Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Mar. 31, 2014 | |
Document And Entity Information | ' |
Entity Registrant Name | 'STUDIO ONE MEDIA, INC. |
Entity Central Index Key | '0000836809 |
Document Type | '10-Q |
Document Period End Date | 31-Mar-14 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--06-30 |
Is Entity a Well-known Seasoned Issuer? | 'No |
Is Entity a Voluntary Filer? | 'No |
Is Entity's Reporting Status Current? | 'Yes |
Entity Filer Category | 'Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 0 |
Document Fiscal Period Focus | 'Q3 |
Document Fiscal Year Focus | '2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
Current Assets | ' | ' |
Cash | $24,328 | $165,258 |
Other Receivable | 19,821 | 16,240 |
Other Current Assets | ' | 19,547 |
Total Current Assets | 44,149 | 201,045 |
Property and Equipment, net | 211,848 | 326,242 |
Property and Equipment, yet to be placed in service | 93,357 | 93,357 |
Intangible Assets, net | 14,248 | 16,689 |
Other Assets | ' | ' |
Deposits | 102,057 | 161,229 |
Total Other Long-Term Assets | 102,057 | 161,229 |
Total Assets | 465,659 | 798,562 |
Current Liabilities | ' | ' |
Accounts Payable | 878,201 | 753,115 |
Accrued Expenses | 65,260 | 50,725 |
Deferred Revenue | 3,500 | 24,182 |
Consulting Services - Related Party | 9,568 | 167,659 |
Lease Payable | 29,194 | 21,743 |
Notes Payable - Related Party | 610,000 | 575,000 |
Notes Payable | 40,488 | 40,488 |
Convertible Notes Payable - Related Party | 3,920,047 | 2,096,416 |
Convertible Notes payable | 586,567 | 306,366 |
Total Current Liabilities | 6,142,825 | 4,035,694 |
Long-Term Liabilities | ' | ' |
Lease Payable, net of current portion | 65,684 | 73,134 |
Convertible related party notes payable, net of current portion | ' | 1,724,439 |
Total Liabilities | 6,208,509 | 5,833,267 |
Stockholders' Deficit | ' | ' |
Convertible Preferred stock, Series A; $0.001 par value; 100,000 shares authorized, 15,500 shares issued and outstanding | 16 | 16 |
Convertible Preferred stock, Series A-1; $0.001 par value; 3,000,000 shares authorized, 696,000 shares issued and outstanding | 696 | 696 |
Convertible Preferred stock, Series B; $0.001 par value; 200,000 shares authorized, 3,500 shares issued and outstanding | 3 | 3 |
Convertible Preferred stock, Series C; $0.001 par value; 1,000,000 shares authorized, 13,404 shares issued and outstanding | 13 | 13 |
Convertible Preferred stock, Series D; $0.001 par value; 375,000 shares authorized, 130,000 shares issued and outstanding | 130 | 130 |
Convertible Preferred stock, Series E; $0.001 par value; 1,000,000 shares authorized, 275,000 shares issued and outstanding | 275 | 275 |
Convertible Preferred stock, Series P; $0.001 par value; 600,000 shares authorized, 86,640 shares issued and outstanding | 87 | 87 |
Convertible Preferred stock, Series S; $0.001 par value; 50,000 shares authorized, -0- shares issued and outstanding | ' | ' |
Common Stock, authorized 100,000,000 shares, par value $0.001; 64,300,449 and 51,244,242 shares issued and outstanding, respectively | 64,302 | 51,243 |
Additional Paid In Capital | 39,520,634 | 36,564,046 |
Accumulated Deficit | -45,329,006 | -41,651,214 |
Total Stockholders' Deficit | -5,742,850 | -5,034,705 |
Total Liabilities and Stockholders' Deficit | $465,659 | $798,562 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 64,300,449 | 51,244,242 |
Common stock, outstanding shares | 64,300,449 | 51,244,242 |
Series A Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 100,000 | 100,000 |
Convertible preferred stock, issued shares | 15,500 | 15,500 |
Convertible preferred stock, outstanding shares | 15,500 | 15,500 |
Series A-1 Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 3,000,000 | 3,000,000 |
Convertible preferred stock, issued shares | 696,000 | 696,000 |
Convertible preferred stock, outstanding shares | 696,000 | 696,000 |
Series B Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 200,000 | 200,000 |
Convertible preferred stock, issued shares | 3,500 | 3,500 |
Convertible preferred stock, outstanding shares | 3,500 | 3,500 |
Series C Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Convertible preferred stock, issued shares | 13,404 | 13,404 |
Convertible preferred stock, outstanding shares | 13,404 | 13,404 |
Series D Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 375,000 | 375,000 |
Convertible preferred stock, issued shares | 130,000 | 130,000 |
Convertible preferred stock, outstanding shares | 130,000 | 130,000 |
Series E Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Convertible preferred stock, issued shares | 275,000 | 275,000 |
Convertible preferred stock, outstanding shares | 275,000 | 275,000 |
Series P Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 600,000 | 600,000 |
Convertible preferred stock, issued shares | 86,640 | 86,640 |
Convertible preferred stock, outstanding shares | 86,640 | 86,640 |
Series S Convertible Preferred stock | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, authorized shares | 50,000 | 50,000 |
Convertible preferred stock, issued shares | 0 | 0 |
Convertible preferred stock, outstanding shares | 0 | 0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
REVENUES | ' | ' | ' | ' |
Session Revenues | $3,000 | $162,299 | $29,922 | $210,431 |
Advertising Revenues | ' | ' | ' | 2,000 |
AfterMaster Revenues | 28,171 | 17,279 | 99,064 | 49,769 |
Total Revenues | 31,171 | 179,578 | 128,986 | 262,200 |
COSTS AND EXPENSES | ' | ' | ' | ' |
Cost of Revenues (Exclusive of Depreciation and Amortization) | 78,201 | 77,711 | 286,058 | 270,772 |
Depreciation and Amortization Expense | 26,201 | 57,471 | 80,995 | 138,494 |
General and Administrative Expenses | 675,547 | 592,664 | 2,261,121 | 2,075,665 |
Total Costs and Expenses | 779,949 | 727,846 | 2,628,174 | 2,484,931 |
Loss from Operations | -748,778 | -548,268 | -2,499,188 | -2,222,731 |
Other Income (Expense) | ' | ' | ' | ' |
Interest Expense | -308,884 | -298,140 | -1,107,141 | -969,703 |
Gain (Loss) on Extinguishment of Debt | -53,500 | ' | -25,787 | ' |
Gain (Loss) on Disposal of Property | ' | ' | -45,676 | ' |
Other Income | ' | 1,500 | ' | 1,500 |
Total Other Income (Expense) | -362,384 | -296,640 | -1,178,604 | -968,203 |
Loss Before Income Taxes | -1,111,162 | -844,908 | -3,677,792 | -3,190,934 |
NET LOSS | -1,111,162 | -844,908 | -3,677,792 | -3,190,934 |
Preferred Stock Accretion and Dividends | -17,016 | -17,016 | -51,048 | -51,048 |
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | ($1,128,178) | ($861,924) | ($3,728,840) | ($3,241,982) |
Basic and Diluted Loss Per Share of Common Stock | ($0.02) | ($0.02) | ($0.06) | ($0.08) |
Weighted Average Number of Shares Outstanding | 62,498,968 | 40,790,747 | 57,775,047 | 39,064,369 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
OPERATING ACTIVITIES | ' | ' |
Net Loss | ($3,677,792) | ($3,190,934) |
Adjustments to reconcile to cash from operating activities: | ' | ' |
Depreciation and amortization | 80,995 | 81,023 |
Share-based compensation - Common Stock | 537,870 | 478,480 |
Share-based compensation - warrants | 259,212 | 10,089 |
Common stock issued for services and rent | 398,777 | 276,268 |
Amortization of debt discount and issuance costs | 423,394 | 386,040 |
(Gain)/Loss on Disposal of assets | 45,676 | 2,002 |
(Gain)/Loss on extinguishment of debt | 50,000 | ' |
Changes in Operating Assets and Liabilities: | ' | ' |
Other receivables | -3,581 | -10,765 |
Other assets | 106,719 | 152,919 |
Lease payable | ' | 70,000 |
Accounts payable and accrued expenses | 536,571 | 88,338 |
Net Cash Used in Operating Activities | -1,242,159 | -1,656,540 |
INVESTING ACTIVITIES | ' | ' |
Purchase of property and equipment | -9,836 | -72,353 |
Net Cash Used in Investing Activities | -9,836 | -72,353 |
FINANCING ACTIVITIES | ' | ' |
Common Stock issued for cash, net of offering costs of $15,935 and $3,300, respectively | 699,065 | 106,700 |
Proceeds from notes payable - related party | 35,000 | 500,000 |
Proceeds from convertible notes payable - related party | ' | 100,000 |
Proceeds from convertible notes payable | 385,000 | 85,000 |
Repayments of convertible notes payable | -8,000 | ' |
Net Cash Provided by Financing Activities | 1,111,065 | 791,700 |
NET DECREASE IN CASH | -140,930 | -937,193 |
CASH AT BEGINNING OF PERIOD | 165,258 | 99,637 |
CASH AT END OF PERIOD | 24,328 | -837,556 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' |
Cash paid for interest | 918 | ' |
NON CASH FINANCING ACTIVITIES: | ' | ' |
Common Stock issued to extinguish debt and liabilities | ' | 37,840 |
Common Stock and warrants issued for prepaid services | 28,000 | 10,252 |
Common Stock and warrants issued for interest | 28,100 | ' |
Warrants and beneficial conversion feature on issuance of convertible debt | $575,723 | $108,364 |
1_CONDENSED_FINANCIAL_STATEMEN
1. CONDENSED FINANCIAL STATEMENTS | 9 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
1. CONDENSED FINANCIAL STATEMENTS | ' |
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2014, and for all periods presented herein, have been made. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2013 audited financial statements. The results of operations for the periods ended March 31, 2014 and 2013 are not necessarily indicative of the operating results for the full years. | |
2_GOING_CONCERN
2. GOING CONCERN | 9 Months Ended |
Mar. 31, 2014 | |
Text Block [Abstract] | ' |
2. GOING CONCERN | ' |
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred losses since inception of $45,329,006 and currently has revenues which are insufficient to covering its operating costs which raises substantial doubt about its ability to continue as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. | |
The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its operations and (2) to achieve adequate revenues from its MyStudio and AfterMaster businesses. Management's plan to address these issues includes, (a) continued exercise of tight cost controls to conserve cash, (b) obtaining additional financing, and (c) place in service additional personal recording kiosks. | |
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. |
3_SUMMARY_OF_SIGNIFICANT_ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2014 | |
Notes to Financial Statements | ' |
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments. Actual results could differ from those estimates. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of Studio One Media, Inc. and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. | |
Fair Value Instruments | |
Cash is the Company’s only financial asset or liability required to be recognized at fair value and is measured using quoted prices for active markets for identical assets (Level 1 fair value hierarchy). The carrying amounts reported in the balance sheets for notes receivable and accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments. | |
The fair value of the Company’s notes payable at March 31, 2014 is approximately $5,292,888 (carrying value of $5,157,103). Market prices are not available for the Company’s loans due to related parties or its other notes payable, nor are market prices of similar loans available. The Company determined that the fair value of the notes payable based on its amortized cost basis due to the short term nature and current borrowing terms available to the Company for these instruments. | |
Income Taxes | |
There is no income tax provision for the three months ended March 31, 2014 and 2013 due to net operating losses for which there is no benefit currently available. | |
At March 31, 2014, the Company had deferred tax assets associated with state and federal net operating losses. The Company has recorded a corresponding full valuation allowance as it is more likely than not that some portion of all of the deferred tax assets will not be realized. | |
Recent Accounting Pronouncements | |
Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements. | |
4_NOTES_PAYABLE
4. NOTES PAYABLE | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes Payable [Abstract] | ' | ||||||||
4. NOTES PAYABLE | ' | ||||||||
Convertible Notes Payable | |||||||||
Convertible notes payable consisted of the following as of March 31, 2014 and June 30, 2013, respectively: | |||||||||
Convertible Notes Payable – Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
$250,000 face value, issued in February 2010, interest rate of 12%, matures in February 2013, net of unamortized discount of $0 and $0 at March 31, 2014 and June 30,2013, respectively. | $ | 250,000 | $ | 250,000 | |||||
$250,000 face value, issued in May 2010, interest rate of 12%, matures in May 2013, net of unamortized discount of $0 and $0 at March 31, 2014 and June 30,2013, respectively. | 250,000 | 250,000 | |||||||
$250,000 face value, issued in August 2010, interest rate of 12%, matures in August 2013, net of unamortized discount of $0 and $24,559 at March 31, 2014 and June 30,2013, respectively. | 250,000 | 225,441 | |||||||
$250,000 face value, issued in December 2010, interest rate of 12%, matures in December 2013, net of unamortized discount of $0 and $40,148 at March 31, 2014 and June 30,2013, respectively. | 250,000 | 209,852 | |||||||
$250,000 face value, issued in November 2011, interest rate of 15%, matures in November 2012, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 250,000 | 250,000 | |||||||
$250,000 face value, issued in December 2011, interest rate of 15%, matures in June 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 250,000 | 250,000 | |||||||
$100,000 face value, issued in December 2011, interest rate of 15%, matures in June 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 100,000 | 100,000 | |||||||
$300,000 face value, issued in December 2011, interest rate of 15%, matures in June 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 300,000 | 300,000 | |||||||
$100,000 face value, issued in February 2012, interest rate of 15%, matures in August 2013, net of unamortized discount of $0 and $1,168 as of March 31, 2014 and June 30,2013, respectively. | 100,000 | 98,832 | |||||||
$100,000 face value, issued in February 2012, interest rate of 15%, matures in August 2013, net of unamortized discount of $0 and $1,514 as of March 31, 2014 and June 30,2013, respectively. | 100,000 | 98,486 | |||||||
$150,000 face value, issued in March 2012, interest rate of 15%, matures in September 2013, net of unamortized discount of $0 and $1,111 as of March 31, 2014 and June 30,2013, respectively. | 150,000 | 148,889 | |||||||
$200,000 face value, issued in March 2012, interest rate of 15%, matures in September 2013, net of unamortized discount of $0 and $1,814 as of March 31, 2014 and June 30,2013, respectively. | 200,000 | 198,186 | |||||||
$200,000 face value, issued in April 2012, interest rate of 10%, matures in October 2013, net of unamortized discount of $0 and $2,450 as of March 31, 2014 and June 30,2013, respectively. | 200,000 | 197,550 | |||||||
$150,000 face value, issued in May 2012, interest rate of 10%, matures in November 2013, net of unamortized discount of $0 and $1,682 as of March 31, 2014 and June 30,2013, respectively. | 150,000 | 148,318 | |||||||
$125,000 face value, issued in June 2012, interest rate of 10%, matures in December 2013, net of unamortized discount of $0 and $1,897 as of March 31, 2014 and June 30,2013, respectively. | 125,000 | 123,103 | |||||||
$125,000 face value, issued in June 2012, interest rate of 10%, matures in December 2013, net of unamortized discount of $0 and $2,208 as of March 31, 2014 and June 30,2013, respectively. | 125,000 | 122,792 | |||||||
$50,000 face value, issued in August 2012, interest rate of 10%, matures in February 2014, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30, 2013. | 50,000 | 50,000 | |||||||
$50,000 face value, issued in September 2012, interest rate of 10%, matures in March 2014, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30, 2013. | 50,000 | 50,000 | |||||||
$100,000 face value, issued in October 2012, interest rate of 10%, matures in April 2014, net of unamortized discount of $95 and $2,662 as of March 31, 2014 and June 30, 2013. | 99,905 | 97,338 | |||||||
$100,000 face value, issued in October 2012, interest rate of 10%, matures in April 2014, net of unamortized discount of $163 and $2,786 as of March 31, 2014 and June 30, 2013. | 99,837 | 97,214 | |||||||
$50,000 face value, issued in October 2012, interest rate of 10%, matures in April 2014, net of unamortized discount of $99 and $1,192 as of March 31, 2014 and June 30, 2013. | 49,901 | 48,808 | |||||||
$75,000 face value, issued in November 2012, interest rate of 10%, matures in May 2014, net of unamortized discount of $244 and $1,804 as of March 31, 2014 and June 30, 2013. | 74,756 | 73,196 | |||||||
$25,000 face value, issued in November 2012, interest rate of 10%, matures in May 2014, net of unamortized discount of $188 and $1,159 as of March 31, 2014 and June 30, 2013. | 24,812 | 23,841 | |||||||
$50,000 face value, issued in November 2012, interest rate of 10%, matures in May 2014, net of unamortized discount of $413 and $2,358 as of March 31, 2014 and June 30, 2013. | 49,587 | 47,642 | |||||||
$50,000 face value, issued in December 2012, interest rate of 10%, matures in June 2014, net of unamortized discount of $555 and $2,502 as of March 31, 2014 and June 2013. | 49,445 | 47,498 | |||||||
$75,000 face value, issued in January 2013, interest rate of 10%, matures in July 2014, net of unamortized discount of $526 and $2,111 as ofMarch 31, 2014 and June 30, 2013. | 74,474 | 72,889 | |||||||
$25,000 face value, issued in January 2013, interest rate of 10%, matures in July 2014, net of unamortized discount of $160 and $637 as of March 31, 2014 and June 30, 2013. | 24,840 | 24,363 | |||||||
$35,000 face value, issued in January 2013, interest rate of 10%, matures in July 2014, net of unamortized discount of $274 and $1,099 as of March 31, 2014 and June 30, 2013. | 34,726 | 33,901 | |||||||
$5,000 face value, issued in February 2013, interest rate of 10%, matures in August 2014, net of unamortized discount of $39 and $156 as of March 31, 2014 and June 30, 2013. | 4,961 | 4,844 | |||||||
$10,000 face value, issued in February 2013, interest rate of 10%, matures in August 2014, net of unamortized discount of $94 and $374 as of March 31, 2014 and June 30, 2013. | 9,906 | 9,626 | |||||||
$50,000 face value, issued in February 2013, interest rate of 10%, matures in August 2014, net of unamortized discount of $572 and $2,296 as of March 31, 2014 and June 30, 2013. | 49,428 | 47,704 | |||||||
$50,000 face value, issued in March 2013, interest rate of 10%, matures in September 2014, net of unamortized discount of $445 and $1,746 as of March 31, 2014 and June 30, 2013. | 49,555 | 48,254 | |||||||
$75,000 face value, issued in April 2013, interest rate of 10%, matures in October 2014, net of unamortized discount of $1,086 and $2,712 as of March 31, 2014 and June 30, 2013. | 73,914 | 72,288 | |||||||
Total convertible notes payable – related parties | 3,920,047 | 3,820,855 | |||||||
Less current portion | 3,920,047 | 2,096,416 | |||||||
Convertible notes payable – related parties, long-term | $ | - | $ | 1,724,439 | |||||
On August 9, 2012, the Company issued a convertible note to a related party for $50,000 that matures in February 9, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. The convertible note is in default and has been reclassified as current. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 50,000 shares of the Company’s Common Stock. The warrant has an exercise price of $0.25 per share and a contractual life of 5 years from the issuance date. The value of the beneficial conversion feature (BCF) recorded was $2,356 and the debt discount related to the attached warrants was $2,356, for a total debt discount of $4,712. | |||||||||
On September 10, 2012, the Company issued a convertible note to a related party for $50,000 that matures in March 10, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. The convertible note is in default and has been reclassified as current. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 50,000 shares of the Company’s Common Stock. The warrant has an exercise price of $0.25 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $17,060 and the debt discount related to the attached warrants was $3,505, for a total debt discount of $20,120. | |||||||||
On October 10, 2012, the Company issued a convertible note to a related party for $100,000 that matures in April 10, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 25,000 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $5,126, for a total debt discount of $5,126. | |||||||||
On October 17, 2012, the Company issued a convertible note to a related party for $100,000 that matures in April 17, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 25,000 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $5,236, for a total debt discount of $5,236. | |||||||||
On October 25, 2012, the Company issued a convertible note to a related party for $50,000 that matures in April 25, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 12,500 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $2,181, for a total debt discount of $2,181. | |||||||||
On November 13, 2012, the Company issued a convertible note to a related party for $75,000 that matures in May 13, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 18,750 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $3,107, for a total debt discount of $3,107. | |||||||||
On November 23, 2012, the Company issued a convertible note to a related party for $25,000 that matures in May 23, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 6,250 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $1,936, for a total debt discount of $1,936. | |||||||||
On November 28, 2012, the Company issued a convertible note to a related party for $50,000 that matures in May 28, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 12,500 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $3,877, for a total debt discount of $3,877. | |||||||||
On December 17, 2012, the Company issued a convertible note to a related party for $50,000 that matures in June 17, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 12,500 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $3,886, for a total debt discount of $3,886. | |||||||||
On January 14, 2013, the Company issued a convertible note to a related party for $75,000 that matures in July 14, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 18,750 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $3,158, for a total debt discount of $3,158. | |||||||||
On January 23, 2013, the Company issued a convertible note to a related party for $25,000 that matures in July 14, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 6,250 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $953, for a total debt discount of $953. | |||||||||
On January 31, 2013, the Company issued a convertible note to a related party for $35,000 that matures in July 31, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 8,750 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $1,644, for a total debt discount of $1,644. | |||||||||
On February 5, 2013, the Company issued a convertible note to a related party for $5,000 that matures in August 5, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 1,250 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $234, for a total debt discount of $234. | |||||||||
On February 14, 2013, the Company issued a convertible note to a related party for $10,000 that matures in August 14, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 2,500 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $0 and the debt discount related to the attached warrants was $559, for a total debt discount of $559. | |||||||||
On February 22, 2013, the Company issued a convertible note to a related party for $50,000 that matures in August 22, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 18,750 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $3,434, for a total debt discount of $3,434. | |||||||||
On March 6, 2013, the Company issued a convertible note to a related party for $50,000 that matures in September 6, 2013. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. The convertible note is in default and has been reclassified as current. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 18,750 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $2,605, for a total debt discount of $2,605. | |||||||||
On April 8, 2013, the Company issued a convertible note to a related party for $75,000 that matures in October 8, 2014. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, after 180 days into shares of the Company’s Common Stock at $0.50 per share. | |||||||||
In conjunction with the note, the Company issued detachable warrants to purchase 18,750 shares of the Company’s Common Stock. The warrant has an exercise price of $0.40 per share and a contractual life of 5 years from the issuance date. The value of the BCF recorded was $-0- and the debt discount related to the attached warrants was $3,252, for a total debt discount of $3,252. | |||||||||
Convertible Notes Payable - Non-Related Parties | |||||||||
Convertible notes payable due to non-related parties consisted of the following as of March 31, 2013 and June 30, 2013, respectively: | |||||||||
Convertible Notes Payable - Non-Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
$100,000 face value, issued in September 2011, interest rate of 15%, originally matured in December 2011, extended to August 2014, net of unamortized discount of $-0- and $4,064 as of March 31, 2014 and June 30,2013. | $ | 100,000 | $ | 95,936 | |||||
$10,000 face value, of which $8,000 has been paid back, issued in October 2011, interest rate of 15%, matures in August 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013. | 2,000 | 10,000 | |||||||
$15,000 face value, issued in October 2011, interest rate of 10%, matures in June 2012, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013. | 15,000 | 15,000 | |||||||
$75,000 face value, issued in January 2012, interest rate of 12%, originally matured in June 2013, extended to August 2014, net of unamortized discount of $-0- and $3,017 as of March 31, 2014 and June 30,2013. | 75,000 | 71,984 | |||||||
$50,000 face value, issued in August 2012, interest rate of 10%, matures in February 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30, 2013. | 50,000 | 50,000 | |||||||
$10,000 face value, issued in Sepember 2012, interest rate of 10%, matures in March 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013. | 10,000 | 10,000 | |||||||
$50,000 face value of which $9,600 was converted leaving a $40,400 face value, issued in November 2012, interest rate of 10%, matures in November 2013, net of unamortized discount of $0 and $13,789 as of March 31, 2014 and June 30, 2013. | 40,400 | 26,611 | |||||||
$30,000 face value, issued in February 2013, interest rate of 10%, matures in November 2013, net of unamortized discount of $0 and $10,487 as of March 31, 2014 and June 30, 2013. | 30,000 | 19,513 | |||||||
$20,000 face value, issued in April 2013, interest rate of -0-%, matures in October 2013, net of unamortized discount of $0 and $12,678 as of March 31, 2014 and June 30, 2013. | 20,000 | 7,322 | |||||||
$60,000 face value, of which $60,000 has been paid back, issued in July 2013, interest rate of 6%, matures in October 2013, net of unamortized discount of $0 as of March 31, 2014. | - | - | |||||||
$100,000 face value, issued in September 2013, interest rate of 6%, matures in February 2014, net of unamortized discount of $0 as of March 31, 2014. | 100,000 | - | |||||||
$50,000 face value, issued in October 2013, interest rate of 0%, originally matured in November 2013, with an extended maturity date of May 2014, net of unamortized discount of $22,084 as of March 31, 2014. | 27,916 | - | |||||||
$50,000 face value, issued in November 2013, interest rate of 0%, matures in May 2014, net of unamortized discount of $15,746 as of March 31, 2014. | 34,254 | - | |||||||
$25,000 face value, issued in November 2013, interest rate of 0%, matures in February 27, 2014, net of unamortized discount of $0 as of March 31, 2014. | 25,000 | - | |||||||
$20,000 face value, issued in March 2014, interest rate of 10%, matures in June 2014, net of unamortized discount of $20,000 as of March 31, 2014. | - | - | |||||||
$10,000 face value of which $10,000 was converted leaving a $0 face value, issued in February 2014, interest rate of 10%, matures in March 2014, net of unamortized discount of $0 as of March 31, 2014. | - | - | |||||||
$50,000 face value, issued in February 2014, interest rate of 10%, matures in April 2014, net of unamortized discount of $7,576 as of March 31, 2014. | 42,424 | - | |||||||
$50,000 face value, issued in February 2014, interest rate of 6%, matures in August 2014, net of unamortized discount of $39,503 as of March 31, 2014. | 10,497 | - | |||||||
$30,000 face value, issued in March 2014, interest rate of 0%, matures in September 2014, net of unamortized discount of $25,924 as of March 31, 2014. | 4,076 | - | |||||||
Total convertible notes payable – non-related parties | 586,568 | 306,366 | |||||||
Less current portion | 586,568 | 306,366 | |||||||
Convertible notes payable – non-related parties, long-term | $ | - | $ | - | |||||
On September 4, 2012, the Company issued a convertible note to an unrelated individual for $10,000 that matures on March 4, 2013. The note bears an interest rate of 10% per annum and is convertible, along with all accrued interest, into shares of the Company’s Common Stock at $0.25 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The convertible note is in default and has been reclassified as current. | |||||||||
As additional compensation, the Company issued to the holder 10,000 shares of restricted common stock. The value of the debt discount relate to the attached Common Stock was $2,481. | |||||||||
On November 28, 2012, the Company issued a convertible note to an unrelated individual for $50,000 that matures one year after issuance. The note bears an interest rate of 0% for the first 90 days and 10% after 90 days per annum and is convertible, along with all accrued interest, into shares of the Company’s Common Stock at the lesser of $0.18 per share or 60% of the lowest trade price in the 25 trading days previous to conversion. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $33,333. The convertible note is in default and has been reclassified as current. The note holder elected to convert $9,600 of the note and accrued interest on June 3, 2013. | |||||||||
On February 13, 2013, the Company issued a convertible note to an unrelated individual for $30,000 that matures on November 28, 2013. The note bears an interest rate of 0% for the first 90 days and 10% after 90 days per annum and is convertible, along with all accrued interest, into shares of the Company’s Common Stock at the lesser of $0.18 per share or 60% of the lowest trade price in the 25 trading days previous to conversion. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $30,000. The convertible note is in default and has been reclassified as current. | |||||||||
On April 24, 2013, the Company issued a convertible note to an unrelated individual for $20,000 that matures on October 24, 2013. The note bears an interest rate of 0% for the first 90 days and 10% after 90 days per annum and is convertible, along with all accrued interest, into shares of the Company’s Common Stock at the lesser of $0.18 per share or 60% of the lowest trade price in the 25 trading days previous to conversion. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was$20,000. The convertible note is in default and has been reclassified as current. | |||||||||
On July 30, 2013, the Company issued a convertible note to an unrelated individual for $60,000 that matures on September 30, 2013. The note bears an interest rate of 6% per annum and is convertible, along with all accrued interest, into shares of the Company’s Common Stock at $0.15 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $26,000. Subsequent to period end on October 1, 2013, the Company paid the note and interest in full. | |||||||||
On September 30, 2013, the Company issued a convertible note to an unrelated individual for $100,000 that matures on February 28, 2014. The note bears an interest rate of 0% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $100,000. The convertible note is in default and has been reclassified as current. | |||||||||
On October 17, 2013, the Company issued a convertible note to an unrelated individual for $50,000 with an original maturity date of November 17, 2013, the note bears an interest rate of 0% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the original BCF recorded was $50,000. The note was amended on November 17, 2013 to extend the maturity date to May 17, 2014 and issued 25,000 common stock and 25,000 warrants as incentive to extending the maturity date. Under ASC 470-60-55-12, the debt was deemed to be extinguished and the company recognized a loss on extinguishment of debt $27,713 and recoded a BCF on the new terms of $50,000. | |||||||||
On November 5, 2013, the Company issued a convertible note to an unrelated individual for $50,000 that matures on May 5, 2014. The note bears an interest rate of 0% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $50,000. | |||||||||
On November 27, 2013, the Company issued a convertible note to an unrelated individual for $25,000 that matures on February 27, 2014. The note bears an interest rate of 0% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $25,000. The convertible note is in default and has been reclassified as current. | |||||||||
On February 3, 2014, the Company issued a convertible note to an unrelated individual for $10,000 that matures on March 31, 2014. The note bears an interest rate of 10% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $10,000. On March 31, 2014 the note holder elected to convert the entire note and accrued interest of $10,000 and $153 respectively. | |||||||||
As additional compensation, the Company issued to the holder 10,000 shares of restricted common stock. The value of the debt discount relate to the attached Common Stock was $2,400. | |||||||||
On February 3, 2014, the Company issued a convertible note to an unrelated individual for $50,000 that matures on April 10, 2014. The note bears an interest rate of 10% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $50,000. | |||||||||
As additional compensation, the Company issued to the holder 25,000 shares of restricted common stock. The value of the debt discount relate to the attached Common Stock was $6,250. | |||||||||
On February 21, 2014, the Company issued a convertible note to an unrelated individual for $50,000 that matures on August 21, 2014. The note bears an interest rate of 6% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $50,000. | |||||||||
As additional compensation, the Company issued to the holder 25,000 shares of restricted common stock. The value of the debt discount relate to the attached Common Stock was $5,250. | |||||||||
On March 6, 2014, the Company issued a convertible note to an unrelated individual for $30,000 that matures on September 6, 2014. The note bears an interest rate of 0% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $30,000. | |||||||||
As additional compensation, the Company issued to the holder 15,000 shares of restricted common stock. The value of the debt discount relate to the attached Common Stock was $3,500. | |||||||||
On March 31, 2014, the Company issued a convertible note to an unrelated individual for $20,000 that matures on June 28, 2014. The note bears an interest rate of 10% per annum and is convertible into shares of the Company’s Common Stock at $0.10 per share. The maturity date of the note can be extended, at the option of the holder, for a single 30 day period. The value of the BCF recorded was $20,000. | |||||||||
As additional compensation, the Company issued to the holder 10,000 shares of restricted common stock. The value of the debt discount relate to the attached Common Stock was $2,300. | |||||||||
Non-convertible Notes Payable – Related Parties | |||||||||
Non-convertible notes payable due to related parties consisted of the following as of March 31, 2014 and June 30, 2013: | |||||||||
Non-Convertible Notes Payable – Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Face value of $200,000, issued in April 2011, original maturity date of August 2011 extended to June 2013, 30,000 warrants per month were granted in lieu of interest through June 2011, warrants increased to 50,000 shares per month through August 2011, from September until maturity, the note bears interest at 12%. | $ | 200,000 | $ | 200,000 | |||||
Face value of $250,000, issued in September 2011, matures in September 2012, 25,000 warrants per month issued for first 90 days, note bears interest at 15% from December 2011 through maturity. | 250,000 | 250,000 | |||||||
Face value of $125,000, issued in October 2011, matures in October 2012, 30,000 warrants issued in lieu of interest through December 2011, note bears interest at 15% from December 2011 through maturity. | 125,000 | 125,000 | |||||||
Face value of $35,000, issued in January 2014, matures in February 2014, note bears interest at 10%, interest is accrued monthly and paid quarterly by issuing restricted stock until the January 2015 and thereafter interest to be paid in cash. | 35,000 | - | |||||||
Total non-convertible notes payable – related parties | 610,000 | 575,000 | |||||||
Less current portion | 610,000 | 575,000 | |||||||
Non-convertible notes payable - related parties, long term | $ | - | $ | - | |||||
In September 2011, the Company entered into a one-year note payable for $250,000 with a related party. The note provided for 0% interest per annum for the first 90 days. In lieu of interest for the first 90 days, the Company granted the lender a warrant to purchase 25,000 shares of Company’s Common Stock at an exercise price of $0.40 for a contractual period of 5 years for each 30 days or portion thereof the note remains outstanding. If the note remained outstanding beyond the first 90 days, the note provided for an interest rate of 15% per annum. This note includes the following priority repayment provisions: 1) the Company agrees to apply 50% of the first $600,000 of capital raised by the Company in the near term toward all outstanding notes the lender has outstanding with the Company; 2) the Company agrees to apply the first $450,000 of proceeds raised beyond the $600,000 to any outstanding notes the lender has outstanding with the Company; and 3) if the Company is unable to raise additional capital but a large marketing or sales agreement is entered into which provide for revenue in excess of $50,000, all funds received above $50,000 shall be applied to any notes the lender has outstanding with the Company at the time. | |||||||||
The Company was also required to provide to the lender or its representative online access, for viewing purposes only, to the accounting and financial data maintained by the Company. Online access shall be terminated once the loan and other funds advanced by the lender to the Company, including any accrued interest, have been fully paid. | |||||||||
Further, per the terms of the agreement, if the note was not fully repaid by October 31, 2011, which was subsequently extended to November 15, 2011, and the Company had not deployed and made operational certain designated studios, the Company would be obligated to issue to the lender a warrant to purchase 25,000 shares of the Company’s Common Stock at an exercise price of $0.40 per share with a contractual life of 5 years. Such warrant was issued in accordance with the terms of the note. | |||||||||
On October 1, 2012, the note holder agreed to extend the maturity date of the note to June 30, 2013. No consideration was paid to extend the maturity date. The convertible note is in default and has been reclassified as current. | |||||||||
In October 2011, the Company entered into a one-year note payable for $125,000 with a related party. The note provided for 0% interest per annum for the first 45 days. In lieu of interest for the first 45 days, the Company granted the lender a warrant to purchase 30,000 shares of Company’s Common Stock at an exercise price of $0.40 for a contractual period of 5 years. Effective December 1, 2011, the note bears interest of 15% per annum until paid. The convertible note is in default and has been reclassified as current. | |||||||||
This note includes the following priority repayment provisions: 1) the Company agrees to apply 50% of the first $600,000 of capital raised by the Company in the near term toward all outstanding notes the lender has outstanding with the Company; 2) the Company agrees to apply the first $575,000 of proceeds raised beyond the $600,000 to any outstanding notes the lender has outstanding with the Company; and 3) if the Company is unable to raise additional capital but a large marketing or sales agreement is entered into which provide for revenue in excess of $50,000, all funds received above $50,000 shall be applied to any notes the lender has outstanding with the Company at the time. | |||||||||
In January 2014, the Company entered into a one month note payable for $35,000 with a related party. The note provided for 10% interest per annum in restricted common stock calculated at 75% of the preceding 10-day running average closing price for the first year payable each quarter. Thereafter, interest is to be paid in cash. The convertible note is in default and has been reclassified as current. | |||||||||
This note includes the following priority repayment provisions: 1) the Company agrees to apply the first and all subsequent funds raised by the company unless otherwise authorized by the holder; 2) the holder will approve all checks of the company before they are issued, until the note is repaid; and 3) if the terms are not complied with, the note will be due on demand. | |||||||||
Non-Convertible Notes Payable – Non-Related Parties | |||||||||
Non-convertible notes payable due to non-related parties consisted of the following as of March 31, 2014 and June 30, 2013: | |||||||||
Non-Convertible Notes Payable – Non-Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Various term notes with total face value of $40,488 due upon demand, interest rates range from 12% to 14%. | $ | 40,488 | $ | 40,488 | |||||
Total non-convertible note payable – non-related parties | 40,488 | 40,488 | |||||||
Less current portion | 40,488 | 40,488 | |||||||
Non-convertible notes payable – non-related parties, long-term | $ | - | $ | - | |||||
5_CONVERTIBLE_PREFERRED_STOCK
5. CONVERTIBLE PREFERRED STOCK | 9 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
5. CONVERTIBLE PREFERRED STOCK | ' | ||||||||||||
The Company has authorized 10,000,000 shares of $0.001 par value per share Preferred Stock, of which the following were issued outstanding: | |||||||||||||
Shares | Shares | Liquidation | |||||||||||
Allocated | Outstanding | Preference | |||||||||||
Series A Convertible Preferred | 100,000 | 15,500 | - | ||||||||||
Series A-1 Convertible Preferred | 3,000,000 | 696,000 | 773,115 | ||||||||||
Series B Convertible Preferred | 200,000 | 3,500 | 79,099 | ||||||||||
Series C Convertible Preferred | 1,000,000 | 13,404 | - | ||||||||||
Series D Convertible Preferred | 375,000 | 130,000 | 130,000 | ||||||||||
Series E Convertible Preferred | 1,000,000 | 275,000 | 275,000 | ||||||||||
Series P Convertible Preferred | 600,000 | 86,640 | - | ||||||||||
Series S Convertible Preferred | 50,000 | - | - | ||||||||||
Total Preferred Stock | 6,325,000 | 1,220,044 | $ | 1,257,214 | |||||||||
The Company's Series A Convertible Preferred Stock ("Series A Preferred") is convertible into Common Stock at the rate of 0.025 share of Common stock for each share of the Series A Preferred. Dividends of $0.50 per share annually from date of issue, are payable from retained earnings, but have not been declared or paid. | |||||||||||||
The Company’s Series A-1 Senior Convertible Redeemable Preferred Stock (“Series A-1 Preferred”) is convertible at the rate of 2 shares of Common Stock per share of Series A-1 Preferred. The dividend rate of the Series A-1 Senior Convertible Redeemable Preferred Stock is 6% per share per annum in cash, or commencing on June 30, 2009 in shares of the Company’s Common Stock (at the option of the Company). | |||||||||||||
Due to the fact that the Series A-1 Preferred has certain features of debt and is redeemable, the Company analyzed the Series A-1 Preferred in accordance with ASC 480 and ASC 815 to determine if classification within permanent equity was appropriate. Based on the fact that the redeemable nature of the stock and all cash payments are at the option of the Company, it is assumed that payments will be made in shares of the Company’s Common Stock and therefore, the instruments are afforded permanent equity treatment. | |||||||||||||
The Company's Series B Convertible 8% Preferred Stock ("Series B Preferred") is convertible at the rate of 0.067 share of Common Stock for each share of Series B Preferred. Dividends from date of issue are payable on June 30 from retained earnings at the rate of 8% per annum but have not been declared or paid. | |||||||||||||
The Company's Series C Convertible Preferred Stock ("Series C Preferred") is convertible at a rate of 0.007 share of Common Stock per share of Series C Preferred. Holders are entitled to dividends only to the extent of the holders of the Company’s Common Stock receive dividends. | |||||||||||||
The Company's Series D Convertible Preferred Stock ("Series D Preferred") is convertible at a rate of 0.034 share of Common Stock per share of Series D Preferred. Holders are entitled to a proportionate share of any dividends paid as though they were holders of the number of shares of Common Stock of the Company into which their shares of are convertible as of the record date fixed for the determination of the holders of Common Stock of the Company entitled to receive such distribution. | |||||||||||||
The Company's Series E Convertible Preferred Stock ("Series E Preferred") is convertible at a rate of 0.034 share of Common Stock per share of Series E Preferred. Holders are entitled to a proportionate share of any dividends paid as though they were holders of the number of shares of Common Stock of the Company into which their shares of are convertible as of the record date fixed for the determination of the holders of Common Stock of the Company entitled to receive such distribution. | |||||||||||||
The Company's Series P Convertible Preferred Stock ("Series P Preferred") is convertible at a rate of 0.007 share of Common Stock for each share of Series P Preferred. Holders are entitled to dividends only to the extent of the holders of the Company’s Common Stock receive dividends. | |||||||||||||
In the event of a liquidation, dissolution or winding up of the affairs of the Company, holders of Series A Preferred Stock, Series P Convertible Preferred Stock, Series C Convertible Preferred Stock have no liquidation preference over holders of the Company’s Common Stock. Holders of Second Series B Preferred Stock have a liquidation preference over holders of the Company’s Common Stock and the Company’s Series A Preferred Stock. Holders of Series D Preferred Stock are entitled to receive, before any distribution is made with respect to the Company’s Common Stock, a preferential payment at a rate per each whole share of Series D Preferred Stock equal to $1.00. Holders of Series E Preferred Stock are entitled to receive, after the preferential payment in full to holders of outstanding shares of Series D Preferred Stock but before any distribution is made with respect to the Company’s Common Stock, a preferential payment at a rate per each whole share of Series E Preferred Stock equal to $1.00. Holders of Series A-1 Preferred Stock are superior in rank to the Company’s Common Stock and to all other series of Preferred Stock heretofore designated with respect to dividends and liquidation. | |||||||||||||
The activity surrounding the issuances of the Preferred Stock is as follows: | |||||||||||||
During the Nine Months ended March 31, 2014 and the fiscal year ended June 30, 2013, the Company issued -0- shares of Series A-1 Preferred Stock for $-0- in cash, net of $-0- of issuance costs, respectively. | |||||||||||||
During the fiscal year ended June 30, 2013, the outstanding Preferred Stock accumulated $17,016 in dividends. | |||||||||||||
During the Nine Months ended March 31, 2014, the outstanding Preferred Stock accumulated $34,032 in dividends; in Nine Months ended March 31, 2013 it accumulated $34,032 in dividends on outstanding Preferred Stock. The cumulative dividends in arrears through March 31, 2014 were approximately $637,115. | |||||||||||||
6_COMMON_STOCK
6. COMMON STOCK | 9 Months Ended |
Mar. 31, 2014 | |
Text Block [Abstract] | ' |
6. COMMON STOCK | ' |
The Company has authorized 100,000,000 shares of $0.001 par value per share Common Stock, of which 64,300,449 were issued outstanding as of March 31, 2014. The activity surrounding the issuances of the Common Stock is as follows: | |
For the Nine Months Ended March 31, 2014 | |
The Company issued 7,150,000 common shares for net cash proceeds of $699,065. The Company paid as offering costs $15,935 in cash offering costs and 97,000 in common stock offering costs. Offering costs paid in cash have been recorded as reductions to additional paid-in capital from common stock proceeds and common stock issued for offering costs have been expensed as compensation expenses. Attached to the Common Shares, the Company issued 196,804 warrants to purchase shares of the Company’s Common Stock. The Company recognized $259,212 in employee stock option expense and for the amortization of warrants issued in prior periods. | |
The Company also issued 612,500 shares of Common Stock as incentive to notes for $164,349 to convertible notes payable and recorded $461,000 in beneficial conversion features related to new issuances of debt. | |
As share-based compensation to employees and non-employees, the Company issued 2,033,349 shares of common stock valued at $547,870, based on the market price of the stock on the date of issuance. As interest expense on outstanding notes payable, the Company issued 2,199,095 shares of common stock valued at $575,723 based on the market price on the date of issuance. | |
For the Nine Months Ended March 31, 2013 | |
The Company issued 450,800 common shares for net cash proceeds of $106,700. The Company paid as offering costs $3,300 in cash offering costs. Offering costs have been recorded as reductions to additional paid-in capital from common stock proceeds. Attached to the Common Shares, the Company issued 430,000 warrants to purchase shares of the Company’s Common Stock. The Company recognized $14,090 in employee stock option expense and for the amortization of warrants issued in prior periods. | |
As share-based compensation to employees and non-employees, the Company issued 3,133,732 shares of common stock valued at $706,325, based on the market price of the stock on the date of issuance. As interest expense on outstanding notes payable, the Company issued 1,767,988 shares of common stock valued at $431,183 based on the market price on the date of issuance. | |
7_STOCK_PURCHASE_OPTIONS_AND_W
7. STOCK PURCHASE OPTIONS AND WARRANTS | 9 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||
7. STOCK PURCHASE OPTIONS AND WARRANTS | ' | ||||||||||||||||||||
The Board of Directors on June 10, 2009 approved the 2009 Long-Term Stock Incentive Plan. The purpose of the 2009 Long-term Stock Incentive Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by employees and other key individuals. The 2009 Long-Term Stock Incentive Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 1,500,000 shares of the Company's Common Stock is reserved for issuance under stock options to be issued under the 2009 Long-Term Stock Incentive Plan. The Plan permits the grant of incentive stock options, nonstatutory stock options and restricted stock awards. The 2009 Long-Term Stock Incentive Plan is administered by the Board of Directors or, at its direction, a Compensation Committee comprised of officers of the Company. | |||||||||||||||||||||
Stock Purchase Options | |||||||||||||||||||||
During the Nine Months ended March 31, 2014, the Company issued 25,000 any stock purchase options for a value of $6,045. The Company did recognize $10,713 in employee stock option expense during the quarter ended March 31, 2014 for options vested during the period that were issued in prior periods. | |||||||||||||||||||||
During the fiscal year ended June 30, 2013, the Company did not issue any stock purchase options. The Company did recognize $10,914 in employee stock option expense during the fiscal year ended June 30, 2013 for options vested during the period that were issued in prior periods. | |||||||||||||||||||||
Stock Purchase Warrants | |||||||||||||||||||||
During the Nine Months ended March 31, 2014, the Company issued warrants to purchase a total of 1,366,016 and expired 222,500 shares of the Company’s Common Stock. The Company issued 29,400 warrants in conjunction to a default clause in a convertible note payable and issued 311,616 warrants in conjunction to a consulting agreement entered into in July 2013. The Company also issued 500,000 warrants in conjunction to a consulting agreement entered into in October 2013.The Company issued 25,000 warrants in conjunction to an extension in a convertible note payable in conjunction with 50,000 shares of common stock. The Company issued 100,000 warrants in conjunction with a consulting agreement entered into January 2014. The Company issued 300,000 warrants in conjunction with an employment agreement entered into January 2014. The Company also issued 100,000 warrants as compensation for references purchased. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The Company apportioned value to the warrants based on the relative fair market value of the Common Stock and warrants. | |||||||||||||||||||||
During the fiscal year ended June 30, 2013, the Company issued warrants to purchase a total of 1,395,732 and expired 395,000 shares of the Company’s Common Stock. As described in Note 6, the Company issued 495,000 warrants attached to Common Stock. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The Company apportioned value to the warrants based on the relative fair market value of the Common Stock and warrants. | |||||||||||||||||||||
An additional 231,250 warrants were issued in conjunction with related party convertible notes payable. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The fair market value of the warrants has been accounted for as debt discount. | |||||||||||||||||||||
An additional 574,482 warrants valued at $108,660, were issued in for services to be expensed as services were performed. | |||||||||||||||||||||
An additional 95,000 warrants valued at $19,521, were issued in advance for services to be amortized over the term of the service period. | |||||||||||||||||||||
The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Expected volatility | 113 – 132% | ||||||||||||||||||||
Expected dividends | 0% | ||||||||||||||||||||
Expected term | 2 – 10 years | ||||||||||||||||||||
Risk-free interest rate | 0.35 – 1.75 % | ||||||||||||||||||||
The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the nine months ended March 31, 2014. | |||||||||||||||||||||
Date Issued | Number of Warrants | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Expiration Date (yrs) | Value if Exercised | ||||||||||||||||
Balance June 30, 2013 | 7,530,063 | $ | 0.67 | $ | 2.45 | 4.17 | $ | 4,770,713 | |||||||||||||
Granted | 1,366,016 | 1.27 | 0.23 | 5 | 305,421 | ||||||||||||||||
Exercised | -65,000 | - | - | - | - | ||||||||||||||||
Cancelled/Expired | -222,500 | - | - | - | - | ||||||||||||||||
Outstanding as of March 31, 2014 | 8,608,579 | $ | 5 | $ | 0.69 | 1.75 | $ | 5,076,134 | |||||||||||||
8_COMMITMENTS_AND_CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 9 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
8. COMMITMENTS AND CONTINGENCIES | ' | ||||
Legal Proceedings | |||||
The Company may become involved in certain legal proceedings and claims which arise in the normal course of business. In addition, from time to time, third parties may assert intellectual property infringement claims against the Company in the form of letters and other forms of communication. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the Company’s results of operations, prospects, cash flows, financial position and brand. | |||||
The Company was a defendant in a lease agreement with Westfield Century City with an outstanding balance of $90,000 for unpaid rent plus $68,615 in interest per the rent agreement. Westfield has not taken any legal actions to collect this debt as of March 31, 2014. | |||||
The Company was a defendant in a suit brought by one if its suppliers. The Company has defended the claim alleging that the vendor failed to deliver the goods and services contracted for. A tentative settlement agreement has been negotiated pursuant to which, if executed, will result in the Company paying the vendor approximately $74,000 in equal payments, without interest, over a period of eighteen months. | |||||
In November 2012, the Company’s former Chief Financial Officer, Joseph Desiderio, signed a promissory note (“Note”) on behalf of the Company in favor of JMJ Financial or its Assignees. The Note provided, among other things, for the right on the part of the Lender to convert part of the debt to stock. Subsequently, the parties have disagreed on the validity and terms of the agreement. The Lender has filed suit in the state court in Dade County, Florida, seeking to enforce the agreement. The Company disputes the Lender’s position on the grounds that (1) the Note contains provisions that violate Florida’s usury laws, (2) there has been no default by Company under the Note, and (3) some provisions of the Note are void and unenforceable. The Company expects the matter to be resolved to its satisfaction. Except as described in the preceding paragraph, to the best knowledge of our management, there are no material litigation matters pending or threatened against us. | |||||
The Company is a defendant in a suit brought by one if its suppliers. The Company has defended the claim alleging that the vendor failed to deliver the goods and services contracted for. | |||||
Lease Agreements | |||||
Pursuant to a lease originally dated January 2006, we currently occupy approximately 11,800 square feet of office space located at 7650 E. Evans Rd., Suite C, Scottsdale, Arizona on a month-to-month basis. The total lease expense is approximately $9,600 per month, payable in cash and Common Stock of the Company. | |||||
We are leasing office space on a month-to-month basis in West Hollywood, California. We also lease an office in Los Angeles for use by our audio team in connection with our AfterMaster product under a lease expiring on August 31, 2013. The total lease expense for both facilities is approximately $4,305 per month, after which, the Company has agreed to lease on a month to month basis, and the total remaining obligations under these leases at June 30, 2013 were approximately $8,610. | |||||
We lease space at mall locations for MyStudio generally pursuant to one-year leases. The monthly rent for these spaces is at market rates commensurate with other kiosk operations. As we expand, we will continue to secure space for our recording studios at various venues and locations throughout the country. | |||||
Rent expense for the Nine Months ended March 31, 2014 was $205,934, of which $146,275 was paid in cash and $59,659 was paid in Common Stock. Rent expense for the Nine Months ended March 31, 2013 was $110,513, of which $53,121 was paid in cash and $57,392 was paid in Common Stock. | |||||
Below is a table summarizing the annual operating lease obligations over the next 5 years: | |||||
Year | Lease Payments | ||||
2014 | $ | 29,194 | |||
2015 | $ | 33,600 | |||
Thereafter | $ | 32,084 | |||
Total | $ | 94,878 | |||
9_SUBSEQUENT_EVENTS
9. SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
9. SUBSEQUENT EVENTS | ' |
In accordance with ASC 855 Company management reviewed all material events through the date of this filing and determined that there are no material subsequent events to report. |
3_SUMMARY_OF_SIGNIFICANT_ACCOU1
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2014 | |
Notes to Financial Statements | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments. Actual results could differ from those estimates. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of Studio One Media, Inc. and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. | |
Fair Value Instruments | ' |
Fair Value Instruments | |
Cash is the Company’s only financial asset or liability required to be recognized at fair value and is measured using quoted prices for active markets for identical assets (Level 1 fair value hierarchy). The carrying amounts reported in the balance sheets for notes receivable and accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments. | |
The fair value of the Company’s notes payable at March 31, 2014 is approximately $5,292,888 (carrying value of $5,157,103). Market prices are not available for the Company’s loans due to related parties or its other notes payable, nor are market prices of similar loans available. The Company determined that the fair value of the notes payable based on its amortized cost basis due to the short term nature and current borrowing terms available to the Company for these instruments. | |
Income Taxes | ' |
Income Taxes | |
There is no income tax provision for the three months ended March 31, 2014 and 2013 due to net operating losses for which there is no benefit currently available. | |
At March 31, 2014, the Company had deferred tax assets associated with state and federal net operating losses. The Company has recorded a corresponding full valuation allowance as it is more likely than not that some portion of all of the deferred tax assets will not be realized. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements. |
4_NOTES_PAYABLE_Tables
4. NOTES PAYABLE (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Convertible Notes Payable-Related Parties | ' | ||||||||
Convertible notes payable consisted of the following as of March 31, 2014 and June 30, 2013, respectively: | |||||||||
Convertible Notes Payable – Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
$250,000 face value, issued in February 2010, interest rate of 12%, matures in February 2013, net of unamortized discount of $0 and $0 at March 31, 2014 and June 30,2013, respectively. | $ | 250,000 | $ | 250,000 | |||||
$250,000 face value, issued in May 2010, interest rate of 12%, matures in May 2013, net of unamortized discount of $0 and $0 at March 31, 2014 and June 30,2013, respectively. | 250,000 | 250,000 | |||||||
$250,000 face value, issued in August 2010, interest rate of 12%, matures in August 2013, net of unamortized discount of $0 and $24,559 at March 31, 2014 and June 30,2013, respectively. | 250,000 | 225,441 | |||||||
$250,000 face value, issued in December 2010, interest rate of 12%, matures in December 2013, net of unamortized discount of $0 and $40,148 at March 31, 2014 and June 30,2013, respectively. | 250,000 | 209,852 | |||||||
$250,000 face value, issued in November 2011, interest rate of 15%, matures in November 2012, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 250,000 | 250,000 | |||||||
$250,000 face value, issued in December 2011, interest rate of 15%, matures in June 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 250,000 | 250,000 | |||||||
$100,000 face value, issued in December 2011, interest rate of 15%, matures in June 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 100,000 | 100,000 | |||||||
$300,000 face value, issued in December 2011, interest rate of 15%, matures in June 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013, respectively. | 300,000 | 300,000 | |||||||
$100,000 face value, issued in February 2012, interest rate of 15%, matures in August 2013, net of unamortized discount of $0 and $1,168 as of March 31, 2014 and June 30,2013, respectively. | 100,000 | 98,832 | |||||||
$100,000 face value, issued in February 2012, interest rate of 15%, matures in August 2013, net of unamortized discount of $0 and $1,514 as of March 31, 2014 and June 30,2013, respectively. | 100,000 | 98,486 | |||||||
$150,000 face value, issued in March 2012, interest rate of 15%, matures in September 2013, net of unamortized discount of $0 and $1,111 as of March 31, 2014 and June 30,2013, respectively. | 150,000 | 148,889 | |||||||
$200,000 face value, issued in March 2012, interest rate of 15%, matures in September 2013, net of unamortized discount of $0 and $1,814 as of March 31, 2014 and June 30,2013, respectively. | 200,000 | 198,186 | |||||||
$200,000 face value, issued in April 2012, interest rate of 10%, matures in October 2013, net of unamortized discount of $0 and $2,450 as of March 31, 2014 and June 30,2013, respectively. | 200,000 | 197,550 | |||||||
$150,000 face value, issued in May 2012, interest rate of 10%, matures in November 2013, net of unamortized discount of $0 and $1,682 as of March 31, 2014 and June 30,2013, respectively. | 150,000 | 148,318 | |||||||
$125,000 face value, issued in June 2012, interest rate of 10%, matures in December 2013, net of unamortized discount of $0 and $1,897 as of March 31, 2014 and June 30,2013, respectively. | 125,000 | 123,103 | |||||||
$125,000 face value, issued in June 2012, interest rate of 10%, matures in December 2013, net of unamortized discount of $0 and $2,208 as of March 31, 2014 and June 30,2013, respectively. | 125,000 | 122,792 | |||||||
$50,000 face value, issued in August 2012, interest rate of 10%, matures in February 2014, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30, 2013. | 50,000 | 50,000 | |||||||
$50,000 face value, issued in September 2012, interest rate of 10%, matures in March 2014, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30, 2013. | 50,000 | 50,000 | |||||||
$100,000 face value, issued in October 2012, interest rate of 10%, matures in April 2014, net of unamortized discount of $95 and $2,662 as of March 31, 2014 and June 30, 2013. | 99,905 | 97,338 | |||||||
$100,000 face value, issued in October 2012, interest rate of 10%, matures in April 2014, net of unamortized discount of $163 and $2,786 as of March 31, 2014 and June 30, 2013. | 99,837 | 97,214 | |||||||
$50,000 face value, issued in October 2012, interest rate of 10%, matures in April 2014, net of unamortized discount of $99 and $1,192 as of March 31, 2014 and June 30, 2013. | 49,901 | 48,808 | |||||||
$75,000 face value, issued in November 2012, interest rate of 10%, matures in May 2014, net of unamortized discount of $244 and $1,804 as of March 31, 2014 and June 30, 2013. | 74,756 | 73,196 | |||||||
$25,000 face value, issued in November 2012, interest rate of 10%, matures in May 2014, net of unamortized discount of $188 and $1,159 as of March 31, 2014 and June 30, 2013. | 24,812 | 23,841 | |||||||
$50,000 face value, issued in November 2012, interest rate of 10%, matures in May 2014, net of unamortized discount of $413 and $2,358 as of March 31, 2014 and June 30, 2013. | 49,587 | 47,642 | |||||||
$50,000 face value, issued in December 2012, interest rate of 10%, matures in June 2014, net of unamortized discount of $555 and $2,502 as of March 31, 2014 and June 2013. | 49,445 | 47,498 | |||||||
$75,000 face value, issued in January 2013, interest rate of 10%, matures in July 2014, net of unamortized discount of $526 and $2,111 as ofMarch 31, 2014 and June 30, 2013. | 74,474 | 72,889 | |||||||
$25,000 face value, issued in January 2013, interest rate of 10%, matures in July 2014, net of unamortized discount of $160 and $637 as of March 31, 2014 and June 30, 2013. | 24,840 | 24,363 | |||||||
$35,000 face value, issued in January 2013, interest rate of 10%, matures in July 2014, net of unamortized discount of $274 and $1,099 as of March 31, 2014 and June 30, 2013. | 34,726 | 33,901 | |||||||
$5,000 face value, issued in February 2013, interest rate of 10%, matures in August 2014, net of unamortized discount of $39 and $156 as of March 31, 2014 and June 30, 2013. | 4,961 | 4,844 | |||||||
$10,000 face value, issued in February 2013, interest rate of 10%, matures in August 2014, net of unamortized discount of $94 and $374 as of March 31, 2014 and June 30, 2013. | 9,906 | 9,626 | |||||||
$50,000 face value, issued in February 2013, interest rate of 10%, matures in August 2014, net of unamortized discount of $572 and $2,296 as of March 31, 2014 and June 30, 2013. | 49,428 | 47,704 | |||||||
$50,000 face value, issued in March 2013, interest rate of 10%, matures in September 2014, net of unamortized discount of $445 and $1,746 as of March 31, 2014 and June 30, 2013. | 49,555 | 48,254 | |||||||
$75,000 face value, issued in April 2013, interest rate of 10%, matures in October 2014, net of unamortized discount of $1,086 and $2,712 as of March 31, 2014 and June 30, 2013. | 73,914 | 72,288 | |||||||
Total convertible notes payable – related parties | 3,920,047 | 3,820,855 | |||||||
Less current portion | 3,920,047 | 2,096,416 | |||||||
Convertible notes payable – related parties, long-term | $ | - | $ | 1,724,439 | |||||
Schedule of Convertible Notes Payable-Non-Related Parties | ' | ||||||||
Convertible notes payable due to non-related parties consisted of the following as of March 31, 2013 and June 30, 2013, respectively: | |||||||||
Convertible Notes Payable - Non-Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
$100,000 face value, issued in September 2011, interest rate of 15%, originally matured in December 2011, extended to August 2014, net of unamortized discount of $-0- and $4,064 as of March 31, 2014 and June 30,2013. | $ | 100,000 | $ | 95,936 | |||||
$10,000 face value, of which $8,000 has been paid back, issued in October 2011, interest rate of 15%, matures in August 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013. | 2,000 | 10,000 | |||||||
$15,000 face value, issued in October 2011, interest rate of 10%, matures in June 2012, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013. | 15,000 | 15,000 | |||||||
$75,000 face value, issued in January 2012, interest rate of 12%, originally matured in June 2013, extended to August 2014, net of unamortized discount of $-0- and $3,017 as of March 31, 2014 and June 30,2013. | 75,000 | 71,984 | |||||||
$50,000 face value, issued in August 2012, interest rate of 10%, matures in February 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30, 2013. | 50,000 | 50,000 | |||||||
$10,000 face value, issued in Sepember 2012, interest rate of 10%, matures in March 2013, net of unamortized discount of $0 and $0 as of March 31, 2014 and June 30,2013. | 10,000 | 10,000 | |||||||
$50,000 face value of which $9,600 was converted leaving a $40,400 face value, issued in November 2012, interest rate of 10%, matures in November 2013, net of unamortized discount of $0 and $13,789 as of March 31, 2014 and June 30, 2013. | 40,400 | 26,611 | |||||||
$30,000 face value, issued in February 2013, interest rate of 10%, matures in November 2013, net of unamortized discount of $0 and $10,487 as of March 31, 2014 and June 30, 2013. | 30,000 | 19,513 | |||||||
$20,000 face value, issued in April 2013, interest rate of -0-%, matures in October 2013, net of unamortized discount of $0 and $12,678 as of March 31, 2014 and June 30, 2013. | 20,000 | 7,322 | |||||||
$60,000 face value, of which $60,000 has been paid back, issued in July 2013, interest rate of 6%, matures in October 2013, net of unamortized discount of $0 as of March 31, 2014. | - | - | |||||||
$100,000 face value, issued in September 2013, interest rate of 6%, matures in February 2014, net of unamortized discount of $0 as of March 31, 2014. | 100,000 | - | |||||||
$50,000 face value, issued in October 2013, interest rate of 0%, originally matured in November 2013, with an extended maturity date of May 2014, net of unamortized discount of $22,084 as of March 31, 2014. | 27,916 | - | |||||||
$50,000 face value, issued in November 2013, interest rate of 0%, matures in May 2014, net of unamortized discount of $15,746 as of March 31, 2014. | 34,254 | - | |||||||
$25,000 face value, issued in November 2013, interest rate of 0%, matures in February 27, 2014, net of unamortized discount of $0 as of March 31, 2014. | 25,000 | - | |||||||
$20,000 face value, issued in March 2014, interest rate of 10%, matures in June 2014, net of unamortized discount of $20,000 as of March 31, 2014. | - | - | |||||||
$10,000 face value of which $10,000 was converted leaving a $0 face value, issued in February 2014, interest rate of 10%, matures in March 2014, net of unamortized discount of $0 as of March 31, 2014. | - | - | |||||||
$50,000 face value, issued in February 2014, interest rate of 10%, matures in April 2014, net of unamortized discount of $7,576 as of March 31, 2014. | 42,424 | - | |||||||
$50,000 face value, issued in February 2014, interest rate of 6%, matures in August 2014, net of unamortized discount of $39,503 as of March 31, 2014. | 10,497 | - | |||||||
$30,000 face value, issued in March 2014, interest rate of 0%, matures in September 2014, net of unamortized discount of $25,924 as of March 31, 2014. | 4,076 | - | |||||||
Total convertible notes payable – non-related parties | 586,568 | 306,366 | |||||||
Less current portion | 586,568 | 306,366 | |||||||
Convertible notes payable – non-related parties, long-term | $ | - | $ | - | |||||
Schedule of Non-Convertible Notes Payable-Related Parties | ' | ||||||||
Non-convertible notes payable due to related parties consisted of the following as of March 31, 2014 and June 30, 2013: | |||||||||
Non-Convertible Notes Payable – Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Face value of $200,000, issued in April 2011, original maturity date of August 2011 extended to June 2013, 30,000 warrants per month were granted in lieu of interest through June 2011, warrants increased to 50,000 shares per month through August 2011, from September until maturity, the note bears interest at 12%. | $ | 200,000 | $ | 200,000 | |||||
Face value of $250,000, issued in September 2011, matures in September 2012, 25,000 warrants per month issued for first 90 days, note bears interest at 15% from December 2011 through maturity. | 250,000 | 250,000 | |||||||
Face value of $125,000, issued in October 2011, matures in October 2012, 30,000 warrants issued in lieu of interest through December 2011, note bears interest at 15% from December 2011 through maturity. | 125,000 | 125,000 | |||||||
Face value of $35,000, issued in January 2014, matures in February 2014, note bears interest at 10%, interest is accrued monthly and paid quarterly by issuing restricted stock until the January 2015 and thereafter interest to be paid in cash. | 35,000 | - | |||||||
Total non-convertible notes payable – related parties | 610,000 | 575,000 | |||||||
Less current portion | 610,000 | 575,000 | |||||||
Non-convertible notes payable - related parties, long term | $ | - | $ | - | |||||
Schedule of Non-Convertible Notes Payable-Non-Related Parties | ' | ||||||||
Non-convertible notes payable due to non-related parties consisted of the following as of March 31, 2014 and June 30, 2013: | |||||||||
Non-Convertible Notes Payable – Non-Related Parties | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Various term notes with total face value of $40,488 due upon demand, interest rates range from 12% to 14%. | $ | 40,488 | $ | 40,488 | |||||
Total non-convertible note payable – non-related parties | 40,488 | 40,488 | |||||||
Less current portion | 40,488 | 40,488 | |||||||
Non-convertible notes payable – non-related parties, long-term | $ | - | $ | - |
5_CONVERTIBLE_PREFERRED_STOCK_
5. CONVERTIBLE PREFERRED STOCK (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Convertible Preferred Stock Tables | ' | ||||||||||||
Schedule of Preferred Stock | ' | ||||||||||||
The Company has authorized 10,000,000 shares of $0.001 par value per share Preferred Stock, of which the following were issued outstanding: | |||||||||||||
Shares | Shares | Liquidation | |||||||||||
Allocated | Outstanding | Preference | |||||||||||
Series A Convertible Preferred | 100,000 | 15,500 | - | ||||||||||
Series A-1 Convertible Preferred | 3,000,000 | 696,000 | 773,115 | ||||||||||
Series B Convertible Preferred | 200,000 | 3,500 | 79,099 | ||||||||||
Series C Convertible Preferred | 1,000,000 | 13,404 | - | ||||||||||
Series D Convertible Preferred | 375,000 | 130,000 | 130,000 | ||||||||||
Series E Convertible Preferred | 1,000,000 | 275,000 | 275,000 | ||||||||||
Series P Convertible Preferred | 600,000 | 86,640 | - | ||||||||||
Series S Convertible Preferred | 50,000 | - | - | ||||||||||
Total Preferred Stock | 6,325,000 | 1,220,044 | $ | 1,257,214 | |||||||||
7_STOCK_PURCHASE_OPTIONS_AND_W1
7. STOCK PURCHASE OPTIONS AND WARRANTS (Tables) | 9 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||
Schedule of Assumptions Used to Estimate Fair Value | ' | ||||||||||||||||||||
The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Expected volatility | 113 – 132% | ||||||||||||||||||||
Expected dividends | 0% | ||||||||||||||||||||
Expected term | 2 – 10 years | ||||||||||||||||||||
Risk-free interest rate | 0.35 – 1.75 % | ||||||||||||||||||||
Schedule of Warrants | ' | ||||||||||||||||||||
The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the nine months ended March 31, 2014. | |||||||||||||||||||||
Date Issued | Number of Warrants | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Expiration Date (yrs) | Value if Exercised | ||||||||||||||||
Balance June 30, 2013 | 7,530,063 | $ | 0.67 | $ | 2.45 | 4.17 | $ | 4,770,713 | |||||||||||||
Granted | 1,366,016 | 1.27 | 0.23 | 5 | 305,421 | ||||||||||||||||
Exercised | -65,000 | - | - | - | - | ||||||||||||||||
Cancelled/Expired | -222,500 | - | - | - | - | ||||||||||||||||
Outstanding as of March 31, 2014 | 8,608,579 | $ | 5 | $ | 0.69 | 1.75 | $ | 5,076,134 |
8_COMMITMENTS_AND_CONTINGENCIE1
8. COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Annual operating lease obligations | ' | ||||
Below is a table summarizing the annual operating lease obligations over the next 5 years: | |||||
Year | Lease Payments | ||||
2014 | $ | 29,194 | |||
2015 | $ | 33,600 | |||
Thereafter | $ | 32,084 | |||
Total | $ | 94,878 | |||
3_SUMMARY_OF_SIGNIFICANT_ACCOU2
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Mar. 31, 2014 |
Summary Of Significant Accounting Policies Details Narrative | ' |
Fair value of notes payable | $5,292,888 |
Carrying value of notes payable | $5,157,103 |
4_NOTES_PAYABLE_Details
4. NOTES PAYABLE (Details) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
Notes Payable Details | ' | ' |
Total convertible notes payable - related parties | $3,920,047 | $3,820,855 |
Less current portion | 3,920,047 | 2,096,416 |
Convertible related party notes payable, net of current portion | ' | 1,724,439 |
Total convertible notes payable - non-related parties | 586,568 | 306,366 |
Less current portion | 586,567 | 306,366 |
Convertible notes payable - non-related parties, long-term | ' | ' |
Total non-convertible notes payable - related parties | 610,000 | 575,000 |
Less current portion | 610,000 | 575,000 |
Non-convertible notes payable - related parties, long term | ' | ' |
Total non-convertible note payable - non-related parties | 40,488 | 40,488 |
Less current portion | 40,488 | 40,488 |
Non-convertible notes payable - non-related parties, long-term | ' | ' |
5_CONVERTIBLE_PREFERRED_STOCK_1
5. CONVERTIBLE PREFERRED STOCK (Details) | Mar. 31, 2014 |
Shares Allocated | ' |
Series A Convertible Preferred | 100,000 |
Series A-1 Convertible Preferred | 3,000,000 |
Series B Convertible Preferred | 200,000 |
Series C Convertible Preferred | 1,000,000 |
Series D Convertible Preferred | 375,000 |
Series E Convertible Preferred | 1,000,000 |
Series P Convertible Preferred | 600,000 |
Series S Convertible Preferred | 50,000 |
Total Preferred Stock | 6,325,000 |
Shares Outstanding | ' |
Series A Convertible Preferred | 15,500 |
Series A-1 Convertible Preferred | 696,000 |
Series B Convertible Preferred | 3,500 |
Series C Convertible Preferred | 13,404 |
Series D Convertible Preferred | 130,000 |
Series E Convertible Preferred | 275,000 |
Series P Convertible Preferred | 86,640 |
Series S Convertible Preferred | ' |
Total Preferred Stock | 1,220,044 |
Liquidation Preference | ' |
Series A Convertible Preferred | ' |
Series A-1 Convertible Preferred | 773,115 |
Series B Convertible Preferred | 79,099 |
Series C Convertible Preferred | ' |
Series D Convertible Preferred | 130,000 |
Series E Convertible Preferred | 275,000 |
Series P Convertible Preferred | ' |
Series S Convertible Preferred | ' |
Total Preferred Stock | 1,257,214 |
5_CONVERTIBLE_PREFERRED_STOCK_2
5. CONVERTIBLE PREFERRED STOCK (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2013 | |
Equity [Abstract] | ' | ' | ' |
Devidends on preferred stock | $34,032 | $34,032 | $17,016 |
Devidends in arrears | $637,115 | ' | ' |
6_COMMON_STOCK_Details_Narrati
6. COMMON STOCK (Details Narrative) (USD $) | 9 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Text Block [Abstract] | ' | ' |
Common shares issued | 7,150,000 | 450,800 |
Proceeds from issuance of common stock | $699,065 | $106,700 |
Offering costs | 15,935 | 3,300 |
Common stock offering costs | 97,000 | ' |
Warrants issued with common stock issuance | 196,804 | 430,000 |
Employee stock option expense recognized including amortization of warrants issued in prior periods | 259,212 | 14,090 |
Common stock issued for convertible note, shares | 612,500 | ' |
Common stock issued for convertible note, value | 164,349 | 37,840 |
Beneficial conversion feature | 461,000 | ' |
Share based compensation to employees and non-employees, shares issued | 2,033,349 | 3,133,732 |
Share based compensation to employees and non-employees, value of shares issued | 547,870 | 706,325 |
Shares issued for interest expense on outstanding notes payable | 2,199,095 | 1,767,988 |
Value of shares issued for interest expense on outstanding notes payable | $575,723 | $431,183 |
7_STOCK_PURCHASE_OPTIONS_AND_W2
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details) | 9 Months Ended |
Mar. 31, 2014 | |
Stock Purchase Options And Warrants Details | ' |
Expected volatility, minimum | 113.00% |
Expected volatility, maximum | 132.00% |
Expected dividends | 0.00% |
Expected term, minimum | '2 years |
Expected term, maximum | '10 years |
Risk-free interest rate, minimum | 0.35% |
Risk-free interest rate, maximum | 1.75% |
7_STOCK_PURCHASE_OPTIONS_AND_W3
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details 1) (USD $) | 9 Months Ended |
Mar. 31, 2014 | |
Stock Purchase Options And Warrants Details 1 | ' |
Number of Warrants Outstanding, Beginning | 7,530,063 |
Number of Warrants Granted | 1,366,016 |
Number of Warrants Exercised | -65,000 |
Number of Warrants Canceled/Expired | -222,500 |
Number of Warrants Outstanding, Ending | 8,608,579 |
Weighted Average Exercise Price Outstanding, Beginning | $0.67 |
Weighted Average Exercise Price Granted | $1.27 |
Weighted Average Exercise Price Exercised | ' |
Weighted Average Exercise Price Canceled/Expired | ' |
Weighted Average Exercise Price Outstanding, Ending | $5 |
Weighted Average Grant Date Fair Value Outstanding beginning | $2.45 |
Weighted Average Grant Date Fair Value Outstanding, granted | $0.23 |
Weighted Average Grant Date Fair Value Outstanding, exercised | ' |
Weighted Average Grant Date Fair Value Outstanding, cancelled | ' |
Weighted Average Grant Date Fair Value Outstanding, ending | $0.69 |
Expiration Date outstanding, beginning | '4 years 2 months 1 day |
Expiration Date, granted | '5 years |
Expiration Date, exercised | '0 years |
Expiration Date, cancelled | '0 years |
Expiration Date, ending | '1 year 9 months |
Value if Exercised, Beginning | $4,770,713 |
Value if Exercised, Granted | 305,421 |
Value if Exercised | ' |
Value if Exercised, Cancelled | ' |
Value if Exercised, Ending | $5,076,134 |
7_STOCK_PURCHASE_OPTIONS_AND_W4
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Jun. 30, 2013 | |
Notes to Financial Statements | ' | ' |
Stock purchase options issued | 25,000 | ' |
Stock purchase options issued, value | $6,045 | ' |
Employee stock option expense | $10,713 | $10,914 |
Warrants issued | 1,366,016 | ' |
Warrants expired | 222,500 | ' |
8_COMMITMENTS_AND_CONTINGENCIE2
8. COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
2014 | $29,194 | ' |
2015 | 33,600 | ' |
Thereafter | 32,084 | ' |
Total | 94,878 | ' |
Rent expense | 205,934 | 110,513 |
Paid in Cash | ' | ' |
Rent expense | 146,275 | 53,121 |
Paid with Stock | ' | ' |
Rent expense | $59,659 | $57,392 |