Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2018 | Feb. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | AFTERMASTER, INC. | |
Entity Central Index Key | 836,809 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 217,346,210 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 133,376 | $ 390,191 |
Accounts receivable, net | 368,438 | 203,720 |
Prepaid expenses | 557,276 | 388,374 |
Total Current Assets | 1,059,090 | 982,285 |
Property and equipment, net | 96,465 | 143,360 |
Deposits | 24,217 | 25,117 |
Total Assets | 1,179,772 | 1,150,762 |
Current Liabilities | ||
Accounts payable and other accrued expenses | 1,729,543 | 1,592,257 |
Accrued interest | 634,894 | 351,189 |
Deferred revenue | 421 | 2,400 |
Accrued consulting services - related party | 118,585 | 70,621 |
Derivative liability | 3,490,023 | 2,815,520 |
Notes payable - related party | 188,500 | 76,000 |
Notes payable, net of discount of $30,999 and $77,090, respectively | 971,001 | 642,910 |
Convertible notes payable - related party, net of discount of $955 and $4,422, respectively | 118,545 | 115,078 |
Convertible notes payable, net of discount of $1,167,037 and $812,306, respectively | 3,585,517 | 2,959,457 |
Total Current Liabilities | 10,837,029 | 8,625,432 |
Total Liabilities | 10,837,029 | 8,625,432 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Common stock, authorized 250,000,000 shares, par value $0.001, 167,170,130 and 133,446,521 shares issued and outstanding, respectively | 167,466 | 133,742 |
Common stock to be issued, 37,926,080 and 28,841,381, respectively | 37,637 | 28,553 |
Additional paid in capital | 71,000,100 | 68,916,676 |
Accumulated deficit | (80,865,569) | (76,556,750) |
Total Stockholders' Deficit | (9,657,257) | (7,474,670) |
Total Liabilities and Stockholders' Deficit | 1,179,772 | 1,150,762 |
Series A Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 16 | 16 |
Series A-1 Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 2,585 | 2,585 |
Series B Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 3 | 3 |
Series C Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 13 | 13 |
Series D Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 130 | 130 |
Series E Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 275 | 275 |
Series H Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 0 | 0 |
Series P Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | 87 | 87 |
Series S Convertible Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Discount on notes payable | $ 30,999 | $ 77,090 |
Discount on related party convertible notes payable, current | 955 | 4,422 |
Discount on convertible notes payable | $ 1,167,037 | $ 812,306 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 250,000,000 | 250,000,000 |
Common stock, issued shares | 167,170,130 | 133,446,521 |
Common stock, outstanding shares | 167,170,130 | 133,446,521 |
Common stock to be issued | 37,926,080 | 28,841,381 |
Series A Convertible Preferred stock | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Convertible preferred stock, par value | $ 0.001 | $ 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 | $ 0.001 | $ 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 | $ 0.001 | $ 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 | $ 0.001 | $ 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 | $ 0.001 | $ 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 | $ 0.001 | $ 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 H Convertible Preferred stock | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Convertible preferred stock, par value | $ 0.001 | $ 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 |
Series P Convertible Preferred stock | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Convertible preferred stock, par value | $ 0.001 | $ 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 | $ 0.001 | $ 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 - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | ||||
AfterMaster Revenues | $ 126,959 | $ 118,904 | $ 272,372 | $ 239,619 |
Product Revenues | 281,105 | 126,162 | 670,214 | 220,843 |
Total Revenues | 408,064 | 245,066 | 942,586 | 460,462 |
COSTS AND EXPENSES | ||||
Cost of Revenues (Exclusive of Depreciation and Amortization) | 461,196 | 355,012 | 878,953 | 511,340 |
Depreciation and Amortization Expense | 23,428 | 44,538 | 46,895 | 83,507 |
Research and Development | 3,023 | 0 | 5,623 | 2,194 |
Advertising and Promotion Expense | 12,199 | 16,649 | 66,568 | 18,665 |
Legal and Professional Expense | 3,780 | 23,000 | 14,810 | 37,190 |
Non-Cash Consulting Expense | 238,731 | 15,597 | 303,847 | 92,035 |
General and Administrative Expenses | 786,347 | 818,042 | 1,635,534 | 1,605,032 |
Total Costs and Expenses | 1,528,704 | 1,272,838 | 2,952,230 | 2,349,963 |
Loss from Operations | (1,120,640) | (1,027,772) | (2,009,644) | (1,889,501) |
Other Income (Expense) | ||||
Interest Expense | (731,916) | (610,037) | (1,538,566) | (1,465,488) |
Derivative Expense | (312,256) | (202,813) | (1,355,346) | (340,279) |
Change in Fair Value of Derivative | (17,475) | 906,544 | 594,737 | 1,109,364 |
Gain on Extinguishment of Debt | 0 | 0 | 0 | 90,042 |
Total Other Income (Expense) | (1,061,647) | 93,694 | (2,299,175) | (606,361) |
Loss Before Income Taxes | (2,182,287) | (934,078) | (4,308,819) | (2,495,862) |
Income Tax Expense | 0 | 0 | 0 | 0 |
NET LOSS | (2,182,287) | (934,078) | (4,308,819) | (2,495,862) |
Preferred Stock Accretion and Dividends | (56,367) | (56,367) | (112,734) | (112,734) |
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ (2,238,654) | $ (990,445) | $ (4,421,553) | $ (2,608,596) |
Basic and diluted Loss Per Share of Common Stock | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.02) |
Weighted Average Number of Shares Outstanding | 166,333,423 | 124,080,046 | 154,374,704 | 121,773,934 |
Other Comprehensive Income, net of tax | ||||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ (2,238,654) | $ (990,445) | $ (4,421,553) | $ (2,608,596) |
Unrealized loss on available for sale securities | 0 | 10,860 | 0 | (64,800) |
COMPREHENSIVE LOSS | $ (2,238,654) | $ (979,585) | $ (4,421,533) | $ (2,673,396) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (4,308,819) | $ (2,495,862) |
Adjustments to reconcile net loss to cash from operating activities: | ||
Depreciation and amortization | 46,895 | 83,508 |
Share-based compensation - Common Stock | 125,676 | 187,623 |
Common stock issued for services | 303,874 | 0 |
Common stock issued as incentive with convertible debt | 0 | 16,897 |
Amortization of debt discount and issuance costs | 1,054,407 | 877,382 |
(Gain)/Loss on extinguishment of debt | 0 | (90,042) |
Derivative Expense | 1,355,346 | 340,279 |
(Gain)/Loss remeasurement of derivative | (594,737) | (1,109,364) |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | (164,718) | 27,389 |
Inventory | 0 | (235,498) |
Other assets | 62,989 | 96,135 |
Deposits | 900 | 0 |
Accounts payable and accrued expenses | 137,289 | 270,240 |
Payment made on accrued interest | (160,251) | 0 |
Accrued interest | 413,907 | 677,525 |
Deferred revenue | (1,979) | (83,871) |
Accrued consulting services - related party | 47,964 | 10,355 |
Net Cash Used in Operating Activities | (1,521,006) | (1,427,304) |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | 0 | (5,424) |
Purchase of intangible assets | 0 | (3,150) |
Net Cash Used in Investing Activities | 0 | (8,574) |
FINANCING ACTIVITIES | ||
Common Stock issued for cash | 0 | 222,750 |
Proceeds from notes payable | 300,000 | 425,000 |
Repayments of notes payable | (36,000) | (16,000) |
Proceeds from notes payable - related party | 112,500 | 68,000 |
Repayments of notes payable - related party | 0 | (45,000) |
Proceeds from convertible notes payable | 1,077,350 | 1,147,036 |
Repayments of convertible notes payable | (189,659) | (453,000) |
Lease Payable | 0 | (1,937) |
Net Cash Provided by Financing Activities | 1,264,191 | 1,346,849 |
NET CHANGE IN CASH | (256,815) | (89,029) |
CASH AT BEGINNING OF PERIOD | 390,191 | 250,728 |
CASH AT END OF PERIOD | 133,376 | 161,699 |
CASH PAID FOR: | ||
Interest | 160,251 | 0 |
Taxes | 0 | 0 |
NON CASH FINANCING ACTIVITIES: | ||
Beneficial conversion feature | 0 | 184,821 |
Conversion of Notes and Interest into common stock | 421,333 | 34,000 |
Derivative Liability | 1,077,350 | 677,139 |
Conversion of Derivative Liability | 1,163,456 | 0 |
Mark to Market on available for sale securities | 0 | 64,800 |
Common Stock issued with convertible debt | 0 | 15,963 |
Common stock issued for prepaid expenses | 415,765 | 22,800 |
Convertible notes payable issued for prepaid expenses | 120,000 | 0 |
Original Issue Discount | 184,146 | 79,965 |
Assignment of Debt | 11,238 | 0 |
Conversion of accrued interest into common stock | $ 0 | $ 217,628 |
1. CONDENSED FINANCIAL STATEMEN
1. CONDENSED FINANCIAL STATEMENTS | 6 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. CONDENSED FINANCIAL STATEMENTS | The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2018, and for all periods presented herein, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2018 audited financial statements. The results of operations for the periods ended December 31, 2018 and 2017 are not necessarily indicative of the operating results for the full year. |
2. GOING CONCERN
2. GOING CONCERN | 6 Months Ended |
Dec. 31, 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 $80,865,569, negative working capital of $9,777,939 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. SUMMARY OF SIGNIFICANT ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments. Principles of Consolidation The consolidated financial statements include the accounts of Aftermaster, Inc. and its subsidiaries. All significant inter-Company accounts and transactions have been eliminated. Accounts Receivables Accounts receivable 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 $47,616 and $0 as of December 31, 2018 and June 30, 2018, respectively. Fair Value Instruments The carrying amounts reported in the balance sheets for accounts receivable and accounts payable and other accrued expenses approximate their fair market value based on the short-term maturity of these instruments. Market prices are not available for the Company’s loans due to related parties or its other notes payable, nor are market prices of similar loans available. The Company determined that the fair value of the notes payable based on its amortized cost basis due to the short-term nature and current borrowing terms available to the Company for these instruments. 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, 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 used this sequencing policy, whereby 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 used this sequencing policy, whereby all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to October 3, 2016 and November 15, 2016 until the notes were 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 January 1, 2017 until the note was converted on January 4, 2017 were derivative liabilities. 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. 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. Income Taxes There is no income tax provision for the six months ended December 31, 2018 and 2017 due to net operating losses for which there is no benefit currently available. At December 31, 2018, the Company had deferred tax assets associated with state and federal net operating losses. The Company has recorded a corresponding full valuation allowance as it is more likely than not that some portion of all of the deferred tax assets will not be realized. Revenue Recognition The Company applies the provisions of FASB ASC 606, 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. Disaggregation of Revenue The table below presents disaggregated revenue from contracts with customers by customer geography and contract-type. We believe this disaggregation best depicts the nature, amount, timing and uncertainty of our revenue and cash flows that may be affected by industry, market and other economic factors: For the Six Months Ended December 31 2018 Geography Professional Transaction Total services based North America $ 272,372 $ 670,214 $ 942,586 International — — — Total $ 272,372 $ 670,214 $ 942,586 Adoption of ASC Topic 606, “Revenue from Contracts with Customers” As of December 31, 2018 Condensed Consolidated Balance Sheets As Reported Previous Accounting Guidance Impact from Adopting Topic 606 ASSETS Accounts receivable 368,438 417,769 49,331 Total Current Assets 1,059,090 1,108,421 49,331 Total Assets $ 1,179,772 $ 1,229,103 $ 49,331 LIABILITIES AND STOCKHOLDERS’ DEFICIT Accounts payable and other accrued expenses 1,729,543 1,769,553 40,010 Total Current Liabilities 10,837,029 10,868,798 31,769 Total Liabilities $ 10,837,029 $ 10,868,798 $ 31,769 Accumulated Deficit (80,865,569 ) (80,817,319 ) 48,250 Total Stockholders’ Deficit (9,657,257 ) (9,639,695 ) 17,562 Total Liabilities and Stockholders’ Deficit $ 1,179,772 $ 1,229,103 $ 49,331 Condensed Consolidated Statements of Operations and Comprehensive Loss Three months ended December 31, 2018 Six months ended December 31, 2018 As Reported Previous Accounting Guidance Impact from Adopting Topic 606 As Reported Previous Accounting Guidance Impact from Adopting Topic 606 Product Revenues $ 281,105 $ 330,436 $ 49,331 $ 670,214 $ 719,545 $ 49,331 Total Revenues 408,064 457,395 49,331 942,586 991,917 49,331 Cost of Revenues (Exclusive of Depreciation and Amortization) 461,196 501,206 40,010 878,953 918,963 40,010 Total Costs and Expenses 1,528,704 1,568,714 40,010 2,952,230 2,992,240 40,010 Total Loss from Operations (1,120,640 ) (1,111,319 ) 9,321 (2,009,644 ) (2,000,323 ) 9,321 Loss Before Income Taxes (2,182,287 ) (2,172,966 ) 9,321 (4,308,819 ) (4,299,498 ) 9,321 NET LOSS (2,182,287 ) (2,172,966 ) 9,321 (4,308,819 ) (4,299,498 ) 9,321 NET LOSS AVAILABLE TO COMMON SHAREHOLDERS (2,238,654 ) (2,229,333 ) 9,321 (4,421,553 ) (4,412,232 ) 9,321 COMPREHENSIVE LOSS (2,238,654 ) (2,229,333 ) 9,321 (4,421,553 ) (4,412,232 ) 9,321 Cost of Revenues The Company’s cost of revenues includes studio lease expense, employee costs, component and finished goods expense, 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 revenues as incurred. Depreciation is not included within cost of revenues. 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 three and six months ended December 31, 2018 and 2017 of $56,367 and $112,734, respectively. Diluted earnings per Common Share is computed by dividing net 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 three and six months ended December 31, 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 234,671,382 and 90,410,737 at December 31, 2018 and 2017, respectively. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842), requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except for short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15—Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for eight specific cash flow issues with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The effective date for ASU 2016-15 is for annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. We adopted Topic 230 as of January 1, 2018 In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The new ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2019 and early adoption is permitted. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures. |
4. NOTES PAYABLE
4. NOTES PAYABLE | 6 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
4. NOTES PAYABLE | Convertible Notes Payable In accounting for its convertible notes payable, 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 December 31, 2018 and June 30, 2018, respectively: Convertible Notes Payable – Related Parties December 31, June 30, 2018 2018 $30,000 face value, issued in August 2016, interest rate of 0% and is convertible into shares of the Company’s Common stock at $0.40 per share, matures June 2019, a gain on extinguishment of debt was recorded totaling $3,818 in prior period net unamortized discount of $0 as of December 31, 2018 and June 30, 2018. $ 30,000 $ 30,000 $5,000 face value, issued in September 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019, net amortized discount of $0 and $607 as of December 31, 2018 and June 30, 2018, respectively. 5,000 4,393 $10,000 face value, issued in November 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019. 10,000 10,000 $25,000 face value, issued in December 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019, net amortized discount of $0 and $1,890 as of December 31, 2018 and June 30, 2018, respectively. 25,000 23,110 $10,000 face value, issued in January 2018, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures January 2019, net unamortized discount of $265 and $534 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 9,735 9,466 $15,000 face value, issued in January 2018, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures January 2019, net unamortized discount of $690 and $1,391 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 14,310 13,609 $24,500 face value, issued in February 2018, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019. 24,500 24,500 Total convertible notes payable – related parties 118,545 115,078 Less current portion 118,545 115,078 Convertible notes payable – related parties, long-term $ - $ - Due to sequencing on February 2, 2017, the Company determined under ASC 815, that notes containing 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 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 . During the six months ended December 31, 2018, The Company evaluated the amendments under ASC 470-50, “ Debt - Modification and Extinguishment” Convertible Notes Payable - Non-Related Parties Convertible notes payable due to non-related parties consisted of the following as of December 31, 2018 and June 30, 2018, respectively: Convertible Notes Payable - Non-Related Parties December 31, June 30, 2018 2018 $7,000 face value, issued in July 2014, interest rate of 6% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019. $ 7,000 $ 7,000 $100,000 face value, issued in February 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.30 per share, matures February 2019. 100,000 100,000 $25,000 face value, issued in February 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.40 per share, matures February 2019. 25,000 25,000 $100,000 face value, issued in March 2016, interest rate of 10%, matured October 2018. The note is currently in default. 100,000 100,000 $10,000 face value, issued in March 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.40 per share, matured October 2018. The note is currently in default. 10,000 10,000 $50,000 face value, issued in July 2016, interest rate of 0% and is convertible into shares of the Company’s Common stock at $0.40 per share, matured October 2018. The note is currently in default. 50,000 50,000 $50,000 face value, issued in August 2016, interest rate of 0% and is convertible into shares of the Company’s Common stock at $0.40 per share, matures October 2018. The note is currently in default. 50,000 50,000 $1,000,000 face value, issued in September 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.40 per share, matured October 2018. The note is currently in default. 1,000,000 1,000,000 $149,000 face value, issued in February 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids twenty (20) days prior to the conversion date or $0.60 per share, matured June 2018, of which $55,238 was converted. The note is currently in default. 93,762 79,340 $224,000 face value, issued in February 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids twenty (20) days prior to the conversion date or $0.60 per share, matured June 2018, of which $99,458 was converted. The note is currently in default. 124,542 98,508 $265,000 face value, issued in May 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $.31 and 60% of the lowest closing bids twenty-five (25) days prior to the conversion date, matured February 2018, of which 98,585 was converted. The note is currently in default. 166,415 200,412 $100,000 face value, issued in June 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $.17 per share, matured June 2018. The note is currently in default. 100,000 100,000 $78,000 face value, issued in July 2017, interest rate of 12% 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, matured May 2018, of which $72,000 was converted. The note is currently in default. 6,000 6,000 $10,000 face value, issued in August 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019. 10,000 9,271 $53,000 face value, issued in August 2017, interest rate of 12% 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, matured June 2018. The note currently is in default. 53,000 53,000 $10,000 face value, issued in September 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured September 2018, net amortized discount of $0 and $4,400 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 10,000 5,600 $100,000 face value, issued in October 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019, net amortized discount of $0 and $22,333 as of December 31, 2018 and June 30, 2018, respectively. 100,000 77,667 $115,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids thirty (30) days prior to the conversion per share, matured August 2018, net amortized discount of $0 and $50,584 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 115,000 64,416 $50,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018. The note is currently in default. 50,000 50,000 $66,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019, net amortized discount of $0 and $17,085 as of December 31, 2018 and June 30, 2018, respectively. 66,000 48,915 $100,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids twenty (20) days prior to the conversion per share, matured November 2018, net amortized discount of $0 and $39,452 as of December 31, 2018 and June 30, 2018, respectively, $100,000 was transferred to a new note. - 60,548 $5,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured November 2018, net amortized discount of $0 and $1,932 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 5,000 3,068 $53,000 face value, issued in November 2017, interest rate of 12% and is convertible into shares of the Company’s common stock at 61% of the lowest closing bids fifteen (15) days prior to the conversion per share, matured July 2018, net amortized discount of $0 and $4,649 as of December 31, 2018 and June 30, 2018, respectively, $53,000 was converted. - 13,821 $100,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018, net amortized discount of $0 and $20,137 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 100,000 79,863 $20,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018, net amortized discount of $0 and $4,689 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 20,000 15,311 $75,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019, net amortized discount of $0 and $23,180 as of December 31, 2018 and June 30, 2018, respectively. 75,000 51,820 $20,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018, net amortized discount of $0 and $6,181 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 20,000 13,819 $115,000 face value, issued in January 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $.12 and 57.5% of the lowest trading price during the prior thirty (30) days, matured October 2018, net amortized discount of $0 and $42,967 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 115,000 72,033 $20,000 face value, issued in February 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at $0.10 per share, matured February 2019, net amortized discount of $2,410 and $4,847 as of December 31, 2018 and June 30, 2018, respectively. 17,590 15,153 $75,075 face value, issued in February 2018, interest rate of 12% and 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 (25) consecutive trading days including the immediately preceding the conversion date, matured November 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018, of which $75,075 was transferred to two new notes. - 75,075 $6,000 face value, issued in February 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019. 6,000 6,000 $10,000 face value, issued in March 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures March 2019, net amortized discount of $1,124 and $2,267 as of December 31, 2018 and June 30, 2018, respectively. 8,876 7,733 $15,000 face value, issued in March 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures March 2019, net amortized discount of $1,379 and $2,780 as of December 31, 2018 and June 30, 2018, respectively. 13,621 12,220 $100,000 face value, issued in March 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures March 2019, net amortized discount of $10,759 and $21,696 as of December 31, 2018 and June 30, 2018, respectively. 89,241 78,304 $26,000 face value, issued from an assignment in March 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at 60% the lowest trading price during the previous twenty (20) days to the date of conversion, matured October 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018, of which $26,000 has been paid. - 26,000 $150,000 face value, issued in April 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $0.05 and 57.5% of the lowest closing bids twenty (20) days prior to the conversion date, matured January 2019, net amortized discount of $35,016 and $105,818 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 124,984 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% and is convertible into shares of the Company’s common stock at rate of 55% of the average trading price for the prior three (3) trading days, matures April 2019, net amortized discount of $17,014 and $36,000 as of December 31, 2018 and June 30, 2018, respectively, of which $223,198 has been converted. 159,788 140,802 $15,000 face value, issued in April 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at rate of 55% of the average trading price for the prior three (3) trading days, matures April 2019, net amortized discount of $5,951 and $12,000 as of December 31, 2018 and June 30, 2018, respectively. 9,049 3,000 $150,086 face value, issued in May 2018, interest rate of 12% 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, matures May 2019, net amortized discount of $57,782 and $116,522 as of December 31, 2018 and June 30, 2018, of which $53,300 has been paid. 39,004 21,564 $135,700 face value, issued in May 2018, interest rate of 12% 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, matures May 2019, net amortized discount of $55,291 and $111,499 as of December 31, 2018 and June 30, 2018, of which $53,300 has been paid. 27,109 12,201 $15,651 face value, issued in June 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at 60% the lowest trading price during the previous twenty (20) days to the date of conversion, matures June 2019. 15,651 15,651 $55,718 face value, issued from an assignment in June 2018, interest rate of 12% 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, matured October 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018, of which $55,718 has been converted. - 55,718 $161,000 face value, issued in June 2018, interest rate of 12% 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, matures June 2019, net amortized discount of $79,620 and $160,558 as of December 31, 2018 and June 30, 2018, respectively, of which 41,300 was paid. 40,080 442 $120,000 face value, issued in July 2018 for prepaid services, interest rate of 15% and is convertible into shares of the Company’s common stock at 70% of the lowest closing price during the twenty (20) days prior to the conversion per share, matures July 2019. 120,000 - $23,000 face value, issued in August 2018 of $20,000 in principal and an OID of $3,000, interest rate of 12% and is convertible into shares of the Company’s common stock at 55% of the average of the three (3) lowest closing price during the 25 days prior to the conversion per share, matures August 2019, net amortized discount of $14,619 as of December 31, 2018. 8,381 - $575,000 face value, issued in August 2018 of $496,000 in principal and an OID of $79,000, interest rate of 10% 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 (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, matures August 2019, net amortized discount of $343,425 as of December 31, 2018. 231,575 - $23,000 face value, issued in August 2018 of $20,000 in principal and an OID of $3,000, interest rate of 12% and is convertible into shares of the Company’s common stock at 61% of the lowest trading price for the prior fifteen (15) trading days including the immediately preceding the conversion date, matures August 2019, net amortized discount of $14,619 as of December 31, 2018. 8,381 - $41,850 face value, issued in August 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at 61% of the lowest trading price for the prior fifteen (15) trading days to the date of conversion, matures August 2019, net amortized discount of $24,537 as of December 31, 2018. 17,313 - $290,323 face value, issued in October 2018 of $249,750 in principal and an OID of $40,573, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $0.12 or 70% of the lowest Trading Price for the Common Stock during the thirty (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, matures October 2019, net amortized discount of $232,258 as of December 31, 2018. 58,065 - $290,323 face value, issued in December 2018 of $249,750 in principal and an OID of $40,573, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $0.12 or 70% of the lowest Trading Price for the Common Stock during the thirty (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, matures December 2019, net amortized discount of $271,233 as of December 31, 2018. 19,090 - Total convertible notes payable – non-related parties 3,585,517 2,959,457 Less current portion 3,585,517 2,959,457 Convertible notes payable – non-related parties, long-term $ - $ - Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that notes containing 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 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 . During the six months ended December 31, 2018, ten notes were amended to extend the maturity dates. The Company evaluated the amendments 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 matured in June 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of $.40 per share or 60% of the average three lowest closing bids twenty (20) days prior to the conversion date. On September 10, 2018, the note converted the principal of $23,966 and $5,966 in accrued interest into for 1,800,000 shares of common stock. On February 23, 2017, the Company issued a convertible note to an unrelated company for $224,000 that matured in June 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of $.40 per share or 60% of the average three lowest closing bids twenty (20) days prior to the conversion date. On September 10, 2018, the note converted the principal of $15,578 and $4,222 in accrued interest into for 1,200,000 shares of common stock. On May 12, 2017, the Company issued a convertible note to an unrelated company for $265,000 that matured 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 twenty-five (25) days prior to the conversion date. 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 7, 2018, the note converted principal of $3,377, $8,373 in interest, and $250 in conversion fees for 1,000,000 shares of common stock. On November 21, 2017, the Company issued a convertible note to an unrelated party for $100,000 that matured 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 twenty (20) days prior to the conversion per share. On August 16, 2018, the Lender assigned principal of $100,000 and accrued interest of $6,795 an unrelated party. On November 28, 2017, the Company issued a convertible note to an unrelated party for $53,000 that matured 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 fifteen (15) days prior to the conversion per share. On July 9, 2018, the note converted the remainder of the principal of $18,470 and $2,524 for 914,934 shares of common stock. On February 21, 2018, the Company issued a convertible note to an unrelated party for $6,000 that matured April 1, 2018. The note was amended on August 24, 2018, to extend the maturity date to June 30, 2019. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The note was amended 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” On February 16, 2018, the Company issued a convertible note to an unrelated party for $75,075 that matured 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 (25) consecutive trading days including the immediately preceding the conversion date. On August 16, 2018, the Lender assigned principal and accrued interest of $39,759 to two unrelated parties. On March 28, 2018, the Company issued a convertible note to an unrelated party for $26,000 that matured May 18, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 60% the lowest trading price during the previous twenty (20) days to the date of conversion. On October 16, 2018, the Company paid principal of $26,000 and accrued interest of $1,284 and converted $8,085 as an early out payment for 700,000 shares of common stock fully paying off the note. 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, 2018 and $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. On July 19, 2018, the note converted all the principal of $55,718 for 2,854,420 shares of common stock. On July 2, 2018, the Company issued a convertible note to an unrelated company for $120,000 as part of an advisory agreement for prepaid services over a twelve-month period that matures on July 2, 2019. The note bears 15% interest per annum and is convertible into shares of the Company’s common stock at 70% of the lowest closing bids twenty (20) days prior to the conversion per share. As additional consideration the Company also issued 3,000,000 warrants. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model. On August 2, 2018, the Company issued a convertible note to an unrelated party for $106,795 that matures August 2, 2019 in exchange for an existing note for $100,000 issued on November 21, 2017 and $6,795 in accrued interest. The note is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids twenty (20) days prior to the conversion per share. On August 24, 2018, the note converted a principal of $69,857 for 5,217,098 shares of common stock. On October 16, 2018, the note converted the remaining principal of $36,938 for 3,697,237 shares of common stock. As part of the assignment of the convertible note for $106,795 on August 2, 2018, the Company issued a convertible note to an unrelated party for $41,850 that matures August 2, 2019 as an early out payment. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest trading price for the prior fifteen (15) trading days to the date of conversion. On August 2, 2018, the Company issued a convertible note to an unrelated company for $575,000, which includes proceeds of $496,000 and $79,000 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 (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. 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 convertible note to an unrelated party for $39,759, that matures August 2, 2019 in exchange for an existing note for $37,538 issued on February 16, 2018 and $2,221 in accrued interest. 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 (25) consecutive trading days including the immediately preceding the conversion date. On August 16, 2018, the new note holder converted the entire $39,759 balance for 2,839,920 shares of common stock. On August 16, 2018, the Company issued a convertible note to an unrelated party for $39,759, that matures August 2, 2019 in exchange for an existing note for $37,538 issued on February 16, 2018 and $2,221 in accrued interest. 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 (25) consecutive trading days including the immediately preceding the conversion date. On August 31, 2018, the other new note holder paid the entire $39,759 balance. On August 20, 2018, the Company issued a convertible note to an unrelated party for $23,000, which includes proceeds of $20,000 and $3,000 in OID, that matures August 20, 2019. The note bears 12% interest per annum. The note is convertible into shares of the Company’s common stock at 55% of the average of the three lowest closing prices for common stock on principal market during the twenty-five (25) consecutive trading days including the immediately preceding the conversion date. On August 20, 2018, the Company issued a convertible note to an unrelated party for $23,000, which includes proceeds of $20,000 and $3,000 in OID, that matures August 20, 2019. The note bears 12% interest per annum. The note is convertible into shares of the Company’s common stock at 61% of the lowest trading price for the prior fifteen (15) trading days including the immediately preceding the conversion date. On October 19, 2018, the Company issued a convertible note to an unrelated company for $290,323, which includes proceeds of $249,750 and $40,573 in OID, that matures on October 19, 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 (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. As additional consideration the Company also issued 1,814,516 warrants. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . On December 7, 2018, the Company issued a convertible note to an unrelated company for $290,323, which includes proceeds of $249,750 and $40,573 in OID, that matures on December 7, 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 (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. As additional consideration the Company also issued 1,814,516 warrants. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the . Notes Payable – Related Parties Notes payable due to related parties consisted of the following as of December 31, 2018 and June 30, 2018, respectively: Notes Payable – Related Parties December 31, June 30, 2018 2018 Various term notes with total face value of $30,000 issued from November 16 to February 17, interest rates of 0%, of which $5,000 has been paid. $ 25,000 $ 25,000 $18,000 face value, issued in September 2017, interest rate of 0%, matures June 2019. 18,000 18,000 $15,000 face value, issued in October 2017, interest rate of 0%, matures June 2019. 15,000 15,000 $10,000 face value, issued in June 2018, interest rate of 0%, matures June 2019. 10,000 10,000 $8,000 face value, issued in June 2018, interest rate of 0%, matures June 2019. 8,000 8,000 $6,000 face value, issued in July 2018, interest rate of 0%, matures June 2019. 6,000 - $6,000 face value, issued in July 2018, interest rate of 0%, matures June 2019. 6,000 - $12,000 face value, issued in August 2018, interest rate of 0%, matures June 2019. 12,000 - $15,000 face value, issued in September 2018, interest rate of 0%, matures June 2019. 15,000 - $18,500 face value, issued in October 2018, interest rate of 0%, matures June 2019. 18,500 - $15,000 face value, issued in November 2018, interest rate of 0%, matures June 2019. 15,000 - $20,000 face value, issued in November 2018, interest rate of 0%, matures June 2019. 20,000 - $20,000 face value, issued in December 2018, int |
5. CONVERTIBLE PREFERRED STOCK
5. CONVERTIBLE PREFERRED STOCK | 6 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
5. CONVERTIBLE PREFERRED STOCK | The Company has authorized 10,000,000 shares of $0.001 par value per share Preferred Stock, of which the following were issued outstanding: Shares Shares Liquidation Allocated Outstanding Preference Series A Convertible Preferred 100,000 15,500 $ - Series A-1 Convertible Preferred 3,000,000 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 H Preferred 5 - - Series P Convertible Preferred 600,000 86,640 - Series S Convertible Preferred 50,000 - - Total Preferred Stock 6,325,005 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, 2019 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 H Preferred Stock shall not be convertible into the Corporation’s Common Stock, nor shall such shares have any liquidation or dividend preference over the Corporation’s Common Stock. Series H Preferred Stock shall have the right to take action by written consent or vote based on the number of votes equal to four times the number of votes of all outstanding shares of capital stock of the Corporation such that the holders of outstanding shares of Series H Preferred Stock shall always constitute eighty percent (80%) of the voting rights of the Corporation 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 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 six months ended December 31, 2018 the Company did not issue shares of Series A-1 Preferred. During the fiscal year ended June 30, 2018 the Company did not issue shares of Series A-1 Preferred. During the six months ended December 31, 2018 and 2017, the outstanding Preferred Stock accumulated $112,734 and $112,734 in dividends on outstanding Preferred Stock. The cumulative dividends in arrears as of December 31, 2018 were approximately $1,247,140. |
6. COMMON STOCK
6. COMMON STOCK | 6 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
6. COMMON STOCK | The Company has authorized 250,000,000 shares of $0.001 par value per share Common Stock, of which 205,096,210 issued (of which 37,926,080 are to be issued) as of December 31, 2018 and 162,287,902 issued (of which 28,841,381 are to be issued) as of June 30, 2018. The activity surrounding the issuances of the Common Stock is as follows: For the Six months ended December 31, 2018 The Company issued 22,723,609 shares of Common Stock for the conversion of notes and accrued interest valued at $331,333. The Company issued 11,885,000 shares of Common Stock as payment for services valued at $415,765. As share-based compensation to employees and non-employees, the Company issued 5,199,699 shares of common stock valued at $125,676, based on the market price of the stock on the date of issuance. As part of a provision in a note payable, the Company issued 3,000,000 shares of common stock valued at $90,000 based on the market price on the date of issuance. For the six months Ended December 31, 2017 The Company issued The Company issued 340,000 shares of Common Stock for the conversion of notes and accrued interest valued at $34,000. The Company issued 3,010,506 shares of Common Stock as incentive with convertible notes valued at $192,896. The Company issued 120,000 shares of Common Stock for the prepaid consulting services and rent valued at $22,800. The Company issued 115,000 shares of Common Stock for the extension of two convertible notes valued at $16,897. As share-based compensation to employees and non-employees, the Company issued 1,348,525 shares of common stock valued at $187,623, based on the market price of the stock on the date of issuance. As conversion of accrued 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. |
7. STOCK PURCHASE OPTIONS AND W
7. STOCK PURCHASE OPTIONS AND WARRANTS | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
7. STOCK PURCHASE OPTIONS AND WARRANTS | The Board of Directors on June 10, 2009 approved the 2009 Long-Term Stock Incentive Plan. The purpose of the 2009 Long-term Stock Incentive Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by employees and other key individuals. The 2009 Long-Term Stock Incentive Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 1,500,000 shares of the Company’s Common Stock is reserved for issuance under stock options to be issued under the 2009 Long-Term Stock Incentive Plan. The Plan permits the grant of incentive stock options, nonstatutory stock options and restricted stock awards. The 2009 Long-Term Stock Incentive Plan is administered by the Board of Directors or, at its direction, a Compensation Committee comprised of officers of the Company. Stock Purchase Options During the six months ended December 31, 2018, the Company did not issue any stock purchase options, and 25,000 expired. During the fiscal year ended December 31, 2018, the Company did not issue stock purchase options. The following table summarizes the changes in options outstanding of the Company during the six months ended December 31, 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, 2018 525,000 $ 0.05 $ 0.16 3.81 $ 93,750 Granted - - - - - Exercised - - - - - Cancelled/Expired (25,000 ) - - - (3,750 ) Outstanding as of December 31, 2018 500,000 $ 0.05 $ 0.17 3.50 $ 90,000 Stock Purchase Warrants During the six months ended December 31, 2018, the Company issued warrants to purchase a total of in conjunction with issuance of four promissory notes, valued at $280,922. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted: December 31, 2018 June 30, 2018 Expected volatility 125-211% 105-304% Expected dividends 0% 0% Expected term 0-5 Years 0-5 Years Risk-free interest rate 2.00-3.05% 0.96-2.73% The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the six months ended December 31, 2018. Number of Weighted Average Weighted Average Expiration Date Warrants Exercise Price Grant Date Fair Value (yrs) Value if Exercised Balance June 30, 2018 41,759,597 $ 0.32 $ 0.40 3.01 $ 13,291,022 Granted 10,322,782 0.07 0.04 4.38 75,581 Exercised - - - - - Cancelled/Expired (5,424,468 ) 0.57 - - (2,587,503 ) Outstanding as of December 31, 2018 46,657,911 $ 0.23 $ 0.32 3.18 $ 10,779,100 |
8. FINANCIAL INSTRUMENTS
8. FINANCIAL INSTRUMENTS | 6 Months Ended |
Dec. 31, 2018 | |
Financial Instruments | |
8. 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 December 31, 2018 and June 30, 2018. The fair values of the derivative instruments are measured each quarter, which resulted in a gain(loss) of ($17,475) and $906,544 and $594,737 and $1,109,364, and derivative expense of $312,256 and $202,813 and $1,355,346 and $340,279 during the three and six months ended December 31, 2018 and 2017, respectively. As of December 31, 2018, and June 30, 2018, the fair market value of the derivatives aggregated $3,490,023 and $2,815,520, respectively, using the following assumptions: estimated 5-0 year term, estimated volatility of 210.59 – 124.95%, and a discount rate of 3.05 – 2.00%. |
9. FAIR VALUE MEASUREMENTS
9. FAIR VALUE MEASUREMENTS | 6 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
9. 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 December 31, 2018, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 3,490,023 $ 3,490,023 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 |
10. COMMITMENTS AND CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
10. 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. 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 expired on December 31, 2017 and now is on a month to month basis. The total lease expense for the facility is approximately $20,573.50 per month, and the total remaining obligations under these leases at December 31, 2018, were approximately $0. We lease a warehouse space located at 8260 E Gelding Drive, Suite 102, Scottsdale, Arizona, 85260. The lease expired on January 31, 2019 and now is on a month to month basis. The total lease expense for the facility is approximately $1,993 per month, and the total remaining obligations under this lease at December 31, 2018, were approximately $3,986. 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 $7,450 per month, and the total remaining obligations under this lease at December 31, 2018, were approximately $208,593. 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 $3,100 per month, and the total remaining obligations under this lease at December 31, 2018, were approximately $86,797. During the three and six months ended December 31, 2018 and 2017, the operating lease expense totaled $85,180 and $92,209 and $175,766 and $182,418. Below is a table summarizing the annual operating lease obligations over the next 5 years: Year Lease Payments 2019 $ 67,284 2020 $ 126,596 2021 $ 105,496 2022 $ - 2023 $ - Total $ 299,376 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 December 31, 2018 were approximately $1,247,140. |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
11. 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: During the subsequent period, four notes were amended to extend the maturity dates. The Company evaluated the amendments under ASC 470-50, “ Debt - Modification and Extinguishment” During January 2019, the Company issued two notes to a related party for a total of $22,000 that matures on June 30, 2019. The notes bear 0% interest per annum. From January through February 2019, the Company issued On February 23, 2017, the Company issued a convertible note to an unrelated company for $149,000 that matured in June 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of $.40 per share or 60% of the average three lowest closing bids 20 days prior to the conversion date. On January 22, 2019, principal of $12,499, $8,501 in accrued interest, and $500 in conversion fees were converted into 2,800,000 shares of common stock. On February 23, 2017, the Company issued a convertible note to an unrelated company for $224,000 that matured in June 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of $.40 per share or 60% of the average three lowest closing bids 20 days prior to the conversion date. On January 24, 2019, principal of $20,208, $11,292 in accrued interest, and $500 in conversion fees were converted into 4,200,000 shares of common stock. On February 1, 2019, the Company amended its Certificate of Incorporation in the State of Delaware to designate a series of preferred stock, the Series H Preferred Stock. Five (5) shares of preferred stock were designated as Series H Preferred Stock. The Series H Preferred Stock is not convertible into common stock, nor does the Series H Preferred Stock have any right to dividends and any liquidation preference. The holders of all outstanding Series H Preferred Stock have in the aggregate four (4) times the number of votes of all outstanding shares of capital stock of the Company. On February 5, 2019, the Company issued 1 share of its Series H Preferred Stock to the Company’s CEO and director in consideration of $25,000 of accrued and unpaid wages, the Company’s failure to timely pay current and past salaries. The issuance was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as there was no general solicitation, and the transaction did not involve a public offering. On February 5, 2019, the Company issued 1 share of its Series H Preferred Stock to the Company’s Senior Vice President and director in consideration of $25,000 of accrued and unpaid wages, the Company’s failure to timely pay current and past salaries. The issuance was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as there was no general solicitation, and the transaction did not involve a public offering. |
3. SUMMARY OF SIGNIFICANT ACC_2
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
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. |
Principles of Consolidation | The consolidated financial statements include the accounts of Aftermaster, Inc. and its subsidiaries. All significant inter-Company accounts and transactions have been eliminated. |
Accounts Receivables | Accounts receivable 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 $47,616 and $0 as of December 31, 2018 and June 30, 2018, respectively. |
Fair Value Instruments | The carrying amounts reported in the balance sheets for accounts receivable and accounts payable and other accrued expenses approximate their fair market value based on the short-term maturity of these instruments. Market prices are not available for the Company’s loans due to related parties or its other notes payable, nor are market prices of similar loans available. The Company determined that the fair value of the notes payable based on its amortized cost basis due to the short-term nature and current borrowing terms available to the Company for these instruments. |
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, 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 used this sequencing policy, whereby 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 used this sequencing policy, whereby all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to October 3, 2016 and November 15, 2016 until the notes were 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 January 1, 2017 until the note was converted on January 4, 2017 were derivative liabilities. 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. 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. |
Income Taxes | There is no income tax provision for the six months ended December 31, 2018 and 2017 due to net operating losses for which there is no benefit currently available. At December 31, 2018, the Company had deferred tax assets associated with state and federal net operating losses. The Company has recorded a corresponding full valuation allowance as it is more likely than not that some portion of all of the deferred tax assets will not be realized. |
Revenue Recognition | The Company applies the provisions of FASB ASC 606, 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. |
Disaggregation of Revenue | The table below presents disaggregated revenue from contracts with customers by customer geography and contract-type. We believe this disaggregation best depicts the nature, amount, timing and uncertainty of our revenue and cash flows that may be affected by industry, market and other economic factors: For the Six Months Ended December 31 2018 Geography Professional Transaction Total services based North America $ 272,372 $ 670,214 $ 942,586 International — — — Total $ 272,372 $ 670,214 $ 942,586 |
Adoption of ASC Topic 606, “Revenue from Contracts with Customers” | On July 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of July 1, 2018. Results for reporting periods beginning after July 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. We did not record a change to accumulated deficit as of July 1, 2018 due to the immaterial cumulative impact of adopting Topic 606. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our products to our customers. Transfer of control to the customer for products generally occurs at the point in time when products have been shipped to our customer by third party carriers as this represents the point in time when the customer has a present obligation to pay and physical possession including title and risk of loss have been transferred to the customer. The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company’s distinct performance obligations consist mainly of transferring control of its products identified in the contracts, purchase orders or invoices and implied PCS services. Transaction prices are typically based on contracted rates. Generally, payment is due from customers within 60 days of the invoice date and the contracts do not have significant financing components or include extended payment terms. The timing of revenue recognition, billing and cash collections results in billed accounts receivable, deferred revenue, and customer deposits on the Consolidated Balance Sheets. Accounts receivable are recognized in the period the Company’s right to the consideration is unconditional. Our contract liabilities consist of advance payments (Customer deposits) recognized primarily related to deferred revenue. We classify customer deposits as a current liability, and deferred revenue as a current or noncurrent liability based on the timing of when we expect to fulfill these remaining performance obligations. The current portion of deferred revenue is included in other current liabilities and the noncurrent portion is included in other long-term liabilities in our consolidated balance sheets. The impact from adopting Topic 606 on the Company’s condensed consolidated financial statements was as follows: As of December 31, 2018 Condensed Consolidated Balance Sheets As Reported Previous Accounting Guidance Impact from Adopting Topic 606 ASSETS Accounts receivable 368,438 417,769 49,331 Total Current Assets 1,059,090 1,108,421 49,331 Total Assets $ 1,179,772 $ 1,229,103 $ 49,331 LIABILITIES AND STOCKHOLDERS’ DEFICIT Accounts payable and other accrued expenses 1,729,543 1,769,553 40,010 Total Current Liabilities 10,837,029 10,868,798 31,769 Total Liabilities $ 10,837,029 $ 10,868,798 $ 31,769 Accumulated Deficit (80,865,569 ) (80,817,319 ) 48,250 Total Stockholders’ Deficit (9,657,257 ) (9,639,695 ) 17,562 Total Liabilities and Stockholders’ Deficit $ 1,179,772 $ 1,229,103 $ 49,331 Condensed Consolidated Statements of Operations and Comprehensive Loss Three months ended December 31, 2018 Six months ended December 31, 2018 As Reported Previous Accounting Guidance Impact from Adopting Topic 606 As Reported Previous Accounting Guidance Impact from Adopting Topic 606 Product Revenues $ 281,105 $ 330,436 $ 49,331 $ 670,214 $ 719,545 $ 49,331 Total Revenues 408,064 457,395 49,331 942,586 991,917 49,331 Cost of Revenues (Exclusive of Depreciation and Amortization) 461,196 501,206 40,010 878,953 918,963 40,010 Total Costs and Expenses 1,528,704 1,568,714 40,010 2,952,230 2,992,240 40,010 Total Loss from Operations (1,120,640 ) (1,111,319 ) 9,321 (2,009,644 ) (2,000,323 ) 9,321 Loss Before Income Taxes (2,182,287 ) (2,172,966 ) 9,321 (4,308,819 ) (4,299,498 ) 9,321 NET LOSS (2,182,287 ) (2,172,966 ) 9,321 (4,308,819 ) (4,299,498 ) 9,321 NET LOSS AVAILABLE TO COMMON SHAREHOLDERS (2,238,654 ) (2,229,333 ) 9,321 (4,421,553 ) (4,412,232 ) 9,321 COMPREHENSIVE LOSS (2,238,654 ) (2,229,333 ) 9,321 (4,421,553 ) (4,412,232 ) 9,321 |
Cost of Revenues | The Company’s cost of revenues includes studio lease expense, employee costs, component and finished goods expense, 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 revenues as incurred. Depreciation is not included within cost of revenues. |
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 three and six months ended December 31, 2018 and 2017 of $56,367 and $112,734, respectively. Diluted earnings per Common Share is computed by dividing net 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 three and six months ended December 31, 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 234,671,382 and 90,410,737 at December 31, 2018 and 2017, respectively. |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842), requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except for short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15—Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for eight specific cash flow issues with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The effective date for ASU 2016-15 is for annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. We adopted Topic 230 as of January 1, 2018 In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The new ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2019 and early adoption is permitted. The Company is evaluating the effect that the updated standard will have on its financial statements and related disclosures. |
3. SUMMARY OF SIGNIFICANT ACC_3
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies | |
Disaggregation of revenue | The table below presents disaggregated revenue from contracts with customers by customer geography and contract-type. We believe this disaggregation best depicts the nature, amount, timing and uncertainty of our revenue and cash flows that may be affected by industry, market and other economic factors: For the Six Months Ended December 31 2018 Geography Professional Transaction Total services based North America $ 272,372 $ 670,214 $ 942,586 International — — — Total $ 272,372 $ 670,214 $ 942,586 |
Impacts from adoption of accounting policy | As of September 28, 2018 Condensed Consolidated Balance Sheets As Reported Previous Accounting Guidance Impact from Adopting Topic 606 ASSETS Accounts receivable 368,438 417,769 49,331 Total Current Assets 1,059,090 1,108,421 49,331 Total Assets $ 1,179,772 $ 1,229,103 $ 49,331 LIABILITIES AND STOCKHOLDERS’ DEFICIT Accounts payable and other accrued expenses 1,729,543 1,769,553 40,010 Total Current Liabilities 10,828,788 10,868,798 40,010 Total Liabilities $ 10,828,788 $ 10,868,798 $ 40,010 Accumulated Deficit (80,857,328 ) (80,817,319 ) 40,010 Total Stockholders’ Deficit (9,649,016 ) (9,639,695 ) 9,321 Total Liabilities and Stockholders’ Deficit $ 1,179,772 $ 1,229,103 $ 49,331 Condensed Consolidated Statements of Operations and Comprehensive Loss Three months ended December 31, 2018 Six months ended December 31, 2018 As Reported Previous Accounting Guidance Impact from Adopting Topic 606 As Reported Previous Accounting Guidance Impact from Adopting Topic 606 Product Revenues $ 281,105 $ 330,436 $ 49,331 $ 670,214 $ 719,545 $ 49,331 Total Revenues 408,064 457,395 49,331 942,586 991,917 49,331 Cost of Revenues (Exclusive of Depreciation and Amortization) 461,196 501,206 40,010 878,953 918,963 40,010 Total Costs and Expenses 1,528,704 1,568,714 40,010 2,952,230 2,992,240 40,010 Total gross profit (1,120,640 ) (1,111,319 ) 9,321 (2,009,644 ) (2,000,323 ) 9,321 Loss Before Income Taxes (2,182,287 ) (2,172,966 ) 9,321 (4,308,819 ) (4,299,498 ) 9,321 NET LOSS (2,182,287 ) (2,172,966 ) 9,321 (4,308,819 ) (4,299,498 ) 9,321 NET LOSS AVAILABLE TO COMMON SHAREHOLDERS (2,238,654 ) (2,229,333 ) 9,321 (4,421,553 ) (4,412,232 ) 9,321 COMPREHENSIVE LOSS (2,238,654 ) (2,229,333 ) 9,321 (4,421,553 ) (4,412,232 ) 9,321 |
4. NOTES PAYABLE (Tables)
4. NOTES PAYABLE (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable-Related Parties | December 31, June 30, 2018 2018 $30,000 face value, issued in August 2016, interest rate of 0% and is convertible into shares of the Company’s Common stock at $0.40 per share, matures June 2019, a gain on extinguishment of debt was recorded totaling $3,818 in prior period net unamortized discount of $0 as of December 31, 2018 and June 30, 2018. $ 30,000 $ 30,000 $5,000 face value, issued in September 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019, net amortized discount of $0 and $607 as of December 31, 2018 and June 30, 2018, respectively. 5,000 4,393 $10,000 face value, issued in November 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019. 10,000 10,000 $25,000 face value, issued in December 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019, net amortized discount of $0 and $1,890 as of December 31, 2018 and June 30, 2018, respectively. 25,000 23,110 $10,000 face value, issued in January 2018, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures January 2019, net unamortized discount of $265 and $534 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 9,735 9,466 $15,000 face value, issued in January 2018, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures January 2019, net unamortized discount of $690 and $1,391 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 14,310 13,609 $24,500 face value, issued in February 2018, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019. 24,500 24,500 Total convertible notes payable – related parties 118,545 115,078 Less current portion 118,545 115,078 Convertible notes payable – related parties, long-term $ - $ - |
Schedule of Convertible Notes Payable-Non-Related Parties | December 31, June 30, 2018 2018 $7,000 face value, issued in July 2014, interest rate of 6% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019. $ 7,000 $ 7,000 $100,000 face value, issued in February 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.30 per share, matures February 2019. 100,000 100,000 $25,000 face value, issued in February 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.40 per share, matures February 2019. 25,000 25,000 $100,000 face value, issued in March 2016, interest rate of 10%, matured October 2018. The note is currently in default. 100,000 100,000 $10,000 face value, issued in March 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.40 per share, matured October 2018. The note is currently in default. 10,000 10,000 $50,000 face value, issued in July 2016, interest rate of 0% and is convertible into shares of the Company’s Common stock at $0.40 per share, matured October 2018. The note is currently in default. 50,000 50,000 $50,000 face value, issued in August 2016, interest rate of 0% and is convertible into shares of the Company’s Common stock at $0.40 per share, matures October 2018. The note is currently in default. 50,000 50,000 $1,000,000 face value, issued in September 2016, interest rate of 10% and is convertible into shares of the Company’s Common stock at $0.40 per share, matured October 2018. The note is currently in default. 1,000,000 1,000,000 $149,000 face value, issued in February 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids twenty (20) days prior to the conversion date or $0.60 per share, matured June 2018, of which $55,238 was converted. The note is currently in default. 93,762 79,340 $224,000 face value, issued in February 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids twenty (20) days prior to the conversion date or $0.60 per share, matured June 2018, of which $99,458 was converted. The note is currently in default. 124,542 98,508 $265,000 face value, issued in May 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $.31 and 60% of the lowest closing bids twenty-five (25) days prior to the conversion date, matured February 2018, of which 98,585 was converted. The note is currently in default. 166,415 200,412 $100,000 face value, issued in June 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $.17 per share, matured June 2018. The note is currently in default. 100,000 100,000 $78,000 face value, issued in July 2017, interest rate of 12% 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, matured May 2018, of which $72,000 was converted. The note is currently in default. 6,000 6,000 $10,000 face value, issued in August 2017, interest rate of 0% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019. 10,000 9,271 $53,000 face value, issued in August 2017, interest rate of 12% 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, matured June 2018. The note currently is in default. 53,000 53,000 $10,000 face value, issued in September 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured September 2018, net amortized discount of $0 and $4,400 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 10,000 5,600 $100,000 face value, issued in October 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019, net amortized discount of $0 and $22,333 as of December 31, 2018 and June 30, 2018, respectively. 100,000 77,667 $115,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids thirty (30) days prior to the conversion per share, matured August 2018, net amortized discount of $0 and $50,584 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 115,000 64,416 $50,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018. The note is currently in default. 50,000 50,000 $66,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019, net amortized discount of $0 and $17,085 as of December 31, 2018 and June 30, 2018, respectively. 66,000 48,915 $100,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids twenty (20) days prior to the conversion per share, matured November 2018, net amortized discount of $0 and $39,452 as of December 31, 2018 and June 30, 2018, respectively, $100,000 was transferred to a new note. - 60,548 $5,000 face value, issued in November 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured November 2018, net amortized discount of $0 and $1,932 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 5,000 3,068 $53,000 face value, issued in November 2017, interest rate of 12% and is convertible into shares of the Company’s common stock at 61% of the lowest closing bids fifteen (15) days prior to the conversion per share, matured July 2018, net amortized discount of $0 and $4,649 as of December 31, 2018 and June 30, 2018, respectively, $53,000 was converted. - 13,821 $100,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018, net amortized discount of $0 and $20,137 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 100,000 79,863 $20,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018, net amortized discount of $0 and $4,689 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 20,000 15,311 $75,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures February 2019, net amortized discount of $0 and $23,180 as of December 31, 2018 and June 30, 2018, respectively. 75,000 51,820 $20,000 face value, issued in December 2017, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matured December 2018, net amortized discount of $0 and $6,181 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 20,000 13,819 $115,000 face value, issued in January 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $.12 and 57.5% of the lowest trading price during the prior thirty (30) days, matured October 2018, net amortized discount of $0 and $42,967 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 115,000 72,033 $20,000 face value, issued in February 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at $0.10 per share, matured February 2019, net amortized discount of $2,410 and $4,847 as of December 31, 2018 and June 30, 2018, respectively. 17,590 15,153 $75,075 face value, issued in February 2018, interest rate of 12% and 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 (25) consecutive trading days including the immediately preceding the conversion date, matured November 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018, of which $75,075 was transferred to two new notes. - 75,075 $6,000 face value, issued in February 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures June 2019. 6,000 6,000 $10,000 face value, issued in March 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures March 2019, net amortized discount of $1,124 and $2,267 as of December 31, 2018 and June 30, 2018, respectively. 8,876 7,733 $15,000 face value, issued in March 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures March 2019, net amortized discount of $1,379 and $2,780 as of December 31, 2018 and June 30, 2018, respectively. 13,621 12,220 $100,000 face value, issued in March 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at $0.10 per share, matures March 2019, net amortized discount of $10,759 and $21,696 as of December 31, 2018 and June 30, 2018, respectively. 89,241 78,304 $26,000 face value, issued from an assignment in March 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at 60% the lowest trading price during the previous twenty (20) days to the date of conversion, matured October 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018, of which $26,000 has been paid. - 26,000 $150,000 face value, issued in April 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $0.05 and 57.5% of the lowest closing bids twenty (20) days prior to the conversion date, matured January 2019, net amortized discount of $35,016 and $105,818 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 124,984 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% and is convertible into shares of the Company’s common stock at rate of 55% of the average trading price for the prior three (3) trading days, matures April 2019, net amortized discount of $17,014 and $36,000 as of December 31, 2018 and June 30, 2018, respectively, of which $223,198 has been converted. 159,788 140,802 $15,000 face value, issued in April 2018, interest rate of 10% and is convertible into shares of the Company’s common stock at rate of 55% of the average trading price for the prior three (3) trading days, matures April 2019, net amortized discount of $5,951 and $12,000 as of December 31, 2018 and June 30, 2018, respectively. 9,049 3,000 $150,086 face value, issued in May 2018, interest rate of 12% 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, matures May 2019, net amortized discount of $57,782 and $116,522 as of December 31, 2018 and June 30, 2018, of which $53,300 has been paid. 39,004 21,564 $135,700 face value, issued in May 2018, interest rate of 12% 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, matures May 2019, net amortized discount of $55,291 and $111,499 as of December 31, 2018 and June 30, 2018, of which $53,300 has been paid. 27,109 12,201 $15,651 face value, issued in June 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at 60% the lowest trading price during the previous twenty (20) days to the date of conversion, matures June 2019. 15,651 15,651 $55,718 face value, issued from an assignment in June 2018, interest rate of 12% 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, matured October 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018, of which $55,718 has been converted. - 55,718 $161,000 face value, issued in June 2018, interest rate of 12% 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, matures June 2019, net amortized discount of $79,620 and $160,558 as of December 31, 2018 and June 30, 2018, respectively, of which 41,300 was paid. 40,080 442 $120,000 face value, issued in July 2018 for prepaid services, interest rate of 15% and is convertible into shares of the Company’s common stock at 70% of the lowest closing price during the twenty (20) days prior to the conversion per share, matures July 2019. 120,000 - $23,000 face value, issued in August 2018 of $20,000 in principal and an OID of $3,000, interest rate of 12% and is convertible into shares of the Company’s common stock at 55% of the average of the three (3) lowest closing price during the 25 days prior to the conversion per share, matures August 2019, net amortized discount of $14,619 as of December 31, 2018. 8,381 - $575,000 face value, issued in August 2018 of $496,000 in principal and an OID of $79,000, interest rate of 10% 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 (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, matures August 2019, net amortized discount of $343,425 as of December 31, 2018. 231,575 - $23,000 face value, issued in August 2018 of $20,000 in principal and an OID of $3,000, interest rate of 12% and is convertible into shares of the Company’s common stock at 61% of the lowest trading price for the prior fifteen (15) trading days including the immediately preceding the conversion date, matures August 2019, net amortized discount of $14,619 as of December 31, 2018. 8,381 - $41,850 face value, issued in August 2018, interest rate of 12% and is convertible into shares of the Company’s common stock at 61% of the lowest trading price for the prior fifteen (15) trading days to the date of conversion, matures August 2019, net amortized discount of $24,537 as of December 31, 2018. 17,313 - $290,323 face value, issued in October 2018 of $249,750 in principal and an OID of $40,573, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $0.12 or 70% of the lowest Trading Price for the Common Stock during the thirty (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, matures October 2019, net amortized discount of $232,258 as of December 31, 2018. 58,065 - $290,323 face value, issued in December 2018 of $249,750 in principal and an OID of $40,573, interest rate of 10% and is convertible into shares of the Company’s common stock at the lesser of $0.12 or 70% of the lowest Trading Price for the Common Stock during the thirty (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date, matures December 2019, net amortized discount of $271,233 as of December 31, 2018. 19,090 - Total convertible notes payable – non-related parties 3,585,517 2,959,457 Less current portion 3,585,517 2,959,457 Convertible notes payable – non-related parties, long-term $ - $ - |
Schedule of Non-Convertible Notes Payable-Related Parties | December 31, June 30, 2018 2018 Various term notes with total face value of $30,000 issued from November 16 to February 17, interest rates of 0%, of which $5,000 has been paid. $ 25,000 $ 25,000 $18,000 face value, issued in September 2017, interest rate of 0%, matures June 2019. 18,000 18,000 $15,000 face value, issued in October 2017, interest rate of 0%, matures June 2019. 15,000 15,000 $10,000 face value, issued in June 2018, interest rate of 0%, matures June 2019. 10,000 10,000 $8,000 face value, issued in June 2018, interest rate of 0%, matures June 2019. 8,000 8,000 $6,000 face value, issued in July 2018, interest rate of 0%, matures June 2019. 6,000 - $6,000 face value, issued in July 2018, interest rate of 0%, matures June 2019. 6,000 - $12,000 face value, issued in August 2018, interest rate of 0%, matures June 2019. 12,000 - $15,000 face value, issued in September 2018, interest rate of 0%, matures June 2019. 15,000 - $18,500 face value, issued in October 2018, interest rate of 0%, matures June 2019. 18,500 - $15,000 face value, issued in November 2018, interest rate of 0%, matures June 2019. 15,000 - $20,000 face value, issued in November 2018, interest rate of 0%, matures June 2019. 20,000 - $20,000 face value, issued in December 2018, interest rate of 0%, matures June 2019. 20,000 - Total notes payable – related parties 188,500 76,000 Less current portion 188,500 76,000 Notes payable - related parties, long term $ - $ - |
Schedule of Non-Convertible Notes Payable-Non-Related Parties | December 31, June 30, 2018 2018 $52,000 face value, issued in August 2017, interest rate of 0%, matured December 2018 net of unamortized discount of $0 as of December 31, 2018 and June 30, 2018. The note is currently in default. $ 52,000 $ 52,000 $52,000 face value, issued in August 2017, interest rate of 10%, matures February 2019 net of unamortized discount of $0 as of December 31, 2018 and June 30, 2018. 52,000 47,099 $81,000 face value, issued in September 2017, interest rate of 8% per month, matured September 2018 net of unamortized discount of $0 as of December 31, 2018 and June 30, 2018. The note is currently in default. 81,000 81,000 $50,000 face value, issued in March 2018, interest rate of 10%, matured December 2018, net amortized discount of $0 as of December 31, 2018 and June 30, 2018. The note is currently in default. 50,000 50,000 $225,000 face value, issued in March 2018, interest rate of 30%, matures March 2019 net of unamortized discount of $30,999 and $62,512 as of December 31, 2018 and June 30, 2018, respectively. The note is currently in default. 194,001 162,488 $260,000 face value, issued in June 2018, an additional $10,000 was added to principal by the noteholder, interest rate of 0%, matured December 2018 net of unamortized discount of $0 and $9,677 as of December 31, 2018 and June 30, 2018, respectively, of which $20,000 has been paid. The note is currently in default. 250,000 250,323 $52,000 face value, issued in August 2018, interest rate of 0%, matured November 2018 net of unamortized discount of $0 as of December 31, 2018. The note is currently in default. 52,000 - $80,000 face value, issued in September 2018, interest rate of 0%, matured October 2018 net of unamortized discount of $0 as of December 31, 2018. The note is currently in default. 80,000 - $16,000 face value, issued in October 2018, interest rate of 0%, matured November 2018 net of unamortized discount of $0 as of December 31, 2018, of which $16,000 has been paid. - - $160,000 face value, issued in November 2018, interest rate of 5% per month, matures February 2019 net of unamortized discount of $0 as of December 31, 2018. 160,000 - Total note payable – non-related parties 971,001 642,910 Less current portion 971,001 642,910 Notes payable – non-related parties, long-term $ - $ - |
5. CONVERTIBLE PREFERRED STOCK
5. CONVERTIBLE PREFERRED STOCK (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Convertible Preferred Stock Tables | |
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 H Preferred 5 - - Series P Convertible Preferred 600,000 86,640 - Series S Convertible Preferred 50,000 - - Total Preferred Stock 6,325,005 3,109,044 $ 3,616,964 |
7. STOCK PURCHASE OPTIONS AND_2
7. STOCK PURCHASE OPTIONS AND WARRANTS (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Schedule of options activity | Date Issued Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Expiration Date (yrs) Value if Exercised Balance June 30, 2018 525,000 $ 0.05 $ 0.16 3.81 $ 93,750 Granted - - - - - Exercised - - - - - Cancelled/Expired (25,000 ) - - - (3,750 ) Outstanding as of December 31, 2018 500,000 $ 0.05 $ 0.17 3.50 $ 90,000 |
Schedule of Assumptions Used to Estimate Fair Value | December 31, 2018 June 30, 2018 Expected volatility 125-211% 105-304% Expected dividends 0% 0% Expected term 0-5 Years 0-5 Years Risk-free interest rate 2.00-3.05% 0.96-2.73% |
Schedule of Warrants | Number of Weighted Average Weighted Average Expiration Date Warrants Exercise Price Grant Date Fair Value (yrs) Value if Exercised Balance June 30, 2018 41,759,597 $ 0.32 $ 0.40 3.01 $ 13,291,022 Granted 10,322,782 0.07 0.04 4.38 75,581 Exercised - - - - - Cancelled/Expired (5,424,468 ) 0.57 - - (2,587,503 ) Outstanding as of December 31, 2018 46,657,911 $ 0.23 $ 0.32 3.18 $ 10,779,100 |
9. FAIR VALUE MEASUREMENTS (Tab
9. FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements Tables | |
Schedule or fair value measurements | Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 3,490,023 $ 3,490,023 Level 1 Level 2 Level 3 Total Fair value of derivatives $ - $ - $ 2,815,520 $ 2,815,520 |
10. COMMITMENTS AND CONTINGEN_2
10. COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Annual operating lease obligations | Year Lease Payments 2019 $ 67,284 2020 $ 126,596 2021 $ 105,496 2022 $ - 2023 $ - Total $ 299,376 |
2. GOING CONCERN (Details Narra
2. GOING CONCERN (Details Narrative) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Going Concern | ||
Accumulated deficit | $ (80,865,569) | $ (76,556,750) |
Working capital | $ (9,777,939) |
3. SUMMARY OF SIGNIFICANT ACC_4
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 408,064 | $ 245,066 | $ 942,586 | $ 460,462 |
Professional Services | ||||
Revenue | 272,372 | |||
Professional Services | North America | ||||
Revenue | 272,372 | |||
Professional Services | International | ||||
Revenue | 0 | |||
Transaction Based | ||||
Revenue | 670,214 | |||
Transaction Based | North America | ||||
Revenue | 670,214 | |||
Transaction Based | International | ||||
Revenue | $ 0 |
3. SUMMARY OF SIGNIFICANT ACC_5
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
ASSETS | |||||
Accounts receivable | $ 368,438 | $ 368,438 | $ 203,720 | ||
Total Current Assets | 1,059,090 | 1,059,090 | 982,285 | ||
Total Assets | 1,179,772 | 1,179,772 | 1,150,762 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
Accounts payable and other accrued expenses | 1,729,543 | 1,729,543 | 1,592,257 | ||
Total Current Liabilities | 10,837,029 | 10,837,029 | 8,625,432 | ||
Total Liabilities | 10,837,029 | 10,837,029 | 8,625,432 | ||
Accumulated Deficit | (80,865,569) | (80,865,569) | (76,556,750) | ||
Total Stockholders’ Deficit | (9,657,257) | (9,657,257) | (7,474,670) | ||
Total Liabilities and Stockholders’ Deficit | 1,179,772 | 1,179,772 | $ 1,150,762 | ||
Product Revenues | 281,105 | $ 126,162 | 670,214 | $ 220,843 | |
Total Revenues | 408,064 | 245,066 | 942,586 | 460,462 | |
Cost of Revenues (Exclusive of Depreciation and Amortization) | 461,196 | 355,012 | 878,953 | 511,340 | |
Total Costs and Expenses | 1,528,704 | 1,272,838 | 2,952,230 | 2,349,963 | |
NET LOSS | (2,182,287) | (934,078) | (4,308,819) | (2,495,862) | |
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | (2,238,654) | (990,445) | (4,421,553) | (2,608,596) | |
COMPREHENSIVE LOSS | (2,238,654) | $ (979,585) | (4,421,533) | $ (2,673,396) | |
As Reported | |||||
ASSETS | |||||
Accounts receivable | 368,438 | 368,438 | |||
Total Current Assets | 1,059,090 | 1,059,090 | |||
Total Assets | 1,179,772 | 1,179,772 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
Accounts payable and other accrued expenses | 1,729,543 | 1,729,543 | |||
Total Current Liabilities | 10,837,029 | 10,837,029 | |||
Total Liabilities | 10,837,029 | 10,837,029 | |||
Accumulated Deficit | (80,865,569) | (80,865,569) | |||
Total Stockholders’ Deficit | (9,657,257) | (9,657,257) | |||
Total Liabilities and Stockholders’ Deficit | 1,179,772 | 1,179,772 | |||
Product Revenues | 281,105 | 670,214 | |||
Total Revenues | 408,064 | 942,586 | |||
Cost of Revenues (Exclusive of Depreciation and Amortization) | 461,196 | 878,953 | |||
Total Costs and Expenses | 1,528,704 | 2,952,230 | |||
Total Loss from Operations | (1,120,640) | (2,009,644) | |||
Loss Before Income Taxes | (2,182,287) | (4,308,819) | |||
NET LOSS | (2,182,287) | (4,308,819) | |||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | (2,238,654) | (4,421,553) | |||
COMPREHENSIVE LOSS | (2,238,654) | (4,421,553) | |||
Previous Accounting Guidance | |||||
ASSETS | |||||
Accounts receivable | 417,769 | 417,769 | |||
Total Current Assets | 1,108,421 | 1,108,421 | |||
Total Assets | 1,229,103 | 1,229,103 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
Accounts payable and other accrued expenses | 1,769,553 | 1,769,553 | |||
Total Current Liabilities | 10,868,798 | 10,868,798 | |||
Total Liabilities | 10,868,798 | 10,868,798 | |||
Accumulated Deficit | (80,817,319) | (80,817,319) | |||
Total Stockholders’ Deficit | (9,639,695) | (9,639,695) | |||
Total Liabilities and Stockholders’ Deficit | 1,229,103 | 1,229,103 | |||
Product Revenues | 330,436 | 719,545 | |||
Total Revenues | 457,395 | 991,917 | |||
Cost of Revenues (Exclusive of Depreciation and Amortization) | 501,206 | 918,963 | |||
Total Costs and Expenses | 1,568,714 | 2,992,240 | |||
Total Loss from Operations | (1,111,319) | (2,000,323) | |||
Loss Before Income Taxes | (2,172,966) | (4,299,498) | |||
NET LOSS | (2,172,966) | (4,299,498) | |||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | (2,229,333) | (4,412,232) | |||
COMPREHENSIVE LOSS | (2,229,333) | (4,412,232) | |||
Impact from Adopting Topic 606 | |||||
ASSETS | |||||
Accounts receivable | 49,331 | 49,331 | |||
Total Current Assets | 49,331 | 49,331 | |||
Total Assets | 49,331 | 49,331 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
Accounts payable and other accrued expenses | 40,010 | 40,010 | |||
Total Current Liabilities | 31,769 | 31,769 | |||
Total Liabilities | 31,769 | 31,769 | |||
Accumulated Deficit | 48,250 | 48,250 | |||
Total Stockholders’ Deficit | 17,562 | 17,562 | |||
Total Liabilities and Stockholders’ Deficit | 49,331 | 49,331 | |||
Product Revenues | 49,331 | 49,331 | |||
Total Revenues | 49,331 | 49,331 | |||
Cost of Revenues (Exclusive of Depreciation and Amortization) | 40,010 | 40,010 | |||
Total Costs and Expenses | 40,010 | 40,010 | |||
Total Loss from Operations | 9,321 | 9,321 | |||
Loss Before Income Taxes | 9,321 | 9,321 | |||
NET LOSS | 9,321 | 9,321 | |||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | 9,321 | 9,321 | |||
COMPREHENSIVE LOSS | $ 9,321 | $ 9,321 |
3. SUMMARY OF SIGNIFICANT ACC_6
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Summary Of Significant Accounting Policies Details Narrative | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Preferred Stock Accretion and Dividends | $ (56,367) | $ (56,367) | $ (112,734) | $ (112,734) | |
Potentially dilutive common shares excluded | 234,671,382 | 90,410,737 |
4. NOTES PAYABLE (Details)
4. NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Total convertible notes payable - related parties | $ 118,545 | $ 115,078 |
Less current portion | 118,545 | 115,078 |
Convertible related party notes payable, net of current portion | 0 | 0 |
Convertible Notes Payable One [Member] | ||
Total convertible notes payable - related parties | 30,000 | 30,000 |
Convertible Notes Payable Two [Member] | ||
Total convertible notes payable - related parties | 5,000 | 4,393 |
Convertible Notes Payable Three [Member] | ||
Total convertible notes payable - related parties | 10,000 | 10,000 |
Convertible Notes Payable Four [Member] | ||
Total convertible notes payable - related parties | 25,000 | 23,110 |
Convertible Notes Payable Five [Member] | ||
Total convertible notes payable - related parties | 9,735 | 9,466 |
Convertible Notes Payable Six [Member] | ||
Total convertible notes payable - related parties | 14,310 | 13,609 |
Convertible Notes Payable Seven [Member] | ||
Total convertible notes payable - related parties | $ 24,500 | $ 24,500 |
4. NOTES PAYABLE (Details 1)
4. NOTES PAYABLE (Details 1) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Total convertible notes payable - non-related parties | $ 3,585,517 | $ 2,959,457 |
Less current portion | 3,585,517 | 2,959,457 |
Convertible notes payable - non-related parties, long-term | 0 | 0 |
Convertible Notes Payable One [Member] | ||
Total convertible notes payable - non-related parties | 7,000 | 7,000 |
Convertible Notes Payable Two [Member] | ||
Total convertible notes payable - non-related parties | 100,000 | 100,000 |
Convertible Notes Payable Three [Member] | ||
Total convertible notes payable - non-related parties | 25,000 | 25,000 |
Convertible Notes Payable Four [Member] | ||
Total convertible notes payable - non-related parties | 100,000 | 100,000 |
Convertible Notes Payable Five [Member] | ||
Total convertible notes payable - non-related parties | 10,000 | 10,000 |
Convertible Notes Payable Six [Member] | ||
Total convertible notes payable - non-related parties | 50,000 | 50,000 |
Convertible Notes Payable Seven [Member] | ||
Total convertible notes payable - non-related parties | 50,000 | 50,000 |
Convertible Notes Payable Eight [Member] | ||
Total convertible notes payable - non-related parties | 1,000,000 | 1,000,000 |
Convertible Notes Payable Nine [Member] | ||
Total convertible notes payable - non-related parties | 93,762 | 79,340 |
Convertible Notes Payable Ten [Member] | ||
Total convertible notes payable - non-related parties | 124,542 | 98,508 |
Convertible Notes Payable Eleven [Member] | ||
Total convertible notes payable - non-related parties | 166,415 | 200,412 |
Convertible Notes Payable Twelve [Member] | ||
Total convertible notes payable - non-related parties | 100,000 | 100,000 |
Convertible Notes Payable Thirteen [Member] | ||
Total convertible notes payable - non-related parties | 6,000 | 6,000 |
Convertible Notes Payable Fourteen [Member] | ||
Total convertible notes payable - non-related parties | 10,000 | 9,271 |
Convertible Notes Payable Fifteen [Member] | ||
Total convertible notes payable - non-related parties | 53,000 | 53,000 |
Convertible Notes Payable Sixteen [Member] | ||
Total convertible notes payable - non-related parties | 10,000 | 5,600 |
Convertible Notes Payable Seventeen [Member] | ||
Total convertible notes payable - non-related parties | 100,000 | 77,667 |
Convertible Notes Payable Eighteen [Member] | ||
Total convertible notes payable - non-related parties | 115,000 | 64,416 |
Convertible Notes Payable Nineteen [Member] | ||
Total convertible notes payable - non-related parties | 50,000 | 50,000 |
Convertible Notes Payable Twenty [Member] | ||
Total convertible notes payable - non-related parties | 66,000 | 48,915 |
Convertible Notes Payable Twenty One [Member] | ||
Total convertible notes payable - non-related parties | 0 | 60,548 |
Convertible Notes Payable Twenty Two [Member] | ||
Total convertible notes payable - non-related parties | 5,000 | 3,068 |
Convertible Notes Payable Twenty Three [Member] | ||
Total convertible notes payable - non-related parties | 0 | 13,821 |
Convertible Notes Payable Twenty Four [Member] | ||
Total convertible notes payable - non-related parties | 100,000 | 79,863 |
Convertible Notes Payable Twenty Five [Member] | ||
Total convertible notes payable - non-related parties | 20,000 | 15,311 |
Convertible Notes Payable Twenty Six [Member] | ||
Total convertible notes payable - non-related parties | 75,000 | 51,820 |
Convertible Notes Payable Twenty Seven [Member] | ||
Total convertible notes payable - non-related parties | 20,000 | 13,819 |
Convertible Notes Payable Twenty Eight [Member] | ||
Total convertible notes payable - non-related parties | 115,000 | 72,033 |
Convertible Notes Payable Twenty Nine [Member] | ||
Total convertible notes payable - non-related parties | 17,590 | 15,153 |
Convertible Notes Payable Thirty [Member] | ||
Total convertible notes payable - non-related parties | 0 | 75,075 |
Convertible Notes Payable Thirty One [Member] | ||
Total convertible notes payable - non-related parties | 6,000 | 6,000 |
Convertible Notes Payable Thirty Two [Member] | ||
Total convertible notes payable - non-related parties | 8,876 | 7,733 |
Convertible Notes Payable Thirty Three [Member] | ||
Total convertible notes payable - non-related parties | 13,621 | 12,220 |
Convertible Notes Payable Thirty Four [Member] | ||
Total convertible notes payable - non-related parties | 89,241 | 78,304 |
Convertible Notes Payable Thirty Five [Member] | ||
Total convertible notes payable - non-related parties | 0 | 26,000 |
Convertible Notes Payable Thirty Six [Member] | ||
Total convertible notes payable - non-related parties | 124,984 | 44,182 |
Convertible Notes Payable Thirty Seven [Member] | ||
Total convertible notes payable - non-related parties | 159,788 | 140,802 |
Convertible Notes Payable Thirty Eight [Member] | ||
Total convertible notes payable - non-related parties | 9,049 | 3,000 |
Convertible Notes Payable Thirty Nine [Member] | ||
Total convertible notes payable - non-related parties | 39,004 | 21,564 |
Convertible Notes Payable Forty [Member] | ||
Total convertible notes payable - non-related parties | 27,109 | 12,201 |
Convertible Notes Payable Forty One [Member] | ||
Total convertible notes payable - non-related parties | 15,651 | 15,651 |
Convertible Notes Payable Forty Two [Member] | ||
Total convertible notes payable - non-related parties | 0 | 55,718 |
Convertible Notes Payable Forty Three [Member] | ||
Total convertible notes payable - non-related parties | 40,080 | 441 |
Convertible Notes Payable Forty Four [Member] | ||
Total convertible notes payable - non-related parties | 120,000 | 0 |
Convertible Notes Payable Forty Five [Member] | ||
Total convertible notes payable - non-related parties | 0 | 0 |
Convertible Notes Payable Forty Six [Member] | ||
Total convertible notes payable - non-related parties | 0 | 0 |
Convertible Notes Payable Forty Seven [Member] | ||
Total convertible notes payable - non-related parties | 8,381 | 0 |
Convertible Notes Payable Forty Eight [Member] | ||
Total convertible notes payable - non-related parties | 0 | 0 |
Convertible Notes Payable Forty Nine [Member] | ||
Total convertible notes payable - non-related parties | 231,575 | 0 |
Convertible Notes Payable Fifty One [Member] | ||
Total convertible notes payable - non-related parties | 8,381 | 0 |
Convertible Notes Payable Fifty Two [Member] | ||
Total convertible notes payable - non-related parties | 17,313 | 0 |
Convertible Notes Payable Fifty Three [Member] | ||
Total convertible notes payable - non-related parties | 58,065 | 0 |
Convertible Notes Payable Fifty Four [Member] | ||
Total convertible notes payable - non-related parties | $ 19,090 | $ 0 |
4. NOTES PAYABLE (Details 2)
4. NOTES PAYABLE (Details 2) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Notes payable - related parties | $ 188,500 | $ 76,000 |
Less current portion | 188,500 | 76,000 |
Notes payable - related parties, long term | 0 | 0 |
Convertible Notes Payable One [Member] | ||
Notes payable - related parties | 25,000 | 25,000 |
Convertible Notes Payable Two [Member] | ||
Notes payable - related parties | 18,000 | 18,000 |
Convertible Notes Payable Three [Member] | ||
Notes payable - related parties | 15,000 | 15,000 |
Convertible Notes Payable Four [Member] | ||
Notes payable - related parties | 10,000 | 10,000 |
Convertible Notes Payable Five [Member] | ||
Notes payable - related parties | 8,000 | 8,000 |
Convertible Notes Payable Six [Member] | ||
Notes payable - related parties | 6,000 | 0 |
Convertible Notes Payable Seven [Member] | ||
Notes payable - related parties | 6,000 | 0 |
Convertible Notes Payable Eight [Member] | ||
Notes payable - related parties | 12,000 | 0 |
Convertible Notes Payable Nine [Member] | ||
Notes payable - related parties | 15,000 | 0 |
Convertible Notes Payable Ten [Member] | ||
Notes payable - related parties | 18,500 | 0 |
Convertible Notes Payable Eleven [Member] | ||
Notes payable - related parties | 15,000 | 0 |
Convertible Notes Payable Twelve [Member] | ||
Notes payable - related parties | 20,000 | 0 |
Convertible Notes Payable Thirteen [Member] | ||
Notes payable - related parties | $ 20,000 | $ 0 |
4. NOTES PAYABLE (Details 3)
4. NOTES PAYABLE (Details 3) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Note payable - non-related parties | $ 971,001 | $ 642,910 |
Less current portion | 971,001 | 642,910 |
Notes payable - non-related parties, long-term | 0 | 0 |
Convertible Notes Payable One [Member] | ||
Note payable - non-related parties | 52,000 | 52,000 |
Convertible Notes Payable Two [Member] | ||
Note payable - non-related parties | 52,000 | 47,099 |
Convertible Notes Payable Three [Member] | ||
Note payable - non-related parties | 81,000 | 81,000 |
Convertible Notes Payable Four [Member] | ||
Note payable - non-related parties | 50,000 | 50,000 |
Convertible Notes Payable Five [Member] | ||
Note payable - non-related parties | 194,001 | 162,488 |
Convertible Notes Payable Six [Member] | ||
Note payable - non-related parties | 250,000 | 250,323 |
Convertible Notes Payable Seven [Member] | ||
Note payable - non-related parties | 52,000 | 162,488 |
Convertible Notes Payable Eight [Member] | ||
Note payable - non-related parties | 80,000 | 250,323 |
Convertible Notes Payable Nine [Member] | ||
Note payable - non-related parties | 0 | 0 |
Convertible Notes Payable Ten [Member] | ||
Note payable - non-related parties | $ 160,000 | $ 0 |
5. CONVERTIBLE PREFERRED STOC_2
5. CONVERTIBLE PREFERRED STOCK (Details) | Dec. 31, 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 H Convertible Preferred | 5 |
Series P Convertible Preferred | 600,000 |
Series S Convertible Preferred | 50,000 |
Total Preferred Stock | 6,325,005 |
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 H Convertible Preferred | 0 |
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 H Convertible Preferred | 0 |
Series P Convertible Preferred | 0 |
Series S Convertible Preferred | 0 |
Total Preferred Stock | 3,616,964 |
5. CONVERTIBLE PREFERRED STOC_3
5. CONVERTIBLE PREFERRED STOCK (Details Narrative) - USD ($) | 6 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Dividends on preferred stock | $ 112,734 | $ 112,734 |
Dividends in arrears | $ 1,247,140 |
6. COMMON STOCK (Details Narrat
6. COMMON STOCK (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Text Block [Abstract] | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, authorized shares | 250,000,000 | 250,000,000 | |
Common stock, issued shares | 167,170,130 | 133,446,521 | |
Common stock, outstanding shares | 167,170,130 | 133,446,521 | |
Common stock issued for conversion of notes and accrued interest, shares | 22,723,609 | ||
Common stock issued for conversion of notes and accrued interest, value | $ 331,333 | ||
Common stock issued for sevices, shares | 11,885,000 | ||
Common stock issued for services, value | $ 415,765 | ||
Common stock issued for the extension of convertible note, shares | 3,010,506 | ||
Common stock issued for the extension of convertible note, value | $ 192,896 | ||
Share based compensation to employees and non-employees, shares | 5,199,699 | 1,280,162 | |
Share based compensation to employees and non-employees, value | $ 125,676 | $ 187,623 | |
Common stock issued for services and rent, shares | 120,000 | ||
Common stock issued for services and rent value | $ 22,800 | ||
Common stock issued for interest expense on outstanding notes payable, shares | 3,000,000 | 340,000 | |
Common stock issued for interest expense on outstanding notes payable, value | $ 90,000 | $ 34,000 |
7. STOCK PURCHASE OPTIONS AND_3
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details) | 6 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Stock Purchase Options And Warrants Details 2 | |
Number of Options/Warrants Outstanding, Beginning | shares | 525,000 |
Number of Warrants Granted | shares | 0 |
Number of Warrants Exercised | shares | 0 |
Number of Warrants Canceled/Expired | shares | (25,000) |
Number of Options/Warrants Outstanding, Ending | shares | 500,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.05 |
Weighted Average Exercise Price Granted | 0 |
Weighted Average Exercise Price Exercised | 0 |
Weighted Average Exercise Price Canceled/Expired | 0 |
Weighted Average Exercise Price Outstanding, Ending | 0.05 |
Weighted Average Grant Date Fair Value Outstanding, Beginning | 0.16 |
Weighted Average Grant Date Fair Value Outstanding Granted | 0 |
Weighted Average Grant Date Fair Value Outstanding Exercised | 0 |
Weighted Average Grant Date Fair Value Outstanding Canceled/Expired | 0 |
Weighted Average Grant Date Fair Value Outstanding, Ending | $ 0.16 |
Expiration Date Outstanding, Beginning | 3 years 9 months 22 days |
Expiration Date Outstanding, Ending | 3 years 6 months |
Value if Exercised, Beginning | $ | $ 93,750 |
Value if Exercised Granted | $ | 0 |
Value if Exercised Exercised | $ | 0 |
Value if Exercised Canceled/Expired | $ | (3,750) |
Value if Exercised, Ending | $ | $ 90,000 |
7. STOCK PURCHASE OPTIONS AND_4
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details 1) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Jun. 30, 2018 | |
Stock Purchase Options And Warrants Details 1 | ||
Expected volatility, minimum | 125.00% | 105.00% |
Expected volatility, maximum | 211.00% | 304.00% |
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 | 2.00% | 0.96% |
Risk-free interest rate, maximum | 3.05% | 2.73% |
7. STOCK PURCHASE OPTIONS AND_5
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details 2) | 6 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Number of Options/Warrants Outstanding, Beginning | shares | 525,000 |
Number of Options/Warrants Granted | shares | 0 |
Number of Options/Warrants Exercised | shares | 0 |
Number of Options/Warrants Canceled/Expired | shares | (25,000) |
Number of Options/Warrants Outstanding, Ending | shares | 500,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.05 |
Weighted Average Exercise Price Granted | 0 |
Weighted Average Exercise Price Exercised | 0 |
Weighted Average Exercise Price Canceled/Expired | 0 |
Weighted Average Exercise Price Outstanding, Ending | 0.05 |
Weighted Average Grant Date Fair Value Outstanding, Beginning | 0.16 |
Weighted Average Grant Date Fair Value Outstanding Granted | 0 |
Weighted Average Grant Date Fair Value Outstanding Exercised | 0 |
Weighted Average Grant Date Fair Value Outstanding Cancelled | 0 |
Weighted Average Grant Date Fair Value Outstanding, Ending | $ 0.16 |
Expiration Date Outstanding, Beginning | 3 years 9 months 22 days |
Expiration Date Outstanding, Ending | 3 years 6 months |
Value if Exercised, Beginning | $ | $ 93,750 |
Value if Exercised Granted | $ | 0 |
Value if Exercised, Ending | $ | $ 90,000 |
Stock Options | |
Number of Options/Warrants Outstanding, Beginning | shares | 41,759,597 |
Number of Options/Warrants Granted | shares | 10,322,782 |
Number of Options/Warrants Exercised | shares | 0 |
Number of Options/Warrants Canceled/Expired | shares | (5,424,468) |
Number of Options/Warrants Outstanding, Ending | shares | 46,657,911 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.32 |
Weighted Average Exercise Price Granted | 0.07 |
Weighted Average Exercise Price Exercised | 0 |
Weighted Average Exercise Price Canceled/Expired | 0.57 |
Weighted Average Exercise Price Outstanding, Ending | 0.23 |
Weighted Average Grant Date Fair Value Outstanding, Beginning | 0.40 |
Weighted Average Grant Date Fair Value Outstanding Granted | 0.04 |
Weighted Average Grant Date Fair Value Outstanding Exercised | 0 |
Weighted Average Grant Date Fair Value Outstanding Cancelled | 0 |
Weighted Average Grant Date Fair Value Outstanding, Ending | $ 0.32 |
Expiration Date Outstanding, Beginning | 3 years 4 days |
Expiration Date Granted | 4 years 4 months 17 days |
Expiration Date Outstanding, Ending | 3 years 2 months 5 days |
Value if Exercised, Beginning | $ | $ 13,291,022 |
Value if Exercised Granted | $ | 75,581 |
Value if Exercised | $ | 0 |
Value if Exercised Cancelled/Expired | $ | (2,587,503) |
Value if Exercised, Ending | $ | $ 10,779,100 |
7. STOCK PURCHASE OPTIONS AND_6
7. STOCK PURCHASE OPTIONS AND WARRANTS (Details Narrative) | 6 Months Ended |
Dec. 31, 2018shares | |
Notes to Financial Statements | |
Stock purchase options issued | 10,322,782 |
8. FINANCIAL INSTRUMENTS (Detai
8. FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Financial Instruments | |||||
Gain (loss) from derivative instruments | $ (17,475) | $ 906,544 | $ 594,737 | $ 1,109,364 | |
Derivative expense | 312,256 | $ 202,813 | 1,355,346 | $ 340,279 | |
Fair market value of the derivatives | $ 3,490,023 | $ 3,490,023 | $ 2,815,520 |
9. FAIR VALUE MEASUREMENTS (Det
9. FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Fair value of derivatives | $ 3,490,023 | $ 2,815,520 |
Level 1 [Member] | ||
Fair value of derivatives | 0 | 0 |
Level 2 [Member] | ||
Fair value of derivatives | 0 | 0 |
Level 3 [Member] | ||
Fair value of derivatives | $ 3,490,023 | $ 2,815,520 |
10. COMMITMENTS AND CONTINGEN_3
10. COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2018USD ($) |
Commitments And Contingencies Details | |
2,019 | $ 67,284 |
2,020 | 126,596 |
2,021 | 105,496 |
2,022 | 0 |
2,023 | 0 |
Total | $ 299,376 |
10. COMMITMENTS AND CONTINGEN_4
10. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies | ||||
Operating lease expense | $ 85,180 | $ 92,209 | $ 175,766 | $ 182,418 |