Cover
Cover - shares | 6 Months Ended | |
Dec. 31, 2021 | Feb. 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 000-30202 | |
Entity Registrant Name | mPHASE TECHNOLOGIES, INC. | |
Entity Central Index Key | 0000825322 | |
Entity Tax Identification Number | 22-2287503 | |
Entity Incorporation, State or Country Code | NJ | |
Entity Address, Address Line One | 9841 Washingtonian Blvd #200 | |
Entity Address, City or Town | Gaithersburg | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20878 | |
City Area Code | (301) | |
Local Phone Number | 329-2700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 85,042,887 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Current Assets | ||
Cash | $ 545,871 | $ 2,473,386 |
Accounts receivable, net | 19,929,137 | 15,784,081 |
Prepaid expenses | 195,354 | 238,927 |
Other assets | 479,827 | 422,254 |
Total Current Assets | 21,150,189 | 18,918,648 |
Property and equipment, net | 9,278 | 16,518 |
Goodwill | 3,662 | 3,669 |
Intangible assets - purchased software, net | 1,599,933 | 2,079,047 |
Other assets | 3,634 | 3,645 |
Total Assets | 22,766,696 | 21,021,527 |
Current Liabilities | ||
Accounts payable | 3,497,201 | 4,158,006 |
Accrued expenses | 1,205,065 | 1,368,367 |
Contract liabilities | 430,027 | 350,689 |
Due to related parties | 89,377 | 87,688 |
Notes payable to officer | 713,137 | 691,942 |
Notes payable | 93,144 | 323,218 |
Convertible notes payable, net | 3,527,623 | 1,991,036 |
Liabilities in arrears with convertible features | 109,000 | 109,000 |
Liabilities of discontinued operations | 82,795 | 82,795 |
Total Current Liabilities | 9,747,369 | 9,162,741 |
Notes payable, net of current portion | 146,890 | 146,890 |
Total Liabilities | 9,894,259 | 9,309,631 |
Commitments and Contingencies (Note 11) | ||
Stockholders’ Equity | ||
Preferred stock, $0.01 par value; 1,000 shares authorized, issued and outstanding at December 31, 2021 and June 30, 2021 | 10 | 10 |
Common stock, $0.01 par value; 500,000,000 shares authorized, 81,656,033 shares issued and 81,627,663 shares outstanding at December 31, 2021, and 78,612,608 shares issued and 78,584,238 shares outstanding at June 30, 2021 | 816,278 | 785,844 |
Additional paid-in-capital | 237,890,249 | 236,935,277 |
Common stock to be issued | 30,000 | 63,700 |
Accumulated other comprehensive income (loss) | 3,106 | (11,526) |
Accumulated deficit | (225,867,206) | (226,061,409) |
Total Stockholders’ Equity | 12,872,437 | 11,711,896 |
Total Liabilities and Stockholders’ Equity | $ 22,766,696 | $ 21,021,527 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Jun. 30, 2021 | Aug. 04, 2020 | Aug. 03, 2020 | Aug. 02, 2020 | Jul. 14, 2020 | Jul. 13, 2020 | Jun. 10, 2020 | Jun. 09, 2020 | Sep. 04, 2019 | Sep. 03, 2019 | Aug. 27, 2019 | Aug. 23, 2019 |
Statement of Financial Position [Abstract] | |||||||||||||
Preferred stock, par or stated value per share | $ 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 or Stated Value Per Share | $ 0.01 | $ 0.01 | |||||||||||
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 | 250,000,000 | 500,000,000 | 250,000,000 | 100,000,000 | 100,000,000 | 250,000,000 | 100,000,000 | 25,000,000 | 25,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 81,656,033 | 78,612,608 | |||||||||||
Common Stock, Shares, Outstanding | 81,627,663 | 78,584,238 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 8,339,877 | $ 7,636,436 | $ 16,565,587 | $ 15,223,300 |
Cost of revenue | 5,625,000 | 5,625,010 | 11,250,033 | 11,250,399 |
Gross Profit | 2,714,877 | 2,011,426 | 5,315,554 | 3,972,901 |
Operating Expenses: | ||||
Software development costs | 314,664 | 314,664 | ||
Salaries and benefits | 241,304 | 268,859 | 458,891 | 788,632 |
General and administrative expenses | 971,290 | 423,669 | 1,977,242 | 669,742 |
Total Operating Expenses | 1,527,258 | 692,528 | 2,750,797 | 1,458,374 |
Operating Income (Loss) | 1,187,619 | 1,318,898 | 2,564,757 | 2,514,527 |
Other (Expense) Income: | ||||
Interest expense | (82,027) | (31,776) | (178,308) | (117,739) |
(Loss) gain on change in fair value of derivative liability | (108,188) | 157,900 | ||
Amortization of debt discounts, deferred financing costs, and original issue discounts | (1,038,525) | (173,722) | (2,077,049) | (494,184) |
Initial derivative liability expense | (366,068) | |||
(Loss) gain on debt extinguishments and settlements | (166,625) | (115,197) | 31,270 | |
Total Other (Expense) Income | (1,287,177) | (313,686) | (2,370,554) | (788,821) |
(Loss) income before income taxes | (99,558) | 1,005,212 | 194,203 | 1,725,706 |
Income taxes | ||||
Net (loss) income | (99,558) | 1,005,212 | 194,203 | 1,725,706 |
Comprehensive income (loss): | ||||
Unrealized gain (loss) on currency translation adjustment | 1,573 | (21,932) | 14,632 | (143,095) |
Comprehensive income (loss) | $ (97,985) | $ 983,280 | $ 208,835 | $ 1,582,611 |
(Loss) Income per common share: | ||||
(Loss) income per common share – basic | $ 0.01 | $ 0.03 | ||
(Loss) income per common share – diluted | $ 0.01 | $ 0.02 | ||
Weighted average shares outstanding – basic | 80,160,272 | 73,996,275 | 79,547,721 | 68,591,025 |
Weighted average shares outstanding – diluted | 80,160,272 | 105,716,572 | 118,768,099 | 100,341,323 |
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] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Jun. 30, 2020 | $ 10 | $ 191,745 | $ 231,984,704 | $ 955,466 | $ 113,070 | $ (227,727,420) | $ 5,517,575 |
Beginning balance, shares at Jun. 30, 2020 | 1,000 | 19,174,492 | |||||
Issuance of common stock for vendor services | $ 2,000 | 4,820 | 6,820 | ||||
Issuance of common stock for vendor services, shares | 200,000 | ||||||
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 | |||||
Other comprehensive income (loss) | (121,163) | (121,163) | |||||
Net income (loss) | 720,494 | 720,494 | |||||
Ending balance, value at Sep. 30, 2020 | $ 10 | $ 730,968 | 232,324,611 | 955,466 | (8,093) | (227,006,926) | 6,996,036 |
Ending balance, shares at Sep. 30, 2020 | 1,000 | 73,096,710 | |||||
Beginning balance, value at Jun. 30, 2020 | $ 10 | $ 191,745 | 231,984,704 | 955,466 | 113,070 | (227,727,420) | 5,517,575 |
Beginning balance, shares at Jun. 30, 2020 | 1,000 | 19,174,492 | |||||
Net income (loss) | 1,725,706 | ||||||
Ending balance, value at Dec. 31, 2020 | $ 10 | $ 757,635 | 233,264,147 | (30,025) | (226,001,714) | 7,990,053 | |
Ending balance, shares at Dec. 31, 2020 | 1,000 | 75,763,376 | |||||
Beginning balance, value at Sep. 30, 2020 | $ 10 | $ 730,968 | 232,324,611 | 955,466 | (8,093) | (227,006,926) | 6,996,036 |
Beginning balance, shares at Sep. 30, 2020 | 1,000 | 73,096,710 | |||||
Issuance of common stock for CloseComms acquisition | $ 26,667 | 928,799 | (955,466) | ||||
Issuance of common stock for CloseComms acquisition, shares | 2,666,666 | ||||||
Stock-based compensation for restricted shares under employment agreement | 10,737 | 10,737 | |||||
Other comprehensive income (loss) | (21,932) | (21,932) | |||||
Net income (loss) | 1,005,212 | 1,005,212 | |||||
Ending balance, value at Dec. 31, 2020 | $ 10 | $ 757,635 | 233,264,147 | (30,025) | (226,001,714) | 7,990,053 | |
Ending balance, shares at Dec. 31, 2020 | 1,000 | 75,763,376 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 10 | $ 785,844 | 236,935,277 | 63,700 | (11,526) | (226,061,409) | 11,711,896 |
Beginning balance, shares at Jun. 30, 2021 | 1,000 | 78,584,238 | |||||
Issuance of common stock for vendor services | $ 5,454 | 142,226 | (63,700) | 83,960 | |||
Issuance of common stock for vendor services, shares | 543,425 | ||||||
Stock-based compensation for restricted shares under employment agreement | 19,466 | 19,466 | |||||
Relative fair value of warrants issued with convertible promissory notes | 125,252 | 125,252 | |||||
Other comprehensive income (loss) | 13,059 | 13,059 | |||||
Net income (loss) | 293,761 | 293,761 | |||||
Ending balance, value at Sep. 30, 2021 | $ 10 | $ 791,278 | 237,222,221 | 1,533 | (225,767,648) | 12,247,394 | |
Ending balance, shares at Sep. 30, 2021 | 1,000 | 79,127,663 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 10 | $ 785,844 | 236,935,277 | 63,700 | (11,526) | (226,061,409) | 11,711,896 |
Beginning balance, shares at Jun. 30, 2021 | 1,000 | 78,584,238 | |||||
Issuance of common stock for conversions of convertible promissory notes, shares | 25,000,000 | ||||||
Net income (loss) | 194,203 | ||||||
Ending balance, value at Dec. 31, 2021 | $ 10 | $ 816,278 | 237,890,249 | 30,000 | 3,106 | (225,867,206) | 12,872,437 |
Ending balance, shares at Dec. 31, 2021 | 1,000 | 81,627,663 | |||||
Beginning balance, value at Sep. 30, 2021 | $ 10 | $ 791,278 | 237,222,221 | 1,533 | (225,767,648) | 12,247,394 | |
Beginning balance, shares at Sep. 30, 2021 | 1,000 | 79,127,663 | |||||
Issuance of common stock for conversions of convertible promissory notes | $ 25,000 | 641,625 | 666,625 | ||||
Issuance of common stock for conversions of convertible promissory notes, shares | 2,500,000 | ||||||
Stock-based compensation for restricted shares under employment agreement | 26,403 | 26,403 | |||||
Issuance of common stock for Board of Directors services | 30,000 | 30,000 | |||||
Other comprehensive income (loss) | 1,573 | 1,573 | |||||
Net income (loss) | (99,558) | (99,558) | |||||
Ending balance, value at Dec. 31, 2021 | $ 10 | $ 816,278 | $ 237,890,249 | $ 30,000 | $ 3,106 | $ (225,867,206) | $ 12,872,437 |
Ending balance, shares at Dec. 31, 2021 | 1,000 | 81,627,663 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 194,203 | $ 1,725,706 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Amortization of debt discounts, deferred financing costs, and original issue discounts | 2,077,049 | 494,184 |
Depreciation and amortization | 459,230 | 461,659 |
Stock-based compensation | 159,829 | 206,521 |
Loss (gain) on debt extinguishments and settlements | 115,197 | (31,270) |
Gain on change in fair value of derivative liability | (157,900) | |
Initial derivative expense | 366,068 | |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (11,645,056) | (15,298,054) |
Decrease (increase) in prepaid expenses | 43,573 | (7,692) |
Increase in other assets | (57,573) | (546) |
Increase in contract liabilities | 79,338 | 79,677 |
Increase in accounts payable and accrued expenses | 6,782,462 | 11,833,599 |
Net cash used in operating activities | (1,791,748) | (328,048) |
Cash flows from investing activities: | ||
Capital expenditures | (2,357) | (1,727) |
Net cash used in investing activities | (2,357) | (1,727) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes payable, net | 156,248 | 463,600 |
Repayments of notes payable | (304,290) | |
Repayments under settlement agreement | (15,000) | |
Repayments of convertible notes payable | (116,000) | |
Net cash provided by financing activities | (148,042) | 332,600 |
Effect of foreign exchange rates changes on cash | 14,632 | (143,095) |
Net decrease in cash | (1,927,515) | (140,270) |
Cash at beginning of period | 2,473,386 | 142,413 |
Cash at end of period | 545,871 | 2,143 |
Supplemental disclosure: | ||
Cash paid for interest | 32,603 | 52,681 |
Cash paid for taxes | ||
Supplemental disclosure of non-cash operating activities: | ||
Initial fair value of derivative liability recorded as debt discount | 463,300 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Relative fair value of warrants issued with convertible promissory notes | 125,252 | |
Issuance of Common Stock for services | ||
Value | $ 147,660 | $ 6,820 |
Shares | 543,425 | 200,000 |
Issuance of Common Stock for conversions of convertible promissory notes and accrued interest | ||
Value | $ 666,625 | $ 708,272 |
Shares | 2,500,000 | 16,331,766 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2021 | |
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 (“AI”) 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 On May 11, 2020, the Company acquired CloseComms, a patented, software application platform that can be integrated into a retail customer’s existing Wi-Fi infrastructure, giving the retailer important customer data and enabling AI-enhanced, targeted promotions to drive store traffic and sales. During 2021, the Company announced that it would be adding EV+ (electric vehicle) charging network and consumer engagement platform as part of a major strategic initiative to monetize additional points of contact during consumer travel and travel planning. During the course of 2021, the Company actively planned pilot programs in EV+ (electric vehicle) charging network and, as part of a larger strategy to build an AI-driven consumer ecosystem. By late-2021, the Company transitioned into a “green” consumer company, serving as an important bridge between consumers, retailers, and service providers. The Company can best be described as a technology company focused on consumer engagement using data analytics and artificial intelligence to create a monetizable link between consumers and retailers at opportunistic times and places. The Company is currently building a connected ecosystem that includes EV charging and software solutions that optimize consumer engagement within the framework of a SaaS/TaaS model. Branded under the mPower name, this ecosystem will empower the way people shop, dine, fuel and interact with the world to create a richer life experience. The mPower ecosystem is tailored to each individual’s tastes and needs, with particular emphasis on empowering tomorrow’s green consumer. The Company has data driven business units generating recurring revenue outside of its consumer ecosystem, in addition to legacy nanobattery technology and a related patent portfolio that are slated for future development. The Company plans to expand into other markets, both in the United States and globally, where it believes its technology and services will provide a distinct competitive advantage over its competition. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 1: NATURE OF BUSINESS AND BASIS OF PRESENTATION (continued) Concurrently, the Company continues to pursue strategic alternatives to best monetize its patent portfolio, including partnering to exploit opportunities for its drug delivery system. The Company continues seeking to obtain government funding available under the Departments of Defense and Homeland Security including The Department of Defense Ordnance Technology Consortium (“DOTC”), Small Business Innovative Research (“SBIR”), Cooperative Research and Development Agreements (“CRADA”) and similar programs for targeted applications for its smart nano-battery applications. Basis of Presentation The unaudited consolidated 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 unaudited consolidated financial statements for the three and six months ended December 31, 2021 and 2020 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 unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended June 30, 2021, contained in the Company’s Annual Report on Form 10-K filed with the SEC on October 13, 2021. The results of operations for the three and six months ended December 31, 2021, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2022. 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. As economic activity has begun and continues recovering, the impact of the COVID-19 pandemic on our business has been more reflective of greater economic and marketplace dynamics. Furthermore, in light of variant strains of the virus that have emerged, the COVID-19 pandemic could once again impact our operations and the operations of our customers and vendors as a result of quarantines, illnesses, and travel restrictions. 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. The Company applied for a loan under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief and Economic Security Act of 2020 (“CARES ACT”). During April 2020, the Company received loan proceeds of $ 33,333 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Dec. 31, 2021 | |
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 generated net income of $ 194,203 and has used cash in operating activities of $ 1,791,748 for the six months ended December 31, 2021. At December 31, 2021, the Company had a working capital surplus of $ 11,402,820 , and an accumulated deficit of $ 225,867,206 . While these factors alone may raise doubt as to the Company’s ability to continue as a going concern, management believes the Company’s present and expected cash flows will enable it to meet its obligations for a period of twelve months from the date of this filing. 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 the event managements’ plans do not materialize, in order to meet the Company’s working capital needs through the next twelve months and to fund the growth of its nanotechnology, artificial intelligence, and machine learning technologies, as well as our EV charging initiatives, 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 may 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 | 6 Months Ended |
Dec. 31, 2021 | |
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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The exchange rates used to translate amounts in INR and GBP into USD for the purposes of preparing the consolidated financial statements were as follows: SCHEDULE OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATE Balance sheet: December 31, 2021 June 30, 2021 Period-end INR: USD exchange rate $ 0.01349 $ 0.01349 Period-end GBP: USD exchange rate $ 1.34915 $ 1.38510 Income statement: For the Three Months Ended For the Six Months Ended December 31, December 31, 2021 2020 2021 2020 Average Period INR: USD exchange rate $ 0.01349 $ 0.01362 $ 0.01349 $ 0.01351 Average Period GBP: USD exchange rate $ 1.34876 $ 1.32094 $ 1.36066 $ 1.29006 Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated at the rate on the date of the transaction and included in the results of operations as incurred. 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, estimated useful lives of finite-lived intangible assets, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the deferred tax asset valuation allowance. Concentrations of Credit Risk Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with 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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Risk Agreements which potentially subject the Company to concentrations of revenue risk consist principally of one customer agreement. For the six months ended December 31, 2021 and 2020, this one customer accounted for approximately 100 % and 100 % of our total revenue, respectively. At December 31, 2021 and June 30, 2021, this one customer accounted for approximately 100 % and 100 % of our total accounts receivable, respectively. During December 2021, the Company began invoicing its consumer engagement locations. Although immaterial at December 31, 2021, as these locations continue to grow, the aforementioned one customer will become less of the Company’s total revenue and accounts receivable, thus decreasing the Company’s revenue risk concentrations. Supplier Risk Agreements which potentially subject the Company to concentrations of supplier risk consist principally of one supplier agreement. For the six months ended December 31, 2021, this one supplier accounted for approximately 100 80 100 97 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 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 six 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 six tri-party settlement and offset agreements has totaled $ 48,750,000 no 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, 2022, the Company will perform its annual evaluation of goodwill impairment to determine if the estimated fair value of the reporting unit exceeds its carrying value. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 December 31, 2021 and June 30, 2021, the book value of patents and licenses of $ 214,383 no 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 December 31, 2021, the book value of purchased and developed technology of $ 3,875,256 449,142 450,302 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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ASC 820 also describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial instruments consist principally of cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities, due to related parties, and current and long-term debt. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The fair value of short and long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value with the exception of the fair value of due to related parties as the fair value cannot be determined due to a lack of similar instruments available to the Company. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. Revenue Recognition 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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 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, 2021 and 2020. 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 is not included if the result would be anti-dilutive, such as when a net loss is reported. For the three months ended December 31, 2021, basic and diluted EPS are computed using the same number of weighted average shares as we incurred a net loss for those periods. For the six months ended December 31, 2021, as we incurred net income for the period, dilutive shares included approximately 25,000,000 shares of the Company’s common stock related to convertible promissory notes and outstanding warrants to purchase up to approximately 14,000,000 shares of the Company’s common stock, assuming conversion of such convertible promissory notes and exercise of such warrants occurred at July 1, 2021, as the conversion price of the convertible promissory notes and warrants were less than the average market price of the Company’s common stock for the six months ended December 31, 2021. At December 31, 2021, there were approximately 134,316 shares of the Company’s common stock to be issued and 1,000,000 restricted shares of the Company’s common stock to be issued upon vesting pursuant to the terms of employment agreements with the Company’s Chief Operating Officer and Chief Financial Officer, which were not included in computing dilutive EPS. For the three and six months ended December 31, 2020, as we incurred net income for those periods, dilutive shares included 31,750,297 shares of the Company’s common stock related to convertible promissory notes, assuming conversion of such convertible promissory notes occurred at October 1, 2020 and July 1, 2020, respectively, 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 and six months ended December 31, 2020. Additionally, for dilutive EPS purposes for the three and six months ended December 31, 2020, the assumed conversion of such convertible promissory notes at October 1, 2020 and July 1, 2020, increased the net income amount used in the dilutive EPS computation by $ 742,537 and $ 751,482 , respectively, 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 December 31, 2020. At December 31, 2020, there were 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 former Chief Financial Officer, which were not included in computing dilutive EPS. Modification/Extinguishment of Debt In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recently Adopted Accounting Standards Effective July 1, 2021, the Company adopted Accounting Standards Update (“ASU”) 2019-12, Income Taxes Recently Issued Accounting Standards Not Yet Adopted During August 2020, the FASB issued ASU 2020-06, to modify and simplify the application of U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. The standard is effective for the Company as of July 1, 2024, with early adoption permitted. The Company is reviewing the impact of this guidance on its consolidated financial statements. During May 2021, the FASB issued ASU 2021-04, to clarify and reduce diversity in accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The standard is effective for the Company as of July 1, 2022, 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 | 6 Months Ended |
Dec. 31, 2021 | |
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: SCHEDULE OF INTANGIBLE ASSET December 31, June 30, 2021 2021 Purchased software $ 3,875,256 $ 3,905,228 Less: accumulated amortization (2,275,323 ) (1,826,181 ) Purchased software, net $ 1,599,933 $ 2,079,047 Intangible asset – Purchased Software consists of the following three software technologies: SCHEDULE OF INTANGIBLE ASSET BY DEVELOPED SOFTWARE Alpha Predictions developed software $ 448,255 Travel Buddhi developed software 114,420 CloseComms developed software 1,037,258 Total developed software $ 1,599,933 The Alpha Predictions and Travel Buddhi developed software were acquired during the fiscal year ended June 30, 2019. The CloseComms developed software was acquired during the fiscal year ended June 30, 2020. At December 31, 2021, the Travel Buddhi and CloseComms technology platforms have been placed in service. Developed software costs are amortized on a straight-line basis over three years For the three and six months ended December 31, 2021, amortization expense was $ 224,348 449,142 226,469 450,302 Future amortization expense related to the existing net carrying amount of developed software at December 31, 2021 is expected to be as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Remainder of fiscal year 2022 $ 402,668 Fiscal year 2023 564,743 Fiscal year 2024 415,325 Fiscal year 2025 217,197 Purchased software, net $ 1,599,933 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Dec. 31, 2021 | |
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: SCHEDULE OF REVENUE DISAGGREGATED BY CATEGORY For the Three Months Ended For the Six Months Ended December 31, December 31, 2021 2020 2021 2020 Categories: Subscription $ 6,434,050 $ 6,180,000 $ 12,839,050 $ 12,360,000 Service and support 1,005,157 906,756 1,961,087 1,804,020 Application development and implementation 900,670 549,680 1,765,450 1,059,280 Total Revenue $ 8,339,877 $ 7,636,436 $ 16,565,587 $ 15,223,300 Primary Geographic Regions: United States 100 % - % 100 % - % India - % 100 % - % 100 % 100 % 100 % 100 % 100 % Effective July 1, 2021, the Company moved the invoicing office of its largest customer to its customer’s United States based office. This change was to align the invoicing by the Company to the customer’s location managing the services provided under the customer agreement. The following table presents our long-lived assets by primary geographic regions within our single reporting segment: SCHEDULE OF LONG-LIVED ASSETS December 31, 2021 2020 United States $ 1,438 $ 1,438 India 568,973 1,490,952 United Kingdom 1,046,096 1,068,556 Total long-lived assets $ 1,616,507 $ 2,560,946 For the six months ended December 31, 2021 and 2020, the Company was subject to revenue concentration risk as one customer accounted for approximately 100 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 to ten years. All of these fees are allocated to the single performance obligation of providing software to the customer. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 5: REVENUE FROM CONTRACTS WITH CUSTOMERS (continued) 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 December 31, 2021 and June 30, 2021, contract liabilities totaled $ 430,027 350,689 The following table presents a reconciliation of the contract liabilities from June 30, 2021 to December 31, 2021: SCHEDULE OF RECONCILIATION OF CONTRACT LIABILITIES June 30, 2021 $ 350,689 Contract liability deferral 300,247 Amortization of contract liability to revenue (220,909 ) December 31, 2021 $ 430,027 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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 6: NOTES PAYABLE Notes payable is comprised of the following: SCHEDULE OF NOTES PAYABLE December 31, June 30, 2021 2021 Note payable, SBA – Paycheck Protection Program [1] $ 33,751 $ 33,680 Note payable, SBA – Economic Injury Disaster Loan [2] 163,081 160,393 Note payable, Accredited Investor [3] 43,202 276,035 Total notes payable $ 240,034 $ 470,108 Less: current portion of notes payable (93,144 ) (323,218 ) Long-term portion of notes payable $ 146,890 $ 146,890 [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 1,876 April 28, 2022 33,751 [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 CARES Act and the terms of the COVID-19 Economic Injury Disaster Loan (“EIDL”) program of the SBA’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 . Subsequent to issuance, the SBA extended the first payment due date to 24 months from the date of the note . 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 December 31, 2021, the Company recorded this amount as a current liability. At December 31, 2021, $ 16,191 was recorded as a current liability within notes payable and $ 146,890 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 6: NOTES PAYABLE (continued) [3] effective February 8, 2021, the Company entered into a securities purchase agreement with an accredited investor and issued an 12 362,250 47,250 February 8, 2022 288,000 27,000 250,000 200,000 50,715 101,430 43,202 |
CONVERTIBLE DEBT ARRANGEMENTS
CONVERTIBLE DEBT ARRANGEMENTS | 6 Months Ended |
Dec. 31, 2021 | |
Convertible Debt Arrangements | |
CONVERTIBLE DEBT ARRANGEMENTS | NOTE 7: CONVERTIBLE DEBT ARRANGEMENTS JMJ Financial At December 31, 2021 and June 30, 2021, the amount recorded in current liabilities for this one convertible note and accrued interest thereon due to JMJ Financial was $ 235,925 213,545 9,221 8,514 At December 31, 2021 and June 30, 2021, the aggregate remaining amount of convertible securities held by JMJ could be converted into 11,796 10,677 20 Accredited Investors Evergreen Agreement On April 6, 2021, the Company entered into a Securities Purchase Agreement (“Agreement”) with Evergreen Capital Management LLC (the “Investor”), pursuant to which the Company sold to the Investor an aggregate of up to $ 2,040,000 11,730,000 1,540,000 1,771,000 8,855,000 500,000 575,000 2,875,000 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 7: Convertible Debt Arrangements The Notes mature on April 6, 2022 and May 3, 2022 , bears interest at the rate of 5 % per annum and are convertible at any time upon the option of the Investor into shares of Common Stock at a conversion price equal to $ 0.20 per share or, upon the occurrence and during the continuance of an Event of Default (as defined in the Note), if lower, at a conversion price equal to 75% of the lowest daily volume-weighted average price (“VWAP”) of the Common Stock during the 20 consecutive trading days immediately preceding the applicable conversion date. The Company has the right to prepay all or any portion of the outstanding balance of the Note in an amount equal to 115% or 120%, depending on whether such repayment is made before or after November 5, 2021, multiplied by the portion of the outstanding balance to be prepaid . The Company is required to prepay all or any portion of the outstanding balance of the Note upon the occurrence of a Qualified Financing (as defined in the Note). If at any time while the Note is outstanding, the Company completes any single Future Transaction (as defined in the Note), the Investor may, in its sole discretion, elect to apply all, or any portion, of the then outstanding principal amount of this Note and any accrued but unpaid interest, as purchase consideration for such Future Transaction. The Warrants are exercisable at a purchase price of $ 0.20 per share at any time on or prior to April 6, 2025 and May 3, 2025, and may be exercised on a cashless basis, beginning on the six-month anniversary of the Effective Date, if the shares of Common Stock underlying the Warrants are not then registered under the Securities Act of 1933, as amended (the “Securities Act”). On January 31, 2022, the Investor agreed to not convert, tender for conversion or otherwise take steps toward the conversion of either of the Notes to Common Stock until the earlier of (a) May 1, 2022 or (b) the date on which the Common Stock commences trading on the Nasdaq Stock Market or another national stock exchange. The Investor will not have the right to exercise the Warrants if the Investor, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to its conversion and under no circumstances may exercise the Warrants if the Investor, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to its exercise . The Securities Purchase Agreement (the “SPA”) contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties thereto, and termination provisions. In connection herewith, the Company recorded an original issue discount of $ 306,000 42,500 1,927,988 1,387,297 500,000 2,500,000 166,625 Investors’ Agreement On May 4, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with two accredited investors (the “Investors”), pursuant to which the Company sold to the Investors an aggregate of up to $ 2,550,000 15,000,000 1,924,999 2,264,706 11,323,529 625,001 735,294 3,676,471 The first and second Tranches closed and funded on May 3, 2021 and June 30, 2021, respectively. The Company received a portion of the proceeds related to the second Tranche on July 1, 2021. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 7: Convertible Debt Arrangements The Notes mature on May 4, 2022 and June 30, 2022, bear interest at the rate of 5 0.20 . The Warrants are exercisable at a purchase price of $ 0.20 per share at any time on or prior to May 4, 2025 and June 30, 2025, and may be exercised on a cashless basis, beginning on the six-month anniversary of the Effective Date, if the shares of Common Stock underlying the Warrants are not then registered under the Securities Act. The SPA contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties thereto, and termination provisions. In connection herewith, the Company recorded an original issue discount of $ 447,237 10,000 3,075,146 2,135,337 At December 31, 2021 and June 30, 2021, there was $ 4,832,616 5,143,795 1,304,993 3,157,759 During the six months ended December 31, 2021 and 2020, amortization of original issue discount, deferred financing costs, and debt discounts amounted to $ 2,077,049 494,184 During the six months ended December 31, 2021, $ 500,000 2,500,000 288,182 16,331,766 At December 31, 2021, the Company was in compliance with the terms of the Accredited Investors convertible promissory notes. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 7: Convertible Debt Arrangements Notes payable under convertible debt and debenture agreements, net is comprised of the following: SCHEDULE OF NOTES PAYABLE UNDER CONVERTIBLE DEBT AND DEBENTURE AGREEMENT, NET December 31, June 30, 2021 2021 JMJ Financial $ 109,000 $ 109,000 Accredited Investors 4,832,616 5,148,795 Unamortized OID, deferred financings costs, and debt discounts (1,304,993 ) (3,157,759 ) Total convertible debt arrangements, net $ 3,636,623 $ 2,100,036 At December 31, 2021 and June 30, 2021, the outstanding balances are reflected as current liabilities within our consolidated balance sheets. At December 31, 2021 and June 30, 2021, accrued interest on these convertible notes of $ 303,207 162,271 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 6 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 8: DERIVATIVE LIABILITY We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. 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 or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 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, 2020 to June 30, 2021, as there was no derivative liability transactions during the three months ended December 31, 2021: SCHEDULE OF RECONCILIATION OF DERIVATIVE LIABILITY Conversion feature derivative liability June 30, 2020 $ 897,631 Initial fair value of derivative liability recorded as debt discount 853,800 Initial fair value of derivative liability charged to other expense 2,240,908 Gain on change in fair value included in earnings (3,267,323 ) Derivative liability relieved by conversions of convertible promissory notes (725,016 ) June 30, 2021 $ - Total derivative liability at December 31, 2021 and June 30, 2021 amounted to $ 0 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 December 31, 2021, the Company did not have any derivative instruments that were designated as hedges. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9: STOCKHOLDERS’ EQUITY At December 31, 2021, the total number of shares of all classes of stock that the Company shall have the authority to issue is 500,001,000 500,000,000 0.01 81,656,033 81,627,663 1,000 0.01 1,000 1,000 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 25,000,000 25,000,000 100,000,000 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 250,000,000 100,000,000 100,000,000 250,000,000 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 500,000,000 250,000,000 250,000,000 500,000,000 Common Stock Stock Based Compensation – Common Stock Grants During the six months ended December 31, 2021, the Company recorded $ 45,869 500,000 500,000 restricted shares of common stock to the Company’s Chief Operating Officer, both of which vests 25% on the 1 year, 2 year, 3 year, and 4 year anniversaries of the grant dates During the six months ended December 31, 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 37,390,452 The Cancelled Warrants had an exercise price of $ 0.50 5,650,708 153,301 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 9: STOCKHOLDERS’ EQUITY (continued) Furthermore, during the six months ended December 31, 2020, the Company recorded $ 21,474 231,635 the Company’s former Chief Financial Officer, which vested 25 Vendor Services During the six months ended December 31, 2021, the Company entered into various consulting, public relations, and marketing agreements whereby the Company issued an aggregate of 543,425 83,960 During the six months ended December 31, 2020, the Company entered into a consulting, public relations, and marketing agreement whereby the Company issued 200,000 6,820 Board of Director Services During the six months ended December 31, 2021, the Company granted an aggregate of 134,316 30,000 134,316 30,000 During the six months ended December 31, 2020, there were no restricted shares of the Company’s common stock granted in accordance with any Board of Directors agreements. Conversion of Debt Securities During the six months ended December 31, 2021, $ 500,000 of convertible notes were converted into 2,500,000 shares of the Company’s common stock by an accredited investor, valued at $ 666,625 288,182 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 . mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 9: STOCKHOLDERS’ EQUITY (continued) Reserved Shares At December 31, 2021, the convertible promissory notes entered into with the accredited investors require the Company to reserve approximately 82,000,000 At December 31, 2021, 7,202 8,000 Common Stock Warrants Exchange Agreement – Warrants Exchanged for Common Stock Refer to the Exchange Agreement, Cancelled Warrants, Transition Agreement and Warrant Agreement discussed in the aforementioned Stock Based Compensation – Common Stock Grants section of Note 9. Warrant Agreements – Convertible Promissory Note Warrants Pursuant to a Securities Purchase Agreement between the Company and two accredited investors dated as of April 30, 2021, the Company sold to the Investors and the Investors acquired an aggregate of 14,908,077 four years 0.20 1,879,204 0.35 As discussed in Note 7, the Evergreen Agreement 11,730,000 four years 0.20 1,293,541 0.27 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 9: STOCKHOLDERS’ EQUITY (continued) Fair Value of Warrants The Company estimates the fair value of each option award on the date of grant using a black-scholes option valuation model that uses the assumptions noted in the table below. Because black-scholes option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and applicable employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following range of assumptions were utilized during the six months ended December 31, 2021: SCHEDULE OF ASSUMPTIONS USED Expected volatility 618.01 % Weighted-average volatility 618.01 % Expected dividends 0 % Expected term (in years) 4.0 Risk-free rate 0.68 % The following table sets forth common stock purchase warrants outstanding at December 31, 2021: SCHEDULE OF COMMON STOCK PURCHASE WARRANTS OUTSTANDING Warrants Weighted Intrinsic Value Outstanding, June 30, 2021 25,718,971 $ 0.20 $ Warrants issued 919,106 0.20 - Warrants forfeited - - - Outstanding, December 31, 2021 26,638,077 $ 0.20 $ - Common stock issuable upon exercise of warrants 26,638,077 $ 0.20 $ - SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE BY EXERCISE PRICE RANGE Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Warrants Exercisable Range of Exercise Prices Number Outstanding at December 31, 2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at December 31, 2021 Weighted Average Exercise Price $ 0.20 26,638,077 3.34 $ 0.20 26,638,077 $ 0.20 26,638,077 3.34 $ 0.20 26,638,077 $ 0.20 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10: RELATED PARTY TRANSACTIONS Microphase Corporation At December 31, 2021, the Company owed $ 32,545 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 to provide working capital to the Company. During the six months ended December 31, 2021 and 2020, there were no 22,883 2,412 On October 22, 2020, the Company received a notice of event of default and demand letter (“Demand Letter”) from a former officer and promissory note holder (the “Note Holder”) 40,739 6 April 18, 2020 51,940 At December 31, 2021 and June 30, 2021, these outstanding notes including accrued interest totaled $ 769,970 747,086 Common Stock Issuances During the six months ended December 31, 2021, the Company recorded $ 45,869 500,000 500,000 the Company’s Chief Operating Officer, both of which vests 25% on the 1 year, 2 year, 3 year, and 4 year anniversaries of the grant dates Office Lease Effective February 8, 2021, the Company relocated its corporate office to Gaithersburg, MD, and incurred rent expense of $ 1,350 1,600 24,389 8,100 35,971 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11: COMMITMENTS AND CONTINGENCIES Commitments Office Lease Refer to Note 10: Related Party Transactions, Office Lease 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). |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Dec. 31, 2021 | |
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 unaudited consolidated financial statements for the three and six months ended December 31, 2021 and 2020. The assets and liabilities associated with discontinued operations included in our consolidated balance sheets at December 31, 2021 and June 30, 2021 were only accounts payable with a balance of $ 82,795 For the three and six months ended December 31, 2021 and 2020, there were no |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13: SUBSEQUENT EVENTS Subsequent to December 31, 2021, the Company, pursuant to the approval of its Board of Directors (the “Board”), entered into an amended and restated employment agreement with Anshu Bhatnagar, Chief Executive Officer of the Company, modifying the terms of the Employment Agreement entered into between the Company and Mr. Bhatnagar dated January 11, 2019 (collectively, the “Bhatnagar Amended Employment Agreement”). The Bhatnagar Amended Employment Agreement became effective retroactively as of January 1, 2022 and shall expire on December 31, 2032. Subsequent to December 31, 2021, the Company, pursuant to the approval of the Board, entered into an amended and restated employment agreement with Angelia Lansinger Hrytsyshyn, Chief Financial Officer of the Company, modifying the terms of the Employment Agreement entered into between the Company and Ms. Hrytsyshyn dated November 16, 2021 (collectively, the “Hrytsyshyn Amended Employment Agreement”). The Hrytsyshyn Amended Employment Agreement became effective January 21, 2022. Subsequent to December 31, 2021, the Company’s Board appointed James F. Engler, Jr. as a member of the Board to serve as a non-executive director of the Company. Subsequent to December 31, 2021, the Company’s Board ratified and approved the establishment of the Audit Committee, Compensation Committee, and Nominating and Governance Committee as committees of the Board, the adoption of the charters for such committees and the appointment of the Company’s directors to such committees. Subsequent to December 31, 2021, the Company entered into a non-recourse Future Receivables Agreement (“Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company sold, assigned, and transferred to Investor all of the Company’s future accounts, contract rights, and other entitlements arising from or relating to the payment of monies from the Company’s customers’ including all payments made in the ordinary course of business, for the payments due to the Company as a result of the Company’s sale of goods or services. The Agreement provides for the purchase of $ 4,050,000 2,910,000 The weekly repayment term began during January 2022 and concludes during July 2022 Subsequent to December 31, 2021, the Company’s Board approved the issuance of 3,352,066 528,607 Subsequent to December 31, 2021, Evergreen agreed to not convert shares for a period of time. Refer to Note 7 for details. Subsequent to December 31, 2021, the Company filed for a name change with the Financial Industry Regulatory Authority (“FINRA”) to mPower Technologies, Inc. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2021 | |
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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The exchange rates used to translate amounts in INR and GBP into USD for the purposes of preparing the consolidated financial statements were as follows: SCHEDULE OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATE Balance sheet: December 31, 2021 June 30, 2021 Period-end INR: USD exchange rate $ 0.01349 $ 0.01349 Period-end GBP: USD exchange rate $ 1.34915 $ 1.38510 Income statement: For the Three Months Ended For the Six Months Ended December 31, December 31, 2021 2020 2021 2020 Average Period INR: USD exchange rate $ 0.01349 $ 0.01362 $ 0.01349 $ 0.01351 Average Period GBP: USD exchange rate $ 1.34876 $ 1.32094 $ 1.36066 $ 1.29006 Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated at the rate on the date of the transaction and included in the results of operations as incurred. |
Use of Estimates | Use of Estimates The preparation of 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, estimated useful lives of finite-lived intangible assets, accrued expenses, valuation of derivative liabilities, stock-based compensation, and the deferred tax asset valuation allowance. |
Concentrations of Credit Risk | Concentrations of Credit Risk Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with 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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Risk Agreements which potentially subject the Company to concentrations of revenue risk consist principally of one customer agreement. For the six months ended December 31, 2021 and 2020, this one customer accounted for approximately 100 % and 100 % of our total revenue, respectively. At December 31, 2021 and June 30, 2021, this one customer accounted for approximately 100 % and 100 % of our total accounts receivable, respectively. During December 2021, the Company began invoicing its consumer engagement locations. Although immaterial at December 31, 2021, as these locations continue to grow, the aforementioned one customer will become less of the Company’s total revenue and accounts receivable, thus decreasing the Company’s revenue risk concentrations. Supplier Risk Agreements which potentially subject the Company to concentrations of supplier risk consist principally of one supplier agreement. For the six months ended December 31, 2021, this one supplier accounted for approximately 100 80 100 97 |
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 |
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 six 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 six tri-party settlement and offset agreements has totaled $ 48,750,000 no |
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, 2022, the Company will perform its annual evaluation of goodwill impairment to determine if the estimated fair value of the reporting unit exceeds its carrying value. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 December 31, 2021 and June 30, 2021, the book value of patents and licenses of $ 214,383 no |
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 December 31, 2021, the book value of purchased and developed technology of $ 3,875,256 449,142 450,302 |
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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ASC 820 also describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial instruments consist principally of cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities, due to related parties, and current and long-term debt. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The fair value of short and long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value with the exception of the fair value of due to related parties as the fair value cannot be determined due to a lack of similar instruments available to the Company. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. |
Revenue Recognition | Revenue Recognition 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. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
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 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 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, 2021 and 2020. |
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 is not included if the result would be anti-dilutive, such as when a net loss is reported. For the three months ended December 31, 2021, basic and diluted EPS are computed using the same number of weighted average shares as we incurred a net loss for those periods. For the six months ended December 31, 2021, as we incurred net income for the period, dilutive shares included approximately 25,000,000 shares of the Company’s common stock related to convertible promissory notes and outstanding warrants to purchase up to approximately 14,000,000 shares of the Company’s common stock, assuming conversion of such convertible promissory notes and exercise of such warrants occurred at July 1, 2021, as the conversion price of the convertible promissory notes and warrants were less than the average market price of the Company’s common stock for the six months ended December 31, 2021. At December 31, 2021, there were approximately 134,316 shares of the Company’s common stock to be issued and 1,000,000 restricted shares of the Company’s common stock to be issued upon vesting pursuant to the terms of employment agreements with the Company’s Chief Operating Officer and Chief Financial Officer, which were not included in computing dilutive EPS. For the three and six months ended December 31, 2020, as we incurred net income for those periods, dilutive shares included 31,750,297 shares of the Company’s common stock related to convertible promissory notes, assuming conversion of such convertible promissory notes occurred at October 1, 2020 and July 1, 2020, respectively, 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 and six months ended December 31, 2020. Additionally, for dilutive EPS purposes for the three and six months ended December 31, 2020, the assumed conversion of such convertible promissory notes at October 1, 2020 and July 1, 2020, increased the net income amount used in the dilutive EPS computation by $ 742,537 and $ 751,482 , respectively, 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 December 31, 2020. At December 31, 2020, there were 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 former Chief Financial Officer, which were not included in computing dilutive EPS. |
Modification/Extinguishment of Debt | Modification/Extinguishment of Debt In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective July 1, 2021, the Company adopted Accounting Standards Update (“ASU”) 2019-12, Income Taxes |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted During August 2020, the FASB issued ASU 2020-06, to modify and simplify the application of U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. The standard is effective for the Company as of July 1, 2024, with early adoption permitted. The Company is reviewing the impact of this guidance on its consolidated financial statements. During May 2021, the FASB issued ASU 2021-04, to clarify and reduce diversity in accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The standard is effective for the Company as of July 1, 2022, 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) | 6 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATE | The exchange rates used to translate amounts in INR and GBP into USD for the purposes of preparing the consolidated financial statements were as follows: SCHEDULE OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATE Balance sheet: December 31, 2021 June 30, 2021 Period-end INR: USD exchange rate $ 0.01349 $ 0.01349 Period-end GBP: USD exchange rate $ 1.34915 $ 1.38510 Income statement: For the Three Months Ended For the Six Months Ended December 31, December 31, 2021 2020 2021 2020 Average Period INR: USD exchange rate $ 0.01349 $ 0.01362 $ 0.01349 $ 0.01351 Average Period GBP: USD exchange rate $ 1.34876 $ 1.32094 $ 1.36066 $ 1.29006 |
INTANGIBLE ASSET _ PURCHASED _2
INTANGIBLE ASSET – PURCHASED SOFTWARE, NET (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSET | Intangible asset – Purchased Software, net, is comprised of the following at: SCHEDULE OF INTANGIBLE ASSET December 31, June 30, 2021 2021 Purchased software $ 3,875,256 $ 3,905,228 Less: accumulated amortization (2,275,323 ) (1,826,181 ) Purchased software, net $ 1,599,933 $ 2,079,047 |
SCHEDULE OF INTANGIBLE ASSET BY DEVELOPED SOFTWARE | Intangible asset – Purchased Software consists of the following three software technologies: SCHEDULE OF INTANGIBLE ASSET BY DEVELOPED SOFTWARE Alpha Predictions developed software $ 448,255 Travel Buddhi developed software 114,420 CloseComms developed software 1,037,258 Total developed software $ 1,599,933 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | Future amortization expense related to the existing net carrying amount of developed software at December 31, 2021 is expected to be as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Remainder of fiscal year 2022 $ 402,668 Fiscal year 2023 564,743 Fiscal year 2024 415,325 Fiscal year 2025 217,197 Purchased software, net $ 1,599,933 mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE DISAGGREGATED BY CATEGORY | The following table presents our revenue disaggregated by category and primary geographic regions within our single reporting segment: SCHEDULE OF REVENUE DISAGGREGATED BY CATEGORY For the Three Months Ended For the Six Months Ended December 31, December 31, 2021 2020 2021 2020 Categories: Subscription $ 6,434,050 $ 6,180,000 $ 12,839,050 $ 12,360,000 Service and support 1,005,157 906,756 1,961,087 1,804,020 Application development and implementation 900,670 549,680 1,765,450 1,059,280 Total Revenue $ 8,339,877 $ 7,636,436 $ 16,565,587 $ 15,223,300 Primary Geographic Regions: United States 100 % - % 100 % - % India - % 100 % - % 100 % 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: SCHEDULE OF LONG-LIVED ASSETS December 31, 2021 2020 United States $ 1,438 $ 1,438 India 568,973 1,490,952 United Kingdom 1,046,096 1,068,556 Total long-lived assets $ 1,616,507 $ 2,560,946 |
SCHEDULE OF RECONCILIATION OF CONTRACT LIABILITIES | The following table presents a reconciliation of the contract liabilities from June 30, 2021 to December 31, 2021: SCHEDULE OF RECONCILIATION OF CONTRACT LIABILITIES June 30, 2021 $ 350,689 Contract liability deferral 300,247 Amortization of contract liability to revenue (220,909 ) December 31, 2021 $ 430,027 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF NOTES PAYABLE | Notes payable is comprised of the following: SCHEDULE OF NOTES PAYABLE December 31, June 30, 2021 2021 Note payable, SBA – Paycheck Protection Program [1] $ 33,751 $ 33,680 Note payable, SBA – Economic Injury Disaster Loan [2] 163,081 160,393 Note payable, Accredited Investor [3] 43,202 276,035 Total notes payable $ 240,034 $ 470,108 Less: current portion of notes payable (93,144 ) (323,218 ) Long-term portion of notes payable $ 146,890 $ 146,890 [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 1,876 April 28, 2022 33,751 [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 CARES Act and the terms of the COVID-19 Economic Injury Disaster Loan (“EIDL”) program of the SBA’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 . Subsequent to issuance, the SBA extended the first payment due date to 24 months from the date of the note . 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 December 31, 2021, the Company recorded this amount as a current liability. At December 31, 2021, $ 16,191 was recorded as a current liability within notes payable and $ 146,890 was recorded as a long-term liability within notes payable, net of current portion with the consolidated balance sheets. mPHASE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020 (UNAUDITED) NOTE 6: NOTES PAYABLE (continued) [3] effective February 8, 2021, the Company entered into a securities purchase agreement with an accredited investor and issued an 12 362,250 47,250 February 8, 2022 288,000 27,000 250,000 200,000 50,715 101,430 43,202 |
CONVERTIBLE DEBT ARRANGEMENTS (
CONVERTIBLE DEBT ARRANGEMENTS (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Convertible Debt Arrangements | |
SCHEDULE OF NOTES PAYABLE UNDER CONVERTIBLE DEBT AND DEBENTURE AGREEMENT, NET | Notes payable under convertible debt and debenture agreements, net is comprised of the following: SCHEDULE OF NOTES PAYABLE UNDER CONVERTIBLE DEBT AND DEBENTURE AGREEMENT, NET December 31, June 30, 2021 2021 JMJ Financial $ 109,000 $ 109,000 Accredited Investors 4,832,616 5,148,795 Unamortized OID, deferred financings costs, and debt discounts (1,304,993 ) (3,157,759 ) Total convertible debt arrangements, net $ 3,636,623 $ 2,100,036 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
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, 2020 to June 30, 2021, as there was no derivative liability transactions during the three months ended December 31, 2021: SCHEDULE OF RECONCILIATION OF DERIVATIVE LIABILITY Conversion feature derivative liability June 30, 2020 $ 897,631 Initial fair value of derivative liability recorded as debt discount 853,800 Initial fair value of derivative liability charged to other expense 2,240,908 Gain on change in fair value included in earnings (3,267,323 ) Derivative liability relieved by conversions of convertible promissory notes (725,016 ) June 30, 2021 $ - |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
SCHEDULE OF ASSUMPTIONS USED | SCHEDULE OF ASSUMPTIONS USED Expected volatility 618.01 % Weighted-average volatility 618.01 % Expected dividends 0 % Expected term (in years) 4.0 Risk-free rate 0.68 % |
SCHEDULE OF COMMON STOCK PURCHASE WARRANTS OUTSTANDING | The following table sets forth common stock purchase warrants outstanding at December 31, 2021: SCHEDULE OF COMMON STOCK PURCHASE WARRANTS OUTSTANDING Warrants Weighted Intrinsic Value Outstanding, June 30, 2021 25,718,971 $ 0.20 $ Warrants issued 919,106 0.20 - Warrants forfeited - - - Outstanding, December 31, 2021 26,638,077 $ 0.20 $ - Common stock issuable upon exercise of warrants 26,638,077 $ 0.20 $ - |
SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE BY EXERCISE PRICE RANGE | SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE BY EXERCISE PRICE RANGE Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Warrants Exercisable Range of Exercise Prices Number Outstanding at December 31, 2021 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at December 31, 2021 Weighted Average Exercise Price $ 0.20 26,638,077 3.34 $ 0.20 26,638,077 $ 0.20 26,638,077 3.34 $ 0.20 26,638,077 $ 0.20 |
NATURE OF BUSINESS AND BASIS _2
NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | Apr. 30, 2020 | Jun. 30, 2019 |
Restructuring Cost and Reserve [Line Items] | ||
Proceeds from Loan Originations | $ 33,333 | |
Alpha Predictions LLP [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Business acquisition, percentage of voting interests acquired | 99.00% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net Income (Loss) Attributable to Parent | $ (99,558) | $ 293,761 | $ 1,005,212 | $ 720,494 | $ 194,203 | $ 1,725,706 | |
Net Cash Provided by (Used in) Operating Activities | 1,791,748 | $ 328,048 | |||||
Working capital | 11,402,820 | 11,402,820 | |||||
Retained Earnings (Accumulated Deficit) | $ 225,867,206 | $ 225,867,206 | $ 226,061,409 |
SCHEDULE OF FOREIGN CURRENCIES
SCHEDULE OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATE (Details) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Period-end INR [Member] | |||||
Offsetting Assets [Line Items] | |||||
Foreign currency translation exchange rate | 0.01349 | 0.01349 | 0.01349 | ||
Period-end GBP [Member] | |||||
Offsetting Assets [Line Items] | |||||
Foreign currency translation exchange rate | 1.34915 | 1.34915 | 1.38510 | ||
Average Period INR [Member] | |||||
Offsetting Assets [Line Items] | |||||
Average foreign currency translation exchange rate | 0.01349 | 0.01362 | 0.01349 | 0.01351 | |
Average Period GBP [Member] | |||||
Offsetting Assets [Line Items] | |||||
Average foreign currency translation exchange rate | 1.34876 | 1.32094 | 1.36066 | 1.29006 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Product Information [Line Items] | ||||||
Cash and cash equivalents | $ 0 | $ 0 | $ 0 | |||
Aggregate settlement amount | 48,750,000 | 48,750,000 | ||||
Allowance for doubtful account receivable | $ 0 | $ 0 | 0 | |||
Income tax examination, likelihood of unfavourable settlement | greater than 50 percent | |||||
Common stock shares to be issued | 134,316 | |||||
Restricted Stock [Member] | ||||||
Product Information [Line Items] | ||||||
Common stock shares to be issued | 1,000,000 | |||||
Employment Agreement [Member] | Restricted Shares [Member] | ||||||
Product Information [Line Items] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 115,817 | |||||
Common Stock [Member] | ||||||
Product Information [Line Items] | ||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 2,500,000 | 16,331,766 | 25,000,000 | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 14,000,000 | 14,000,000 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 742,537 | 31,750,297 | 751,482 | |||
Technology Platforms [Member] | ||||||
Product Information [Line Items] | ||||||
Capitalized software development costs | $ 3,875,256 | $ 3,875,256 | ||||
Amortization expense of capitalized software development costs | 449,142 | $ 450,302 | ||||
Patents and Licenses [Member] | ||||||
Product Information [Line Items] | ||||||
Intangible asset - purchased software, net | $ 214,383 | 214,383 | $ 214,383 | |||
Amortization expense of intangible assets | $ 0 | $ 0 | ||||
Cost of Revenue [Member] | Product Concentration Risk [Member] | One Supplier [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 100.00% | 100.00% | ||||
Accounts Payable [Member] | Product Concentration Risk [Member] | One Supplier [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 80.00% | 97.00% | ||||
One Customer [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 100.00% | 100.00% | ||||
One Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 100.00% | 100.00% |
SCHEDULE OF INTANGIBLE ASSET (D
SCHEDULE OF INTANGIBLE ASSET (Details) - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Purchased software | $ 3,875,256 | $ 3,905,228 |
Less: accumulated amortization | (2,275,323) | (1,826,181) |
Purchased software, net | $ 1,599,933 | $ 2,079,047 |
SCHEDULE OF INTANGIBLE ASSET BY
SCHEDULE OF INTANGIBLE ASSET BY DEVELOPED SOFTWARE (Details) - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Total developed software | $ 1,599,933 | $ 2,079,047 |
Alpha Predictions Purchased Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total developed software | 448,255 | |
Travel Buddhi Purchased Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total developed software | 114,420 | |
CloseComms Purchased Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total developed software | $ 1,037,258 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of fiscal year 2022 | $ 402,668 | |
Fiscal year 2023 | 564,743 | |
Fiscal year 2024 | 415,325 | |
Fiscal year 2025 | 217,197 | |
Purchased software, net | $ 1,599,933 | $ 2,079,047 |
INTANGIBLE ASSET _ PURCHASED _3
INTANGIBLE ASSET – PURCHASED SOFTWARE, NET (Details Narrative) - Developed Software [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortized of straight line term | 3 years | |||
Amortization expense related to purchased software | $ 224,348 | $ 226,469 | $ 449,142 | $ 450,302 |
SCHEDULE OF REVENUE DISAGGREGAT
SCHEDULE OF REVENUE DISAGGREGATED BY CATEGORY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 8,339,877 | $ 7,636,436 | $ 16,565,587 | $ 15,223,300 |
Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
UNITED STATES | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | ||
INDIA | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | ||
Subscription [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 6,434,050 | $ 6,180,000 | $ 12,839,050 | $ 12,360,000 |
Service and Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,005,157 | 906,756 | 1,961,087 | 1,804,020 |
Application Development and Implementation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 900,670 | $ 549,680 | $ 1,765,450 | $ 1,059,280 |
SCHEDULE OF LONG-LIVED ASSETS (
SCHEDULE OF LONG-LIVED ASSETS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Disaggregation of Revenue [Line Items] | ||
Total long-lived assets | $ 1,616,507 | $ 2,560,946 |
UNITED STATES | ||
Disaggregation of Revenue [Line Items] | ||
Total long-lived assets | 1,438 | 1,438 |
INDIA | ||
Disaggregation of Revenue [Line Items] | ||
Total long-lived assets | 568,973 | 1,490,952 |
UNITED KINGDOM | ||
Disaggregation of Revenue [Line Items] | ||
Total long-lived assets | $ 1,046,096 | $ 1,068,556 |
SCHEDULE OF RECONCILIATION OF C
SCHEDULE OF RECONCILIATION OF CONTRACT LIABILITIES (Details) | 6 Months Ended |
Dec. 31, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Beginning balance, contract liabilities | $ 350,689 |
Contract liability deferral | 300,247 |
Amortization of contract liability to revenue | (220,909) |
Ending balance, contract liabilities | $ 430,027 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | $ 430,027 | $ 350,689 | |
One Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 100.00% | 100.00% |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) | May 28, 2020 | Dec. 31, 2021 | Jun. 30, 2021 | May 04, 2021 | |
Short-term Debt [Line Items] | |||||
Total notes payable | $ 240,034 | $ 470,108 | |||
Less: current portion of notes payable | (93,144) | (323,218) | |||
Long-term portion of notes payable | 146,890 | 146,890 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||
Notes Payable One [Member] | |||||
Short-term Debt [Line Items] | |||||
Total notes payable | [1] | 33,751 | 33,680 | ||
Notes Payable Two [Member] | |||||
Short-term Debt [Line Items] | |||||
Total notes payable | [2] | 163,081 | 160,393 | ||
Notes Payable Two [Member] | Economic Injury Disaster Loan [Member] | |||||
Short-term Debt [Line Items] | |||||
Total notes payable | $ 150,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | ||||
Debt Instrument, Periodic Payment | $ 731 | ||||
Debt Instrument, Maturity Date | May 28, 2050 | ||||
Notes Payable Three [Member] | |||||
Short-term Debt [Line Items] | |||||
Total notes payable | [3] | $ 43,202 | $ 276,035 | ||
[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 1,876 April 28, 2022 33,751 | ||||
[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 $ | ||||
[3] | effective February 8, 2021, the Company entered into a securities purchase agreement with an accredited investor and issued an 12 362,250 47,250 February 8, 2022 288,000 27,000 250,000 200,000 50,715 101,430 43,202 |
SCHEDULE OF NOTES PAYABLE (De_2
SCHEDULE OF NOTES PAYABLE (Details) (Parenthetical) - USD ($) | Feb. 10, 2021 | Feb. 08, 2021 | Jun. 04, 2020 | May 28, 2020 | Apr. 28, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | May 04, 2021 | |
Short-term Debt [Line Items] | ||||||||||
Total notes payable | $ 240,034 | $ 470,108 | ||||||||
Debt instrument interest rate | 5.00% | |||||||||
Notes payable current | 93,144 | 323,218 | ||||||||
Notes Payable, Noncurrent | 146,890 | 146,890 | ||||||||
Proceeds from debt | 156,248 | $ 463,600 | ||||||||
Notes Payable One [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Total notes payable | [1] | 33,751 | 33,680 | |||||||
Notes Payable Two [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Total notes payable | [2] | 163,081 | $ 160,393 | |||||||
Paycheck Protection Program (PPP Loan) [Member] | Notes Payable One [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Total notes payable | $ 33,333 | |||||||||
Decsription of debt instrument, payment terms | 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. Subsequent to issuance, the first payment due date was extended | |||||||||
Debt instrument interest rate | 1.00% | |||||||||
Debt instrument, periodic payment | $ 1,876 | |||||||||
Debt instrument maturity date | Apr. 28, 2022 | |||||||||
Notes payable current | 33,751 | |||||||||
Economic Injury Disaster Loan [Member] | Notes Payable Two [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Total notes payable | $ 150,000 | |||||||||
Decsription of debt instrument, payment terms | The note was approved under the provisions of the CARES Act and the terms of the COVID-19 Economic Injury Disaster Loan (“EIDL”) program of the SBA’s EIDL Program. The note accrues interest at a rate of | |||||||||
Debt instrument interest rate | 3.75% | |||||||||
Debt instrument, periodic payment | $ 731 | |||||||||
Debt instrument maturity date | May 28, 2050 | |||||||||
Notes payable current | 16,191 | |||||||||
Proceeds from Notes Payable | $ 4,000 | |||||||||
Notes Payable, Noncurrent | 146,890 | |||||||||
Twelve Percentage Promissory Note [Member] | Accredited Investors [Member] | Securities Purchase Agreement with Power Up Lending Group [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt instrument interest rate | 12.00% | |||||||||
Debt instrument maturity date | Feb. 8, 2022 | |||||||||
Principal amount of promissory note | $ 362,250 | |||||||||
Debt original issue discount | 47,250 | |||||||||
Proceeds from debt | $ 288,000 | |||||||||
Payment to reimburse amount | $ 27,000 | |||||||||
Debt installments payment amount | $ 50,715 | |||||||||
Twelve Percentage Promissory Note [Member] | Accredited Investors [Member] | Securities Purchase Agreement [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Accrued interest | 101,430 | |||||||||
Convertible debt | $ 43,202 | |||||||||
Convertible Promissory Note [Member] | Commitment Shares [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Shares of restricted stock issued | 250,000 | |||||||||
Convertible Promissory Note [Member] | Returnable Shares [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Shares issued during period | 200,000 | |||||||||
[1] | effective April 28, 2020, the Company entered into a promissory note with an approved lender in the principal amount of $ 33,333 The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”) and the terms of the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program. The note accrues interest for the first six months following the issuance date at a rate of 1 1,876 April 28, 2022 33,751 | |||||||||
[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 $ |
SCHEDULE OF NOTES PAYABLE UNDER
SCHEDULE OF NOTES PAYABLE UNDER CONVERTIBLE DEBT AND DEBENTURE AGREEMENT, NET (Details) - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total convertible debt arrangements, net | $ 3,636,623 | $ 2,100,036 |
JMJ Financial [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total convertible debt arrangements, net | 109,000 | 109,000 |
Accredited Investors [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total convertible debt arrangements, net | 4,832,616 | 5,148,795 |
Unamortized OID, Deferred Financings Costs, and Debt Discounts [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total convertible debt arrangements, net | $ (1,304,993) | $ (3,157,759) |
CONVERTIBLE DEBT ARRANGEMENTS_2
CONVERTIBLE DEBT ARRANGEMENTS (Details Narrative) - USD ($) | May 04, 2021 | Apr. 06, 2021 | Apr. 06, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 |
Defined Benefit Plan Disclosure [Line Items] | |||||||
Convertible notes payable | $ 4,832,616 | $ 4,832,616 | $ 5,143,795 | ||||
Debt conversion, shares issued | 2,500,000 | 16,331,766 | |||||
Debt instrument, convertible, conversion price | $ 0.20 | ||||||
Aggregate amount of common stock issued to purchase warrants | 30,000 | $ 30,000 | 63,700 | ||||
Debt instrument, interest rate, stated percentage | 5.00% | ||||||
Debt instrument description | May 4, 2022 and June 30, 2022, bear interest at the rate of 5% per annum and are convertible at any time upon the option of the Investors into shares of Common Stock at a conversion price equal to $0.20 per share. The Company has the right to prepay all or any portion of the outstanding balance of the Notes in an amount equal to 115% or 120%, depending on whether such repayment is made before November 5, 2021 or after November 5, 2021, respectively, multiplied by the portion of the outstanding balance to be prepaid | upon the occurrence and during the continuance of an Event of Default (as defined in the Note), if lower, at a conversion price equal to 75% of the lowest daily volume-weighted average price (“VWAP”) of the Common Stock during the 20 consecutive trading days immediately preceding the applicable conversion date. The Company has the right to prepay all or any portion of the outstanding balance of the Note in an amount equal to 115% or 120%, depending on whether such repayment is made before or after November 5, 2021, multiplied by the portion of the outstanding balance to be prepaid | |||||
Debt converted into shares, amount | 500,000 | $ 288,182 | |||||
Debt discount | $ 1,304,993 | 1,304,993 | 3,157,759 | ||||
Amortization of original issue discount, deferred financing costs, and debt discount | 2,077,049 | 494,184 | |||||
Evergreen Capital Management LLC [Member] | Convertible Debt [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Debt conversion, shares issued | 2,500,000 | ||||||
Debt converted into shares, amount | $ 500,000 | ||||||
Evergreen Agreement [Member] | Convertible Debt [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Convertible notes payable | 166,625 | 166,625 | |||||
Evergreen Agreement [Member] | Accredited Investor Eleven [Member] | Evergreen Capital Management LLC [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Debt instrument, convertible, conversion price | $ 0.20 | $ 0.20 | |||||
Aggregate amount of common stock issued to purchase warrants | $ 2,040,000 | $ 2,040,000 | |||||
Number of common stock issued to purchase warrants | 11,730,000 | 11,730,000 | |||||
Debt principal amount | 1,927,988 | 1,927,988 | |||||
Debt Instrument, Maturity Date, Description | April 6, 2022 and May 3, 2022 | ||||||
Debt instrument, interest rate, stated percentage | 5.00% | 5.00% | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.20 | $ 0.20 | |||||
Warrants exercisable terms, description | The Investor will not have the right to exercise the Warrants if the Investor, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to its conversion and under no circumstances may exercise the Warrants if the Investor, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to its exercise | ||||||
Debt original issued discount | $ 306,000 | ||||||
Deferred financing cost | $ 42,500 | 42,500 | 1,387,297 | 1,387,297 | |||
Evergreen Agreement [Member] | Accredited Investor Eleven [Member] | Evergreen Capital Management LLC [Member] | First Tranche [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Aggregate amount of common stock issued to purchase warrants | $ 1,540,000 | $ 1,540,000 | |||||
Number of common stock issued to purchase warrants | 8,855,000 | 8,855,000 | |||||
Debt principal amount | $ 1,771,000 | $ 1,771,000 | |||||
Evergreen Agreement [Member] | Accredited Investor Eleven [Member] | Evergreen Capital Management LLC [Member] | Second Tranche [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Aggregate amount of common stock issued to purchase warrants | $ 500,000 | $ 500,000 | |||||
Number of common stock issued to purchase warrants | 2,875,000 | 2,875,000 | |||||
Debt principal amount | $ 575,000 | $ 575,000 | |||||
Investors Agreement [Member] | Convertible Debt [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Convertible notes payable | 3,075,146 | 3,075,146 | |||||
Accrued interest | 3,075,146 | 3,075,146 | |||||
Deferred financing cost | 2,135,337 | 2,135,337 | |||||
Investors Agreement [Member] | Accredited Investor Twelve [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Aggregate amount of common stock issued to purchase warrants | $ 2,550,000 | ||||||
Number of common stock issued to purchase warrants | 15,000,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.20 | ||||||
Debt original issued discount | $ 447,237 | ||||||
Deferred financing cost | 10,000 | ||||||
Investors Agreement [Member] | Accredited Investor Twelve [Member] | First Tranche [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Aggregate amount of common stock issued to purchase warrants | $ 1,924,999 | ||||||
Number of common stock issued to purchase warrants | 11,323,529 | ||||||
Debt principal amount | $ 2,264,706 | ||||||
Investors Agreement [Member] | Accredited Investor Twelve [Member] | Second Tranche [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Aggregate amount of common stock issued to purchase warrants | $ 625,001 | ||||||
Number of common stock issued to purchase warrants | 3,676,471 | ||||||
Debt principal amount | $ 735,294 | ||||||
Securities Purchase Agreement [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Convertible notes payable | $ 303,207 | $ 303,207 | 162,271 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.35 | $ 0.35 | |||||
JMJ Financial [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Convertible notes payable | $ 235,925 | $ 235,925 | $ 213,545 | ||||
Accrued interest | $ 9,221 | $ 9,221 | $ 8,514 | ||||
Debt conversion, shares issued | 11,796 | 10,677 | |||||
Debt instrument, convertible, conversion price | $ 20 | $ 20 | $ 20 |
SCHEDULE OF RECONCILIATION OF D
SCHEDULE OF RECONCILIATION OF DERIVATIVE LIABILITY (Details) | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
June 30, 2020 | $ 897,631 |
Initial fair value of derivative liability recorded as debt discount | 853,800 |
Initial fair value of derivative liability charged to other expense | 2,240,908 |
Gain on change in fair value included in earnings | (3,267,323) |
Derivative liability relieved by conversions of convertible promissory notes | (725,016) |
June 30, 2021 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 0 | $ 0 |
SCHEDULE OF ASSUMPTIONS USED (D
SCHEDULE OF ASSUMPTIONS USED (Details) | 6 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Expected volatility | 618.01% |
Weighted-average volatility | 618.01% |
Expected dividends | 0.00% |
Expected term (in years) | 4 years |
Risk-free rate | 0.68% |
SCHEDULE OF COMMON STOCK PURCHA
SCHEDULE OF COMMON STOCK PURCHASE WARRANTS OUTSTANDING (Details) | 6 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Equity [Abstract] | |
Warrants outstanding, beginning balance | shares | 25,718,971 |
Weighted average exercise price warrants outstanding, beginning balance | $ / shares | $ 0.20 |
Warrants outstanding, intrinsic value beginning balance | $ | |
Warrants issued | shares | 919,106 |
Weighted average exercise price warrants issued | $ / shares | $ 0.20 |
Warrants issued, intrinsic value | $ | |
Warrants forfeited | shares | |
Weighted average exercise price warrants forfeited | $ / shares | |
Warrants issued, intrinsic value | $ | |
Warrants outstanding, ending balance | shares | 26,638,077 |
Weighted average exercise price warrants outstanding, ending balance | $ / shares | $ 0.20 |
Warrants outstanding, intrinsic value ending balance | $ | |
Common stock issuable upon exercise of warrants outstanding | shares | 26,638,077 |
Common stock issuable upon exercise of warrants, outstanding weighted average exercise price | $ / shares | $ 0.20 |
Common stock issuable upon exercise of warrants outstanding intrinsic value | $ |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE BY EXERCISE PRICE RANGE (Details) - $ / shares | 6 Months Ended | |
Dec. 31, 2021 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issuable upon exercise of warrants outstanding number | 26,638,077 | 25,718,971 |
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issuable upon exercise of warrants outstanding number | 26,638,077 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 3 years 4 months 2 days | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.20 | |
Common stock issuable upon warrants exercisable number | 26,638,077 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.20 | |
Warrant [Member] | Exercise Price Range [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issuable upon exercise of warrants outstanding, range of exercise price | $ 0.20 | |
Common stock issuable upon exercise of warrants outstanding number | 26,638,077 | |
Common stock issuable upon exercise of warrants outstanding, weighted average remaining contractual life (years) | 3 years 4 months 2 days | |
Common stock issuable upon exercise of warrants outstanding, weighted average exercise price | $ 0.20 | |
Common stock issuable upon warrants exercisable number | 26,638,077 | |
Common stock issuable upon warrants exercisable, weighted average exercise price | $ 0.20 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Apr. 30, 2021 | Apr. 05, 2021 | Aug. 04, 2020 | Aug. 03, 2020 | Aug. 02, 2020 | Jul. 14, 2020 | Jul. 13, 2020 | Jun. 10, 2020 | Jun. 09, 2020 | Sep. 04, 2019 | Sep. 03, 2019 | Aug. 27, 2019 | Aug. 23, 2019 | |
Class of Stock [Line Items] | ||||||||||||||||
Shares authorized | 500,001,000 | |||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 250,000,000 | 500,000,000 | 250,000,000 | 100,000,000 | 100,000,000 | 250,000,000 | 100,000,000 | 25,000,000 | 25,000,000 | 100,000,000 | |||
Common stock, par value | $ 0.01 | $ 0.01 | ||||||||||||||
Common stock, shares issued | 81,656,033 | 78,612,608 | ||||||||||||||
Common stock, shares outstanding | 81,627,663 | 78,584,238 | ||||||||||||||
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 | ||||||||||||||
Share-based payment arrangement, expense | $ 159,829 | $ 206,521 | ||||||||||||||
Stock issued, restricted stock award, gross | 30,000 | |||||||||||||||
Debt conversion converted amount | $ 500,000 | $ 288,182 | ||||||||||||||
Debt converted into shares | 2,500,000 | 16,331,766 | ||||||||||||||
Issuance of common stock for conversions of convertible promissory notes | $ 666,625 | $ 708,272 | ||||||||||||||
Common stock, capital shares reserved for future issuance | 82,000,000 | |||||||||||||||
Treasury stock, common, shares | 7,202 | |||||||||||||||
2014 under an Equity Line of Credit [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Treasury stock, common, shares | 8,000 | |||||||||||||||
Additional Warrants [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
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 | |||||||||||||||
Exchange Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Share-based Payment Arrangement, Noncash Expense | $ 153,301 | |||||||||||||||
Exchange Agreement [Member] | Cancelled Warrants [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants to acquire shares | 37,390,452 | |||||||||||||||
Warrant exercise price per shares | $ 0.50 | |||||||||||||||
Exchange Agreement [Member] | Additional Warrants [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants to acquire shares | 5,650,708 | |||||||||||||||
Warrant Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants to acquire shares | 37,390,452 | |||||||||||||||
Consulting, Public Relations, and Marketing Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Share-based Payment Arrangement, Noncash Expense | $ 83,960 | $ 6,820 | ||||||||||||||
Number of shares issued on restricted shares, shares | 543,425 | 200,000 | ||||||||||||||
Board Of Directors Agreements [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares issued on restricted shares, shares | 134,316 | |||||||||||||||
Share-based payment arrangement, expense | $ 30,000 | |||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrant exercise price per shares | $ 0.35 | |||||||||||||||
Fair value of warrants | $ 1,879,204 | |||||||||||||||
Chief Operating Officer [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Share-based Payment Arrangement, Noncash Expense | $ 45,869 | |||||||||||||||
Number of common stock grants in period | 500,000 | |||||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting rights description | restricted shares of common stock to the Company’s Chief Operating Officer, both of which vests 25% on the 1 year, 2 year, 3 year, and 4 year anniversaries of the grant dates | |||||||||||||||
Share-based compensation, award vesting rights, percentage | 25.00% | |||||||||||||||
Mr. Cutchens [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Share-based Payment Arrangement, Noncash Expense | $ 21,474 | |||||||||||||||
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 former Chief Financial Officer, which vested 25% on the six month, 1 year, 2 year, and 3 year anniversaries of the grant date | |||||||||||||||
Investors [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants to acquire shares | 14,908,077 | |||||||||||||||
Warrant exercise price per shares | $ 0.20 | |||||||||||||||
Warrants term | 4 years | |||||||||||||||
Evergreen Capital Management LLC [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants to acquire shares | 11,730,000 | |||||||||||||||
Warrant exercise price per shares | $ 0.27 | $ 0.20 | ||||||||||||||
Warrants term | 4 years | |||||||||||||||
Fair value of warrants | $ 1,293,541 | |||||||||||||||
Series A Super Voting Preferred [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | 1,000 | |||||||||||||||
Preferred stock, shares issued | 1,000 | |||||||||||||||
Preferred stock, shares outstanding | 1,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | May 04, 2021 | Apr. 06, 2021 | Oct. 22, 2020 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 |
Related Party Transaction [Line Items] | |||||||
Debt instrument description | May 4, 2022 and June 30, 2022, bear interest at the rate of 5% per annum and are convertible at any time upon the option of the Investors into shares of Common Stock at a conversion price equal to $0.20 per share. The Company has the right to prepay all or any portion of the outstanding balance of the Notes in an amount equal to 115% or 120%, depending on whether such repayment is made before November 5, 2021 or after November 5, 2021, respectively, multiplied by the portion of the outstanding balance to be prepaid | upon the occurrence and during the continuance of an Event of Default (as defined in the Note), if lower, at a conversion price equal to 75% of the lowest daily volume-weighted average price (“VWAP”) of the Common Stock during the 20 consecutive trading days immediately preceding the applicable conversion date. The Company has the right to prepay all or any portion of the outstanding balance of the Note in an amount equal to 115% or 120%, depending on whether such repayment is made before or after November 5, 2021, multiplied by the portion of the outstanding balance to be prepaid | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||||
Outstanding amount | $ 240,034 | $ 470,108 | |||||
Debt converted into shares | 2,500,000 | 16,331,766 | |||||
Description of share based compensation award term | the Company’s Chief Operating Officer, both of which vests 25% on the 1 year, 2 year, 3 year, and 4 year anniversaries of the grant dates | ||||||
Rent expense | $ 1,350 | $ 24,389 | $ 8,100 | ||||
Accrued payable to related party | 35,971 | 35,971 | |||||
Officem [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Finance lease principal payments | 1,600 | ||||||
Event of Default and Demand Letter [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument description | the Company received a notice of event of default and demand letter (“Demand Letter”) from a former officer and promissory note holder (the “Note Holder”) | ||||||
Debt principal amount | $ 40,739 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||||
Debt maturity date | Apr. 18, 2020 | ||||||
Aggregate of principal and interest | $ 51,940 | ||||||
Former Officers [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Loan from officers | 0 | 0 | |||||
Interest on loans | 22,883 | $ 2,412 | |||||
Officers [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding amount | 769,970 | $ 747,086 | |||||
Mr. Smiley [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Legal and consulting expenses | $ 45,869 | ||||||
Debt converted into shares | 500,000 | ||||||
Angelia Hrytsyshyn [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt converted into shares | 500,000 | ||||||
Microphase Corporation [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Company owed amount | $ 32,545 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Accounts payable | $ 82,795 | $ 82,795 | |
Revenue | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | May 04, 2021 | Apr. 06, 2021 | Feb. 10, 2022 | Jan. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | ||||||
Debt Instrument, Description | May 4, 2022 and June 30, 2022, bear interest at the rate of 5% per annum and are convertible at any time upon the option of the Investors into shares of Common Stock at a conversion price equal to $0.20 per share. The Company has the right to prepay all or any portion of the outstanding balance of the Notes in an amount equal to 115% or 120%, depending on whether such repayment is made before November 5, 2021 or after November 5, 2021, respectively, multiplied by the portion of the outstanding balance to be prepaid | upon the occurrence and during the continuance of an Event of Default (as defined in the Note), if lower, at a conversion price equal to 75% of the lowest daily volume-weighted average price (“VWAP”) of the Common Stock during the 20 consecutive trading days immediately preceding the applicable conversion date. The Company has the right to prepay all or any portion of the outstanding balance of the Note in an amount equal to 115% or 120%, depending on whether such repayment is made before or after November 5, 2021, multiplied by the portion of the outstanding balance to be prepaid | ||||
Debt Conversion, Converted Instrument, Shares Issued | 2,500,000 | 16,331,766 | ||||
Debt Conversion, Converted Instrument, Amount | $ 500,000 | $ 288,182 | ||||
Amended And Restated Future Receivables Agreement [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Gross proceeds from sale of equity | $ 2,910,000 | |||||
Debt Instrument, Description | The weekly repayment term began during January 2022 and concludes during July 2022 | |||||
Investor [Member] | Amended And Restated Future Receivables Agreement [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Gross proceeds from sale of equity | $ 4,050,000 | |||||
Anshu Bhatnagar [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,352,066 | |||||
Debt Conversion, Converted Instrument, Amount | $ 528,607 |