Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Sep. 28, 2018 | Sep. 30, 2017 | |
Income Taxes Details 2 | |||
Entity Registrant Name | AFTERMASTER, INC. | ||
Entity Central Index Key | 836,809 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2018 | ||
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 | Non-accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13,816,376 | ||
Entity Common Stock, Shares Outstanding | 150,772,893 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Current Assets | ||
Cash | $ 390,191 | $ 250,728 |
Accounts receivable | 203,720 | 97,103 |
Inventory | 0 | 104,891 |
Available for sale securities | 0 | 123,600 |
Prepaid expenses | 388,374 | 507,254 |
Total Current Assets | 982,285 | 1,083,576 |
Property and Equipment, net | 143,360 | 266,040 |
Intangible Assets, net | 0 | 102,243 |
Other Assets | ||
Deposits | 25,117 | 33,363 |
Prepaid expenses, net of current | 0 | 9,104 |
Total Assets | 1,150,762 | 1,494,326 |
Current Liabilities | ||
Accounts payable and other accrued expenses | 1,592,257 | 459,975 |
Accounts payable - related party | 0 | 0 |
Accrued interest | 351,189 | 185,509 |
Deferred Revenue | 2,400 | 270,623 |
Accrued consulting services - related party | 70,621 | 22,064 |
Lease Payable | 0 | 1,937 |
Derivative Liability | 2,815,520 | 2,145,065 |
Notes Payable - Related Party | 76,000 | 610,000 |
Notes payable, net of discount of $77,090 and $0, respectively | 642,910 | 40,488 |
Convertible notes payable - related party, net of discount of $4,422 and $0, respectively | 115,078 | 3,951,182 |
Convertible notes payable, net of discount of $812,306 and $549,737, respectively | 2,959,456 | 2,267,845 |
Total Current Liabilities | 8,625,432 | 9,954,688 |
Total Liabilities | 8,625,432 | 9,954,688 |
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 2,585,000 shares issued and outstanding, respectively | 2,585 | 2,585 |
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 | 0 | 0 |
Common stock, authorized 250,000,000 shares, par value $0.001, 133,446,521 and 118,486,728 shares issued and outstanding, respectively | $ 133,742 | $ 118,493 |
Common stock to be issued | (28,841,381) | 0 |
Additional Paid In Capital | $ 68,916,676 | $ 63,627,987 |
Accumulated other comprehensive income | 0 | 93,600 |
Accumulated Deficit | (76,456,750) | (72,303,551) |
Total Stockholders' Deficit | (7,474,668) | (8,460,362) |
Total Liabilities and Stockholders' Deficit | $ 1,150,762 | $ 1,494,326 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Discount on notes payable | $ 77,090 | $ 0 |
Discount on related party convertible notes payable, current | 4,422 | 0 |
Discount on convertible notes payable | $ 812,306 | $ 549,737 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 250,000,000 | 250,000,000 |
Common stock, issued shares | 133,446,521 | 118,486,728 |
Common stock, outstanding shares | 133,446,521 | 118,486,728 |
Series A Convertible Preferred stock | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Convertible preferred stock, par value | $ .001 | $ 0.001 |
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 | $ .001 | $ 0.001 |
Convertible preferred stock, authorized shares | 3,000,000 | 3,000,000 |
Convertible preferred stock, issued shares | 2,585,000 | 2,585,000 |
Convertible preferred stock, outstanding shares | 2,585,000 | 2,585,000 |
Series B Convertible Preferred stock | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Convertible preferred stock, par value | $ .001 | $ 0.001 |
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 | $ .001 | $ 0.001 |
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 | $ .001 | $ 0.001 |
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 | $ .001 | $ 0.001 |
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 | $ .001 | $ 0.001 |
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 | $ .001 | $ 0.001 |
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 Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
REVENUES | ||
AfterMaster Revenues | $ 517,689 | $ 338,725 |
Product Revenues | 1,131,812 | 541,259 |
Total Revenues | 1,649,501 | 879,984 |
COSTS AND EXPENSES | ||
Cost of Revenues (Exclusive of Depreciation and Amortization) | 1,565,798 | 1,250,365 |
Depreciation and Amortization Expense | 158,505 | 178,071 |
Research and Development | 15,771 | 221,437 |
Advertising and Promotion Expense | 258,257 | 45,183 |
Legal and Professional Expense | 94,102 | 119,520 |
Non-Cash Consulting Expense | 296,005 | 2,209,950 |
General and Administrative Expenses | 3,637,201 | 2,956,464 |
Total Costs and Expenses | 6,025,639 | 6,980,990 |
Loss from Operations | (4,376,138) | (6,101,006) |
Other Income (Expense) | ||
Interest Expense | (3,178,179) | (1,876,031) |
Derivative Expense | (2,787,712) | (376,427) |
Change in Fair Value of Derivative | 1,161,227 | (138,693) |
Gain Available for Sale Securities | 240,000 | 0 |
Gain Loss on Extinguishment of Debt | 4,762,594 | 1,724 |
Impairment of assets | (74,991) | (27,926) |
Total Other Expense | 122,939 | (2,417,353) |
Loss Before Income Taxes | (4,253,199) | (8,518,359) |
Income Tax Expense | 0 | 0 |
NET LOSS | (4,253,199) | (8,518,359) |
Preferred Stock Accretion and Dividends | (225,468) | (169,850) |
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ (4,478,667) | $ (8,688,209) |
Basic and Diluted Loss Per Share of Common Stock | $ (0.03) | $ (0.08) |
Weighted Average Number of Shares Outstanding | 131,144,651 | 108,520,687 |
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ (4,478,667) | $ (8,688,209) |
Unrealized gain on AFS securities | (93,600) | 60,000 |
COMPREHENSIVE LOSS | $ (4,478,667) | $ (8,628,209) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Subscription Payable | Accumulated Deficit | Accumulated Other Comprehensive Income [Member] | Total |
Beginning Balance, Share at Jun. 30, 2016 | 2,709,044 | 1,021,333,443 | |||||
Beginning Balance, Amount at Jun. 30, 2016 | $ 2,709 | $ 102,140 | $ 58,997,912 | $ 0 | $ (63,785,192) | $ 33,600 | $ (4,648,831) |
Conversion of Preferred Stock to Common Stock, Shares | (150,000) | 315,682 | |||||
Conversion of Preferred Stock to Common Stock, Amount | $ (150) | $ 316 | 7,675 | 7,841 | |||
Preferred Stock Sold for Cash, Shares | 550,000 | ||||||
Preferred Stock Sold for Cash, Amount | $ 550 | 352,598 | 353,148 | ||||
Common Stock Sold for Cash, Shares | 3,471,666 | ||||||
Common Stock Sold for Cash, Amount | $ 3,470 | 988,030 | (991,500) | ||||
Share-Based Compensation to Directors and Employees- Common shares, Shares | 1,237,210 | ||||||
Share-Based Compensation to Directors and Employees- Common shares, Amount | $ 1,236 | 402,710 | 403,946 | ||||
Total Stock Issued for Consulting Services and Rent, Shares | 2,953,057 | ||||||
Total Stock Issued for Consulting Services and Rent, Amount | $ 2,954 | 914,198 | 917,152 | ||||
Common stock issued as incentive with Convertible debt, Shares | 650,000 | ||||||
Common stock issued as incentive with Convertible debt, Amount | $ 650 | 126,950 | 127,600 | ||||
Share-based compensation - warrants and options | 421,000 | 421,000 | |||||
Common stock issued for cash conversion of warrants/options, Shares | 3,020,750 | ||||||
Common stock issued for cash conversion of warrants/options, Amount | $ 3,021 | 903,204 | 906,225 | ||||
Common stock issued for conversion of debt, Shares | 2,150,364 | ||||||
Common stock issued for conversion of debt, Amount | $ 2,150 | 436,631 | 438,781 | ||||
Common stock issued for interest expense, Shares | 2,532,655 | ||||||
Common stock issued for interest expense, Amount | $ 2,533 | 781,253 | 783,786 | ||||
Common stock issued for extension of notes, Shares | 22,000 | ||||||
Common stock issued for extension of notes, Amount | $ 23 | 5,887 | 5,910 | ||||
Accumulated other comprehensive income from Available for Sale Securities | 60,000 | 60,000 | |||||
Beneficial conversion feature | 30,519 | 30,519 | |||||
Derivative liability | (764,581) | (764,581) | |||||
NET LOSS | (8,518,359) | (8,518,359) | |||||
Ending Balance, Shares at Jun. 30, 2017 | 3,109,044 | 118,486,728 | |||||
Ending Balance, Amount at Jun. 30, 2017 | $ 3,109 | $ 118,493 | 63,627,987 | 0 | (72,303,551) | 93,600 | (8,460,362) |
Common Stock Sold for Cash, Shares | 16,200,000 | ||||||
Common Stock Sold for Cash, Amount | $ 2,841 | 626,551 | 13,358 | (642,750) | |||
Share-Based Compensation to Directors and Employees- Common shares, Shares | 4,501,592 | ||||||
Share-Based Compensation to Directors and Employees- Common shares, Amount | $ 2 | 349,446 | 4,501 | 353,949 | |||
Total Stock Issued for Consulting Services and Rent, Shares | 1,415,000 | ||||||
Total Stock Issued for Consulting Services and Rent, Amount | $ 245 | 105,875 | 1,170 | 107,290 | |||
Common stock issued as charitable contribution, Shares | 100,000 | ||||||
Common stock issued as charitable contribution, Amount | $ 100 | 6,900 | 7,000 | ||||
Common stock issued as incentive with Convertible debt, Shares | 6,098,101 | ||||||
Common stock issued as incentive with Convertible debt, Amount | $ 267 | 311,161 | 5,833 | 317,261 | |||
Common stock issued for conversion of debt, Shares | 28,928,570 | ||||||
Common stock issued for conversion of debt, Amount | $ 26,344 | 807,905 | 2,584 | 836,833 | |||
Common stock issued for interest expense, Shares | 1,280,162 | ||||||
Common stock issued for interest expense, Amount | 216,348 | 1,280 | 217,628 | ||||
Common stock issued for extension of notes, Shares | 115,000 | ||||||
Common stock issued for extension of notes, Amount | 16,782 | 115 | 16,897 | ||||
Common Stock cancelled in extinguishment of debt, Shares | (14,837,251) | ||||||
Common Stock cancelled in extinguishment of debt, Amount | $ (14,550) | 14,838 | (288) | 0 | |||
Accumulated other comprehensive income from Available for Sale Securities | (93,600) | (93,600) | |||||
Beneficial conversion feature | 188,521 | 188,521 | |||||
Share-Based Compensation - Warrants and options | (16,532) | (16,532) | |||||
Derivative liability | 2,660,894 | 2,660,894 | |||||
NET LOSS | (4,253,199) | (4,253,199) | |||||
Ending Balance, Shares at Jun. 30, 2018 | 3,109,044 | 162,287,902 | |||||
Ending Balance, Amount at Jun. 30, 2018 | $ 3,109 | $ 133,742 | $ 68,916,676 | $ 28,553 | $ (76,556,750) | $ 0 | $ (7,474,668) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (4,253,199) | $ (8,518,359) |
Adjustments to reconcile net loss to cash from operating activities: | ||
Depreciation and amortization | 158,507 | 178,630 |
Share-based compensation - Common Stock | 353,949 | 399,495 |
Share-based compensation - warrants and options | 246,868 | 0 |
Common stock issued for charitable contribution | 7,000 | 24,001 |
Common stock issued for services and rent | 0 | 94,919 |
Common stock issued to extend the maturity dates on debt | 16,897 | 228,911 |
Common stock issued as incentive with Convertible debt | 0 | 127,500 |
Amortization of debt discount and issuance costs | 1,856,791 | 555,733 |
Impairment of assets | 74,991 | 27,926 |
Dividend expense | 0 | 7,841 |
(Gain)/Loss on extinguishment of debt | (4,762,594) | 1,724 |
Derivative Expense | 2,787,712 | 376,427 |
Gain (loss) remeasurement of derivative | (1,161,227) | 138,694 |
Gain on Available for Sale Securities | (240,000) | 0 |
Changes in Operating Assets and Liabilities: | ||
Accounts receivables | (106,617) | (85,714) |
Inventory | 104,891 | (104,891) |
Other assets | 235,274 | 1,768,155 |
Deposits | 8,246 | 0 |
Accounts payable and accrued expenses | 1,250,908 | 224,014 |
Accrued interest | 1,138,856 | 927,741 |
Deferred revenue | (268,223) | (469,577) |
Accrued consulting services - related party | 48,557 | (6,497) |
Net Cash Used in Operating Activities | (2,381,321) | (4,103,327) |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (5,425) | (149,296) |
Sale of available for sale securities | 270,000 | 0 |
Purchase of intangible assets | (3,150) | (31,800) |
Net Cash Used in Investing Activities | 261,425 | (181,096) |
FINANCING ACTIVITIES | ||
Common Stock issued for cash | 642,750 | 991,500 |
Common Stock issued for conversion of options/warrants | 0 | 906,225 |
A-1 Preferred Stock issued for cash | 0 | 353,148 |
Proceeds from notes payable | 950,000 | 0 |
Repayments of notes payable | (255,000) | 0 |
Proceeds from notes payable - related party | 119,500 | 52,500 |
Repayments of notes payable - related party | (278,500) | (17,500) |
Proceeds from convertible notes payable - related party | 89,500 | 60,000 |
Repayments of convertible notes payable - related party | 0 | (30,000) |
Proceeds from convertible notes payable | 2,022,122 | 2,024,000 |
Repayments of convertible notes payable | (737,500) | (200,000) |
Payment made on accrued interest | (291,576) | 0 |
Lease payable | (1,937) | 953 |
Net Cash Provided by Financing Activities | 2,259,359 | 4,140,826 |
NET CHANGE IN CASH | 139,463 | (143,597) |
CASH AT BEGINNING OF PERIOD | 250,728 | 394,325 |
CASH AT END OF PERIOD | 390,191 | 250,728 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 186,860 | 0 |
NON CASH FINANCING ACTIVITIES: | ||
Beneficial conversion feature | 188,521 | 30,519 |
Conversion of notes and Interest into common stock | 217,628 | 438,781 |
Conversion of preferred stock for common stock | 0 | 300 |
Debt discount | 0 | 26,957 |
Derivative Liability | 1,406,506 | 1,760,160 |
Conversion of Derivative Liability | 2,660,894 | 130,216 |
MTM on AFS Securities | 64,800 | 60,000 |
Common stock issued with notes payable | 317,261 | 0 |
Common stock issued with convertible debt | 805,567 | 33,349 |
Common stock issued for prepaid expenses | 107,290 | 822,233 |
Cancellation of common shares as part of settlement of debt | 14,838 | 0 |
Original issue discount | 281,765 | 127,000 |
Assignment of Debt | 16,532 | 0 |
Conversion of accrued interest into common stock | 8,570 | 783,786 |
Warrants issued for prepaid expenses | $ 0 | $ 365,244 |
1. ORGANIZATION AND SUMMARY OF
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Description of Business AfterMaster, Inc., formerly Studio One Media, Inc. (the “Company” or “AfterMaster”) was originally organized in Delaware on May 12, 1988, as Dimensional Visions Group, Ltd. The name was changed on January 15, 1998 to Dimensional Visions Incorporated. On February 8, 2006, it changed its name to Elevation Media, Inc., and on March 28, 2006 the Company’s name was changed to Studio One Media, Inc. as part of its overall plan to implement its revised business plan. In April 2006, the Company entered into an agreement to purchase MyStudio HD Recording Studios, Inc. (formerly known as Studio One Entertainment, Inc.), a privately-held Scottsdale, Arizona-based company that designed and manufactured the recording studios currently in use by the Company (the “MyStudio Agreement”). Accounting Basis The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The Company has elected a June 30 fiscal year end. Principles of Consolidation The consolidated financial statements include the accounts of AfterMaster and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. 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. Notes and Other Receivables Notes and other receivables are stated at amounts management expects to collect. An allowance for doubtful accounts is provided for uncollectible receivables based upon management's evaluation of outstanding accounts receivable at each reporting period considering historical experience and customer credit quality and delinquency status. Delinquency status is determined by contractual terms. Bad debts are written off against the allowance when identified. Allowance for doubtful accounts were $0 for the years ended June 30, 2018 and 2017. Cash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. As of June 30, 2018 and 2017, the Company’s cash balances were within the FDIC insurance coverage limits. Fair Values, Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures The fair value measurements and disclosure guidance defines fair value and establishes a framework for measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with this guidance, the Company has categorized its recurring basis financial assets and liabilities into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The levels of the fair value hierarchy are described below: ● Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset, either directly or indirectly, for substantially the full term of the asset. Level 2 inputs include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active and inputs other than quoted prices that are observable in the marketplace for the asset. The observable inputs are used in valuation models to calculate the fair value for the asset. ● Level 3 inputs are unobservable but are significant to the fair value measurement for the asset, and include situations where there is little, if any, market activity for the asset. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset. A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. Disclosures for Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis The Company’s financial instruments mainly consist of cash, receivables, current assets, accounts payable and accrued expenses and debt. The carrying amounts of its cash, receivables, current asserts, accounts payable, accrued expenses and current debt approximates fair value due to the short-term nature of these instruments. Concentration of Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions. For the years ended June 30, 2018 and 2017 there was no customer that accounted for a material portion of total revenues. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment: Description Useful Lives Office Equipment and Computers 5 years Computer Software 5 years Furniture and Office Equipment 5 years Vehicles 5 years Leasehold Improvements Shorter of Useful Life or Lease Term Studios 5 years Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment are capitalized, while expenditures that do not, such as repairs and maintenance, are expensed as incurred. Intangible Assets Intangible assets consist of intellectual property, website costs, video backgrounds, and patterns and molds. The Company’s intellectual property includes purchased patents and trademarks as well as other proprietary technologies. Website costs are costs incurred to develop the Company’s website. Video backgrounds are the costs incurred to develop video backgrounds for use in the Company’s recording studios. Patterns and molds are for the design and construction of the studios. The Company amortizes intangible assets over the following useful lives: Description Weighted-Average Amortization Period Intellectual Property 5 years Website Costs 5 years Video Backgrounds 5 years Patterns and Molds 5 years Long-Lived Assets Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses both an estimate of undiscounted future net cash flows of the assets over the remaining useful lives and a replacement cost method when determining their fair values. If the carrying values of the assets exceed the fair value of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests. Revenue Recognition The Company applies the provisions of FASB ASC 605, Revenue Recognition in Financial Statements The Company's revenues are generated from AfterMaster products and services, AfterMaster Pro, sessions revenue, and remastering. Revenues related to AfterMaster Pro sells through consumer retail distribution channels and through our website. For sales through consumer retail distribution channels, revenue recognition occurs when title and risk of loss have transferred to the customer which usually occurs upon shipment to the customers. We established allowances for expected product returns and these allowances are recorded as a direct reduction to revenue. Return allowances are based on our historical experience. Revenues related to sessions and remastering are recognized when the event occurred. Cost of Revenues The Company’s cost of revenues includes studio lease expense, employee costs, and other nominal amounts. Costs associated with products are recognized at the time of the sale. Costs incurred to provide services are recognized as cost of sales as incurred. Depreciation is not included within cost of revenues. Research and Development The Company follows the policy of expensing its research and development costs in the period in which they are incurred in accordance with ASC 730, Accounting for Research and Development Costs Advertising Expenses The Company expenses advertising costs in the period in which they are incurred. Advertising expenses were $258,257 and $45,183 for the years ended June 30, 2018 and 2017. Share-Based Compensation The Company follows the provisions of ASC 718, Share-Based Payment, The Company also follows the provisions of FASB ASC 505-50, “Equity-Based Payments to Non-Employees,” which addresses the accounting and reporting for both the issuer (that is, the purchaser or grantor) and recipient (that is, the goods or service provider or grantee) for a subset of share-based payment transactions. ASC 505-50 requires equity instruments issued to non-employees for goods or services are accounted for at fair value and are marked to market until service is complete or a performance commitment date is reached, whichever is earlier. Convertible Securities and Derivatives The Company estimates the fair values of the debt and warrants, and allocates the proceeds pro rata based on these values. The allocation of proceeds to the warrants results in the debt instrument being recorded at a discount from the face amount of the debt and the value allocated to the warrant is recorded to additional paid-in capital. When the convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds from the convertible host instruments are first allocated to the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, resulting in those instruments being recorded at a discount from their face value. Derivative Liabilities The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares. Using this sequencing policy, the Company used this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to July 5, 2016 until the note was converted on the same day were derivative liabilities. The Company again used this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to August 19, 2016 until the note was converted on August 22, 2016 were derivative liabilities. The Company entered into multiple amendments to a note payable to extend the maturity date (the Amendments). The Company agreed to additional $30,000 extension fees which were converted at a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. This creates a situation where the Company no longer has shares enough available to “cover” all potential equity issuance obligations during the period of issuance until conversion. On February 3, 2017, the company entered into a note payable with an unrelated party at a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. Additionally, the note contains a ratchet provision. The Company determined under ASC 815, that the embedded conversion feature (if offering of common stock is at no consideration or at a price that is lower than the effective conversion price on the date shares are offered for sale, then a ratchet down of effective exercise price to price per share offered for common stock would be used to determine additional shares to be issued). The Company has determined that this ratchet provision indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability. Accordingly, all convertible instruments issued after February 3, 2017 are considered derivatives according to the Company’s sequencing policy. The Company values these convertible notes payable using the multinomial lattice method that values the derivative liability within the notes based on a probability weighted discounted cash flow model. The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations. Loss Per Share Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period. The losses attributable to Common shareholders was increased for accrued and deemed dividends on Preferred Stock during the years ended June 30, 2018 and 2017 of $225,468 and $169,850, respectively. Diluted earnings per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities. For the years ended June 30, 2018 and 2017, all of the Company’s potentially dilutive securities (warrants, options, convertible preferred stock, and convertible debt) were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive Common Shares that were excluded were 92,109,067 and 22,614,408 at June 30, 2018 and 2017, respectively. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. ASC 740, Accounting for Uncertainty in Income Taxes The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest and penalties since its inception. The Company files income tax returns in the U.S. federal tax jurisdiction and various state tax jurisdictions. The tax years for 2012 to 2018 remain open for federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax years. Investments Our available for securities are considered Level 1. Realized gains and losses on these securities are included in “Other income (expense) – net” in the consolidated statements of income using the specific identification method. Unrealized gains and losses, on available-for-sale securities are recorded in accumulated other comprehensive income (accumulated OCI). Unrealized losses that are considered other than temporary are recorded in other income (expense) – net, with the corresponding reduction to the carrying basis of the investment. 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. |
2. GOING CONCERN
2. GOING CONCERN | 12 Months Ended |
Jun. 30, 2018 | |
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 an accumulated deficit of $76,466,750 negative working capital of $7,553,147, and currently has revenues which are insufficient to cover 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 ProMaster 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, (c) more widely commercializing the AfterMaster and ProMaster products, and (d) identifying and executing on additional revenue generating opportunities. 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. PROPERTY AND EQUIPMENT
3. PROPERTY AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
3. PROPERTY AND EQUIPMENT | The Company’s property and equipment are comprised of the following as of June 30, 2018 and 2017: 2018 2017 Furniture and Office Equipment $ 25,478 $ 51,390 Office Equipment and Computers 189,087 413,466 Studios 260,543 255,665 Vehicles 31,399 60,524 Leasehold Improvements 60,084 66,658 Computer Software 66 56,232 Accumulated Depreciation (423,297 ) (637,895 ) Net Property and Equipment $ 143,360 $ 266,040 Depreciation expense for the years ended June 30, 2018 and 2017 was $128,105 and $149,887, respectively. The Company impaired assets totaling $0 and $27,926 for the years ended June 30, 2018 and 2017, respectively. |
4. INTANGIBLE ASSETS
4. INTANGIBLE ASSETS | 12 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
4. INTANGIBLE ASSETS | The Company’s intangible assets are comprised of the following on June 30, 2018 and 2017: 2018 2017 Patterns and Molds $ - $ 18,915 Website Costs - 240,415 Video Backgrounds - 16,172 Accumulated Amortization - (173,259 ) Intangible Assets, Net $ - $ 102,243 Amortization expense for the years ended June 30, 2018 and 2017 was $30,402 and $28,742, respectively. The Company impaired intangible assets totaling $74,991 and $0 for the years ended June 30, 2018 and 2017, respectively. The Company’s future estimated amortization for the above intangible assets are as follows: Year Amortization 2019 $ - 2020 - 2021 - 2022 - 2023 - Total $ - |
5. SECURITIES AVAILABLE-FOR-SAL
5. SECURITIES AVAILABLE-FOR-SALE | 12 Months Ended |
Jun. 30, 2018 | |
Securities Available-for-sale | |
5. SECURITIES AVAILABLE-FOR-SALE | On November 10, 2014, the Company received 600,000 shares of b Booth stock as part of an Asset License agreement with b Booth. On February 22, 2018, the Company sold the 600,000 shares to the CEO of b Booth in exchange for $270,000, which included $250,000 in cash and $20,000 in commissions fees. The Company realized a gain on sale of the available for sale securities of $240,000 (Sales price of $270,000 less the gross realized loss of $30,000). The following table presents the amortized cost, gross unrealized gains, gross unrealized losses, and fair market value of available-for-sale equity securities, nearly all of which are attributable to the Company's investment in b Booth stock, as follows: June 30, 2018 Amortized cost Gross unrealized gains Gross unrealized losses Gross realized gains Gross realized losses Fair value Equity securities $ 123,600 $ - $ - $ - $ (123,600 ) $ - June 30, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Gross realized gains Gross realized losses Fair value Equity securities $ 63,600 $ 60,000 $ - $ - $ - $ 123,600 |
6. INVENTORIES
6. INVENTORIES | 12 Months Ended |
Jun. 30, 2018 | |
Inventories | |
6. INVENTORIES | Inventories are stated at the first in first out and consisted of the following: June 30, 2018 June 30, 2017 Components $ - $ 159,017 Finished Goods - - Allowance / Reserve - (54,126 ) Totals $ - $ 104,891 In April 2014, the Company moved to just-in-time inventory and all orders had been placed by June 30, 2018, bring inventory on hand to $0 by year end. |
7. NOTES PAYABLE
7. NOTES PAYABLE | 12 Months Ended |
Jun. 30, 2018 | |
Notes Payable [Abstract] | |
7. NOTES PAYABLE | Convertible Notes Payable In accounting for its convertible notes payable where derivative accounting does not apply, proceeds from the sale of a convertible debt instrument with Common Stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portions of the proceeds allocated to the warrants are accounted for as paid-in capital with an offset to debt discount. The remainder of the proceeds are allocated to the debt instrument portion of the transaction as prescribed by ASC 470-25-20. The Company then calculates the effective conversion price of the note based on the relative fair value allocated to the debt instrument to determine the fair value of any beneficial conversion feature (“BCF”) associated with the convertible note in accordance with ASC 470-20-30. The BCF is recorded to additional paid-in capital with an offset to debt discount. Both the debt discount related to the issuance of warrants and related to a BCF is amortized over the life of the note. Convertible Notes Payable – Related Parties Convertible notes payable due to related parties consisted of the following as of June 30, 2018 and 2017, respectively: Convertible Notes Payable – Related Parties June 30, June 30, 2018 2017 Various term notes with total face value of $3,925,000 issued from February 2010 to April 2013, interest rates range from 10% to 15%, net of unamortized discount of $0 as of June 30, 2018 and June 30, 2017, of which $3,925,000 was extinguished. $ - $ 3,925,000 $30,000 face value, issued in August 2016, interest rate of 0%, matures June 2019, a gain on extinguishment of debt was recorded totaling $3,818 net unamortized discount of $0 as of June 30, 2018 and June 30, 2017. 30,000 26,182 $5,000 face value, issued in September 2017, interest rate of 0%, matures March 2018, net amortized discount of $607 as of June 30, 2018. 4,393 - $10,000 face value, issued in November 2017, interest rate of 0%, matures November 2018, net amortized discount of $0 as of June 30, 2018. 10,000 - $25,000 face value, issued in December 2017, interest rate of 0%, matures December 2018, net amortized discount of $1,890 as of June 30, 2018. 23,110 - $10,000 face value, issued in January 2018, interest rate of 0%, matures January 2019, net unamortized discount of $534 as of June 30, 2018. 9,466 - $15,000 face value, issued in January 2018, interest rate of 0%, matures January 2019, net unamortized discount of $1,391 as of June 30, 2018. 13,609 - $24,500 face value, issued in February 2018, interest rate of 0%, matures February 2019, net unamortized discount of $0 as of June 30, 2018. 24,500 - Total convertible notes payable – related parties 115,078 3,951,182 Less current portion 115,078 3,951,182 Convertible notes payable – related parties, long-term $ - $ - As part of a settlement agreement dated March 30, 2018, the agreed to extinguish $3,925,000 in convertible notes with related parties and accrued interest of $240,041, $575,000 in related party notes payable and accrued interest of $43,007 for a total payment of $200,000. As part of the arrangement the note holder agreed to cancel 14,837,251 shares of common stock and 531,250 warrants. On August 8, 2016, the Company issued a convertible note to a related individual for $30,000 that matures on October 8, 2016. The note bears interest rate of 0% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share, as part of the note the company issued options to purchase 21,000 shares of 144 restricted common stock at an exercise price $0.50 for a two-year period. The note was amended on November 15, 2016 to extend the maturity date to January 31, 2017 and again on May 10, 2017 to extend the maturity date to October 1, 2017. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a extinguishment of the debt and not modification of the debt resulting in a gain on extinguishment of debt of $3,818. The note was amended subsequently on August 24, 2018 to extend the maturity date to June 30, 2019. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On September 27, 2017, the Company issued a convertible note to an unrelated party for $5,000 that matures on March 31, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $2,995. The note was amended subsequently 0n August 24, 2018 to extend the maturity date to June 30, 2019. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On November 1, 2017, the Company issued a note to a related party for $10,000 that matures on November 1, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. On December 30, 2017, the Company issued a note to a related party for $25,000 that matures on December 30, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. . On January 4, 2018, the Company issued a note to a related party for $15,000 that matures on January 4, 2019. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. . On January 11, 2018, the Company issued a note to a related party for $10,000 that matures on January 11, 2019. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. . On February 14, 2018, the Company issued a note to a related party for $24,500 that matures on February 14, 2019. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. Convertible Notes Payable - Non-Related Parties Convertible notes payable due to non-related parties consisted of the following as of June 30, 2018 and 2017, respectively: Convertible Notes Payable - Non-Related Parties June 30, June 30, 2018 2017 $7,000 face value, issued in July 2014, interest rate of 6%, matures October 2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. $ 7,000 $ 7,000 $600,000 face value, issued in November 2015, interest rate of 0%, an OID of $190,000, matures January 2018, net unamortized discount of $0 of June 30, 2018 and June 30, 2017, respectively, of which $335,000 has been paid and $355,000 was transferred to a new note in April 2018. - 430,000 $100,000 face value, issued in February 2016, interest rate of 10%, matures March 2018, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 100,000 100,000 $25,000 face value, issued in February 2016, interest rate of 10%, matures February 2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 25,000 25,000 $100,000 face value, issued in March 2016, interest rate of 10%, matures June2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 100,000 100,000 $10,000 face value, issued in March 2016, interest rate of 10%, matures March 2018, net unamortized discount $0 of June 30, 2018 and June 30, 2017, respectively. 10,000 10,000 $50,000 face value, issued in July 2016, interest rate of 0%, matures October 2017, net unamortized discount of $0 of June 30, 2018 and June 30, 2017, respectively. 50,000 50,000 $50,000 face value, issued in August 2016, interest rate of 0%, matures September which was amended to January 2018, net unamortized discount of $1,403 and $5,418 of June 30, 2018 and June 30, 2017, respectively. 50,000 44,582 $1,000,000 face value, issued in September 2016, interest rate of 10%, matures June 2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 1,000,000 1,000,000 $258,000 face value, issued in February 2017, interest rate of 12%, matures August 2017, net amortized discount of $0 and $48,464 as of June 30, 2018 and June 30, 2017, respectively, of which $258,000 has been paid. - 209,536 $149,000 face value, issued in February 2017, interest rate of 10%, matures November 2017 which was amended to June 2018, net amortized discount of $0 and $59,740 as of June 30, 2018 and June 30, 2017, respectively, of which $39,660 was converted and $30,000 has been paid. 79,340 89,260 $224,000 face value, issued in February 2017, interest rate of 10%, matures November 2017 which was amended to June 2018, net amortized discount of $32,452 and $119,795 as of June 30, 2018 and June 30, 2017, respectively, of which $75,492 has been converted and $50,000 has been paid. 98,508 104,205 $265,000 face value, issued in May 2017, interest rate of 10%, matures February 2018, net amortized discount of $45,267 and $218,790 as of June 30, 2018 and June 30, 2017, respectively, of which $64,588 was converted. 200,412 46,210 $55,000 face value, issued in June 2017, interest rate of 10%, matures January 2018, with additional fees of $20,000 net amortized discount of $3,341 and $50,631 as of June 30, 2018 and June 30, 2017, respectively, of which $75,000 was converted. - 4,369 $100,000 face value, issued in June 2017, interest rate of 7%, matures June 2018, net amortized discount of $0 and $52,317 as of June 30, 2018 and June 30, 2017, respectively. 100,000 47,683 $78,000 face value, issued in July 2017, interest rate of 12%, matures May 2018, net amortized discount of $0 as of June 30, 2018, of which $72,000 was converted. 6,000 - $50,000 face value, issued in August 2017, interest rate of 0%, matures October 2017, net amortized discount of $0 as of June 30, 2018, of which $34,000 has been converted and $16,000 was transferred to a new note. - - $60,500 face value, issued in August 2017, interest rate of 12%, matures August 2018, net amortized discount of $0 as of June 30, 2018, of which $60,500 has been paid. - - $10,000 face value, issued in August 2017, interest rate of 0%, matures August 2018, net amortized discount of $729 as of June 30, 2018. 9,271 - $82,250 face value, issued in August 2017, interest rate of 12%, matures May 2018, net amortized discount of $0 as of June 30, 2018, of which $35,000 has been converted and $47,250 was transferred to a new note. - - $53,000 face value, issued in August 2017, interest rate of 12%, matures June 2018, net amortized discount of 0 as of June 30, 2018. 53,000 - $65,000 face value, issued in September 2017, interest rate of 12%, matures March 2018, net amortized discount of $0 as of June 30, 2018, of which $65,000 has been paid. - - $10,000 face value, issued in September 2017, interest rate of 10%, matures September 2018, net amortized discount of $4,400 as of June 30, 2018. 5,600 - $50,000 face value, issued in September 2017, interest rate of 0%, matures November 2017, net amortized discount of $0 as of June 30, 2018, of which $50,000 was transferred to a new note. - - $110,000 face value, issued in October 2017, interest rate of 10%, matures July 2018, net amortized discount of $6,447 as of June 30, 2018, of which $110,000 has been paid. - - $100,000 face value, issued in October 2017, interest rate of 10%, matures October 2018, net amortized discount of $22,333 as of June 30, 2018. 77,667 - $115,000 face value, issued in November 2017, interest rate of 10%, matures August 2018, net amortized discount of $50,584 as of June 30, 2018. 64,416 - $50,000 face value, issued in November 2017, interest rate of 10%, matures January 2018, net amortized discount of $0 as of June 30, 2018. 50,000 - $66,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $17,085 as of June 30, 2018. 48,915 - $100,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $39,452 as of June 30, 2018. 60,548 - $5,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $1,932 as of June 30, 2018. 3,068 - $53,000 face value, issued in November 2017, interest rate of 12%, matures July 2018, net amortized discount of $4,649 as of June 30, 2018, of which $34,530 was converted. 13,821 - $100,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $20,137 as of June 30, 2018. 79,863 - $20,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $4,689 as of June 30, 2018. 15,311 - $75,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $23,180 as of June 30, 2018. 51,820 - $20,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $6,181 as of June 30, 2018. 13,819 - $115,000 face value, issued in January 2018, interest rate of 10%, matures October 2018, net amortized discount of $42,967 as of June 30, 2018. 72,033 - $53,000 face value, issued in January 2018, interest rate of 12%, matures November 2018, net amortized discount of $0 as of June 30, 2018, of which $53,000 was transferred to a new note in June 2018. - - $20,000 face value, issued in February 2018, interest rate of 10%, matures February 2019, net amortized discount of $4,847 as of June 30, 2018. 15,153 - $75,075 face value, issued in February 2018, interest rate of 10%, matures November 2018, net amortized discount of $0 as of June 30, 2018. 75,075 - $6,000 face value, issued in February 2018, interest rate of 10%, matures April 2018, net amortized discount of $0 as of June 30, 2018. 6,000 - $10,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $2,267 as of June 30, 2018. 7,733 - $15,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $2,780 as of June 30, 2018. 12,220 - $100,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $21,696 as of June 30, 2018. 78,304 - $26,000 face value, issued from an assignment in March 2018, interest rate of 0%, matures May 2018, net amortized discount of $0 as of June 30, 2018. 26,000 - $53,102 face value, issued from an assignment in March 2018, interest rate of 0%, matures May 2018, net amortized discount of $0 as of June 30, 2018, of which $53,102 has been converted. - - $150,000 face value, issued in April 2018, interest rate of 12%, matures January 2019, net amortized discount of $105,818 as of June 30, 2018. 44,182 - $400,000 face value, issued from an assignment in April 2018 of $355,000 in principal and an OID of $45,000, interest rate of 10%, matures April 2019, net amortized discount of $36,000 as of June 30, 2018, of which $223,198 has been converted. 140,802 - $15,000 face value, issued in April 2018, interest rate of 10%, matures April 2019, net amortized discount of $12,000 as of June 30, 2018, of which $223,198 has been converted. 3,000 - $150,086 face value, issued in May 2018, interest rate of 12%, matures January 2020, net amortized discount of $0 as of June 30, 2018, of which $12,000 has been paid. 21,564 - $135,700 face value, issued in May 2018, interest rate of 12%, matures May 2019, net amortized discount of $0 as of June 30, 2018, of which $12,000 has been paid. 12,201 - $15,651 face value, issued in June 2018, interest rate of 12%, matures June 2019, net amortized discount of $0 as of June 30, 2018. 15,651 - $55,718 face value, issued from an assignment in June 2018, interest rate of 12%, matures October 2018, net amortized discount of $0 as of June 30, 2018. 55,718 - $161,000 face value, issued in June 2018, interest rate of 12%, matures June 2018, net amortized discount of $160,558 as of June 30, 2018. 441 - Total convertible notes payable – non-related parties 2,959,456 2,267,845 Less current portion 2, 959,456 2,267,845 Convertible notes payable – non-related parties, long-term $ - $ - On July 14, 2014, the Company issued a convertible note to an unrelated individual for $7,000 that matures on October 14, 2014. The note bears interest rate of 6% per annum and is convertible into shares of the Company’s Common stock at $0.10 per share. The note was amended September 12, 2018 to extend the maturity date to February 15, 2019. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On February 15, 2016, the Company issued a convertible note to an unrelated individual for $25,000 that matures on February 15, 2017. The note was amended subsequently in September 28, 2017 to extend the maturity date to October 15, 2017. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. The note was amended September 12, 2018 to extend the maturity date to February 15, 2019. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On March 7, 2016, the Company issued a convertible note to an unrelated individual for $100,000 that matures on March 7, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share. The Company valued a BCF related to the note valued at $24,269 and debt discount related to the 10,000 shares of common stock issued with the note at a relative fair value of $4,569. The note was amended again on September 20, 2018 to extend the maturity date to October 15, 2018. The Company evaluated amendment under ASC 470-50, "Debt Modification and Extinguishment", and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On March 7, 2016, the Company issued a convertible note to an unrelated individual for $10,000 that matures on March 7, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.50 per share. The Company valued a debt discount related to the 1,000 shares of common stock issued with the note at a relative fair value of $457. The note was amended again on September 20, 2018 to extend the maturity date to October 15, 2018. The Company evaluated amendment under ASC 470-50, "Debt Modification and Extinguishment", and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On November 20, 2015, the Company issued a convertible note to an unrelated company for $600,000 that matures on May 20, 2016. The company paid $200,000 in principle balance leaving a remain balance of $430,000 including the extension fees and is not convertible unless the borrower defaults under the amendment agreement dated January 1, 2017. The note bears 0% interest and had an original issue discount (OID) of $100,000. This note is not convertible unless there is a default event. Per the terms of the note there are no derivatives until it becomes convertible on the original note, however the $30,000 extensions are to be considered derivatives. The Lender released a clarification of amendments to convertible promissory notes that explained the $30,000 extension fees are the only portion that is to be considered as convertible and converts within 2 days of issuance. The intent of the amendment agreements were to insure the original note dated November 20, 2015 in the amount of $600,000. Because the terms do not dictate a maximum numbers of convertible shares, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability Under ASC 815-40. The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares. During the extension and conversion day period no additional convertible instruments were issued, therefore on the extension was considered in the derivative calculation. The Company extended the maturity date seven times since February 27, 2017 for a total of $210,000, of which, the Company paid $135,000 in the nine months ended March 31, 2018. The Company latest and fourteenth extension with consideration of $30,000 was on December 18, 2017 to extending the maturity date to January 31, 2018. The Company evaluated the amendments under ASC 470-50, “ Debt - Modification and Extinguishment” On February 15, 2016, the Company issued a convertible note to an unrelated individual for $25,000 that matures on February 15, 2017. The note was amended subsequently in September 28, 2017 to extend the maturity date to October 15, 2017. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On September 15, 2016, the Company issued a convertible note to an unrelated individual for $1,000,000 that matures on June 30, 2017. The note was amended subsequently on June 30, 2017 to extend the maturity date to June 30, 2018. The Company evaluated amendment under ASC 470-50, "Debt Modification and Extinguishment" On August 26, 2016, the Company issued a convertible note to an unrelated individual for $50,000 that matures on August 26, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share. The note was amended on June 30, 2017 to extend the maturity date to October 1, 2017. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” Debt - Modification and Extinguishment” On March 7, 2016, the Company issued a convertible note to an unrelated individual for $100,000 that matures on March 7, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share. The Company valued a BCF related to the note valued at $24,269 and debt discount related to the 10,000 shares of common stock issued with the note at a relative fair value of $4,569. The note was amended again on September 28, 2017 to extend the maturity date to January 15, 2018, as additional consideration the Company issued 25,000 shares of common stock valued at $3,998. The note was amended again on September 20, 2018 to extend the maturity date to October 15, 2018. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On July 26, 2016, the Company issued a convertible note to an unrelated individual for $50,000 that matures on September 26, 2016. The note bears interest rate of 0% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share, as part of the note the company issued warrants to purchase 35,000 shares of 144 restricted common stock at an exercise price $0.30 for a two-year period. The note was amended on September 28, 2017 to extend the maturity date to January 15, 2018, as additional consideration the Company issued 15,000 shares of common stock valued at $2,399. The note was amended on September 20, 2018 to extend the maturity date to October 15, 2018, The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On February 23, 2017, the Company issued a convertible note to an unrelated company for $149,000 that matures on November 23, 2017. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids 20 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, that this percentage discount (variable) exercise price indicates is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by paying $10,000 of principal and $1,400 of accrued interest on October 23, 2017 to November 24, 2017 and extend the maturity date to February 21, 2018. The Company extended the possibility to convert date by paying $10,000 of principal and $4,000 of accrued interest on November 29, 2017 to December 22, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . Debt - Modification and Extinguishment” On February 23, 2017, the Company issued a convertible note to an unrelated company for $224,000 that matures on November 23, 2017. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids 20 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The Company extended the possibility to convert date by issuing 90,000 warrants valued at $11,720 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by paying $10,000 of principal and $2,100 of accrued interest on October 23, 2017 to November 24, 2017 and extend the maturity date to February 21, 2018. The Company extended the possibility to convert date by paying $20,000 of principal and $6,000 of accrued interest on November 29, 2017 to December 22, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . Debt - Modification and Extinguishment” On May 12, 2017, the Company issued a convertible note to an unrelated company for $265,000 that matures on February 17, 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at the lesser of $.31 and 60% of the lowest closing bids 25 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On February 22, 2018, the note converted interest of $9,200 and $250 in conversion fees for 450,000 shares of common stock. On March 6, 2018, the note converted principal of $11,138, $13,812 in interest, and $250 in conversion fees for 1,200,000 shares of common stock. On April 16, 2018, the note converted $27,237, $8,513 in interest, and $250 in conversion fees for 1,500,000 shares of common stock. On June 29, 2018, the note converted principal of $26,213, $9,537 in interest, and $250 in conversion fees for 1,500,000 shares of common stock. On June 13, 2017, the Company issued a convertible note to an unrelated company for $55,000 that matures on January 13, 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids 30 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The note was amended on December 13, 2017, to extend the maturity date to January 15, 2018 and again on January 18, 2018, to extend the maturity date to February 15, 2018.As consideration for the extensions two extension fees of $10,000 each had been added to the outstanding principal. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” In conjunction with the note, the Company issued to the holder 55,000 warrants to purchase Common Shares. The value of the debt discount recorded was $41,150 and the debt discount related to the attached relative fair value of warrants was $8,850, for a total debt discount of $50,000, and a derivative expense of $9,432. On July 31, 2017, the Company issued a convertible note to an unrelated company for $78,000, which included $75,000 in proceeds and $3,000 in legal fees, that matures on April 10, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest two trading prices during the fifteen (15) trading day period ending to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On February 1, 2018, the note converted the principal of $12,000 for 238,284 shares of common stock. On February 1, 2018, the note converted the principal of $12,000 for 238,284 shares of common stock. On February 15, 2018, the note converted the principal of $20,000 for 529,101 shares of common stock. On February 22, 2018, the note converted the principal of $20,000 for 655,738 shares of common stock. On March 2, 2018, the note c |
8. CONVERTIBLE PREFERRED STOCK
8. CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
8. 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 2,585,000 3,581,964 Series B Convertible Preferred 200,000 3,500 35,000 Series C Convertible Preferred 1,000,000 13,404 - Series D Convertible Preferred 375,000 130,000 - Series E Convertible Preferred 1,000,000 275,000 - Series P Convertible Preferred 600,000 86,640 - Series S Convertible Preferred 50,000 - - Total Preferred Stock 6,325,000 3,109,044 $ 3,616,964 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 fiscal year ended June 30, 2018 the Company did not issue shares of Series A-1 Preferred. During the fiscal year ended June 30, 2017 the Company issued 550,000 shares of Series A-1 Preferred Stock for $550,000 in cash and paid $196,853 in cash offering costs The Company had one conversion of 150,000 shares of Series A-1 Preferred Stock for 300,000 shares of Common Stock, and issued 15,682 shares of Common Stock of payment of $7,481 in accrued dividends. During the fiscal years ended June 30, 2018 and 2017, the outstanding Preferred Stock accumulated $225,468 and $169,567 in dividends on outstanding Preferred Stock. The cumulative dividends in arrears as of June 30, 2017 were approximately $1,134,406. |
9. COMMON STOCK
9. COMMON STOCK | 12 Months Ended |
Jun. 30, 2018 | |
Text Block [Abstract] | |
9. COMMON STOCK | Fiscal Year Ended June 30, 2018 The Company has authorized 250,000,000 shares of $0.001 par value per share Common Stock, of which 162,287,902 issued (of which 28,841,381 are to be issued) as of June 30, 2018 and 118,486,728 were issued outstanding as of June 30, 2018 and 2017, respectively. The activity surrounding the issuances of the Common Stock is as follows: The Company issued The Company issued 28,928,570 shares of Common Stock for the conversion of notes and accrued interest valued at $834,249. The Company issued 6,098,101 shares of Common Stock as incentive with convertible notes valued at $317,261. The Company issued 1,415,000 shares of Common Stock for the prepaid consulting services and rent valued at $106,120. The Company issued 115,000 shares of Common Stock for the extension of two convertible notes valued at $16,897. The Company issued 100,000 shares of Common Stock issued as charitable contributions valued at $7,000. As share-based compensation to employees and non-employees, the Company issued 4,501,592 shares of common stock valued at $349,448, based on the market price of the stock on the date of issuance. As interest expense on outstanding notes payable, the Company issued 1,280,162 shares of common stock valued at $217,628 based on the market price on the date of issuance. As part of a debt extinguishment, the note holder agreed to cancel 14,837,251 shares of common stock. Fiscal Year Ended June 30, 2017 The Company has authorized 250,000,000 shares of $0.001 par value per share Common Stock, of which 118,486,728 and 102,133,344 were issued outstanding as of June 30, 2017 and 2016, respectively. The Company amended its articles of incorporation on August 28, 2015 to increase the number of authorized shares to 250,000,000. The activity surrounding the issuances of the Common Stock is as follows: The Company issued 3,471,666 shares of Common Stock for cash valued at $991,500. The Company issued 2,150,364 shares of Common Stock for the conversion of notes and accrued interest valued at $438,781. The Company also issued 650,000 shares of Common Stock as incentive to notes valued at $127,600. The Beneficial Conversion was valued at $30,519. The Company also issued 300,000 shares of Common Stock for conversion of Preferred Stock, and issued 15,682 shares of Common Stock of payment of $7,841 in accrued dividends. The Company issued 2,953,057 shares of Common Stock as payment for services and rent valued at $917,152. The Company issued 3,020,750 shares of Common Stock for the conversion warrants valued at $906,225. The Company issued 22,000 shares of Common Stock for the extension of two convertible notes valued at $5,910. As share-based compensation to employees and non-employees, the Company issued 1,237,210 shares of common stock valued at $403,945, based on the market price of the stock on the date of issuance. As interest expense on outstanding notes payable, the Company issued 2,532,655, shares of common stock valued at $783,786 based on the market price on the date of issuance. |
10. STOCK PURCHASE OPTIONS AND
10. STOCK PURCHASE OPTIONS AND WARRANTS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
10. 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 fiscal year ended June 30, 2018, the Company did not issue stock purchase options. During the fiscal year ended June 30, 2017, the Company issued 500,000 stock purchase options. The following table summarizes the changes in options outstanding of the Company during the fiscal year ended June 30, 2018. Date Issued Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Balance June 30, 2017 525,000 $ 0.18 $ 0.16 4.81 $ 93,750 Granted - - - - - Exercised - - - - - Cancelled/Expired - - - - - Outstanding as of June 30, 2018 525,000 $ 0.05 $ 0.16 4.06 $ 93,750 The following table summarizes the changes in options outstanding of the Company during the fiscal year ended June 30, 2017 Date Issued Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Balance June 30, 2016 25,000 $ 0.15 $ 0.24 2.00 $ 3,750 Granted 500,000 0.18 0.16 5.00 90,000 Exercised - - - - - Cancelled/Expired - - - - - Outstanding as of June 30, 2017 525,000 $ 0.18 $ 0.16 4.81 $ 93,750 Stock Purchase Warrants During the fiscal year ended June 30, 2018, the Company issued warrants to purchase a total of 6,675,000, consisting of 75,000 warrants as part of a private placement valued at $6,019, 100,000 warrants as part of two AR financing agreements executed on August 2017 valued at $13,398, 150,000 warrants as part additional consideration of a promissory note on November 2017 valued at $12,560 and an additional 150,000 warrants to modify the note later in November 2017 valued at $12,570, 150,000 warrants as part additional consideration of a promissory note on January 2018 valued at $11,056, 1,000,000 warrants were for facilitating the sales of bBooth stock on February 2018 valued at 63,041, 550,000 warrants in conjunction with extension of three promissory notes valued at $54,491, and 4,500,000 warrants as compensation for consulting services valued at $183,828. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model. During the fiscal year ended June 30, 2017, the Company issued warrants to purchase a total of . The Company issued 455,000 warrants in conjunction with four promissory notes executed in February 2017 to June 2017. 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. The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted: June 30, 2018 June 30, 2017 Expected volatility 105-304% 92-126% Expected dividends 0% 0% Expected term 0-5 Years 0-5 Years Risk-free interest rate 0.96-2.73% 0.74-1.89% The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the fiscal year ended June 30, 2018. Number of Warrants Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Outstanding as of June 30, 2017 39,927,097 $ 0.38 $ 0.45 3.38 $ 15,144,835 Granted 6,675,000 0.08 0.05 4.38 534,250 Exercised - - - - - Cancelled/Expired (4,842,500 ) 0.49 - - (2,388,063 ) Outstanding as of June 30, 2018 41,759,597 $ 0.32 $ 0.40 3.01 $ 13,291,022 The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the fiscal year ended June 30, 2017. Number of Warrants Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Outstanding as of June 30, 2016 35,034,550 $ 0.36 $ 0.45 4.31 $ 12,767,108 Granted 10,424,998 0.46 0.18 2.07 4,404,232 Exercised (3,020,750 ) - - - - Cancelled/Expired (2,511,701 ) 0.36 - - (2,026,505 ) Outstanding as of June 30, 2017 39,927,097 $ 0.38 $ 0.45 3.38 $ 15,144,835 |
11. INCOME TAXES
11. INCOME TAXES | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
11. INCOME TAXES | The components of the income tax (benefit) provision are as follows: As of June 30, June 30, 2018 2017 Current Federal $ - $ - State - - Total Current - - Deferred Federal - - State - - Total Deferred - - Income tax provision $ - $ - A reconciliation of the expected income tax benefit (provision) computed using the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows: As of June 30, June 30, 2018 2017 Income tax benefit based on federal statutory rate $ (11,780,000 ) $ (4,914,000 ) State income tax benefit, net of federal income tax (462,000 ) (475,000 ) Change in deferred tax valuation allowance 12,242,000 5,389,000 Other, net - - Income tax provision $ - $ - The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities are presented below: As of June 30, June 30, 2018 2017 Deferred tax assets: Debt extinguishment $ - $ - Impairment of fixed assets 74,991 - Domestic net operating loss carryforwards 10,286,000 11,671,000 Total gross deferred tax assets 10,360,991 11,671,000 Less valuation allowance on deferred tax assets (10,360,991 ) (11,671,000 ) Net deferred tax assets - - Deferred tax liabilities: Deferred costs - - Total deferred tax liabilities - - Net deferred taxes $ - $ - Deferred income taxes result from temporary differences between income tax and financial reporting computed at the effective income tax rate. The Company has established a valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realization of such assets. Management periodically evaluates the recoverability of the deferred tax assets. At such time it is determined that it is more likely than not that deferred tax assets are realizable, the valuation allowance will be reduced. As of June 30, 2018, and 2017, the Company had net operating loss carry-forwards for federal and state income tax purposes of approximately $42 million and $32 million, respectively. Such carryforwards may be used to reduce taxable income, if any, in future year subject to limitations of Section 382 of the Internal Revenue Code for federal income and Arizona tax purposes. The Company believes an ownership change may have occurred, as defined by Sections 382 and 383 of the Internal Revenue Code, which could result in the forfeiture of a significant portion of its net operating loss carry-forwards. The Company is not using any tax attributes in the current year, but will analyze whether a change occurred and the related impact on its gross deferred tax assets, if needed. As the Company's analysis is not complete, the impact to its gross deferred tax assets is uncertain. If not utilized, the federal and state net operating loss carry-forwards will begin expiring in 2018. |
12. FINANCIAL INSTRUMENTS
12. FINANCIAL INSTRUMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
12. FINANCIAL INSTRUMENTS | The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of June 30, 2018, and 2017. The fair values of the derivative instruments are measured each quarter, which resulted in a gain (loss) of $1,182,308 and $(138,693), and derivative expense of $2,799,404 and $376,427 during the fiscal years ended June 30, 2018 and 2017, respectively. As of June 30, 2018, and 2017, the fair market value of the derivatives aggregated $3,407,690 and $2,145,065, respectively, using the following assumptions: estimated 5-0 year term, estimated volatility of 303.62 -104.82%, and a discount rate of 2.73-0.96%. |
13. FAIR VALUE MEASUREMENTS
13. FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
13. FAIR VALUE MEASUREMENTS | For asset and liabilities measured at fair value, the Company uses the following hierarchy of inputs: ● Level one — Quoted market prices in active markets for identical assets or liabilities; ● Level two — Inputs other than level one inputs that are either directly or indirectly observable; and ● Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Liabilities measured at fair value on a recurring basis at June 30, 2018, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 2,815,520 $ 2,815,520 Securities available-for-sale $ - $ - $ - $ - Liabilities measured at fair value on a recurring basis at June 30, 2017, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 2,145,065 $ 2,145,065 Securities available-for-sale $ 123,600 $ - $ - $ 123,600 |
14. COMMITMENTS AND CONTINGENCI
14. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
14. COMMITMENTS AND CONTINGENCIES | Legal Proceedings The Company may become involved in certain legal proceedings and claims which arise in the normal course of business. The Company is not a party to any litigation. To the best of the knowledge of our management, there are no material litigation matters pending or threatened against us. Lease Agreements We lease offices in Hollywood, California (located at 6671 Sunset Blvd., Suite 1520, 1518 and 1550, Hollywood, California, 90028) for corporate, research, engineering and mastering services. The lease expires on December 31, 2017. The total lease expense for the facility is approximately $17,220 per month, and the total remaining obligations under these leases at June 30, 2018, were approximately $0. We lease a warehouse space located at 8260 E Gelding Drive, Suite 102, Scottsdale, Arizona, 85260. The lease expires on February 28, 2019. The total lease expense for the facility is approximately $1,888 per month, and the total remaining obligations under this leases at June 30, 2018, were approximately $15,104. We lease corporate offices located at 7825 E Gelding Drive, Suite 101, Scottsdale, Arizona, 85260. The lease expires on April 30, 2021. The total lease expense for the facility is approximately $7,224 per month, and the total remaining obligations under this leases at June 30, 2018, were approximately $245,616. We lease corporate offices located at 7825 E Gelding Drive, Suite 103, Scottsdale, Arizona, 85260. The lease expires on April 30, 2021. The total lease expense for the facility is approximately $3,000 per month, and the total remaining obligations under this leases at June 30, 2018, were approximately $99,000. Below is a table summarizing the annual operating lease obligations over the next 5 years: Year Lease Payments 2019 141,464 2020 131,475 2021 86,781 2022 - 2023 - Total $ 359,720 Other The Company has not declared dividends on Series A or B Convertible Preferred Stock or its Series A-1 Convertible Preferred Stock. The cumulative dividends in arrears through June 30, 2018 were approximately $ 1,134,406 |
15. SUBSEQUENT EVENTS
15. SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
15. SUBSEQUENT EVENTS | In accordance with ASC 855, Company’s management reviewed all material events through the date of this filing and determined that there were the following material subsequent events to report: On November 28, 2017, the Company issued a convertible note to an unrelated party for $53,000 that matures on July 16, 2018. The note bears 12% interest per annum. The note is convertible into shares of the Company’s common stock at 61% of the lowest closing bids 15 days prior to the conversion per share. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value . On June 13, 2018, the Company issued a convertible note to an unrelated party for $55,718 that matures June 13, 2019 in exchange for an existing note for $53,000 issued on January 8, 2018and $2,718 in accrued interest. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest two trading prices during the fifteen (15) trading day period ending to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On July 19, 2018, the note converted all the principal of $55,718 for 2,854,420 shares of common stock. On August 2, 2018, the Company issued a convertible note to an unrelated company for $537,500, which includes proceeds of $500,000 and $37,500 in OID, that matures on August 2, 2019. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at equal the lesser of $0.12 and 70% of the lowest Trading Price for the Common Stock during the thirty Trading Day period ending on the latest complete Trading Day prior to the Conversion Date .The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. As additional consideration the Company also issued 3,593,750 warrants. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . On August 16, 2018, the Company issued a note to an unrelated party for $52,000 as part of an Accounts Receivable Financing Agreement, which included $50,000 in proceeds and an OID of $2,000, that matures on November 16, 2018. The note bears 0% interest per annum. On February 16, 2018, the Company issued a convertible note to an unrelated party for $75,075 that matures on November 16, 2018. The note bears 12% interest per annum. The note is convertible into shares of the Company’s common stock at 55% of the lowest sales price for common stock on principal market during the twenty-five consecutive trading days including the immediately preceding the conversion date. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value . Also, on August 16, 2018, the new note holder converted the entire $39,759 balance for 2,839,920 shares of common stock. On May 12, 2017, the Company issued a convertible note to an unrelated company for $265,000 that matures on February 17, 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at the lesser of $.31 and 60% of the lowest closing bids 25 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On February 22, 2018, the note converted interest of $9,200 and $250 in conversion fees for 450,000 shares of common stock. On March 6, 2018, the note converted principal of $11,138, $13,812 in interest, and $250 in conversion fees for 1,200,000 shares of common stock. On April 16, 2018, the note converted $27,237, $8,513 in interest, and $250 in conversion fees for 1,500,000 shares of common stock. On June 29, 2018, the note converted principal of $26,213, $9,537 in interest, and $250 in conversion fees for 1,500,000 shares of common stock. On August 24, 2018, the note converted principal of $30,620, $7,380 in interest, and $250 in conversion fees for 2,500,000 shares of common stock. On November 21, 2017, the Company issued a convertible note to an unrelated party for $100,000 that matures on November 21, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids 20 days prior to the conversion per share. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value . On February 23, 2017, the Company issued a convertible note to an unrelated company for $149,000 that matures on November 23, 2017. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids 20 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, that this percentage discount (variable) exercise price indicates is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by paying $10,000 of principal and $1,400 of accrued interest on October 23, 2017 to November 24, 2017 and extend the maturity date to February 21, 2018. The Company extended the possibility to convert date by paying $10,000 of principal and $4,000 of accrued interest on November 29, 2017 to December 22, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . Debt - Modification and Extinguishment” On February 23, 2017, the Company issued a convertible note to an unrelated company for $224,000 that matures on November 23, 2017. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids 20 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The Company extended the possibility to convert date by issuing 90,000 warrants valued at $11,720 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by paying $10,000 of principal and $2,100 of accrued interest on October 23, 2017 to November 24, 2017 and extend the maturity date to February 21, 2018. The Company extended the possibility to convert date by paying $20,000 of principal and $6,000 of accrued interest on November 29, 2017 to December 22, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . Debt - Modification and Extinguishment” On August 8, 2016, the Company issued a convertible note to a related individual for $30,000 that matures on October 8, 2016. The note bears interest rate of 0% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share, as part of the note the company issued options to purchase 21,000 shares of 144 restricted common stock at an exercise price $0.50 for a two-year period. The note was amended on November 15, 2016 to extend the maturity date to January 31, 2017 and again on May 10, 2017 to extend the maturity date to October 1, 2017. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in an extinguishment of the debt and not modification of the debt resulting in a gain on extinguishment of debt of $3,818. The note was amended again on August 28, 2018 to extend the maturity date to June 30, 2019. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On September 27, 2017, the Company issued a convertible note to an unrelated party for $5,000 that matures on March 31, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $2,995. The note was amended on August 28, 2018 to extend the maturity date to June 30, 2019. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On September 28, 2017, the Company issued a note to an unrelated party for $18,000 that matures on November 28, 2017. The note bears 0% interest per annum. The note was amended on August 28, 2018 to extend the maturity date to June 30, 2019. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On December 30, 2017, the Company issued a note to a related party for $25,000 that matures on December 30, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. . The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On July 14, 2014, the Company issued a convertible note to an unrelated individual for $7,000 that matures on October 14, 2014. The note bears interest rate of 6% per annum and is convertible into shares of the Company’s Common stock at $0.10 per share. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On February 15, 2016, the Company issued a convertible note to an unrelated individual for $25,000 that matures on February 15, 2017. The note was amended subsequently in September 28, 2017 to extend the maturity date to October 15, 2017. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On July 26, 2016, the Company issued a convertible note to an unrelated individual for $50,000 that matures on September 26, 2016. The note bears interest rate of 0% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share, as part of the note the company issued warrants to purchase 35,000 shares of 144 restricted common stock at an exercise price $0.30 for a two-year period. The note was amended on September 28, 2017 to extend the maturity date to January 15, 2018, as additional consideration the Company issued 15,000 shares of common stock valued at $2,399. The note was amended on September 20, 2018 to extend the maturity date to October 15, 2018, The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” On March 7, 2016, the Company issued a convertible note to an unrelated individual for $100,000 that matures on March 7, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share. The Company valued a BCF related to the note valued at $24,269 and debt discount related to the 10,000 shares of common stock issued with the note at a relative fair value of $4,569. The note was amended again on September 28, 2017 to extend the maturity date to January 15, 2018, as additional consideration the Company issued 25,000 shares of common stock valued at $3,998. The note was amended again on September 20, 2018 to extend the maturity date to October 15, 2018. The Company evaluated amendment under ASC 470-50, “ Debt - Modification and Extinguishment” |
1. ORGANIZATION AND SUMMARY O_2
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
Description of Business | AfterMaster, Inc., formerly Studio One Media, Inc. (the “Company” or “AfterMaster”) was originally organized in Delaware on May 12, 1988, as Dimensional Visions Group, Ltd. The name was changed on January 15, 1998 to Dimensional Visions Incorporated. On February 8, 2006, it changed its name to Elevation Media, Inc., and on March 28, 2006 the Company’s name was changed to Studio One Media, Inc. as part of its overall plan to implement its revised business plan. In April 2006, the Company entered into an agreement to purchase MyStudio HD Recording Studios, Inc. (formerly known as Studio One Entertainment, Inc.), a privately-held Scottsdale, Arizona-based company that designed and manufactured the recording studios currently in use by the Company (the “MyStudio Agreement”). |
Accounting Basis | The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The Company has elected a June 30 fiscal year end. |
Principles of Consolidation | The consolidated financial statements include the accounts of AfterMaster and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. |
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. |
Notes and Other Receivables | Notes and other receivables are stated at amounts management expects to collect. An allowance for doubtful accounts is provided for uncollectible receivables based upon management's evaluation of outstanding accounts receivable at each reporting period considering historical experience and customer credit quality and delinquency status. Delinquency status is determined by contractual terms. Bad debts are written off against the allowance when identified. Allowance for doubtful accounts were $0 for the years ended June 30, 2018 and 2017. |
Cash and Cash Equivalents | Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. As of June 30, 2018 and 2017, the Company’s cash balances were within the FDIC insurance coverage limits. |
Fair Values, Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures | The fair value measurements and disclosure guidance defines fair value and establishes a framework for measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with this guidance, the Company has categorized its recurring basis financial assets and liabilities into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The levels of the fair value hierarchy are described below: ● Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset, either directly or indirectly, for substantially the full term of the asset. Level 2 inputs include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active and inputs other than quoted prices that are observable in the marketplace for the asset. The observable inputs are used in valuation models to calculate the fair value for the asset. ● Level 3 inputs are unobservable but are significant to the fair value measurement for the asset, and include situations where there is little, if any, market activity for the asset. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset. A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. |
Disclosure for Non-Financial Asssets Measured at Fair Value on a Non-Recurring Basis | The Company’s financial instruments mainly consist of cash, receivables, current assets, accounts payable and accrued expenses and debt. The carrying amounts of its cash, receivables, current asserts, accounts payable, accrued expenses and current debt approximates fair value due to the short-term nature of these instruments. |
Concentration of Risk | Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions. For the years ended June 30, 2018 and 2017 there was no customer that accounted for a material portion of total revenues. |
Property and Equipment | Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment: Description Useful Lives Office Equipment and Computers 5 years Computer Software 5 years Furniture and Office Equipment 5 years Vehicles 5 years Leasehold Improvements Shorter of Useful Life or Lease Term Studios 5 years Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment are capitalized, while expenditures that do not, such as repairs and maintenance, are expensed as incurred. |
Intangible Assets | Intangible assets consist of intellectual property, website costs, video backgrounds, and patterns and molds. The Company’s intellectual property includes purchased patents and trademarks as well as other proprietary technologies. Website costs are costs incurred to develop the Company’s website. Video backgrounds are the costs incurred to develop video backgrounds for use in the Company’s recording studios. Patterns and molds are for the design and construction of the studios. The Company amortizes intangible assets over the following useful lives: Description Weighted-Average Amortization Period Intellectual Property 5 years Website Costs 5 years Video Backgrounds 5 years Patterns and Molds 5 years |
Valuation of Long-Lived Assets | Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses both an estimate of undiscounted future net cash flows of the assets over the remaining useful lives and a replacement cost method when determining their fair values. If the carrying values of the assets exceed the fair value of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests. |
Revenue Recognition | The Company applies the provisions of FASB ASC 605, Revenue Recognition in Financial Statements The Company's revenues are generated from AfterMaster products and services, AfterMaster Pro, sessions revenue, and remastering. Revenues related to AfterMaster Pro sells through consumer retail distribution channels and through our website. For sales through consumer retail distribution channels, revenue recognition occurs when title and risk of loss have transferred to the customer which usually occurs upon shipment to the customers. We established allowances for expected product returns and these allowances are recorded as a direct reduction to revenue. Return allowances are based on our historical experience. Revenues related to sessions and remastering are recognized when the event occurred. |
Cost of Revenues | The Company’s cost of revenues includes studio lease expense, employee costs, and other nominal amounts. Costs associated with products are recognized at the time of the sale. Costs incurred to provide services are recognized as cost of sales as incurred. Depreciation is not included within cost of revenues. |
Research and Development | The Company follows the policy of expensing its research and development costs in the period in which they are incurred in accordance with ASC 730, Accounting for Research and Development Costs |
Advertising Expenses | The Company expenses advertising costs in the period in which they are incurred. Advertising expenses were $258,257 and $45,183 for the years ended June 30, 2018 and 2017. |
Share-Based Compensation | The Company follows the provisions of ASC 718, Share-Based Payment, The Company also follows the provisions of FASB ASC 505-50, “Equity-Based Payments to Non-Employees,” which addresses the accounting and reporting for both the issuer (that is, the purchaser or grantor) and recipient (that is, the goods or service provider or grantee) for a subset of share-based payment transactions. ASC 505-50 requires equity instruments issued to non-employees for goods or services are accounted for at fair value and are marked to market until service is complete or a performance commitment date is reached, whichever is earlier. |
Convertible Securities and Derivatives | The Company estimates the fair values of the debt and warrants, and allocates the proceeds pro rata based on these values. The allocation of proceeds to the warrants results in the debt instrument being recorded at a discount from the face amount of the debt and the value allocated to the warrant is recorded to additional paid-in capital. When the convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds from the convertible host instruments are first allocated to the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, resulting in those instruments being recorded at a discount from their face value. |
Derivative Liabilities | The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares. Using this sequencing policy, the Company used this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to July 5, 2016 until the note was converted on the same day were derivative liabilities. The Company again used this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to August 19, 2016 until the note was converted on August 22, 2016 were derivative liabilities. The Company entered into multiple amendments to a note payable to extend the maturity date (the Amendments). The Company agreed to additional $30,000 extension fees which were converted at a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. This creates a situation where the Company no longer has shares enough available to “cover” all potential equity issuance obligations during the period of issuance until conversion. On February 3, 2017, the company entered into a note payable with an unrelated party at a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. Additionally, the note contains a ratchet provision. The Company determined under ASC 815, that the embedded conversion feature (if offering of common stock is at no consideration or at a price that is lower than the effective conversion price on the date shares are offered for sale, then a ratchet down of effective exercise price to price per share offered for common stock would be used to determine additional shares to be issued). The Company has determined that this ratchet provision indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability. Accordingly, all convertible instruments issued after February 3, 2017 are considered derivatives according to the Company’s sequencing policy. The Company values these convertible notes payable using the multinomial lattice method that values the derivative liability within the notes based on a probability weighted discounted cash flow model. The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations. |
Loss Per Share | Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period. The losses attributable to Common shareholders was increased for accrued and deemed dividends on Preferred Stock during the years ended June 30, 2018 and 2017 of $225,468 and $169,850, respectively.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Diluted earnings per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended June 30, 2018 and 2017, all of the Company’s potentially dilutive securities (warrants, options, convertible preferred stock, and convertible debt) were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive Common Shares that were excluded were 92,109,067 and 22,614,408 at June 30, 2018 and 2017, respectively.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>" id="sjs-B23"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period. The losses attributable to Common shareholders was increased for accrued and deemed dividends on Preferred Stock during the years ended June 30, 2018 and 2017 of $225,468 and $169,850, respectively.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Diluted earnings per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended June 30, 2018 and 2017, all of the Company’s potentially dilutive securities (warrants, options, convertible preferred stock, and convertible debt) were excluded from the computation of diluted earnings per share as they were anti-dilutive.  The total number of potentially dilutive Common Shares that were excluded were 92,109,067 and 22,614,408 at June 30, 2018 and 2017, respectively.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> |
Income Taxes | The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. ASC 740, Accounting for Uncertainty in Income Taxes The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest and penalties since its inception. The Company files income tax returns in the U.S. federal tax jurisdiction and various state tax jurisdictions. The tax years for 2012 to 2018 remain open for federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax years. |
Investments | Our available for securities are considered Level 1. Realized gains and losses on these securities are included in “Other income (expense) – net” in the consolidated statements of income using the specific identification method. Unrealized gains and losses, on available-for-sale securities are recorded in accumulated other comprehensive income (accumulated OCI). Unrealized losses that are considered other than temporary are recorded in other income (expense) – net, with the corresponding reduction to the carrying basis of the investment. |
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. |
3. PROPERTY AND EQUIPMENT (Tabl
3. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | 2018 2017 Furniture and Office Equipment $ 25,478 $ 51,390 Office Equipment and Computers 189,087 413,466 Studios 260,543 255,665 Vehicles 31,399 60,524 Leasehold Improvements 60,084 66,658 Computer Software 66 56,232 Accumulated Depreciation (423,297 ) (637,895 ) Net Property and Equipment $ 143,360 $ 266,040 |
4. INTANGIBLE ASSETS (Tables)
4. INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | 2018 2017 Patterns and Molds $ - $ 18,915 Website Costs - 240,415 Video Backgrounds - 16,172 Accumulated Amortization - (173,259 ) Intangible Assets, Net $ - $ 102,243 |
Schedule of Amortization Expense | Year Amortization 2019 $ - 2020 - 2021 - 2022 - 2023 - Total $ - |
5. SECURITIES AVAILABLE-FOR-S_2
5. SECURITIES AVAILABLE-FOR-SALE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Securities Availableforsale Tables Abstract | |
Available-for-sale securities | June 30, 2018 Amortized cost Gross unrealized gains Gross unrealized losses Gross realized gains Gross realized losses Fair value Equity securities $ 123,600 $ - $ - $ - $ (123,600 ) $ - June 30, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Gross realized gains Gross realized losses Fair value Equity securities $ 63,600 $ 60,000 $ - $ - $ - $ 123,600 |
6. INVENTORIES (Tables)
6. INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Inventories Tables Abstract | |
Inventory | June 30, 2018 June 30, 2017 Components $ - $ 159,017 Finished Goods - - Allowance / Reserve - (54,126 ) Totals $ - $ 104,891 |
7. NOTES PAYABLE (Tables)
7. NOTES PAYABLE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable-Related Parties | Convertible Notes Payable – Related Parties June 30, June 30, 2018 2017 Various term notes with total face value of $3,925,000 issued from February 2010 to April 2013, interest rates range from 10% to 15%, net of unamortized discount of $0 as of June 30, 2018 and June 30, 2017, of which $3,925,000 was extinguished. $ - $ 3,925,000 $30,000 face value, issued in August 2016, interest rate of 0%, matures June 2019, a gain on extinguishment of debt was recorded totaling $3,818 net unamortized discount of $0 as of June 30, 2018 and June 30, 2017. 30,000 26,182 $5,000 face value, issued in September 2017, interest rate of 0%, matures March 2018, net amortized discount of $607 as of June 30, 2018. 4,393 - $10,000 face value, issued in November 2017, interest rate of 0%, matures November 2018, net amortized discount of $0 as of June 30, 2018. 10,000 - $25,000 face value, issued in December 2017, interest rate of 0%, matures December 2018, net amortized discount of $1,890 as of June 30, 2018. 23,110 - $10,000 face value, issued in January 2018, interest rate of 0%, matures January 2019, net unamortized discount of $534 as of June 30, 2018. 9,466 - $15,000 face value, issued in January 2018, interest rate of 0%, matures January 2019, net unamortized discount of $1,391 as of June 30, 2018. 13,609 - $24,500 face value, issued in February 2018, interest rate of 0%, matures February 2019, net unamortized discount of $0 as of June 30, 2018. 24,500 - Total convertible notes payable – related parties 115,078 3,951,182 Less current portion 115,078 3,951,182 Convertible notes payable – related parties, long-term $ - $ - |
Schedule of Convertible Notes Payable-Non-Related Parties | Convertible Notes Payable - Non-Related Parties June 30, June 30, 2018 2017 $7,000 face value, issued in July 2014, interest rate of 6%, matures October 2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. $ 7,000 $ 7,000 $600,000 face value, issued in November 2015, interest rate of 0%, an OID of $190,000, matures January 2018, net unamortized discount of $0 of June 30, 2018 and June 30, 2017, respectively, of which $335,000 has been paid and $355,000 was transferred to a new note in April 2018. - 430,000 $100,000 face value, issued in February 2016, interest rate of 10%, matures March 2018, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 100,000 100,000 $25,000 face value, issued in February 2016, interest rate of 10%, matures February 2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 25,000 25,000 $100,000 face value, issued in March 2016, interest rate of 10%, matures June2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 100,000 100,000 $10,000 face value, issued in March 2016, interest rate of 10%, matures March 2018, net unamortized discount $0 of June 30, 2018 and June 30, 2017, respectively. 10,000 10,000 $50,000 face value, issued in July 2016, interest rate of 0%, matures October 2017, net unamortized discount of $0 of June 30, 2018 and June 30, 2017, respectively. 50,000 50,000 $50,000 face value, issued in August 2016, interest rate of 0%, matures September which was amended to January 2018, net unamortized discount of $1,403 and $5,418 of June 30, 2018 and June 30, 2017, respectively. 50,000 44,582 $1,000,000 face value, issued in September 2016, interest rate of 10%, matures June 2017, net unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively. 1,000,000 1,000,000 $258,000 face value, issued in February 2017, interest rate of 12%, matures August 2017, net amortized discount of $0 and $48,464 as of June 30, 2018 and June 30, 2017, respectively, of which $258,000 has been paid. - 209,536 $149,000 face value, issued in February 2017, interest rate of 10%, matures November 2017 which was amended to June 2018, net amortized discount of $0 and $59,740 as of June 30, 2018 and June 30, 2017, respectively, of which $39,660 was converted and $30,000 has been paid. 79,340 89,260 $224,000 face value, issued in February 2017, interest rate of 10%, matures November 2017 which was amended to June 2018, net amortized discount of $32,452 and $119,795 as of June 30, 2018 and June 30, 2017, respectively, of which $75,492 has been converted and $50,000 has been paid. 98,508 104,205 $265,000 face value, issued in May 2017, interest rate of 10%, matures February 2018, net amortized discount of $45,267 and $218,790 as of June 30, 2018 and June 30, 2017, respectively, of which $64,588 was converted. 200,412 46,210 $55,000 face value, issued in June 2017, interest rate of 10%, matures January 2018, with additional fees of $20,000 net amortized discount of $3,341 and $50,631 as of June 30, 2018 and June 30, 2017, respectively, of which $75,000 was converted. - 4,369 $100,000 face value, issued in June 2017, interest rate of 7%, matures June 2018, net amortized discount of $0 and $52,317 as of June 30, 2018 and June 30, 2017, respectively. 100,000 47,683 $78,000 face value, issued in July 2017, interest rate of 12%, matures May 2018, net amortized discount of $0 as of June 30, 2018, of which $72,000 was converted. 6,000 - $50,000 face value, issued in August 2017, interest rate of 0%, matures October 2017, net amortized discount of $0 as of June 30, 2018, of which $34,000 has been converted and $16,000 was transferred to a new note. - - $60,500 face value, issued in August 2017, interest rate of 12%, matures August 2018, net amortized discount of $0 as of June 30, 2018, of which $60,500 has been paid. - - $10,000 face value, issued in August 2017, interest rate of 0%, matures August 2018, net amortized discount of $729 as of June 30, 2018. 9,271 - $82,250 face value, issued in August 2017, interest rate of 12%, matures May 2018, net amortized discount of $0 as of June 30, 2018, of which $35,000 has been converted and $47,250 was transferred to a new note. - - $53,000 face value, issued in August 2017, interest rate of 12%, matures June 2018, net amortized discount of 0 as of June 30, 2018. 53,000 - $65,000 face value, issued in September 2017, interest rate of 12%, matures March 2018, net amortized discount of $0 as of June 30, 2018, of which $65,000 has been paid. - - $10,000 face value, issued in September 2017, interest rate of 10%, matures September 2018, net amortized discount of $4,400 as of June 30, 2018. 5,600 - $50,000 face value, issued in September 2017, interest rate of 0%, matures November 2017, net amortized discount of $0 as of June 30, 2018, of which $50,000 was transferred to a new note. - - $110,000 face value, issued in October 2017, interest rate of 10%, matures July 2018, net amortized discount of $6,447 as of June 30, 2018, of which $110,000 has been paid. - - $100,000 face value, issued in October 2017, interest rate of 10%, matures October 2018, net amortized discount of $22,333 as of June 30, 2018. 77,667 - $115,000 face value, issued in November 2017, interest rate of 10%, matures August 2018, net amortized discount of $50,584 as of June 30, 2018. 64,416 - $50,000 face value, issued in November 2017, interest rate of 10%, matures January 2018, net amortized discount of $0 as of June 30, 2018. 50,000 - $66,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $17,085 as of June 30, 2018. 48,915 - $100,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $39,452 as of June 30, 2018. 60,548 - $5,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $1,932 as of June 30, 2018. 3,068 - $53,000 face value, issued in November 2017, interest rate of 12%, matures July 2018, net amortized discount of $4,649 as of June 30, 2018, of which $34,530 was converted. 13,821 - $100,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $20,137 as of June 30, 2018. 79,863 - $20,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $4,689 as of June 30, 2018. 15,311 - $75,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $23,180 as of June 30, 2018. 51,820 - $20,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $6,181 as of June 30, 2018. 13,819 - $115,000 face value, issued in January 2018, interest rate of 10%, matures October 2018, net amortized discount of $42,967 as of June 30, 2018. 72,033 - $53,000 face value, issued in January 2018, interest rate of 12%, matures November 2018, net amortized discount of $0 as of June 30, 2018, of which $53,000 was transferred to a new note in June 2018. - - $20,000 face value, issued in February 2018, interest rate of 10%, matures February 2019, net amortized discount of $4,847 as of June 30, 2018. 15,153 - $75,075 face value, issued in February 2018, interest rate of 10%, matures November 2018, net amortized discount of $0 as of June 30, 2018. 75,075 - $6,000 face value, issued in February 2018, interest rate of 10%, matures April 2018, net amortized discount of $0 as of June 30, 2018. 6,000 - $10,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $2,267 as of June 30, 2018. 7,733 - $15,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $2,780 as of June 30, 2018. 12,220 - $100,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $21,696 as of June 30, 2018. 78,304 - $26,000 face value, issued from an assignment in March 2018, interest rate of 0%, matures May 2018, net amortized discount of $0 as of June 30, 2018. 26,000 - $53,102 face value, issued from an assignment in March 2018, interest rate of 0%, matures May 2018, net amortized discount of $0 as of June 30, 2018, of which $53,102 has been converted. - - $150,000 face value, issued in April 2018, interest rate of 12%, matures January 2019, net amortized discount of $105,818 as of June 30, 2018. 44,182 - $400,000 face value, issued from an assignment in April 2018 of $355,000 in principal and an OID of $45,000, interest rate of 10%, matures April 2019, net amortized discount of $36,000 as of June 30, 2018, of which $223,198 has been converted. 140,802 - $15,000 face value, issued in April 2018, interest rate of 10%, matures April 2019, net amortized discount of $12,000 as of June 30, 2018, of which $223,198 has been converted. 3,000 - $150,086 face value, issued in May 2018, interest rate of 12%, matures January 2020, net amortized discount of $0 as of June 30, 2018, of which $12,000 has been paid. 21,564 - $135,700 face value, issued in May 2018, interest rate of 12%, matures May 2019, net amortized discount of $0 as of June 30, 2018, of which $12,000 has been paid. 12,201 - $15,651 face value, issued in June 2018, interest rate of 12%, matures June 2019, net amortized discount of $0 as of June 30, 2018. 15,651 - $55,718 face value, issued from an assignment in June 2018, interest rate of 12%, matures October 2018, net amortized discount of $0 as of June 30, 2018. 55,718 - $161,000 face value, issued in June 2018, interest rate of 12%, matures June 2018, net amortized discount of $160,558 as of June 30, 2018. 441 - Total convertible notes payable – non-related parties 2,959,456 2,267,845 Less current portion 2, 959,456 2,267,845 Convertible notes payable – non-related parties, long-term $ - $ - |
Schedule of Non-Convertible Notes Payable-Related Parties | June 30, June 30, 2018 2017 Various term notes with total face value of $627,500 issued from April 11 to June 17, interest rates range from 0% to 15%, net of unamortized discount of $0 as of June 30, 2018 and June 30, 2017, respectively, of which $45,000 has been paid. $ 25,000 $ 610,000 $18,000 face value, issued in September 2017, interest rate of 0%, matures June 2019. 18,000 - $15,000 face value, issued in October 2017, interest rate of 0%, matures October 2018. 15,000 - $35,000 face value, issued in December 2017, interest rate of 0%, matures December 2018, of which $35,000 has been paid. - - $7,500 face value, issued in March 2018, interest rate of 0%, matures March 2019, of which $7,500 has been paid. - - $10,000 face value, issued in March 2018, interest rate of 0%, matures March 2019, of which $10,000 has been paid. - - $12,500 face value, issued in May 2018, interest rate of 0%, matures May 2019, of which $12,500 has been paid. - - $3,500 face value, issued in May 2018, interest rate of 0%, matures May 2019, of which $3,500 has been paid. - - $10,000 face value, issued in June 2018, interest rate of 0%, matures June 2019. 10,000 - $8,000 face value, issued in June 2018, interest rate of 0%, matures June 2019. 8,000 - Total notes payable – related parties 76,000 610,000 Less current portion 76,000 610,000 Notes payable - related parties, long term $ - $ - |
Schedule of Non-Convertible Notes Payable-Non-Related Parties | Notes Payable – Non-Related Parties June 30, June 30, 2018 2017 Various term notes with total face value of $40,488 due upon demand, interest rates range from 0% to 14%, of which $40,488 have been extinguished $ - $ 40,488 $52,000 face value, issued in August 2017, interest rate of 0%, matures October 2017 net of unamortized discount of $0 as of June 30, 2018. 52,000 - $52,000 face value, issued in August 2017, interest rate of 0%, matures October 2017 net of unamortized discount of $4,901 as of June 30, 2018. 47,099 - $81,000 face value, issued in September 2017, interest rate of 8% per month, matures March 2018 net of unamortized discount of $0 as of June 30, 2018. 81,000 - $255,000 face value, issued in October 2017, interest rate of 2.5% per month, matures February 2018 net of unamortized discount of $0 as of June 30, 2018, of which $255,000 has been paid. - - $50,000 face value, issued in November 2017, interest rate of 10%, matures March 2019, net amortized discount of $0 as of June 30, 2018. 50,000 - $225,000 face value, issued in March 2018, interest rate of 30%, matures March 2019 net of unamortized discount of $62,512 as of June 30, 2018. 162,488 - $260,000 face value, issued in June 2018, interest rate of 30%, matures July 2018 net of unamortized discount of $9,677 as of June 30, 2018. 250,323 - Total note payable – non-related parties 642,910 40,488 Less current portion 642,910 40,488 Notes payable – non-related parties, long-term $ - $ - |
8. CONVERTIBLE PREFERRED STOCK
8. CONVERTIBLE PREFERRED STOCK (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Convertible Preferred Stock | |
Schedule of Preferred Stock | Shares Shares Liquidation Allocated Outstanding Preference Series A Convertible Preferred 100,000 15,500 - Series A-1 Convertible Preferred 3,000,000 2,585,000 3,581,964 Series B Convertible Preferred 200,000 3,500 35,000 Series C Convertible Preferred 1,000,000 13,404 - Series D Convertible Preferred 375,000 130,000 - Series E Convertible Preferred 1,000,000 275,000 - Series P Convertible Preferred 600,000 86,640 - Series S Convertible Preferred 50,000 - - Total Preferred Stock 6,325,000 3,109,044 $ 3,616,964 |
10. STOCK PURCHASE OPTIONS AN_2
10. STOCK PURCHASE OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
Schedule of Options | Date Issued Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Balance June 30, 2017 525,000 $ 0.18 $ 0.16 4.81 $ 93,750 Granted - - - - - Exercised - - - - - Cancelled/Expired - - - - - Outstanding as of June 30, 2018 525,000 $ 0.05 $ 0.16 4.06 $ 93,750 The following table summarizes the changes in options outstanding of the Company during the fiscal year ended June 30, 2017 Date Issued Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Balance June 30, 2016 25,000 $ 0.15 $ 0.24 2.00 $ 3,750 Granted 500,000 0.18 0.16 5.00 90,000 Exercised - - - - - Cancelled/Expired - - - - - Outstanding as of June 30, 2017 525,000 $ 0.18 $ 0.16 4.81 $ 93,750 |
Schedule of Assumptions Used to Estimate Fair Value | June 30, 2018 June 30, 2017 Expected volatility 105-304% 92-126% Expected dividends 0% 0% Expected term 0-5 Years 0-5 Years Risk-free interest rate 0.96-2.73% 0.74-1.89% |
Schedule of Warrants | Number of Warrants Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Outstanding as of June 30, 2017 39,927,097 $ 0.38 $ 0.45 3.38 $ 15,144,835 Granted 6,675,000 0.08 0.05 4.38 534,250 Exercised - - - - - Cancelled/Expired (4,842,500 ) 0.49 - - (2,388,063 ) Outstanding as of June 30, 2018 41,759,597 $ 0.32 $ 0.40 3.01 $ 13,291,022 Number of Warrants Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Outstanding as of June 30, 2016 35,034,550 $ 0.36 $ 0.45 4.31 $ 12,767,108 Granted 10,424,998 0.46 0.18 2.07 4,404,232 Exercised (3,020,750 ) - - - - Cancelled/Expired (2,511,701 ) 0.36 - - (2,026,505 ) Outstanding as of June 30, 2017 39,927,097 $ 0.38 $ 0.45 3.38 $ 15,144,835 |
11. INCOME TAXES (Tables)
11. INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax (benefit) Provision | As of June 30, June 30, 2018 2017 Current Federal $ - $ - State - - Total Current - - Deferred Federal - - State - - Total Deferred - - Income tax provision $ - $ - |
Schedule of reconciliation of the Expected Income Tax benefit (provision) | As of June 30, June 30, 2018 2017 Income tax benefit based on federal statutory rate $ (11,780,000 ) $ (4,914,000 ) State income tax benefit, net of federal income tax (462,000 ) (475,000 ) Change in deferred tax valuation allowance 12,242,000 5,389,000 Other, net - - Income tax provision $ - $ - |
Schedule of Deferred Tax Asset and Liabilities | As of June 30, June 30, 2018 2017 Deferred tax assets: Debt extinguishment $ - $ - Impairment of fixed assets 74,991 - Domestic net operating loss carryforwards 10,286,000 11,671,000 Total gross deferred tax assets 10,360,991 11,671,000 Less valuation allowance on deferred tax assets (10,360,991 ) (11,671,000 ) Net deferred tax assets - - Deferred tax liabilities: Deferred costs - - Total deferred tax liabilities - - Net deferred taxes $ - $ - |
13. FAIR VALUE MEASUREMENTS (Ta
13. FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | Liabilities measured at fair value on a recurring basis at June 30, 2018, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 2,815,520 $ 2,815,520 Securities available-for-sale $ - $ - $ - $ - Liabilities measured at fair value on a recurring basis at June 30, 2017, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 2,145,065 $ 2,145,065 Securities available-for-sale $ 123,600 $ - $ - $ 123,600 |
14. COMMITMENTS AND CONTINGEN_2
14. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Annual operating lease obligations | Year Lease Payments 2019 141,464 2020 131,475 2021 86,781 2022 - 2023 - Total $ 359,720 |
1. ORGANIZATION AND SUMMARY O_3
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Impairment of fixed assets | ||
Research and development expenses | $ 15,771 | $ 221,437 |
Advertising expenses | $ 258,257 | $ 45,183 |
Anti-dilutive securities excluded from the computation of diluted earnings per share | 92,109,067 | 22,614,408 |
3. PROPERTY AND EQUIPMENT (Deta
3. PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Property And Equipment Details | ||
Furniture and Office Equipment | $ 25,478 | $ 51,390 |
Office Equipment and Computers | 189,087 | 413,466 |
Studios | 260,543 | 255,665 |
Vehicles | 31,399 | 60,524 |
Leasehold Improvements | 60,084 | 66,658 |
Computer Software | 66 | 56,232 |
Accumulated Depreciation | (423,297) | (637,894) |
Property and Equipment, net | $ 143,360 | $ 266,040 |
3. PROPERTY AND EQUIPMENT (De_2
3. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property And Equipment Details Narrative | ||
Depreciation Expense | $ 128,105 | $ 149,887 |
Impaired assets | $ 74,991 | $ 27,926 |
4. INTANGIBLE ASSETS (Details)
4. INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Intangible Assets Details | ||
Patterns and Molds | $ 0 | $ 18,915 |
Website Costs | 0 | 240,415 |
Video Backgrounds | 0 | 16,172 |
Accumulated Amortization | 0 | (173,259) |
Intangible Assets, Net | $ 0 | $ 102,243 |
4. INTANGIBLE ASSETS (Details 1
4. INTANGIBLE ASSETS (Details 1) | Jun. 30, 2018USD ($) |
Intangible Assets Details 1 | |
2,019 | $ 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Total | $ 0 |
4. INTANGIBLE ASSETS (Details N
4. INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Intangible Assets Details Narrative | ||
Amortization expense | $ 30,402 | $ 28,742 |
5. SECURITIES AVAILABLE-FOR-S_3
5. SECURITIES AVAILABLE-FOR-SALE (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Fair value | $ 0 | $ 123,600 |
Equity Securities [Member] | ||
Amortized cost | 123,600 | 63,600 |
Gross unrealized gains | 0 | 60,000 |
Gross unrealized losses | 0 | 0 |
Gross realized gains | 0 | 0 |
Gross realized losses | (123,600) | 0 |
Fair value | $ 0 | $ 123,600 |
6. INVENTORIES (Details)
6. INVENTORIES (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Inventories Details Abstract | ||
Components | $ 0 | $ 159,017 |
Finished Goods | 0 | 0 |
Allowance/Reserve | 0 | (54,126) |
Total Inventories | $ 0 | $ 104,891 |
7. NOTES PAYABLE (Details)
7. NOTES PAYABLE (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Notes Payable Details 3Abstract | ||
Total convertible notes payable - related parties | $ 115,078 | $ 3,951,182 |
Less current portion | 115,078 | 3,951,182 |
Convertible related party notes payable, net of current portion | 0 | 0 |
Total convertible notes payable - non-related parties | 2,959,456 | 2,267,845 |
Less current portion | 2,959,456 | 2,267,845 |
Convertible notes payable - non-related parties, long-term | 0 | 0 |
Total non-convertible notes payable - related parties | 76,000 | 610,000 |
Less current portion | 76,000 | 610,000 |
Non-convertible notes payable - related parties, long term | 0 | 0 |
Total non-convertible note payable - non-related parties | 642,910 | 40,488 |
Less current portion | 642,910 | 40,488 |
Non-convertible notes payable - non-related parties, long-term | $ 0 | $ 0 |
8. CONVERTIBLE PREFERRED STOC_2
8. CONVERTIBLE PREFERRED STOCK (Details) | Jun. 30, 2018shares |
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 | 2,585,000 |
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 | 0 |
Total Preferred Stock | 3,109,044 |
Liquidation Preference | |
Series A Convertible Preferred | 0 |
Series A-1 Convertible Preferred | 3,581,964 |
Series B Convertible Preferred | 35,000 |
Series C Convertible Preferred | 0 |
Series D Convertible Preferred | 0 |
Series E Convertible Preferred | 0 |
Series P Convertible Preferred | 0 |
Series S Convertible Preferred | 0 |
Total Preferred Stock | 3,616,964 |
8. CONVERTIBLE PREFERRED STOC_3
8. CONVERTIBLE PREFERRED STOCK (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Equity [Abstract] | ||
Dividends on preferred stock | $ 225,468 | $ 169,850 |
Dividends in arrears | $ 1,134,406 |
10. STOCK PURCHASE OPTIONS AN_3
10. STOCK PURCHASE OPTIONS AND WARRANTS (Details) - Stock Options - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Number of Options/Warrants Outstanding, Beginning | 525,000 | 25,000 |
Number of Options/Warrants Granted | 0 | 500,000 |
Number of Options/Warrants Exercised | 0 | 0 |
Number of Options/Warrants Canceled/Expired | 0 | 0 |
Number of Options/Warrants Outstanding, Ending | 525,000 | 525,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.18 | $ 0.15 |
Weighted Average Exercise Price Granted | 0 | 0.18 |
Weighted Average Exercise Price Exercised | 0 | 0 |
Weighted Average Exercise Price Canceled/Expired | 0 | 0 |
Weighted Average Exercise Price Outstanding, Ending | 0.05 | 0.18 |
Weighted Average Grant Date Fair Value Outstanding beginning | 0.16 | 0.24 |
Weighted Average Grant Date Fair Value Outstanding, granted | 0 | 0.16 |
Weighted Average Grant Date Fair Value Outstanding, exercised | 0 | 0 |
Weighted Average Grant Date Fair Value Outstanding, cancelled | 0 | 0 |
Weighted Average Grant Date Fair Value Outstanding, ending | $ 0.16 | $ 0.16 |
Expiration Date outstanding, beginning | 4 years 9 months 22 days | 2 years |
Expiration Date, granted | 5 years | |
Expiration Date, ending | 4 years 22 days | 4 years 9 months 18 days |
Value if Exercised, Beginning | $ 93,750 | $ 3,750 |
Value if Exercised, Granted | 90,000 | |
Value if Exercised | 0 | |
Value if Exercised, Cancelled | 0 | |
Value if Exercised, Ending | $ 93,750 | $ 93,750 |
10. STOCK PURCHASE OPTIONS AN_4
10. STOCK PURCHASE OPTIONS AND WARRANTS (Details 1) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Warrants and common shares issued for interest expense, Shares | ||
Expected volatility, minimum | 105.00% | 92.00% |
Expected volatility, maximum | 304.00% | 126.00% |
Expected dividends | 0.00% | 0.00% |
Expected term, minimum | 0 years | 0 years |
Expected term, maximum | 5 years | 5 years |
Risk-free interest rate, minimum | 0.96% | 0.74% |
Risk-free interest rate, maximum | 2.73% | 1.89% |
10. STOCK PURCHASE OPTIONS AN_5
10. STOCK PURCHASE OPTIONS AND WARRANTS (Details 2) - Warrants - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Number of Options/Warrants Outstanding, Beginning | 39,927,097 | 35,034,550 |
Number of Options/Warrants Granted | 6,675,000 | 10,424,998 |
Number of Options/Warrants Exercised | 0 | (3,020,750) |
Number of Options/Warrants Canceled/Expired | (4,842,500) | (2,511,701) |
Number of Options/Warrants Outstanding, Ending | 41,759,597 | 39,927,097 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.38 | $ 0.36 |
Weighted Average Exercise Price Granted | 0.08 | 0.46 |
Weighted Average Exercise Price Exercised | 0 | 0 |
Weighted Average Exercise Price Canceled/Expired | 0.49 | 0.36 |
Weighted Average Exercise Price Outstanding, Ending | 0.32 | 0.38 |
Weighted Average Grant Date Fair Value Outstanding beginning | 0.45 | 0.45 |
Weighted Average Grant Date Fair Value Outstanding, granted | 0.05 | 0.18 |
Weighted Average Grant Date Fair Value Outstanding, exercised | 0 | 0 |
Weighted Average Grant Date Fair Value Outstanding, cancelled | 0 | 0 |
Weighted Average Grant Date Fair Value Outstanding, ending | $ 0.4 | $ 0.45 |
Expiration Date outstanding, beginning | 3 years 5 months 5 days | 4 years 3 months 22 days |
Expiration Date, granted | 4 years 5 months 5 days | 2 years 25 days |
Expiration Date, ending | 3 years 4 days | 3 years 5 months 5 days |
Value if Exercised, Beginning | $ 15,144,835 | $ 12,767,108 |
Value if Exercised, Granted | 534,250 | 6,701,566 |
Value if Exercised | 0 | 0 |
Value if Exercised, Cancelled | (2,388,063) | (4,323,838) |
Value if Exercised, Ending | $ 13,291,022 | $ 15,144,835 |
10. STOCK PURCHASE OPTIONS AN_6
10. STOCK PURCHASE OPTIONS AND WARRANTS (Details Narrative) - shares | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Notes to Financial Statements | ||
Stock purchase options issued | 0 | 500,000 |
11. INCOME TAXES (Details)
11. INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Current | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Total Current | 0 | 0 |
Deferred | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total Deferred | 0 | 0 |
Income tax provision | $ 0 | $ 0 |
11. INCOME TAXES (Details 1)
11. INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes Details 1 | ||
Income tax benefit based on federal statutory rate | $ (11,780,000) | $ 4,914,000 |
State income tax benefit, net of federal income tax | (462,000) | (475,000) |
Change in deferred tax valuation allowance | 12,242,000 | 5,389,000 |
Other, net | 0 | 0 |
Income tax provision | $ 0 | $ 0 |
11. INCOME TAXES (Details 2)
11. INCOME TAXES (Details 2) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred tax assets: | ||
Debt extinguishment | $ 0 | $ 0 |
Impairment of fixed assets | 74,991 | 0 |
Domestic net operating loss carryforwards | 10,286,000 | 11,671,000 |
Total gross deferred tax assets | 10,360,991 | 11,671,000 |
Less valuation allowance on deferred tax assets | (10,360,991) | (11,671,000) |
Net deferred tax assets | 0 | 0 |
Deferred tax liabilities: | ||
Deferred costs | 0 | 0 |
Total deferred tax liabilities | 0 | 0 |
Net deferred taxes | $ 0 | $ 0 |
13. FAIR VALUE MEASUREMENTS (De
13. FAIR VALUE MEASUREMENTS (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Fair value of derivatives | $ 2,815,520 | $ 2,145,065 |
Securities available for sale | 0 | 123,600 |
Level 1 [Member] | ||
Fair value of derivatives | 0 | 0 |
Securities available for sale | 0 | 123,600 |
Level 2 [Member] | ||
Fair value of derivatives | 0 | 0 |
Securities available for sale | 0 | 0 |
Level 3 [Member] | ||
Fair value of derivatives | 2,815,520 | 2,145,065 |
Securities available for sale | $ 0 | $ 0 |
14. COMMITMENTS AND CONTINGEN_3
14. COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2018USD ($) |
Commitments And Contingencies | |
2,019 | $ 141,464 |
2,020 | 131,475 |
2,021 | 86,781 |
2,022 | 0 |
2,023 | 0 |
Total | $ 359,720 |