Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Oct. 13, 2016 | Dec. 31, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | NuSTATE ENERGY HOLDINGS, INC. | ||
Entity Central Index Key | 1,082,733 | ||
Document Type | 10-K/A | ||
Document Period End Date | Jun. 30, 2016 | ||
Amendment Flag | true | ||
Amendment Description | This Amendment No. 1 (the Amendment) to the registrants annual report on Form 10-K for the fiscal year ended June 30, 2016 that was filed with the Securities and Exchange Commission on October 14, 2016 (the Original Filing) is being filed solely for the purpose of adding additional footnote disclosures related to its gain on troubled debt restructuring. No other changes have been made to the Original Filing. This Amendment speaks as of the Original Filing date and does not reflect events that may have occurred subsequent to the Original Filing date, and does not modify or update in any way the disclosures made in the Original Filing. | ||
Current Fiscal Year End Date | --06-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 746,757 | ||
Entity Common Stock, Shares Outstanding | 32,654,179 | ||
Trading Symbol | NSEH | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash | $ 1,806 | $ 6,130 |
Total current assets | 1,806 | 6,130 |
Total assets | 1,806 | 6,130 |
Current liabilities: | ||
Accounts payable and accrued expenses | 550,308 | 440,642 |
Accrued compensation | 190,325 | 342,000 |
Accrued interest | 1,235,330 | 778,462 |
Settlement due to ASC Recap LLC | 2,372,513 | |
Convertible notes payable to ASC Recap LLC | 147,965 | 150,000 |
Convertible notes payable, net of discount of $108,750 and $0, respectively | 1,500,599 | 1,421,730 |
Notes payable | 240,240 | 90,241 |
Derivative liabilities | 636,096 | 295,808 |
Total current liabilities | 4,500,863 | 5,891,396 |
Stockholders' deficit: | ||
Common stock, $0.0001 par value, 250,000,000 shares authorized: 5,654,179 shares and 1,451,303 shares issued and outstanding at June 30, 2016 and 2015, respectively (See Note 7) | 565 | 145 |
Additional paid in capital | 37,025,805 | 36,281,971 |
Accumulated deficit | (41,540,747) | (42,174,837) |
Total stockholders' deficit | (4,499,057) | (5,891,396) |
Total liabilities and stockholders' deficit | 1,806 | 6,130 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 13,992 | |
Series B Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 1,328 | 150 |
Series C Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 3 | |
Series D Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | ||
Series E Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | ||
Series F Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 1 | |
Series G Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | ||
Series H Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 1 | |
Series I Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 300 | |
Series J Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | ||
Series Y Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | $ 870 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Discount of convertible notes payable | $ 108,750 | $ 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 5,654,179 | 1,451,303 |
Common stock, shares outstanding | 5,654,179 | 1,451,303 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 13,992,340 | 0 |
Preferred stock, shares outstanding | 13,992,340 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, shares issued | 1,327,640 | 149,600 |
Preferred stock, shares outstanding | 1,327,640 | 149,600 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 20,000 |
Preferred stock, shares issued | 0 | 332 |
Preferred stock, shares outstanding | 0 | 332 |
Series D Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 40 |
Preferred stock, shares issued | 0 | 19 |
Preferred stock, shares outstanding | 0 | 19 |
Series E Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 1,600 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series F Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 500 |
Preferred stock, shares issued | 0 | 128 |
Preferred stock, shares outstanding | 0 | 128 |
Series G Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 6 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Series H Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 1,600 |
Preferred stock, shares issued | 0 | 70 |
Preferred stock, shares outstanding | 0 | 70 |
Series I Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 100,000 |
Preferred stock, shares issued | 0 | 30,000 |
Preferred stock, shares outstanding | 0 | 30,000 |
Series J Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 80 |
Preferred stock, shares issued | 0 | 2 |
Preferred stock, shares outstanding | 0 | 2 |
Series Y Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 0 | 87,000 |
Preferred stock, shares issued | 0 | 87,000 |
Preferred stock, shares outstanding | 0 | 87,000 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||
Net revenues | ||
Operating expenses: | ||
Selling, general and administrative | 719,868 | 358,656 |
Total operating expenses | 719,868 | 358,656 |
Loss from operations | (719,868) | (358,656) |
Other income (expense) | ||
Gain (loss) on change in fair value of derivative liabilities | 189,712 | 60,481 |
Derivative liability expense | (265,000) | |
Interest expense | (456,546) | (310,864) |
Gain (loss) on troubled debt restructuring | 1,897,927 | (11,928) |
Loss on debt settlement | (12,135) | (339,421) |
Total other income (expense) | 1,353,958 | (601,732) |
Net income (loss) | $ 634,090 | $ (960,388) |
WEIGHTED AVERAGE COMMON SHARES | ||
Basic | 4,087,739 | 1,052,898 |
Diluted | 54,340,344 | 1,052,898 |
NET (LOSS) INCOME PER COMMON SHARE -BASIC: | $ 0.15 | $ (0.91) |
NET (LOSS) INCOME PER COMMON SHARE -DILUTED: | $ 0.01 | $ (0.91) |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Deficit - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] | Series F Preferred Stock [Member] | Series H Preferred Stock [Member] | Series I Preferred Stock [Member] | Series J Preferred Stock [Member] | Series Y Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jun. 30, 2014 | $ 150 | $ 3 | $ 0 | $ 1 | $ 1 | $ 300 | $ 0 | $ 870 | $ 54 | $ 35,815,424 | $ (41,214,449) | $ (5,397,647) | |
Balance, shares at Jun. 30, 2014 | 149,600 | 332 | 19 | 128 | 70 | 30,000 | 2 | 87,000 | 537,069 | ||||
Issuance of common stock to IBC | $ 86 | 441,659 | 441,745 | ||||||||||
Issuance of common stock to IBC, shares | 858,914 | ||||||||||||
Issuance of common stock to partially satisfy payable to ASC Recap, LLC | $ 6 | 24,888 | 0 | 24,894 | |||||||||
Issuance of common stock to partially satisfy payable to ASC Recap, LLC, shares | 55,320 | ||||||||||||
Net income for the year ended | (960,388) | (960,388) | |||||||||||
Balance at Jun. 30, 2015 | $ 150 | $ 3 | $ 0 | $ 1 | $ 1 | $ 300 | $ 0 | $ 870 | $ 145 | 36,281,972 | (42,174,837) | (5,891,396) | |
Balance, shares at Jun. 30, 2015 | 149,600 | 332 | 19 | 128 | 70 | 30,000 | 2 | 87,000 | 1,451,303 | ||||
Net income for the year ended | 634,090 | 634,090 | |||||||||||
Shares issued as compensation | $ 33 | 49,867 | 49,900 | ||||||||||
Shares issued as compensation, shares | 332,667 | ||||||||||||
Shares issued in exchange for accrued compensation | $ 0 | $ 0 | $ 336 | 638,264 | 638,600 | ||||||||
Shares issued in exchange for accrued compensation, shares | 106 | 15 | 3,361,459 | ||||||||||
Shares exchanged for Series A | $ 11,181 | $ (150) | $ (3) | $ 0 | $ (1) | $ (1) | $ (300) | $ 0 | (4,408) | 0 | 6,318 | ||
Shares exchanged for Series A, shares | 11,181,340 | (149,600) | (332) | (19) | (234) | (85) | (30,000) | (2) | |||||
Shares issued in exchange for cash | $ 40 | $ 200 | 84,760 | 0 | 85,000 | ||||||||
Shares issued in exchange for cash, shares | 40,000 | 200,000 | |||||||||||
Shares issued in exchange for Series Y | $ 87 | $ 0 | $ (870) | 783 | 0 | ||||||||
Shares issued in exchange for Series Y, shares | 87,000 | (87,000) | |||||||||||
Shares issued for notes payable | $ 2,684 | $ 1,128 | $ 51 | (25,431) | (21,569) | ||||||||
Shares issued for notes payable, shares | 2,684,000 | 1,127,640 | 508,750 | ||||||||||
Adjust for change in par value | 0 | ||||||||||||
Balance at Jun. 30, 2016 | $ 13,992 | $ 1,328 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 565 | $ 37,025,805 | $ (41,540,747) | $ (4,499,057) |
Balance, shares at Jun. 30, 2016 | 13,992,340 | 1,327,640 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5,654,179 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 634,090 | $ (960,388) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Amortization of debt discount | 156,250 | 106,164 |
Stock based compensation | 49,900 | |
(Gain) on troubled debt restructuring | (1,897,927) | 11,928 |
(Gain) loss on change in fair value of derivative liabilities | (189,712) | (60,481) |
Derivative liability expense | 265,000 | |
Loss on debt settlement | 12,135 | 339,421 |
Changes in operating assets and liabilities | ||
Accounts payable and accrued expenses | (13,929) | 2,721 |
Accrued compensation | 259,573 | 175,000 |
Accrued interest | 300,296 | 206,700 |
Net cash used in operating activities | (424,324) | (178,935) |
Cash flows from financing activities: | ||
Repayment of notes payable | (5,000) | |
Proceed from sale of preferred stock | 85,000 | |
Proceeds from short term note payable | 25,000 | |
Proceeds from convertible notes payable | 315,000 | 185,000 |
Net cash provided by financing activities | 420,000 | 185,000 |
Net increase (decrease) in cash | (4,324) | 6,065 |
Cash at beginning of year | 6,130 | 65 |
Cash at end of year | 1,806 | 6,130 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | ||
Income taxes | ||
Issuance of common stock for conversion of debt | 21,569 | |
Issuance of common stock to settle liability to IBC Funds | 447,874 | |
Issuance of common stock to satisfy accrued compensation | 500,000 | |
Issuance of common stock to partially satisfy settlement payable to ASC Recap | $ 24,894 |
Organization, Description of Bu
Organization, Description of Business and Going Concern | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization, Description of Business and Going Concern | NOTE 1: ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN NuState Energy Holdings, Inc. , The accompanying financial statements have been prepared on a going concern basis. The Company had a loss from operations of $720,000 and had net cash used in operating activities of approximately $424,000 during the year ended June 30, 2016 and had a working capital deficit of approximately $4,500,000 and an accumulated deficit of $41,540,000 at June 30, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions used in Black-Scholes-Merton derivative liability valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate and in the valuation allowance of deferred tax assets. Cash and Cash Equivalents The Company considers all highly liquid, temporary, cash equivalents with an original maturity of three months or less when purchased, to be cash equivalents. The Company had no cash equivalents during the years ended June 30, 2016 and 2015. Concentration of Credit Risks The Company is subject to a concentration of credit risk from cash. The Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or FDIC, up to $250,000. During the years ended June 30, 2016 and 2015, the Company had not reached a bank balance exceeding the FDIC insurance limit. Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of June 30, 2016 and 2015, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. During the year ended June 30, 2016 and 2015, the Company had notes payable outstanding in which the conversion rate was variable and undeterminable. Accordingly, the Company has recognized a derivative liability in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter and in determining which valuation method is most appropriate for the instrument (e.g., Black-Scholes-Merton), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate, if any. Fair Value of Financial Instruments The Company accounts for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company’s derivative liability is classified as Level 3 financial instrument. Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes payable and convertible promissory notes payable, approximate their fair value due to the short maturity of these items or the use of market interest rates. Convertible Instruments The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40, Contracts in Entity’s own Equity, generally provides that, among other things, if an event is not within the entity’s control, such contract could require net cash settlement and shall be classified as an asset or a liability. The Company determines whether the instruments issued in the transactions are considered indexed to the Company’s own stock. During fiscal years 2014 the Company’s issued convertible securities with variable conversion provisions that resulted in derivative liabilities. Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions”. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. Income Taxes, continued The Company has adopted ASC 740-10-25, “ , Share-Based Payments The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation - Stock Compensation”. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period. The Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Segment Reporting The Company operates in one business segment which technologies are providing pertinent, real-time information to the worldwide transportation and security industries. Recent Accounting Pronouncements Recent accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company. As an emerging growth company, we have elected to use the exemption provided for in the Jumpstart Our Business Startups Act or JOBS Act allowing us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies pursuant to Section 102(b)(1) of the Act. Basic and Diluted Earnings Per Share Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and the dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method) and conversion of other securities such as convertible debt or convertible preferred stock. Potential common shares includable in the computation of fully-diluted per-share results are not presented in the financial statements for the year ended June 30, 2016, as their effect would be anti-dilutive. Share amounts reflect the 1500:1 reverse stock split which was effective as of June 16, 2016. For the Years ended June 30, 2016 2015 Numerator: Net loss from operations $ (719,868 ) $ (358,656 ) Interest expense (456,546 ) (310,864 ) Loss on settlement of debt (12,135 ) (339,421 ) Gain (loss) on troubled debt restructuring 1,897,927 (11,928 ) Gain (loss) on change in fair value of derivative liabilities 189,712 60,481 Numerator for basic earnings per share- net income (loss) $ 634,090 $ (960,388 ) Denominator: Denominator for basic earnings per share-weighted average shares 4,087,739 1,052,898 Effect of dilutive securities-when applicable: Convertible promissory notes 50,238,846 2,617,285 Preferred Stock 13,759 44,069 Warrants - - Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions 54,340,344 3,714,252 Earnings (loss) per share Basic: $ 0.15 $ (0.91 ) Earnings (loss) per share Diluted: $ 0.01 $ (0.91 ) The weighted-average potentially dilutive common share equivalents outstanding at June 30, 2016 and 2015 are as follows: 2016 2015 Series A Preferred Stock 9,329 - Series B Preferred Stock 4,430 1,995 Series C Preferred Stock - 22 Series D Preferred Stock - 12,667 Series F Preferred Stock - 17,130 Series H Preferred Stock - 1,864 Series I Preferred Stock - 10,000 Series J Preferred Stock - 333 Series Y Preferred Stock - 58 Convertible notes payable 50,238,846 2,617,285 Warrants - - Total 50,252,605 2,661,354 |
Derivative Liability
Derivative Liability | 12 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 3: DERIVATIVE LIABILITY The Company accounts for the embedded conversion features included in its convertible instruments as derivative liabilities. The aggregate fair value of derivative liabilities at June 30, 2016 and 2015 amounted to $636,096 and $295,808, respectively. For the year ended June 30, 2016, the Company recorded a gain on the change in fair value of derivative liabilities of $189,712. For the year ended June 30, 2015, the Company recorded a gain on the change in derivative liability of $60,481. At each measurement date, the fair value of the embedded conversion features was based on the Black-Scholes-Merton method using the following assumptions: Year Ended June 30, 2016 2015 Effective Exercise price 0.0035 – 0.00477 0.075 Effective Market price 0.0073 0.15 Volatility 497% - 703% 465% Risk-free interest 0.13% 0.1% Terms 14 - 365 days 252 - 365 days Expected dividend rate 0% 0% Changes in the derivative liabilities during the years ended June 30, 2016 and 2015 are as follows: Derivative liabilities at June 30, 2014 $ 356,289 Gain on change in fair value of derivative liability, recognized as other income (60,481 ) Derivative liability at June 30, 2015 295,808 Derivative liability expense 265,000 Original discount on convertible notes payable charged to derivative liability 265,000 Gain on change in fair value of derivative liability, recognized as other expense (189,712 ) Derivative liabilities at June 30, 2016 $ 636,096 |
Convertible Notes Payable and N
Convertible Notes Payable and Note Payable | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable and Note Payable | NOTE 4: CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE Convertible Notes Payable At June 30, 2016 and June 30, 2015 convertible debentures consisted of the following: June 30, 2016 2015 Convertible notes payable $ 1,609,349 $ 1,421,730 Discount on convertible notes (108,750 ) - Convertible notes payable to ASC Recap 147,965 150,000 Total $ 1,648,564 $ 1,571,730 The Company had convertible promissory notes aggregating approximately $1.6 million and $1.6 million at June 30, 2016 and June 30, 2015, respectively. The related accrued interest amounted to approximately $1,037,000 and $754,000 million at June 30, 2016 and June 30, 2015, respectively. The convertible notes payable bear interest at rates ranging from 10% to 18% per annum. The convertible notes are generally convertible, at the holders’ option, at rates ranging from $0.00125 to $0.0267 per share. At June 30, 2016, approximately $1.6 million of convertible promissory notes had matured, are in default, and remain unpaid. On July 22, 2013 and May 6, 2014, the Company issued to ASC Recap LLC (“ASC”), in connection with the Company’s settlement with ASC of up to approximately $2.5 million in liabilities of the Company, two convertible promissory notes with principal amounts of $25,000 and $125,000, respectively. The July 22, 2013 note matured on March 31, 2014 and remains unpaid and in default. The May 6, 2014 note matured on May 6, 2015, is in default, and remains unpaid. The notes are convertible into the common stock of the Company at any time at a conversion price equal to 50% of the lowest closing bid price of our common stock for the twenty days prior to conversion. Notes Payable The Company had promissory notes aggregating $240,241 and $90,241 at June 30, 2016 and June 30, 2015, respectively. The related accrued interest amounted to approximately $200,000 and $25,000 at June 30, 2016 and June 30, 2015, respectively. The notes payable bear interest at rates ranging from 0% to 16% per annum and are payable monthly. All promissory notes outstanding as of June 30, 2016 have matured, are in default, and remain unpaid. Transactions The Company generated proceeds of $315,000 from the issuance of convertible promissory notes with interest rates of 18% during fiscal 2016, and $25,000 from the issuance of a short term note payable, with an interest rate of 0% during fiscal 2016. The Company generated proceeds of $185,000 from the issuance of convertible promissory notes with interest rates of 18% during fiscal 2015. The Company recognized interest expense of approximately $292,000 and $311,000 during fiscal 2016 and 2015, respectively. Gain on Troubled Debt Restructuring During fiscal 2016, the Company entered transactions with noteholders and other vendors to settle amounts owed through the issuance of the Company’s preferred stock in exchange for amounts owed. The table below summarizes the gain realized from this troubled debt restructuring. Year Ended June 30, 2016 2015 Exchange of outstanding Series B preferred shares for Series A preferred shares $ (2,917 ) - Exchange of outstanding Series C preferred shares for Series A preferred shares (37 ) - Exchange of outstanding Series I preferred shares for Series A preferred shares 300 - Exchange of outstanding Series J preferred shares for Series A preferred shares (20 ) - Exchange of outstanding Series Y preferred shares for Series A preferred shares (339 ) - Exchange of convertible notes payable for shares of Series A convertible preferred stock 1,504,865 - Issuance of Series F and Series H preferred stock in exchange for accrued compensation 396,075 - Gain on restructure of troubled convertible notes - (11,928 ) $ 1,897,927 $ ( 11,928 ) |
Obligations to ASC Recap, LLC
Obligations to ASC Recap, LLC | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Obligations to ASC Recap, LLC | NOTE 5: OBLIGATIONS TO ASC RECAP, LLC In July, 2013, certain of the Company’s creditors showed interest in selling their claims against the Company to ASC Recap, LLC (“ASC”); this group also included both current and past management of the Company. This led to the Company signing a Liability Purchase Agreement with ASC on July 23, 2013. This Agreement required the Company to issue common shares within five business days of each purchase at a 25% discount from the market price to ASC in amounts equal to the claims purchased from the Company’s creditors. In addition, under the terms of the Agreement, the Company issued a $25,000 non-interest bearing convertible promissory note to ASC, as described in Note 4. ASC signed a series of Claim Purchase Agreements with certain creditors of the Company to purchase their claims against the Company totaling $2,531,565. These claims consisted of notes payable, convertible notes payable, vendor payables and accrued compensation to the Company’s CEO and to a related party. The Claim Purchase Agreements required ASC to settle the creditors’ claims against the Company for a total of $1,305,996. Each Claim Purchase Agreement stipulated that ASC would pay each creditor the agreed-upon amount in up to twelve (12) monthly installments. In January, 2014, the Company had not issued any shares to ASC as required by the agreement. As a result, ASC filed a complaint in Leon County, Florida demanding the prescribed issuance of shares from the Company for the purchased claims. A settlement agreement was reached on February 6, 2014, and on March 12, 2014 ASC Recap filed a motion in Leon County, Florida which forced the Company to comply. ASC Recap was awarded a $2,531,565 judgement which was to be paid by issuing free trading common stock at a 25% discount from the market price. In addition, on May 6, 2014, the Company issued a $125,000 non-interest bearing convertible promissory note to ASC, as described in Note 4. Between April and June of 2014, the Company issued to ASC 322,220,000 shares of common stock with an aggregate market value of $365,308, which reduced the recorded liability by $273,981; in July of 2014, the Company issued 82,980,000 shares of common stock with an aggregate market value of $24,894 (see Note 6). An analysis of the settlement liability due to ASC is as follows: Total creditor claims purchased by ASC - as ratified by the settlement agreement dated February 6, 2014 $ 2,531,565 Reduction of liability by shares issued between April and June 2014: Market value of 322,220,000 common shares issued $ 365,308 Less 25% discount as per settlement agreement (91,327 ) (273,981 ) Cash Payments and adjustments (50,599 ) Liability after issuances of shares, cash payments, and adjustments 2,206,985 Add back the previous reduction of liability by shares issued in consideration of ASC waiving its right to additional shares under the settlement agreement 273,981 Liability as of June 30, 2014 agreed to by the Company and ASC 2,480,966 Increase in recorded liability by the market value of 82,980,000 common shares issued during July 2014 24,894 Carrying value of settlement liability due to ASC at June 30, 2014 2,505,860 Reduction of liability by shares issued in September 2014: Cash payments and adjustments (133,347 ) Carrying value of settlement liability due to ASC at June 30, 2015 $ 2,372,513 Transfer of liability due to ASC to Original debt-holders (2,372,513 ) Carrying value of settlement liability due to ASC at June 30, 2016 $ - The transfer of liability due to ASC Recap consisted of the following: Notes payable $ 907,500 Accounts payable and accrued liabilities 85,006 Accrued salaries 702,895 Loss on settlement of ASC liability (12,135 ) Accrued interest payable 689,247 $ 2,372,513 The Company ceased issuing shares upon discovering that ASC had failed to make its first payment to the creditors on time, did not give verifiable reports to the creditors, or make regular monthly payments as specified in the Claim Purchase Agreement. A provision in each Claim Purchase Agreement stipulated that the “Purchaser (ASC) shall not be obligated to pay any portion of the purchase price in the event of a Default by the Company.” On August 13, 2015 ASC served the Company with a Notice of Default, which per the Agreement, returns the unpaid balance owed to the creditors of the Company. |
Settlement with IBC Funds, LLC
Settlement with IBC Funds, LLC | 12 Months Ended |
Jun. 30, 2016 | |
Settlement With Ibc Funds Llc | |
Settlement with IBC Funds, LLC | NOTE 6: SETTLEMENT WITH IBC FUNDS, LLC On October 9, 2014, we entered into a Settlement Agreement with IBC Funds, LLC (“IBC’). This agreement was approved by the Manatee County, Florida Court on October 10, 2014. Pursuant to the Settlement Agreement, the Company agreed to settle approximately $259,000 of outstanding accounts payable and accrued expenses (the “IBC Claim Amount”) by issuing IBC 858,814 shares of its common stock at a price per share equal to fifty percent of the lowest sales price of the common stock during the fifteen-day trading period preceding the request of payment. In the event the Company was delinquent on issuance of the Company’s shares upon request by IBC, the discount would be increased by five percent and by an additional five percent for each additional delinquency until all settlement shares had been received. At no time could IBC and its affiliates collectively own more than 4.99% of the outstanding shares of common stock. During October 2014, IBC paid an aggregate of $66,000 to various Company creditors. On February 12, 2015 IBC issued a letter of default to the Company. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 7: STOCKHOLDERS’ DEFICIT Common Stock At June 30, 2016 the Company had 13,333,000 authorized common shares. On July 20, 2016 the Company increased its authorized common shares to 250,000,000. A summary of the issuance of shares of Common Stock, related consideration and fair value of transaction, for the year ended June 30, 2015 was as follows: Number of shares of common stock Fair Value at Issuance Fair Value at Issuance (per share) Issuance of common shares to IBC (see Note 6) 572,667 $ 331,000 $ 0.578 Issuance of common shares to IBC (see Note 6) 286,247 $ 116,874 $ 0.408 Issuances in to partially satisfy settlement payable to ASC Recap, LLC 55,320 $ 24,894 $ 4.50 Issuances of Common Stock During 2016 During fiscal 2016 we issued shares of our common stock as follows: ● On October 14, 2015, Ms. Roberton was issued 332,667 shares of common stock valued at $49,900, or $0.15 per share as a performance bonus pursuant to her employment agreement. ● On October 9, 2015, we issued 3,333,333 shares of our common stock, twenty-six shares of Series F preferred stock, with a stated value of $5,000 and a par value of $0.001 per share, and three shares of Series H Preferred Stock, with a stated value of $1,000 and a par value of $0.001 per share, to the Company’s current Chairman of the Board in consideration for his forgiveness of $633,000 in accrued compensation. Subsequently, in October 2015, these Series F and Series H preferred shares were exchanged for 532,000 shares of Series A preferred stock. Holders of Series A preferred shares are restricted from converting their shares to common stock for two years (the “Lock-Up Period”). After the Lock-Up Period, they may convert f our common stock is below $0.10 per share. Preferred Stock Series A and B issued and outstanding shares of the Company’s preferred stock have a par value of $0.001. The Companies preferred shares Series C, D, F, H. I. J. and Y were exchanged for shares of Series A preferred stock in November, 2015. These classes of shares were subsequently cancelled. Issued and outstanding shares of Series C, D, F, H. I. J. and Y of the Company’s preferred stock had a par value of $0.01 per share. All classes rank(ed) prior to any class or series of the Company’s common stock as to the distribution of assets upon liquidation, dissolution or winding up of the Company or as to the payment of dividends. All preferred stock shall have no voting rights except if the subject of such vote would reduce the amount payable to the holders of preferred stock upon liquidation or dissolution of the company and cancel and modify the conversion rights of the holders of preferred stock as defined in the certificate of designations of the respective series of preferred stock. On October 14, 2015 a former Chairman of the Board of the Company was issued 80 shares of Series F preferred stock with a stated value of $5,000 and a par value $0.001 per share, and 12 shares of Series H preferred stock, with a stated value of $1,000 and a par value $0.001 per share in consideration for his forgiveness of $412,000 in accrued compensation. Subsequently, in October 2015, these Series F and Series H shares were exchanged for 1,648,000 shares of Series A preferred stock. On October 28, 2015, preferred shareholders representing a majority of each series of our outstanding preferred stock, voted to cancel all their shares of preferred stock in exchange for 11,181,340 shares of newly designated Series A preferred stock. The number of shares of newly issued Series A preferred stock issued to each preferred shareholder was calculated by dividing the total stated value of their preferred shares by $0.25. The holders of the Series A preferred shares are restricted from converting their shares to common stock for two years (the “Lock-Up Period”). After the Lock-Up Period, they may convert up to one percent of their Series A preferred shares into common shares on a one for one basis each month for four years (the “Leak-Out Period”). However, the conversion price automatically reduces by 86% to $0.035 per share if our common stock is below $0.10 per share. At the end of the Leak-Out Period, up to all of the remaining Series A preferred shares may be converted to common stock at the shareholders’ discretion. Class Shares Cancelled Shares of Series A Issued Series B (149,600 ) 2,992,000 Series C (332 ) 39,840 Series D (19 ) 1,900,000 Series F (234 ) 4,689,500 Series H (85 ) 340,000 Series I (30,000 ) 1,200,000 Series J (2 ) 20,000 Total 11,181,340 On October 28, 2015 the 87,000 shares of Series Y preferred stock, owned by the Company’s former Chairman of the Board, were exchanged for 87,000 shares of Series A preferred stock. These shares of Series A preferred stock were valued at their fair market value of $8.70. In November, 2015, we sold 40,000 shares of Series A preferred stock to one investor for $10,000 and sold 100,000 shares of Series B preferred stock to another investor for $25,000. See Note 5 for Series B preferred stock issued in exchange for convertible notes payable and accrued interest. Series A Preferred Stock The Series A Preferred Stock has a stated value of $0.25 per share. Each one share of Series A Preferred Stock is convertible into one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the Conversion shall be set at $0.035 per share. The Common Stock shares are governed by Lock-Up/Leak-Out Agreements. Series B Preferred Stock Prior to cancellation, the Series B Preferred Stock had a stated value of $5.00 per share. Each share of Series B Preferred Stock was convertible into 20 shares of the Company’s common stock. In addition, the holders of the preferred stock were entitled to receive annual cumulative dividends of 10% payable in cash or shares of the Company’s common stock, at the Company’s option. At June 30, 2016, the Company had not declared the payment of cumulative dividends aggregating approximately $673,200. Series C Preferred Stock Prior to cancellation, the Series C Preferred Stock had a stated value of $30.00 per share. Each share of Series C Preferred Stock was convertible into 100 shares of the Company’s common stock. Series D Preferred Stock Prior to cancellation, the Series D Preferred Stock had a stated value of $25,000 per share. Each share of the Series D Preferred Stock was convertible into 1,000,000 shares of the Company’s common stock. In addition, the holders of the Series D Preferred Stock were entitled to receive a participation interest in the annual net profits generated from any future business activities undertaken by the Company in Brazil. Series F Preferred Stock Prior to cancellation, the Series F Preferred Stock had a stated value of $5,000 per share. Each share of Series F Preferred Stock was convertible into 200,000 shares of the Company’s common stock. Series H Preferred Stock Prior to cancellation, the Series H Preferred Stock had a stated value of $1,000 per share. Each share of Series H Preferred Stock was convertible into the greater of a) $0.025 per share or b) 100% of the average of the three lowest closing bid prices for the ten trading days immediately preceding the Company’s receipt of a notice of conversion. Series I Preferred Stock Prior to cancellation, the Series I Preferred Stock had a stated value of $10.00 per share. Each share of Series I Preferred Stock was convertible into 500 shares of the Company’s common stock. Series J Preferred Stock Prior to cancellation, the Series J Preferred Stock had a stated value of $2,500 per share. Each share of the Series J Preferred Stock was convertible into the Company’s common shares using a conversion price equal to 50% of the average closing price of the Company’s common stock for the ten trading days immediately preceding the conversion date, although in no instance less than $0.01 per share or greater than $0.03 per share. Series Y Preferred Stock Prior to cancellation, the Series Y Preferred Stock had a stated value and par value of $0.01 and had no liquidity preference. Each share of Series Y Preferred Stock had 203 votes per share and had the right to vote with the common shareholders in all matters. The shares were convertible into one share of the Company’s common stock at the holder’s option subject to an adjustment upon issuing dividends or distributions payable in common stock and reverse or forward stock split. The shares were held by a former Chairman of the Board of the Company. Warrants Weighted Average Weighted Average Remaining Warrants Price per Share Contractual Term Outstanding at June 30, 2014 45,047,293 $ 0.025 1.48 Granted - - Exercised - - Forfeitures (45,047,293 ) 0.025 Outstanding at June 30, 2015 - $ - - Granted - - Exercised - - Forfeitures Outstanding at June 30, 2016 - $ - - Options In January 2001, The Company adopted the 2001 Employee Compensation Plan, or the Plan. The Plan provided for stock compensation through awards of shares of the Company’s common stock. The Company’s board of directors may appoint a Compensation Committee to administer the Plan. In the absence of such appointment, the board of directors is responsible for the administration of the Plan. The Company did not appoint a Compensation Committee to administer the Plan. The board of directors has the sole power to award shares of common stock under the Plan, as well as determine those individuals eligible to receive an award of Plan shares. Awards of shares under the Plan may be made as compensation for services rendered, directly or in lieu of other compensation payable, as a bonus in recognition of past services or performance or may be sold to an employee. The maximum number of shares which may be awarded under the plan is 5,000,000. Awards were generally granted to: ● executive officers, officers and directors (including advisory and other special directors) of the Company; ● full-time and part-time employees of the Company; ● natural persons engaged by the Company as consultants, advisors or agents; and ● a lawyer, law firm, accountant or accounting firm, or other professional or professional firm engaged by the Company. Grants to employees may be made for cash, property, services rendered or other forms of payment constituting lawful consideration under applicable law. Shares awarded, other than for services rendered, may not be sold at less than the fair value of our common stock on the date of grant. The plan terminated in January 2011. The board of directors has absolute discretion to amend the plan with the exception that the board had no authority to extend the term of the plan, to increase the number of shares subject to award under the plan or to amend the definition of “Employee” under the plan. The Company generally recognizes its share-based payments over the vesting period for which such payments are made. The Company had no outstanding options or option activity between July 1, 2013 and June 30, 2016 The total compensation cost related to non-vested awards not yet recognized amounted to $0 at June 30, 2016 and 2015. There was no intrinsic value as of June 30, 2016. The Company’s policy is to issue shares pursuant to the exercise of stock options from its available authorized but unissued shares of common stock. It does not issue shares pursuant to the exercise of stock options from its treasury shares. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8: INCOME TAXES The Company has not filed its corporate tax returns since fiscal 2007. Due to recurring losses, the Company’s tax provision for the years ended June 30, 2016 and 2015 was $0. A summary of our deferred tax is as follows: June 30, 2016 June 30, 2015 Tax benefit of net operating loss carry forward $ 10,364,000 $ 10,698,000 Less: valuation allowance (10,364,000 ) (10,698,000 ) Net deferred tax assets $ - $ - As of June 30, 2016, the Company had unused net operating loss carry forwards of approximately $26.9 million available to reduce future federal taxable income. Net operating loss carryforwards expire through fiscal years ending 2036. During the year ended June 30, 2016 the Company utilized net operating loss carryforwards of approximately $866,000 to reduce current taxable income. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally a greater than 50% change in ownership). The Company’s ability to offset future taxable income, if any, with tax net operating loss carryforwards may be limited due to the non-filing of tax returns and the impact of the statute of limitations on the Company’s ability to claim such benefits. Furthermore, changes in ownership may result in limitations under Internal Revenue Code Section 382. Due to these limitations, and other considerations, management has established full valuation allowances on deferred tax assets relating to net operating loss carryforward, as the realization of any future benefits from these assets is uncertain. The valuation allowance at June 30, 2016 and 2015 was $10,364,300 and $10,698,000, respectively. The change in the valuation allowance during the year ended June 30, 2016 was a decrease of approximately $334,000. The change in the valuation allowance during the year ended June 30, 2015 was an increase of $222,000. The table below summarizes the differences between our effective tax rate and the statutory federal rate as follows for fiscal 2016 and 2015. The effective tax rate is 35% Federal and 3.6% for State after Federal income tax (benefit): 2016 2015 Computed “expected” income tax (benefit) 35.0 % (35.0 )% State income taxes, net of federal income tax (benefit) 3.6 % (3.6 )% Permanent differences 14.1 % 23.0 % Subtotal 52.7 % (15.6 )% Change in valuation allowance (52.7 )% 15.6 % Provision for income taxes — % — % |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9: RELATED PARTY TRANSACTIONS During fiscal 2016 and 2015, the Company incurred expenses of $97,841 and $110,400, respectively, to a related party by means of common ownership and management with the Company as compensation to our Chairman of the Board and Chief Financial Officer. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10: SUBSEQUENT EVENTS On July 8, 2016 Kathleen Roberton resigned her position as Chief Executive Officer and member of the Board of Directors of NuState Energy Holdings, Inc. On July 8, 2016 Mr. Kevin Yates, the current Chairman of the Board, was named as Chief Executive Officer. On July 20, 2016, the Company adopted Articles of Amendment to its Articles of Incorporation to increase the number of authorized shares of Common Stock from 13,333,333 shares to 250,000,000 shares. On August 15, 2016 the Company’s Board of Directors appointed Mark B. Lucky as the Company’s interim Chief Financial Officer. On August 15, 2016 the Company issued 20,000,000 shares of its common stock to its CEO, Kevin Yates, as compensation. The shares were valued at $0.03 per share, the market price of the common stock on the date of issuance. The recipient were accredited investors and the issuances were exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that act. On August 15, 2016 the Company issued 5,000,000 shares of its common stock to its newly appointed CFO, Mark Lucky, as compensation. The shares were valued at $0.03 per share, the market price of the common stock on the date of issuance. The recipient were accredited investors and the issuances were exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that act. On August 15, 2016 the Company issued 2,000,000 shares of its common stock to its former CEO, Kathleen Roberton, pursuant to a settlement agreement, for unpaid wages. Per agreement, the shares were valued at $0.04 per share. The recipient were accredited investors and the issuances were exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that act. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions used in Black-Scholes-Merton derivative liability valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate and in the valuation allowance of deferred tax assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid, temporary, cash equivalents with an original maturity of three months or less when purchased, to be cash equivalents. The Company had no cash equivalents during the years ended June 30, 2016 and 2015. |
Concentration of Credit Risks | Concentration of Credit Risks The Company is subject to a concentration of credit risk from cash. The Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or FDIC, up to $250,000. During the years ended June 30, 2016 and 2015, the Company had not reached a bank balance exceeding the FDIC insurance limit. |
Derivative Liabilities | Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of June 30, 2016 and 2015, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. During the year ended June 30, 2016 and 2015, the Company had notes payable outstanding in which the conversion rate was variable and undeterminable. Accordingly, the Company has recognized a derivative liability in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter and in determining which valuation method is most appropriate for the instrument (e.g., Black-Scholes-Merton), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate, if any. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company’s derivative liability is classified as Level 3 financial instrument. Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes payable and convertible promissory notes payable, approximate their fair value due to the short maturity of these items or the use of market interest rates. |
Convertible Instruments | Convertible Instruments The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40, Contracts in Entity’s own Equity, generally provides that, among other things, if an event is not within the entity’s control, such contract could require net cash settlement and shall be classified as an asset or a liability. The Company determines whether the instruments issued in the transactions are considered indexed to the Company’s own stock. During fiscal years 2014 the Company’s issued convertible securities with variable conversion provisions that resulted in derivative liabilities. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions”. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25, “ , |
Share-Based Payments | Share-Based Payments The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation - Stock Compensation”. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period. The Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Segment Reporting | Segment Reporting The Company operates in one business segment which technologies are providing pertinent, real-time information to the worldwide transportation and security industries. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company. As an emerging growth company, we have elected to use the exemption provided for in the Jumpstart Our Business Startups Act or JOBS Act allowing us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies pursuant to Section 102(b)(1) of the Act. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and the dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method) and conversion of other securities such as convertible debt or convertible preferred stock. Potential common shares includable in the computation of fully-diluted per-share results are not presented in the financial statements for the year ended June 30, 2016, as their effect would be anti-dilutive. Share amounts reflect the 1500:1 reverse stock split which was effective as of June 16, 2016. For the Years ended June 30, 2016 2015 Numerator: Net loss from operations $ (719,868 ) $ (358,656 ) Interest expense (456,546 ) (310,864 ) Loss on settlement of debt (12,135 ) (339,421 ) Gain (loss) on troubled debt restructuring 1,897,927 (11,928 ) Gain (loss) on change in fair value of derivative liabilities 189,712 60,481 Numerator for basic earnings per share- net income (loss) $ 634,090 $ (960,388 ) Denominator: Denominator for basic earnings per share-weighted average shares 4,087,739 1,052,898 Effect of dilutive securities-when applicable: Convertible promissory notes 50,238,846 2,617,285 Preferred Stock 13,759 44,069 Warrants - - Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions 54,340,344 3,714,252 Earnings (loss) per share Basic: $ 0.15 $ (0.91 ) Earnings (loss) per share Diluted: $ 0.01 $ (0.91 ) The weighted-average potentially dilutive common share equivalents outstanding at June 30, 2016 and 2015 are as follows: 2016 2015 Series A Preferred Stock 9,329 - Series B Preferred Stock 4,430 1,995 Series C Preferred Stock - 22 Series D Preferred Stock - 12,667 Series F Preferred Stock - 17,130 Series H Preferred Stock - 1,864 Series I Preferred Stock - 10,000 Series J Preferred Stock - 333 Series Y Preferred Stock - 58 Convertible notes payable 50,238,846 2,617,285 Warrants - - Total 50,252,605 2,661,354 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | For the Years ended June 30, 2016 2015 Numerator: Net loss from operations $ (719,868 ) $ (358,656 ) Interest expense (456,546 ) (310,864 ) Loss on settlement of debt (12,135 ) (339,421 ) Gain (loss) on troubled debt restructuring 1,897,927 (11,928 ) Gain (loss) on change in fair value of derivative liabilities 189,712 60,481 Numerator for basic earnings per share- net income (loss) $ 634,090 $ (960,388 ) Denominator: Denominator for basic earnings per share-weighted average shares 4,087,739 1,052,898 Effect of dilutive securities-when applicable: Convertible promissory notes 50,238,846 2,617,285 Preferred Stock 13,759 44,069 Warrants - - Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions 54,340,344 3,714,252 Earnings (loss) per share Basic: $ 0.15 $ (0.91 ) Earnings (loss) per share Diluted: $ 0.01 $ (0.91 ) |
Summary of Weighted-average Anti-dilutive Common Share Equivalents | The weighted-average potentially dilutive common share equivalents outstanding at June 30, 2016 and 2015 are as follows: 2016 2015 Series A Preferred Stock 9,329 - Series B Preferred Stock 4,430 1,995 Series C Preferred Stock - 22 Series D Preferred Stock - 12,667 Series F Preferred Stock - 17,130 Series H Preferred Stock - 1,864 Series I Preferred Stock - 10,000 Series J Preferred Stock - 333 Series Y Preferred Stock - 58 Convertible notes payable 50,238,846 2,617,285 Warrants - - Total 50,252,605 2,661,354 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value, Valuation Assumptions | At each measurement date, the fair value of the embedded conversion features was based on the Black-Scholes-Merton method using the following assumptions: Year Ended June 30, 2016 2015 Effective Exercise price 0.0035 – 0.00477 0.075 Effective Market price 0.0073 0.15 Volatility 497% - 703% 465% Risk-free interest 0.13% 0.1% Terms 14 - 365 days 252 - 365 days Expected dividend rate 0% 0% |
Schedule of Derivative Liabilities at Fair Value | Changes in the derivative liabilities during the years ended June 30, 2016 and 2015 are as follows: Derivative liabilities at June 30, 2014 $ 356,289 Gain on change in fair value of derivative liability, recognized as other income (60,481 ) Derivative liability at June 30, 2015 295,808 Derivative liability expense 265,000 Original discount on convertible notes payable charged to derivative liability 265,000 Gain on change in fair value of derivative liability, recognized as other expense (189,712 ) Derivative liabilities at June 30, 2016 $ 636,096 |
Convertible Notes Payable and20
Convertible Notes Payable and Note Payable (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debenture | At June 30, 2016 and June 30, 2015 convertible debentures consisted of the following: June 30, 2016 2015 Convertible notes payable $ 1,609,349 $ 1,421,730 Discount on convertible notes (108,750 ) - Convertible notes payable to ASC Recap 147,965 150,000 Total $ 1,648,564 $ 1,571,730 |
Schedule of Gain Realized From Troubled Debt Restructuring | Gain on Troubled Debt Restructuring During fiscal 2016, the Company entered transactions with noteholders and other vendors to settle amounts owed through the issuance of the Company’s preferred stock in exchange for amounts owed. The table below summarizes the gain realized from this troubled debt restructuring. Year Ended June 30, 2016 2015 Exchange of outstanding Series B preferred shares for Series A preferred shares $ (2,917 ) - Exchange of outstanding Series C preferred shares for Series A preferred shares (37 ) - Exchange of outstanding Series I preferred shares for Series A preferred shares 300 - Exchange of outstanding Series J preferred shares for Series A preferred shares (20 ) - Exchange of outstanding Series Y preferred shares for Series A preferred shares (339 ) - Exchange of convertible notes payable for shares of Series A convertible preferred stock 1,504,865 - Issuance of Series F and Series H preferred stock in exchange for accrued compensation 396,075 - Gain on restructure of troubled convertible notes - (11,928 ) $ 1,897,927 $ ( 11,928 ) |
Obligations to ASC Recap, LLC (
Obligations to ASC Recap, LLC (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Analysis of Settlement Liability Due to ASC | An analysis of the settlement liability due to ASC is as follows: Total creditor claims purchased by ASC - as ratified by the settlement agreement dated February 6, 2014 $ 2,531,565 Reduction of liability by shares issued between April and June 2014: Market value of 322,220,000 common shares issued $ 365,308 Less 25% discount as per settlement agreement (91,327 ) (273,981 ) Cash Payments and adjustments (50,599 ) Liability after issuances of shares, cash payments, and adjustments 2,206,985 Add back the previous reduction of liability by shares issued in consideration of ASC waiving its right to additional shares under the settlement agreement 273,981 Liability as of June 30, 2014 agreed to by the Company and ASC 2,480,966 Increase in recorded liability by the market value of 82,980,000 common shares issued during July 2014 24,894 Carrying value of settlement liability due to ASC at June 30, 2014 2,505,860 Reduction of liability by shares issued in September 2014: Cash payments and adjustments (133,347 ) Carrying value of settlement liability due to ASC at June 30, 2015 $ 2,372,513 Transfer of liability due to ASC to Original debt-holders (2,372,513 ) Carrying value of settlement liability due to ASC at June 30, 2016 $ - |
Schedule of Transfer of Liability Due to ASC Recap | The transfer of liability due to ASC Recap consisted of the following: Notes payable $ 907,500 Accounts payable and accrued liabilities 85,006 Accrued salaries 702,895 Loss on settlement of ASC liability (12,135 ) Accrued interest payable 689,247 $ 2,372,513 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Summary of Issuance of Shares of Common Stock Fair Value Transaction | A summary of the issuance of shares of Common Stock, related consideration and fair value of transaction, for the year ended June 30, 2015 was as follows: Number of shares of common stock Fair Value at Issuance Fair Value at Issuance (per share) Issuance of common shares to IBC (see Note 6) 572,667 $ 331,000 $ 0.578 Issuance of common shares to IBC (see Note 6) 286,247 $ 116,874 $ 0.408 Issuances in to partially satisfy settlement payable to ASC Recap, LLC 55,320 $ 24,894 $ 4.50 |
Summary of Stock Conversion | Class Shares Cancelled Shares of Series A Issued Series B (149,600 ) 2,992,000 Series C (332 ) 39,840 Series D (19 ) 1,900,000 Series F (234 ) 4,689,500 Series H (85 ) 340,000 Series I (30,000 ) 1,200,000 Series J (2 ) 20,000 Total 11,181,340 |
Summary of Activity Related to Warrants | Warrants Weighted Average Weighted Average Remaining Warrants Price per Share Contractual Term Outstanding at June 30, 2014 45,047,293 $ 0.025 1.48 Granted - - Exercised - - Forfeitures (45,047,293 ) 0.025 Outstanding at June 30, 2015 - $ - - Granted - - Exercised - - Forfeitures Outstanding at June 30, 2016 - $ - - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Summary of Deferred Tax Assets | A summary of our deferred tax is as follows: June 30, 2016 June 30, 2015 Tax benefit of net operating loss carry forward $ 10,364,000 $ 10,698,000 Less: valuation allowance (10,364,000 ) (10,698,000 ) Net deferred tax assets $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate is 35% Federal and 3.6% for State after Federal income tax (benefit): 2016 2015 Computed “expected” income tax (benefit) 35.0 % (35.0 )% State income taxes, net of federal income tax (benefit) 3.6 % (3.6 )% Permanent differences 14.1 % 23.0 % Subtotal 52.7 % (15.6 )% Change in valuation allowance (52.7 )% 15.6 % Provision for income taxes — % — % |
Organization, Description of 24
Organization, Description of Business and Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||
Loss from Operations | $ 719,868 | $ 358,656 |
Net cash used in operating activities | 424,324 | 178,935 |
Working capital deficit | 4,500,000 | |
Accumulated deficit | $ 41,540,747 | $ 42,174,837 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | |
Jun. 30, 2016USD ($)Segment | Jun. 30, 2015USD ($) | |
Accounting Policies [Abstract] | ||
Cash equivalents | ||
Cash, FDIC insured amount | $ 250,000 | |
Minimum percentage of income tax benefit | 50.00% | |
Number of operating segment | Segment | 1 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Schedule of Calculation of Numerator and Denominator in Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||
Net loss from operations | $ (719,868) | $ (358,656) |
Interest expense | (456,546) | (310,864) |
Loss on debt settlement | (12,135) | (339,421) |
Gain (loss) on troubled debt restructuring | 1,897,927 | (11,928) |
Gain (loss) on change in fair value of derivative liabilities | (189,712) | (60,481) |
Net income (loss) | $ 634,090 | $ (960,388) |
Denominator for basic earnings per share-weighted average shares | 4,087,739 | 1,052,898 |
Convertible promissory notes | 50,238,846 | 2,617,285 |
Preferred Stock | 13,759 | 44,069 |
Warrants | ||
Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions | 54,340,344 | 3,714,252 |
Earnings (loss) per share Basic: | $ 0.15 | $ (0.91) |
Earnings (loss) per share Diluted: | $ 0.01 | $ (0.91) |
Summary Of Significant Accoun27
Summary Of Significant Accounting Policies - Summary of Weighted-average Anti-dilutive Common Share Equivalents (Details) - shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Anti-dilutive common shares equivalents | 50,252,605 | 2,661,354 |
Series A Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 9,329 | |
Series B Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 4,430 | 1,995 |
Series C Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 22 | |
Series D Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 12,667 | |
Series F Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 17,130 | |
Series H Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 1,864 | |
Series I Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 10,000 | |
Series J Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 333 | |
Series Y Preferred Stock [Member] | ||
Anti-dilutive common shares equivalents | 58 | |
Convertible Notes Payable [Member] | ||
Anti-dilutive common shares equivalents | 50,238,846 | 2,617,285 |
Warrants [Member] | ||
Anti-dilutive common shares equivalents |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Fair value of derivative liabilities | $ 636,096 | $ 295,808 |
Gain (loss) on change in fair value of derivative liabilities | $ 189,712 | $ 60,481 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liabilities at Fair Value, Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Effective Exercise price | $ 0.075 | |
Effective Market price | $ 0.0073 | $ 0.15 |
Volatility | 465.00% | |
Risk-free interest | 0.13% | 0.10% |
Expected dividend rate | 0.00% | 0.00% |
Minimum [Member] | ||
Effective Exercise price | $ 0.0035 | |
Volatility | 497.00% | |
Terms | 14 days | 252 days |
Maximum [Member] | ||
Effective Exercise price | $ 0.00477 | |
Volatility | 703.00% | |
Terms | 365 days | 365 days |
Derivative Liability - Schedu30
Derivative Liability - Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liabilities beginning of period | $ 295,808 | $ 356,289 |
Gain on change in fair value of derivative liability, recognized as other income | (186,783) | (60,481) |
Derivative liability expense | 265,000 | |
Original discount on convertible notes payable charged to derivative liability | 265,000 | |
Derivative liabilities end of period | $ 636,096 | $ 295,808 |
Convertible Notes Payable and31
Convertible Notes Payable and Note Payable (Details Narrative) - USD ($) | Oct. 09, 2015 | May 06, 2014 | Jul. 22, 2013 | Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 |
Convertible notes payable | $ 1,600,000 | $ 1,600,000 | ||||
Accrued interest | 1,037,000 | 754,000 | ||||
Convertible debt instrument conversion price per share | $ 0.035 | |||||
Convertible promissory notes default and remain unpaid | 1,600,000 | |||||
Debt convertible into common stock conversion price rate | 86.00% | |||||
Notes payable | 240,240 | 90,241 | ||||
Proceeds from short term note payable | 25,000 | |||||
Proceeds from convertible notes payable | 315,000 | 185,000 | ||||
Interest expense | 292,000 | $ 311,000 | ||||
Convertible Promissory Notes One [Member] | ||||||
Debt instrument face amount | $ 25,000 | |||||
Debt instrument maturity date | Mar. 31, 2014 | |||||
Convertible Promissory Notes Two [Member] | ||||||
Debt instrument face amount | $ 125,000 | |||||
Debt instrument maturity date | May 6, 2015 | |||||
ASC Recap, LLC [Member] | ||||||
Accrued interest | $ 2,500,000 | $ 689,247 | ||||
Debt convertible into common stock conversion price rate | 50.00% | |||||
Convertible Notes Payable [Member] | ||||||
Debt instrument interest rate percentage | 18.00% | 18.00% | ||||
Convertible Notes Payable [Member] | Minimum [Member] | ||||||
Debt instrument interest rate percentage | 10.00% | |||||
Convertible debt instrument conversion price per share | $ 0.00125 | |||||
Convertible Notes Payable [Member] | Maximum [Member] | ||||||
Debt instrument interest rate percentage | 18.00% | |||||
Convertible debt instrument conversion price per share | $ 0.0267 | |||||
Notes Payable [Member] | ||||||
Accrued interest | $ 200,000 | $ 25,000 | ||||
Notes Payable [Member] | Minimum [Member] | ||||||
Debt instrument interest rate percentage | 0.00% | |||||
Notes Payable [Member] | Maximum [Member] | ||||||
Debt instrument interest rate percentage | 16.00% | |||||
Short Term Note Payable [Member] | ||||||
Debt instrument interest rate percentage | 0.00% |
Convertible Notes Payable and32
Convertible Notes Payable and Note Payable - Schedule of Convertible Debenture (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Debt Disclosure [Abstract] | ||
Convertible notes payable | $ 1,609,349 | $ 1,421,730 |
Discount on convertible notes | (108,750) | |
Convertible notes payable to ASC Recap LLC | 147,965 | 150,000 |
Total | $ 1,648,564 | $ 1,571,730 |
Convertible Notes Payable and33
Convertible Notes Payable and Note Payable - Schedule of Gain Realized From Troubled Debt Restructuring (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Gain (loss) on troubled debt restructuring | $ 1,897,927 | $ (11,928) |
Exchange of Outstanding Series B Preferred Shares for Series A Preferred Shares [Member] | ||
Gain (loss) on troubled debt restructuring | (2,917) | |
Exchange of Outstanding Series C Preferred Shares for Series A Preferred Shares [Member] | ||
Gain (loss) on troubled debt restructuring | (37) | |
Exchange of Outstanding Series I Preferred Shares for Series A Preferred Shares [Member] | ||
Gain (loss) on troubled debt restructuring | 300 | |
Exchange of Outstanding Series J Preferred Shares for Series A Preferred Shares [Member] | ||
Gain (loss) on troubled debt restructuring | (20) | |
Exchange of Outstanding Series Y Preferred Shares for Series A Preferred Shares [Member] | ||
Gain (loss) on troubled debt restructuring | (339) | |
Exchange of Convertible Notes Payable for Shares of Series A Convertible Preferred Stock [Member] | ||
Gain (loss) on troubled debt restructuring | 1,504,865 | |
Issuance of Series F and Series H Preferred Stock in Exchange for Accrued Compensation [Member] | ||
Gain (loss) on troubled debt restructuring | 396,075 | (11,928) |
Gain on Restructure of Troubled Convertible Notes [Member] | ||
Gain (loss) on troubled debt restructuring | $ (11,928) |
Obligations to ASC Recap, LLC34
Obligations to ASC Recap, LLC (Details Narrative) - USD ($) | Mar. 12, 2014 | Jul. 31, 2014 | Jul. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2015 | May 06, 2014 |
Litigation settlement amount | $ 2,531,565 | ||||||
Number of common stock shares issued during the period | 82,980,000 | 322,220,000 | |||||
Issuance of common stock to IBC | $ 365,308 | $ 441,745 | |||||
ASC Recap, LLC [Member] | |||||||
Percentage of common stock issued discount from market price | 25.00% | ||||||
Litigation settlement amount | $ 2,531,565 | ||||||
Number of common stock shares issued during the period | 82,980,000 | 322,220,000 | |||||
Issuance of common stock to IBC | $ 24,894 | $ 365,308 | |||||
Decreased value in recorded liability | $ 273,981 | ||||||
ASC Recap, LLC [Member] | Claim Purchase Agreements One [Member] | |||||||
Purchase obligation total | $ 2,531,565 | ||||||
ASC Recap, LLC [Member] | Claim Purchase Agreements Two [Member] | |||||||
Purchase obligation total | $ 1,305,996 | ||||||
Number of monthly installment to creditor | 12 months | ||||||
ASC Recap, LLC [Member] | Non Interest Bearing Convertible Promissory Note [Member] | |||||||
Percentage of common stock issued discount from market price | 25.00% | ||||||
Debt instrument face amount | $ 25,000 | $ 125,000 |
Obligations to ASC Recap, LLC -
Obligations to ASC Recap, LLC - Schedule of Analysis of Settlement Liability Due to ASC (Details) - USD ($) | 5 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Total creditor claims purchased by ASC - as ratified by the settlement agreement dated February 6, 2014 | $ 2,531,565 | ||
Market value of 322,220,000 common shares issued | 365,308 | $ 441,745 | |
Less 25% discount as per settlement agreement | (91,327) | ||
Reduction of liability by shares issued | (273,981) | ||
Cash Payments and adjustments | (50,599) | (133,347) | |
Liability after issuances of shares, cash payments, and adjustments | 2,206,985 | ||
Add back the previous reduction of liability by shares issued in consideration of ASC waiving its right to additional shares under the settlement agreement | 273,981 | ||
Liability as of June 30, 2014 agreed to by the Company and ASC | 2,480,966 | ||
Increase in recorded liability by the market value of 82,980,000 common shares issued during July 2014 | 24,894 | ||
Transfer of liability due to ASC to Original debt-holders | $ (2,372,513) | ||
Carrying value of settlement liability due to ASC at June | $ 2,505,860 | $ 2,372,513 |
Obligations to ASC Recap, LLC36
Obligations to ASC Recap, LLC - Schedule of Analysis of Settlement Liability Due to ASC (Details) (Parenthetical) - shares | 1 Months Ended | 5 Months Ended |
Jul. 31, 2014 | Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of shares issued during period | 82,980,000 | 322,220,000 |
Percentage of discount as per settlement agreement | 25.00% |
Obligations to ASC Recap, LLC37
Obligations to ASC Recap, LLC - Schedule of Transfer of Liability Due to ASC Recap (Details) - USD ($) | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 |
Notes payable | $ 1,609,349 | $ 1,421,730 | |
Accrued interest payable | 1,037,000 | $ 754,000 | |
ASC Recap, LLC [Member] | |||
Notes payable | $ 907,500 | ||
Accounts payable and accrued liabilities | 85,006 | ||
Accrued salaries | 702,895 | ||
Loss on settlement of ASC liability | (12,135) | ||
Accrued interest payable | $ 2,500,000 | 689,247 | |
Transfer of liability due to ASC Recap | $ 2,372,513 |
Settlement with IBC Funds, LLC
Settlement with IBC Funds, LLC (Details Narrative) - USD ($) | Oct. 09, 2014 | Oct. 31, 2014 | Jun. 30, 2016 |
Settlement of outstanding accounts payable and accrued expenses | $ (21,569) | ||
IBC Funds, LLC [Member] | |||
Settlement of outstanding accounts payable and accrued expenses | $ 259,000 | ||
Number shares issued for debt | 858,814 | ||
Equity ownership interest rate percentage | 4.99% | ||
Repayment of related party debt | $ 66,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Oct. 28, 2015 | Oct. 14, 2015 | Oct. 09, 2015 | Jun. 30, 2016 | Nov. 30, 2015 | Jun. 30, 2015 |
Common stock shares authorized | 250,000,000 | 250,000,000 | ||||
Common stock, shares issued | 3,333,333 | 5,654,179 | 1,451,303 | |||
Common stock value issued | $ 565 | $ 145 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Number of shares exchanged, discription | Series F and Series H preferred shares were exchanged for 532,000 shares of Series A preferred stock. | |||||
Common stock discription | Holders of Series A preferred shares are restricted from converting their shares to common stock for two years (the Lock-Up Period). After the Lock-Up Period, they may convert up to one percent of their Series A preferred shares into common shares on a one for one basis each month for four years (the Leak-Out Period). | |||||
Convertible common stock conversion, percentage | 86.00% | |||||
Convertible common stock conversion, price per share | $ 0.035 | |||||
Common stock price per shares | $ 0.10 | |||||
2001 Employee Compensation Plan [Member] | ||||||
Stock options issued for compensation | 5,000,000 | |||||
Compensation cost not yet recognized | $ 0 | $ 0 | ||||
Stock option instrinsic value | $ 0 | |||||
Series A Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.001 | |||||
Convertible preferred stock number of shares issued upon conversion | 11,181,340 | |||||
Series A Preferred Stock [Member] | ||||||
Preferred stock shares discription | Each one share of Series A Preferred Stock is convertible into one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the Conversion shall be set at $0.035 per share. | |||||
Series B Preferred Stock [Member] | ||||||
Preferred stock dividend percentage | 10.00% | |||||
Series C Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 30 | |||||
Convertible preferred stock number of shares issued upon conversion | 100 | |||||
Series D Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 25,000 | |||||
Convertible preferred stock number of shares issued upon conversion | 1,000,000 | |||||
Series F Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 5,000 | |||||
Convertible preferred stock number of shares issued upon conversion | 200,000 | |||||
Series J Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 2,500 | |||||
Percentage of convertible preferred stock, lowest closing bid prices | 50.00% | |||||
Series J Preferred Stock [Member] | Minimum [Member] | ||||||
Preferred stock, par value | $ 0.01 | |||||
Series J Preferred Stock [Member] | Maximum [Member] | ||||||
Preferred stock, par value | 0.03 | |||||
Series Y Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 0.01 | |||||
Preferred stock voting rights | Each share of Series Y Preferred Stock has 203 votes per share and has the right to vote with the common shareholders in all matters. | |||||
Series B Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares issued | 1,327,640 | 149,600 | ||||
Preferred stock, value | $ 1,328 | $ 150 | ||||
Preferred stock, stated value per share | $ 5 | |||||
Convertible preferred stock number of shares issued upon conversion | 20 | |||||
Aggregate dividends payable | $ 673,200 | |||||
Series B Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||||
Convertible preferred stock number of shares issued upon conversion | 2,992,000 | |||||
Series F Preferred Stock [Member] | ||||||
Common stock, shares issued | 26 | |||||
Common stock value issued | $ 5,000 | |||||
Common stock, par value | $ 0.001 | |||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued | 0 | 128 | ||||
Preferred stock, value | $ 1 | |||||
Series F Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||||
Convertible preferred stock number of shares issued upon conversion | 4,689,500 | |||||
Series H Preferred Stock [Member] | ||||||
Common stock, shares issued | 3 | |||||
Common stock value issued | $ 1,000 | |||||
Common stock, par value | $ 0.001 | |||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued | 0 | 70 | ||||
Preferred stock, value | $ 1 | |||||
Preferred stock, stated value per share | $ 1,000 | |||||
Common stock price per shares | $ 0.025 | |||||
Percentage of convertible preferred stock, lowest closing bid prices | 100.00% | |||||
Series H Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||||
Convertible preferred stock number of shares issued upon conversion | 340,000 | |||||
Series A Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.25 | $ 0.001 | $ 0.001 | |||
Preferred stock, shares issued | 13,992,340 | 0 | ||||
Preferred stock, value | $ 13,992 | |||||
Preferred stock, stated value per share | $ 0.25 | |||||
Convertible common stock conversion, price per share | 0.035 | |||||
Convertible preferred stock number of shares issued upon conversion | 11,181,340 | |||||
Preferred stock dividend percentage | 86.00% | |||||
Convertible preferred stock, conversion price | $ 0.035 | |||||
Common stock price per shares | $ .10 | |||||
Series Y Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued | 0 | 87,000 | ||||
Preferred stock, value | $ 870 | |||||
Series I Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued | 0 | 30,000 | ||||
Preferred stock, value | $ 300 | |||||
Preferred stock, stated value per share | $ 10 | |||||
Convertible preferred stock number of shares issued upon conversion | 500 | |||||
Series I Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||||
Convertible preferred stock number of shares issued upon conversion | 1,200,000 | |||||
Ms. Roberton [Member] | Employment Agreement [Member] | ||||||
Common stock, shares issued | 332,667 | |||||
Common stock value issued | $ 49,900 | |||||
Common stock price per shares | $ 0.15 | |||||
Former Chairman of Board [Member] | ||||||
Accrued compensation | $ 412,000 | |||||
Former Chairman of Board [Member] | Series F Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.001 | |||||
Preferred stock, shares issued | 80 | |||||
Preferred stock, value | $ 5,000 | |||||
Convertible preferred stock number of shares issued upon conversion | 1,648,000 | |||||
Former Chairman of Board [Member] | Series H Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.001 | |||||
Preferred stock, shares issued | 12 | |||||
Preferred stock, value | $ 1,000 | |||||
Convertible preferred stock number of shares issued upon conversion | 1,648,000 | |||||
Former Chairman of Board [Member] | Series A Preferred Stock [Member] | ||||||
Convertible preferred stock number of shares issued upon conversion | 87,000 | |||||
Former Chairman of Board [Member] | Series Y Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 8.70 | |||||
Preferred stock, shares issued | 87,000 | |||||
Investor One [Member] | Series A Preferred Stock [Member] | ||||||
Preferred stock, shares issued | 40,000 | |||||
Preferred stock, value | $ 10,000 | |||||
Investor Two [Member] | Series B Preferred Stock [Member] | ||||||
Preferred stock, shares issued | 100,000 | |||||
Preferred stock, value | $ 25,000 | |||||
Chairman of the Board and President [Member] | ||||||
Accrued compensation | $ 633,000 | |||||
July 20, 2016 [Member] | ||||||
Excess shares authorized | 250,000,000 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Issuance of Shares of Common Stock Fair Value Transaction (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Oct. 09, 2015 | |
Fair Value at Issuance (per share) | $ 0.10 | |
Issuance of Common Shares To IBC [Member] | ||
Number of shares of common stock | $ 572,667 | |
Fair Value at Issuance | 331,000 | |
Fair Value at Issuance (per share) | $ 0.578 | |
Issuance of Common Shares To IBC [Member] | ||
Number of shares of common stock | $ 286,247 | |
Fair Value at Issuance | 116,874 | |
Fair Value at Issuance (per share) | $ 0.408 | |
Issuances Into Partially Satisfy Settlement Payable To ASC Recap LLC [Member] | ||
Number of shares of common stock | $ 55,320 | |
Fair Value at Issuance | 24,894 | |
Fair Value at Issuance (per share) | $ 4.50 |
Stockholders' Deficit - Summa41
Stockholders' Deficit - Summary of Stock Conversion (Details) | Jun. 30, 2016shares |
Series A Preferred Stock [Member] | |
Shares Cancelled | |
Shares of Series A Issued | 11,181,340 |
Series B Preferred Stock [Member] | |
Shares of Series A Issued | 20 |
Series B Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (149,600) |
Shares of Series A Issued | 2,992,000 |
Series C Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (322) |
Shares of Series A Issued | 39,840 |
Series D Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (19) |
Shares of Series A Issued | 1,900,000 |
Series F Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (234) |
Shares of Series A Issued | 4,689,500 |
Series H Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (85) |
Shares of Series A Issued | 340,000 |
Series I Preferred Stock [Member] | |
Shares of Series A Issued | 500 |
Series I Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (30,000) |
Shares of Series A Issued | 1,200,000 |
Series J Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Shares Cancelled | (2) |
Shares of Series A Issued | 20,000 |
Stockholders' Deficit - Summa42
Stockholders' Deficit - Summary of Activity Related to Warrants (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Equity [Abstract] | ||
Warrants, Beginning balance | 45,047,293 | |
Warrants, Granted | ||
Warrants, Exercised | ||
Warrants, Forfeitures | (45,047,293) | |
Warrants, Ending balance | ||
Weighted Average Price Per Share, Beginning balance | $ 0.025 | |
Weighted Average Price Per Share, Granted | ||
Weighted Average Price Per Share, Exercised | ||
Weighted Average Price Per Share, Forfeitures | 0.025 | |
Weighted Average Price Per Share, Ending balance | ||
Weighted Average Remaining Contractual Term, Beginning | 0 years | 1 year 5 months 23 days |
Weighted Average Remaining Contractual Term, Ending | 0 years | 0 years |
Income Tax (Details Narrative)
Income Tax (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 0 | $ 0 |
Net operating loss carryovers | $ 26,900,000 | |
Net operating loss carryforwards expire term | expire through fiscal years ending 2036 | |
Current taxable income | $ 866,000 | |
Minimum percentage of income tax benefit | 50.00% | |
Deferred tax assets valuation allowance | $ 10,364,300 | 10,698,000 |
Deferred tax assets increase and decrease | $ 334,000 | $ 222,000 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Tax benefit of net operating loss carry forward | $ 10,364,000 | $ 10,698,000 |
Less: valuation allowance | (10,364,300) | (10,698,000) |
Net deferred tax asset |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Computed "expected" income tax (benefit) | 35.00% | (35.00%) |
State income taxes, net of federal income tax (benefit) | 3.60% | (3.60%) |
Permanent differences | 14.10% | 23.00% |
Subtotal | 52.70% | (15.60%) |
Change in valuation allowance | (52.70%) | 15.60% |
Provision for income taxes | 0.00% | 0.00% |
Income Taxes - Schedule of Ef46
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (Parenthetical) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate of federal | 35.00% | (35.00%) |
State after Federal tax benefit rate | 3.60% | (3.60%) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transactions [Abstract] | ||
Related party transaction expenses | $ 97,841 | $ 110,400 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - $ / shares | Aug. 15, 2016 | Jul. 20, 2016 | Jun. 30, 2016 | Oct. 09, 2015 | Jun. 30, 2015 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | |||
Common stock, shares issued | 5,654,179 | 3,333,333 | 1,451,303 | ||
Common stock price per shares | $ 0.10 | ||||
Subsequent Event [Member] | |||||
Common stock, shares authorized | 13,333,333 | ||||
Subsequent Event [Member] | Kevin Yates [Member] | |||||
Common stock, shares issued | 20,000,000 | ||||
Common stock price per shares | $ 0.03 | ||||
Subsequent Event [Member] | Mark Lucky [Member] | |||||
Common stock, shares issued | 5,000,000 | ||||
Common stock price per shares | $ 0.03 | ||||
Subsequent Event [Member] | Kathleen Roberton [Member] | |||||
Common stock, shares issued | 2,000,000 | ||||
Common stock price per shares | $ 0.04 | ||||
Subsequent Event [Member] | Maximum [Member] | |||||
Common stock, shares authorized | 250,000,000 |