated deficit | $ (227,006,926) | $ (227,727,420) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Concentration risk, percentage | 100.00% | 100.00% | |
Cash equivalents | |||
Aggregate settlement amount | 22,500,000 | ||
Allowance for doubtful accounts receivable | |||
Impairment of long lived assets | |||
Intangible asset - purchased software, net | $ 2,687,340 | 2,835,117 | |
Income tax examination, likelihood of unfavorable settlement | Greater than 50 percent | ||
Net Impact of interest on convertible debt | $ 455,673 | ||
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 | 155,817 | ||
Common Stock [Member] | Convertible Promissory Note [Member] | |||
Antidilutive securities excluded from computation of earnings per share | 32,943,371 | ||
Technology Platforms [Member] | |||
Capitalized software development costs | $ 3,835,077 | ||
Amortization expense of capitalized software development costs | $ 223,833 | 242,139 | |
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 | |||
Cost of Revenue [Member] | One Supplier [Member] | |||
Concentration risk, percentage | 100.00% | 99.00% | |
Accounts Payable [Member] | One Supplier [Member] | |||
Concentration risk, percentage | 94.00% | 83.00% | |
One Customer [Member] | Revenue [Member] | |||
Concentration risk, percentage | 100.00% | 99.00% | |
One Customer [Member] | Accounts Receivable [Member] | |||
Concentration risk, percentage | 100.00% | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Foreign Currencies Translation Exchange Rate (Details) | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Period-end INR [Member] | |||
Foreign currency translation exchange rate | 0.01357 | 0.01329 | |
Period-end GBP [Member] | |||
Foreign currency translation exchange rate | 1.28593 | 1.23244 | |
Average Annual INR [Member] | |||
Foreign currency translation exchange rate | 0.01343 | 0.01437 | |
Average Annual GBP [Member] | |||
Foreign currency translation exchange rate | 1.25861 |
Intangible Asset - Purchased _3
Intangible Asset - Purchased Software, Net (Details Narrative) - USD ($) | Mar. 11, 2020 | Jun. 30, 2019 | Feb. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Asset acquisition | $ 968 | ||||
Developed Software [Member] | |||||
Amortized of straight line term | 3 years | ||||
Amortization expense related to purchased software | $ 223,833 | $ 242,139 | |||
Alpha Predictions Developed Software [Member] | |||||
Asset acquisition | $ 2,905,668 | ||||
Travel Buddhi Developed Software [Member] | |||||
Asset acquisition | $ 115,281 | ||||
CloseComms Developed Software [Member] | |||||
Asset acquisition | $ 954,918 | ||||
Alpha Predictions LLP [Member] | |||||
Business acquisition, percentage of voting interests acquired | 99.00% |
Intangible Asset - Purchased _4
Intangible Asset - Purchased Software, Net - Schedule of Intangible Asset (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Purchased software | $ 3,835,077 | $ 3,759,021 |
Less: accumulated amortization | (1,147,737) | (923,904) |
Intangible asset - purchased software, net | $ 2,687,340 | $ 2,835,117 |
Intangible Asset - Purchased _5
Intangible Asset - Purchased Software, Net - Schedule of Intangible Asset by Developed Software (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Total purchased software | $ 2,687,340 | $ 2,835,117 |
Alpha Predictions Developed Software [Member] | ||
Total purchased software | 1,583,222 | |
Travel Buddhi Developed Software [Member] | ||
Total purchased software | 115,466 | |
CloseComms Developed Software [Member] | ||
Total purchased software | $ 988,653 |
Intangible Asset - Purchased _6
Intangible Asset - Purchased Software, Net - Schedule of Future Amortization Expense (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of fiscal year 2021 | $ 862,543 | |
Fiscal year 2022 | 1,272,738 | |
Fiscal year 2023 | 368,040 | |
Fiscal year 2024 | 184,020 | |
Intangible asset - purchased software, net | $ 2,687,340 | $ 2,835,117 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Concentration risk percentage | 100.00% | 100.00% | |
Contract liabilities | $ 263,652 | $ 219,652 | $ 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 and Primary Geographic Regions (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Total revenue | $ 7,586,864 | $ 7,569,612 |
Concentration risk percentage | 100.00% | 100.00% |
India [Member] | ||
Concentration risk percentage | 100.00% | 100.00% |
Subscription [Member] | ||
Total revenue | $ 6,180,000 | $ 6,180,000 |
Service and Support [Member] | ||
Total revenue | 897,264 | 870,089 |
Application Development and Implementation [Member] | ||
Total revenue | $ 509,600 | $ 519,523 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Long-lived Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Total long-lived assets | $ 2,731,863 | $ 2,883,092 |
India [Member] | ||
Total long-lived assets | 1,714,711 | 2,883,092 |
United Kingdom [Member] | ||
Total long-lived assets | $ 1,017,152 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Reconciliation of Contract Liabilities (Details) | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Beginning balance, contract liabilities | $ 219,652 |
Contract liability deferral | 71,174 |
Amortization of contract liability to revenue | (27,174) |
Ending balance, contract liabilities | $ 263,652 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | |
Total notes payable | $ 954,702 | $ 956,630 | |
Less: current portion of notes payable | (791,344) | (792,171) | |
Long-term portion of notes payable | 163,358 | 167,459 | |
Notes Payable One [Member] | |||
Total notes payable | [1] | 33,472 | 33,388 |
Notes Payable Two [Member] | |||
Total notes payable | [2] | 155,983 | 154,540 |
Notes Payable Three [Member] | |||
Total notes payable | [3] | $ 765,247 | $ 771,702 |
[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 September 30, 2020, $20,635 was recorded as a current liability within notes payable and $12,837 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 September 30, 2020, the Company recorded this amount as a current liability. At September 30, 2020, $5,462 was recorded as a current liability within notes payable and $150,521 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 $765,247 presented as liabilities in arrears - judgement settlement agreement on the consolidated balance sheets. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Aug. 17, 2020 | Jun. 04, 2020 | May 28, 2020 | Apr. 28, 2020 | Dec. 10, 2018 | Sep. 30, 2020 | Jun. 30, 2020 | |
Total notes payable | $ 954,702 | $ 956,630 | ||||||
Notes payable current | 791,344 | 792,171 | ||||||
Notes payable net of current | 163,358 | 167,459 | ||||||
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 | Aug. 17, 2021 | Mar. 31, 2020 | ||||||
Judgement Settlement Agreement [Member] | ||||||||
Debt final payments | $ 195,000 | |||||||
Remaining liabilities of long term debt | 765,247 | |||||||
Notes Payable One [Member] | ||||||||
Total notes payable | [1] | 33,472 | 33,388 | |||||
Notes Payable Two [Member] | ||||||||
Total notes payable | [2] | 155,983 | $ 154,540 | |||||
Paycheck Protection Program [Member] | Notes Payable One [Member] | ||||||||
Total notes payable | $ 33,333 | |||||||
Debt instrument 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 current | 20,635 | |||||||
Notes payable net of current | 12,837 | |||||||
Economic Injury Disaster Loan [Member] | Notes Payable Two [Member] | ||||||||
Total notes payable | $ 150,000 | |||||||
Debt instrument 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 current | 5,462 | |||||||
Notes payable net of current | $ 150,521 | |||||||
Proceeds from notes payable | $ 4,000 | |||||||
Convertible Promissory Note [Member] | Judgement Settlement Agreement [Member] | ||||||||
Total notes payable | $ 300,000 | |||||||
Debt instrument interest rate | 10.00% | |||||||
Debt instrument maturity date | Aug. 17, 2021 | |||||||
Remaining liabilities of long term debt | $ 765,247 | |||||||
[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 September 30, 2020, $20,635 was recorded as a current liability within notes payable and $12,837 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 September 30, 2020, the Company recorded this amount as a current liability. At September 30, 2020, $5,462 was recorded as a current liability within notes payable and $150,521 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. |
Convertible Debt Arrangements_2
Convertible Debt Arrangements (Details Narrative) | Sep. 01, 2020USD ($)Integer | Aug. 31, 2020USD ($) | Aug. 28, 2020USD ($)Integer$ / shares | Aug. 27, 2020USD ($) | Aug. 21, 2020USD ($)Integer | Aug. 20, 2020USD ($)Integer | Aug. 19, 2020USD ($) | Aug. 06, 2020USD ($)Integer | Jul. 31, 2020USD ($) | Jul. 24, 2020USD ($)Integer | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)$ / sharesshares |
Convertible notes payable | $ 694,225 | $ 565,000 | |||||||||||
Debt conversion of shares | shares | 16,331,766 | ||||||||||||
Debt instrument conversion price | $ / shares | $ 0.04 | $ 0.08 | |||||||||||
Debt principal amount | $ 288,182 | ||||||||||||
Proceeds from debt | $ 463,600 | $ 212,000 | |||||||||||
Derivative liability | 1,009,850 | 897,631 | |||||||||||
Debt discount | 563,122 | 375,359 | |||||||||||
Convertible notes | 298,641 | ||||||||||||
Accrued interest and prepayment | 168,691 | ||||||||||||
Amortization of original issue discount, deferred financing costs, and debt discount | 320,462 | 34,335 | |||||||||||
Debt converted into shares, amount | 288,182 | ||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||
Convertible notes payable | 114,762 | 116,619 | |||||||||||
Debt discount | 375,359 | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor One [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Convertible notes payable | 105,000 | ||||||||||||
Accrued interest | 1,588 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt principal amount | $ 105,000 | ||||||||||||
Debt original issued discount | $ 5,000 | ||||||||||||
Debt maturity date | Jul. 24, 2021 | ||||||||||||
Proceeds from debt | $ 95,000 | ||||||||||||
Payment to reimburse amount | $ 5,000 | ||||||||||||
Debt conversion percentage | 60.00% | ||||||||||||
Conversion trading days | Integer | 20 | ||||||||||||
Derivative liability | $ 175,000 | ||||||||||||
Debt original issued discount | 5,000 | ||||||||||||
Deferred financing cost | 5,000 | ||||||||||||
Debt discount | $ 95,000 | ||||||||||||
Convertible notes | 19,849 | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Two [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Convertible notes payable | 68,000 | ||||||||||||
Accrued interest | 924 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt principal amount | $ 68,000 | ||||||||||||
Debt maturity date | Jul. 31, 2021 | ||||||||||||
Proceeds from debt | $ 65,000 | ||||||||||||
Payment to reimburse amount | $ 3,000 | ||||||||||||
Debt conversion percentage | 62.00% | ||||||||||||
Conversion trading days | Integer | 20 | ||||||||||||
Derivative liability | $ 102,228 | ||||||||||||
Deferred financing cost | 3,000 | ||||||||||||
Debt discount | $ 65,000 | ||||||||||||
Convertible notes | 11,551 | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Three [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Convertible notes payable | 99,225 | ||||||||||||
Accrued interest | 935 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt principal amount | $ 99,225 | ||||||||||||
Debt original issued discount | $ 4,725 | ||||||||||||
Debt maturity date | Aug. 19, 2021 | ||||||||||||
Proceeds from debt | $ 90,000 | ||||||||||||
Payment to reimburse amount | $ 4,500 | ||||||||||||
Debt conversion percentage | 60.00% | ||||||||||||
Conversion trading days | Integer | 20 | ||||||||||||
Derivative liability | $ 161,856 | ||||||||||||
Debt original issued discount | 4,725 | ||||||||||||
Deferred financing cost | 4,500 | ||||||||||||
Debt discount | $ 86,400 | ||||||||||||
Convertible notes | 11,690 | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Four [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Convertible notes payable | 63,000 | ||||||||||||
Accrued interest | 580 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt principal amount | $ 63,000 | ||||||||||||
Debt maturity date | Aug. 20, 2021 | ||||||||||||
Proceeds from debt | $ 60,000 | ||||||||||||
Payment to reimburse amount | $ 3,000 | ||||||||||||
Debt conversion percentage | 62.00% | ||||||||||||
Conversion trading days | Integer | 20 | ||||||||||||
Derivative liability | $ 101,996 | ||||||||||||
Deferred financing cost | 3,000 | ||||||||||||
Debt discount | $ 60,000 | ||||||||||||
Convertible notes | 7,249 | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Five [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Convertible notes payable | 105,000 | ||||||||||||
Accrued interest | 805 | ||||||||||||
Debt instrument conversion price | $ / shares | $ 0.03 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt principal amount | $ 105,000 | ||||||||||||
Debt original issued discount | $ 5,000 | ||||||||||||
Debt maturity date | Aug. 27, 2021 | ||||||||||||
Proceeds from debt | $ 96,000 | ||||||||||||
Payment to reimburse amount | $ 4,000 | ||||||||||||
Conversion trading days | Integer | 20 | ||||||||||||
Derivative liability | $ 176,129 | ||||||||||||
Debt original issued discount | 5,000 | ||||||||||||
Deferred financing cost | 4,000 | ||||||||||||
Debt discount | $ 92,200 | ||||||||||||
Convertible notes | 10,068 | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Five [Member] | 8% Convertible Promissory Note [Member] | Maximum [Member] | |||||||||||||
Debt conversion percentage | 62.00% | ||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor Six [Member] | 8% Convertible Promissory Note [Member] | |||||||||||||
Convertible notes payable | 68,000 | ||||||||||||
Accrued interest | 462 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt principal amount | $ 68,000 | ||||||||||||
Debt maturity date | Aug. 31, 2021 | ||||||||||||
Proceeds from debt | $ 65,000 | ||||||||||||
Payment to reimburse amount | $ 3,000 | ||||||||||||
Debt conversion percentage | 62.00% | ||||||||||||
Conversion trading days | Integer | 20 | ||||||||||||
Derivative liability | $ 112,459 | ||||||||||||
Deferred financing cost | 3,000 | ||||||||||||
Debt discount | $ 65,000 | ||||||||||||
Convertible notes | 5,775 | ||||||||||||
JMJ Financial [Member] | |||||||||||||
Convertible notes payable | 213,545 | 209,330 | |||||||||||
Accrued interest | $ 4,215 | $ 3,892 | |||||||||||
Debt conversion of shares | shares | 10,677 | 10,466 | |||||||||||
Debt instrument conversion price | $ / shares | $ 20 | $ 20 |
Convertible Debt Arrangements -
Convertible Debt Arrangements - Schedule of Notes Payable Under Convertible Debt and Debenture Agreements, Net (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Total convertible debt arrangements, net | $ 240,103 | $ 298,641 |
JMJ Financial [Member] | ||
Total convertible debt arrangements, net | 109,000 | 109,000 |
Accredited Investors [Member] | ||
Total convertible debt arrangements, net | 694,225 | 565,000 |
Unamortized OID, Deferred Financings Costs, and Debt Discounts [Member] | ||
Total convertible debt arrangements, net | $ (563,122) | $ (375,359) |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative liability | $ 1,009,850 | $ 897,631 | |
Gain on change in fair value of derivative liability | $ 266,088 | $ 65,803 | |
Conversion price per share | $ 0.04 | $ 0.08 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Reconciliation of Derivative Liability (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability, beginning balance | $ 897,631 | $ 133,669 |
Initial fair value of derivative liability recorded as debt discount | 463,600 | 1,115,000 |
Initial fair value of derivative liability charged to other expense | 366,068 | 1,610,913 |
Gain on change in fair value included in earnings | (266,088) | (1,961,951) |
Derivative liability relieved by conversions of convertible promissory notes | (451,361) | |
Derivative liability, ending balance | $ 1,009,850 | $ 897,631 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Assumptions (Details) | 3 Months Ended |
Sep. 30, 2020$ / shares | |
Expected Volatility [Member] | Minimum [Member] | |
Fair value of measurement percentage | 239.7 |
Expected Volatility [Member] | Maximum [Member] | |
Fair value of measurement percentage | 296.5 |
Expected Term [Member] | Minimum [Member] | |
Fair value of measurement of term | 8 months |
Expected Term [Member] | Maximum [Member] | |
Fair value of measurement of term | 11 months |
Risk-free Interest Rate [Member] | |
Fair value of measurement percentage | 0.12 |
Stock Price [Member] | |
Stock price | $ 0.04 |
Derivative Liability - Schedu_3
Derivative Liability - Schedule of Fair Value On Recurring Basis Derivative Liability (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Derivative liability | $ 1,009,850 | $ 897,631 |
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 | $ 1,009,850 | $ 897,631 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | ||||||||
Sep. 30, 2020 | Sep. 30, 2019 | Aug. 04, 2020 | Aug. 03, 2020 | Jul. 14, 2020 | Jul. 13, 2020 | Jun. 30, 2020 | Sep. 04, 2019 | Sep. 03, 2019 | |
Classes of stock, shares authorized | 500,001,000 | ||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 250,000,000 | 250,000,000 | 100,000,000 | 500,000,000 | 100,000,000 | 25,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |||||||
Common stock, shares issued | 73,212,527 | 19,318,679 | |||||||
Common stock, shares outstanding | 73,096,710 | 19,174,492 | |||||||
Common stock to be issued, shares | 2,666,666 | ||||||||
Preferred stock, shares authorized | 1,000 | 1,000 | |||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||
Preferred stock, shares issued | 1,000 | 1,000 | |||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | |||||||
Proceeds from sale of common stock | $ 64,500 | ||||||||
Stock-based compensation | 187,852 | 10,020,178 | |||||||
Issuance of common stock for services | 6,820 | ||||||||
Debt conversion, converted instrument, amount | $ 288,182 | ||||||||
Debt conversion, converted instrument, common stock issued | 16,331,766 | ||||||||
Issuance of common stock for conversions of convertible promissory notes | $ 708,272 | ||||||||
Common stock, capital shares reserved for future issuance | 297,000,000 | ||||||||
Treasury stock, common, shares | 7,202 | ||||||||
Revenue | $ 7,586,864 | $ 7,569,612 | |||||||
Over the Next Six Months [Member] | |||||||||
Stock-based compensation | 6,232,000 | ||||||||
2014 under an Equity Line of Credit [Member] | |||||||||
Treasury stock, common, shares | 8,000 | ||||||||
Mr. Cutchens [Member] | |||||||||
Stock-based compensation | $ 10,737 | 49,391 | |||||||
Number of common stock grants in period | 231,635 | ||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights description | The Company's Chief Financial Officer, which vests 25% on the six month, 1 year, 2 year, and 3 year anniversaries of the grant date. | ||||||||
Vendor Services [Member] | |||||||||
Issuance of common stock for services | $ 5,708 | $ 0 | |||||||
Mr. Bhatnagar [Member] | |||||||||
Issuance of common stock to accredited investors in private placements | 12,500,000 | ||||||||
Exchange Agreement [Member] | |||||||||
Stock-based compensation | $ 153,301 | ||||||||
Consulting, Public Relations, and Marketing Agreement [Member] | |||||||||
Number of shares issued on restricted shares, shares | 200,000 | ||||||||
Warrant Agreement - Earned Warrants [Member] | Mr. Bhatnagar [Member] | |||||||||
Warrant exercise price per shares | $ 0.50 | ||||||||
Purchase price of common stock, percent | 4.00% | ||||||||
Revenue | $ 1,000,000 | ||||||||
Warrants exceed percentage of fully diluted common stock | 80.00% | ||||||||
Warrant Agreement [Member] | Mr. Bhatnagar [Member] | |||||||||
Class of warrant number of securities called by warrants | 19,941,573 | ||||||||
Cancelled Warrants [Member] | Exchange Agreement [Member] | |||||||||
Issued purchase of warrants | $ 37,390,452 | ||||||||
Forfeited and exchanged for shares | $ 37,390,452 | ||||||||
Warrant exercise price per shares | $ 0.50 | ||||||||
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. | ||||||||
Common Stock [Member] | |||||||||
Issuance of common stock to accredited investors in private placements | 380,000 | ||||||||
Issuance of common stock for services, shares | 200,000 | ||||||||
Issuance of common stock for services | $ 2,000 | ||||||||
Issuance of common stock for conversions of convertible promissory notes | $ 163,318 | ||||||||
Warrants [Member] | |||||||||
Stock-based compensation | $ 9,970,787 | ||||||||
Private Placement [Member] | |||||||||
Proceeds from sale of common stock | $ 64,500 | ||||||||
Issuance of common stock to accredited investors in private placements | 258,000 | ||||||||
Private placement, finder fees | |||||||||
Private Placement [Member] | Common Stock [Member] | |||||||||
Issuance of common stock to accredited investors in private placements | 10,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Assumptions Used (Details) | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Expected volatility | 21779.77% |
Weighted-average volatility | 21779.77% |
Expected dividends | 0.00% |
Expected term (in years) | 5 years |
Risk-free rate | 2.52% |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Common Stock Purchase Warrants Outstanding (Details) | 3 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Warrants outstanding, beginning balance | shares | 4,985,394 |
Warrants earned | shares | 19,941,574 |
Warrants forfeited | shares | |
Warrants outstanding, ending balance | shares | 24,926,968 |
Common stock issuable upon exercise of warrants outstanding | shares | 24,926,968 |
Weighted average exercise price warrants outstanding, beginning balance | $ / shares | $ 0.50 |
Weighted average exercise price warrants earned | $ / shares | 0.50 |
Weighted average exercise price warrants forfeited | $ / shares | |
Weighted average exercise price warrants outstanding, ending balance | $ / shares | 0.50 |
Weighted average exercise price common stock issuable upon exercise of warrants, outstanding | $ / shares | $ 0.50 |
Intrinsic value warrants outstanding, beginning balance | $ | |
Intrinsic value warrants earned | $ | |
Intrinsic value warrants forfeited | $ | |
Intrinsic value warrants outstanding, ending balance | $ | |
Intrinsic value common stock issuable upon exercise of warrants outstanding | $ |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable by Exercise Price Range (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Common stock issuable upon exercise of warrants outstanding number | 24,926,968 | 4,985,394 |
Warrants [Member] | ||
Common stock issuable upon exercise of warrants outstanding number | 24,926,968 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 4 years 11 months 15 days | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.50 | |
Common stock issuable upon warrants exercisable number | 24,926,968 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.50 | |
Warrants [Member] | Exercise Price Range [Member] | ||
Common stock issuable upon exercise of warrants outstanding, range of exercise price | $ 0.50 | |
Common stock issuable upon exercise of warrants outstanding number | 24,926,968 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 4 years 11 months 15 days | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.50 | |
Common stock issuable upon warrants exercisable number | 24,926,968 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.50 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 01, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 |
Outstanding amount | $ 954,702 | $ 956,630 | ||
Rent expense | $ 1,350 | 4,050 | $ 4,050 | |
Accrued payable to related party | $ 27,871 | 23,821 | ||
Officers [Member] | ||||
Debt interest rate | 6.00% | |||
Loan from officers | $ 0 | 20,952 | ||
Interest on loans | 1,197 | 11,137 | ||
Outstanding amount | 79,955 | $ 78,758 | ||
Former Officers [Member] | ||||
Loan from officers | 0 | 20,952 | ||
Interest on loans | 1,197 | 11,137 | ||
Mr. Smiley [Member] | ||||
Legal and consulting expenses | $ 10,500 | |||
Microphase Corporation [Member] | ||||
Company owed amount | $ 32,545 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 17, 2020 | May 01, 2019 | Dec. 10, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 |
Rent expense | $ 1,350 | $ 4,050 | $ 4,050 | |||
Debt principal amount | $ 288,182 | |||||
Common stock, par value | $ 0.01 | $ 0.01 | ||||
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 | Aug. 17, 2021 | Mar. 31, 2020 | ||||
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 | 765,247 | |||||
Judgment Settlement Agreement One [Member] | ||||||
Loss on contingency sought value | $ 435,000 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Accounts payable | $ 82,795 | $ 82,795 | |
Revenue |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 02, 2020 | Oct. 22, 2020 | Jun. 30, 2020 |
Debt principal amount | $ 288,182 | ||
Subsequent Event [Member] | Asset Purchase Agreement [Member] | CloseComms Acquisition [Member] | |||
Number of stock issued on acquisition | 2,666,666 | ||
Subsequent Event [Member] | Event of Default and Demand Letter [Member] | |||
Debt principal amount | $ 40,739 | ||
Debt interest rate | 6.00% | ||
Debt maturity date | Apr. 18, 2020 | ||
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 |