Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Oct. 09, 2020 | Dec. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | VISIUM TECHNOLOGIES, INC. | ||
Entity Central Index Key | 0001082733 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | FL | ||
Entity File Number | 000-25753 | ||
Entity Public Float | $ 216,315 | ||
Entity Common Stock, Shares Outstanding | 2,026,275,356 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash | $ 30,251 | $ 18,668 |
Total current assets | 30,251 | 18,668 |
Total assets | 30,251 | 18,668 |
Current liabilities: | ||
Accounts payable and accrued expenses | 333,805 | 213,805 |
Accrued compensation | 652,529 | 316,529 |
Accrued interest | 677,857 | 593,838 |
Convertible notes payable to ASC Recap LLC | 147,965 | 147,965 |
Convertible notes payable, net of discount of $0 and $158,333 | 852,962 | 917,095 |
Derivative liabilities | 438,553 | 807,053 |
Notes payable | 205,000 | 205,000 |
Due to officers | 102,340 | 62,000 |
Total current liabilities | 3,411,011 | 3,263,285 |
Commitments and Contingencies (Note 12) | ||
Stockholders' deficit: | ||
Common stock, $0.0001 par value, 10,000,000,000 shares authorized: 1,544,793,446 shares issued and 1,544,126,787 outstanding at June 30, 2020, and 45,610,716 shares issued and 42,066,269 outstanding at June 30, 2019, respectively (See Note 6) | 154,413 | 4,207 |
Additional paid in capital | 44,441,085 | 43,184,984 |
Accumulated deficit | (47,991,578) | (46,449,128) |
Total stockholders' deficit | (3,380,760) | (3,244,617) |
Total liabilities and stockholders' deficit | 30,251 | 18,668 |
Series A Preferred Stock | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized | 13,992 | 13,992 |
Series B Preferred Stock | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized | 1,328 | 1,328 |
Series AA Convertible Stock | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Convertible notes payable, net of discount | $ 0 | $ 158,333 |
Common stock, par value | $ .0001 | $ 0.0001 |
Common stock, shares authorized | 10,000,000,000 | 10,000,000,000 |
Common stock, shares issued | 1,544,793,446 | 45,610,716 |
Common stock, shares outstanding | 1,544,126,787 | 42,066,269 |
Series A Preferred Stock | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 13,992,340 | 13,992,340 |
Preferred stock, shares outstanding | 13,992,340 | 13,992,340 |
Series B Preferred Stock | ||
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 | 1,327,640 |
Preferred stock, shares outstanding | 1,327,640 | 1,327,640 |
Series AA Convertible Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1 | 1 |
Preferred stock, shares issued | 1 | 1 |
Preferred stock, shares outstanding | 1 | 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Net revenues | $ 0 | $ 0 |
Operating expenses: | ||
Selling, general and administrative | 917,993 | 2,721,467 |
Development expense | 35,500 | |
Amortization expense | 0 | 141,970 |
Total operating expenses | 953,493 | 2,863,437 |
Loss from operations | (953,493) | (2,863,437) |
Other income (expenses): | ||
Loss on change in fair value of derivative liabilities | 385,367 | (183,130) |
Derivative liability expense | (61,396) | (341,423) |
Interest expense | (323,021) | (276,087) |
Gain (loss) on debt write off | (593,907) | 2,303,147 |
Impairment expense | 0 | (407,002) |
Other income | 4,000 | 10,000 |
Total other income (expense) | (588,957) | 1,105,505 |
Net loss | $ (1,542,450) | $ (1,757,932) |
Weighted average common shares outstanding - basic and diluted | 312,626,670 | 22,992,865 |
Net loss per common share - basic and diluted | $ (0.005) | $ (0.076) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Series A Preferred | Series B Preferred | Series AA Convertible Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Jun. 30, 2018 | 13,992,340 | 1,327,640 | 1 | 9,376,442 | |||
Beginning balance, amount at Jun. 30, 2018 | $ 13,992 | $ 1,328 | $ 0 | $ 937 | $ 40,160,699 | $ (44,691,196) | $ (4,514,240) |
Shares issued as compensation to directors and officers, shares | 23,427,772 | ||||||
Shares issued as compensation to directors and officers, amount | $ 2,343 | 1,899,157 | 1,901,500 | ||||
Shares issued for consulting services, shares | 3,233,341 | ||||||
Shares issued for consulting services, amount | $ 323 | 174,177 | $ 174,500 | ||||
Proceeds from sale of common stock, shares | 2,505,000 | 2,505,000 | |||||
Proceeds from sale of common stock, amount | $ 251 | 250,250 | $ 250,501 | ||||
Shares issued for conversion of notes payable, shares | 1,985,327 | 1,985,327 | |||||
Shares issued for conversion of notes payable, amount | $ 199 | 200,855 | $ 201,054 | ||||
Acquisition of TSSG, shares | 1,538,327 | 1,538,387 | |||||
Acquisition of TSSG, amount | $ 154 | 499,846 | $ 500,000 | ||||
Net loss | (1,757,932) | (1,757,932) | |||||
Ending balance, shares at Jun. 30, 2019 | 13,992,340 | 1,327,640 | 1 | 42,066,269 | |||
Ending balance, amount at Jun. 30, 2019 | $ 13,992 | $ 1,328 | $ 0 | $ 4,207 | 43,184,984 | (46,449,128) | (3,244,617) |
Shares issued as compensation to directors and officers, shares | 348,000,000 | ||||||
Shares issued as compensation to directors and officers, amount | $ 34,800 | 113,200 | 148,000 | ||||
Shares issued for consulting services, shares | 199,850,000 | ||||||
Shares issued for consulting services, amount | $ 19,985 | 178,750 | $ 198,735 | ||||
Shares issued for conversion of notes payable, shares | 954,210,518 | 954,210,518 | |||||
Shares issued for conversion of notes payable, amount | $ 95,421 | 964,151 | $ 1,059,572 | ||||
Acquisition of TSSG, amount | 0 | ||||||
Net loss | (1,542,450) | (1,542,450) | |||||
Ending balance, shares at Jun. 30, 2020 | 13,992,340 | 1,327,640 | 1 | 1,544,126,787 | |||
Ending balance, amount at Jun. 30, 2020 | $ 13,992 | $ 1,328 | $ 0 | $ 154,413 | $ 44,441,085 | $ (47,991,578) | $ (3,380,760) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (1,542,450) | $ (1,757,932) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization expense related to intangible asset | 0 | 141,970 |
Amortization of debt discounts | 206,249 | 141,667 |
Stock based payments for consultants, directors and officers | 346,735 | 2,076,000 |
Gain (loss) on debt settlement write off | 593,907 | (2,303,147) |
Gain (loss) on change in fair value of derivative liabilities | (385,367) | 183,130 |
Derivative liability expense | 61,396 | 341,423 |
Impairment expense | 0 | 407,002 |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 130,832 | (90,751) |
Accrued compensation | 336,000 | 160,704 |
Accrued interest | 145,941 | 133,189 |
Net cash used in operating activities | (106,757) | (566,745) |
Cash flows from financing activities: | ||
Advance from officers | 40,340 | 41,000 |
Proceed from sale of common stock | 0 | 250,501 |
Proceeds from convertible notes payable | 78,000 | 282,500 |
Net cash provided by financing activities | 118,340 | 574,001 |
Net increase in cash | 11,583 | 7,256 |
Cash at beginning of year | 18,668 | 11,412 |
Cash at end of year | 30,251 | 18,668 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 0 | 1,235 |
Cash paid for income taxes | 0 | 0 |
Issuance of common stock for conversion of notes payable and accrued interest (fair value of the shares issued 0 $1,059,572) | 333,220 | 201,055 |
Change in fair value of derivative liability related to debt conversions | 92,444 | 0 |
Issuance of common stock for acquisition of Threat Surface Solutions Group | 0 | 500,000 |
Derivative liability attributable to debt discount on notes payable | $ 48,000 | $ 282,500 |
Organization, Description of Bu
Organization, Description of Business and Going Concern | 12 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business and Going Concern | Visium Technologies, Inc., or the Company, is a Florida corporation that was originally incorporated in Nevada in October 1987. It was formerly known as Jaguar Investments, Inc. between October 1987 and May 2003, Power2Ship, Inc. between May 2003 and November 2006, Fittipaldi Logistics, Inc. between November 2006 and December 2007, and as NuState Energy Holdings, Inc. between December 2007 and March 5, 2018 when it changed its name to Visium Technologies, Inc. The Company is focused on digital risk management, cybersecurity, and technology services for network physical security, the Cloud, mobility solutions, and the Internet of Things (“IOT”). The Company named Mark Lucky as its Chief Executive Officer in February 2018 to provide strategic expertise in pursuing its business plans. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis. For the year ended June 30, 2020 we had a net loss of $1,542,450, had net cash used in operating activities of $106,757 and had negative working capital of $3,380,760. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. 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. Management is in the process of acquiring an operating entity actively engaged in a business that generates sustained revenues. We are also considering several additional potential acquisitions and are investigating various candidates to determine whether they would have the potential to add value to us for the benefit of our stockholders. We intend to restrict our consideration of potential business to communications, services, or technology. Because we have limited resources, the scope and number of suitable candidates to merge with is relatively limited. Because we may participate in a business opportunity with a newly formed firm, a firm that is in the development stage, or a firm that is entering a new phase of growth, we may incur further risk due to the inability of the target’s management to have proven its abilities or effectiveness, or the lack of an established market for the target’s products or services, or the inability to reach profitability in the next few years. Any business combination or transaction may result in a significant issuance of shares and substantial dilution to our present stockholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Use of Estimates The preparation of consolidated 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 Cox, Ross & Rubinstein Binomial Tree stock-based compensation and derivative liabilities 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 or investments 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, 2020 and 2019. 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, 2020 and 2019, 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, 2020 and 2019, 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. 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, the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any. The Company recorded a derivative liability as of June 30, 2020 of $438,553. 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. 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 through 2020 the Company’s issued convertible securities with variable conversion provisions that resulted in derivative liabilities. See discussion above under derivative liabilities that resulted in a change in derivative liability accounting. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). 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 The Company accounts for stock-based compensation in accordance with ASU 2020-07, Compensation – Stock Compensation (Topic 718). This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. Under 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 Cox, Ross & Rubinstein Binomial Tree valuation 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 focused on cybersecurity. Recent Accounting Pronouncements In May 2019, the FASB issued ASU No. 2020-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, regarding the accounting implications of the recently issued Tax Cuts and Jobs Act (the “Act”). This standard is effective immediately. The update clarifies that in a company’s financial statements that include the reporting period in which the Act was enacted, the company must first reflect the income tax effects of the Act in which the accounting under GAAP is complete. These amounts would not be provisional amounts. The company would also report provisional amounts for those specific income tax effects for which the accounting under GAAP is incomplete, but a reasonable estimate can be determined. Technical corrections or other forthcoming guidance could change how the Company interprets provisions of the Act, which may impact its effective tax rate and could affect its deferred tax assets, tax positions and/or its tax liabilities. In July 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-11. “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception (“ASU 2017-11”) ASU 2017-11 revises the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities. ASU 2017-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted, including adoption in an interim period. ASU 2017-11 provides that upon adoption, an entity may apply this standard retrospectively to outstanding financial instruments with a down round feature by means of a cumulative- effect adjustment to the opening balance of accumulated deficit in the fiscal year and interim period adoption. The Company has adopted ASU 2017-11 retrospectively as of January 1, 2020. The adoption of this ASU did not have any impact on its financial statements. 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 in-the-money 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, 2020 and 2019 as their effect would be anti-dilutive. Potential common shares that would be as follows: For the Years ended June 30, 2020 2019 Weighted average common shares outstanding 312,626,670 22,992,865 Effect of dilutive securities-when applicable: Convertible promissory notes 1,014,701,330 14,604,829 Preferred Stock 13,996,767 13,996,767 Warrants 500,000 500,000 Fully diluted earnings per share—adjusted weighted-average shares and assumed conversions 1,341,824,767 52,094,461 |
Derivative Liability
Derivative Liability | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Liability [Abstract] | |
Derivative Liability | Derivative liability - warrants The Company issued warrants in connection with convertible notes payable which were issued in January 2020. These warrants have price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the $0.15 per share exercise price of the warrants. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. Because it is indeterminate whether there is a sufficient number of authorized and unissued shares exists at the assessment date, the Company calculates a derivative liability associated with the warrants in accordance with FASB ASC Topic 815-40-25. Accounting for Derivative Warrant Liability The Company’s derivative warrant instruments have been measured at fair value at June 30, 2020 using the Cox, Ross & Rubinstein Binomial Tree valuation model. The Company recognizes the derivative liability related to those warrants that contain price protection features in its consolidated balance sheet as liabilities. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company’s cash flows. Derivative liability – convertible notes The Company has certain convertible notes with variable price conversion terms. U pon the issuance of these convertible notes and as a consequence of their conversion features, the convertible notes give rise to derivative liabilities. The revaluation of the warrants and convertible debt at each reporting period, as well as the charges associated with issuing additional convertible notes, and warrants with price protection features, resulted in the recognition of a gain of $385,367 and a loss of $183,130 for the years ended June 30, 2020 and 2019, respectively in the Company’s consolidated statements of operations, under the caption “Gain (loss) in change of fair value of derivative liability”. The fair value of the warrants at June 30, 2020 and June 30, 2019 was $250 and $37,200, respectively. The fair value of the derivative liabilities related to the convertible debt at June 30, 2020 and June 30, 2019 is $438,303 and $807,053, respectively, which is reported on the consolidated balance sheet under the caption “Derivative liabilities”. The Company has determined its derivative liability to be a Level 3 fair value measurement. The significant assumptions used in the Cox, Ross & Rubinstein Binomial Tree valuation of the derivative are as follows: Year Ended June 30, 2020 2019 Effective exercise price $ 0.00024 – $0.00039 $ 0.0355 - $ 0.0449 Effective market price $ 0.0007 $ 0.0745 Expected volatility 275.5% to 338.5 % 329.6% to 411.42 % Risk-free interest 0.14 % 1.92% - 2.18 % Expected terms 60 - 559 days 92 - 946 days Expected dividend rate 0 % 0 % Changes in the derivative liabilities during the year ended June 30, 2020 was follows: Derivative liability at June 30, 2019 $ 807,053 Derivative liability reduced as a result of note conversions (92,529 ) Gain on change in fair value of derivative liabilities (385,367 ) Increase due to issuance of convertible note 109,396 Derivative liability at June 30, 2020 $ 438,553 |
Convertible Notes Payable and N
Convertible Notes Payable and Note Payable | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable and Note Payable | Convertible Notes Payable At June 30, 2020 and June 30, 2019 convertible debentures consisted of the following: June 30, 2020 2019 Convertible notes payable $ 852,962 $ 1,075,428 Discount on convertible notes - (158,333 ) Convertible notes, net 852,962 917,095 Convertible notes payable to ASC Recap 147,965 147,965 Total $ 1,000,927 $ 1,065,060 The Company had convertible promissory notes aggregating approximately $1.0 million and $1.1 million at June 30, 2020 and June 30, 2019, respectively. The related accrued interest amounted to approximately $503,068 and $434,835 at June 30, 2020 and June 30, 2019, respectively. The convertible notes payable bear interest at rates ranging from 0% to 18% per annum. The convertible notes are generally convertible, at the holders’ option, at rates ranging from $0.00024 to $22,500 (as a result of two reverse stock splits) per share. At June 30, 2020, $841,000 of convertible promissory notes had matured, are in default and remain unpaid. There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default. On July 22, 2013 and May 6, 2014, the Company issued to ASC Recap LLC (“ASC”) two convertible promissory notes with principal amounts of $25,000 and $125,000, respectively. These two notes were issued as a fee for services under a 3(a)10 transaction. While the Company continues to carry the balance of these notes on its balance sheet, management is disputing the notes and does not believe that the balances of these notes are owed (see Note 12). The July 22, 2013 note matured on March 31, 2014 and a balance of $22,965 remains unpaid. The May 6, 2014 note matured on May 6, 2016 and remains unpaid. The notes are convertible into the common stock of the Company at any time at a conversion price equal to (i) 50% of the lowest closing bid price of our common stock for the twenty days prior to conversion or (ii) fixed price of $0.15 or $0.30 per share. For the year ended June 30, 2020, the following summarizes the conversion of debt for common shares: Amount of Amount of Adjustment Conversion Shares Converted Converted Conversion To Price Name Issued Principal Interest Expense Fair Value Total Per Share Auctus Funds, LLC 364,978,008 $ 85,856 $ 22,167 $ 21,000 $ 313,405 $ 442,428 $ $0.0012 FirstFire Global Opportunities Fund LLC 268,413,286 133,710 0 19,000 253,849 406,559 $0.0015 Power Up 309,918,093 48,000 2,880 0 95,388 146,268 $0.0005 Mark Lucky 10,901,131 32,900 7,707 0 23,710 64,317 $0.0059 TOTAL 954,210,518 $ 300,466 $ 32,754 $ 40,000 $ 686,351 $ 1,059,572 $ $0.0011 The adjustment to Fair Value of $686,351 is comprised of the following: Loss on settlement of debt $ 593,907 Change in fair value of derivative liability related to debt conversions 92,444 $ 686,351 Covenants and Other Matters Certain of our convertible loan agreements contain customary covenants and events of default and termination, including cross-default provisions, whereby a default under one loan and security agreement triggers a default under those certain other convertible notes Transactions Convertible Notes Payable In October 2019 we issued a convertible note to an investor, with a face value totaling $48,000 which generated net proceeds of $48,000. The notes bore interest at 8% and have a term of one year. This note was fully converted and retired as of June 30, 2020. In June 2020, in exchange for net proceeds of $30,000, we amended the outstanding convertible notes held by Auctus Funds, LLC and FirstFire Global Opportunities Fund, LLC, to increase the outstanding principal balance of each note in the amount of $15,000. Notes Payable The Company had promissory notes aggregating $205,000 at June 30, 2020 and June 30, 2019. The related accrued interest amounted to approximately $175,000 and $159,000 at June 30, 2020 and June 30, 2019, 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, 2020 have matured, are in default, and remain unpaid. There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default. The Company recognized interest expense on promissory notes payable of approximately $16,000 and $16,000 during the fiscal years 2020 and 2019, respectively. |
Accrued Interest Payable
Accrued Interest Payable | 12 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Interest Payable | Changes in accrued interest payable during the year ended June 30, 2020, is as follows: Accrued interest payable at June 30, 2019 $ 593,838 Interest expense on notes payable for the year ended June, 2020 116,772 Conversion of accrued interest into common stock (32,753 ) Accrued interest payable at June 30, 2020 $ 677,857 Interest expense for year ended June 30, 2020 was comprised of the following: Interest expense for the year ended June 30, 2020 $ 116,772 Amortization of debt discount 206,249 Total interest expense for the year ended June 30, 2020 $ 323,021 |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | Common Stock At June 30, 2020, the Company had 10,000,000,000 authorized common shares. At June 30, 2020, the Company has 1,544,793,446 common shares issued of which 1,544,126,787 were outstanding, which is net of 666,659 unvested shares issued for the restricted stock awards granted during the year. See Note 7. Issuances of Common Stock During 2020 Convertible Notes Payable During the fiscal year ended June 30, 2020 the Company issued 954,210,518 shares of its common stock related to the conversion of $333,220 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.00041 per share. The fair value of these conversions was $1,059,572, resulting in a net loss of $593,907. Stock Based Compensation During the fiscal year ended June 30, 2020 the Company issued 348,000,000 shares of its $0.0001 par value common stock as compensation to its directors and officers related to the vesting of restricted stock grants. The shares were valued at $148,000, or $0.00043 per share, based on the share price at the time of the transactions. During shares of its common stock to consultants, as compensation. The shares were valued at $0.001, the market price on the date of issuance for a total value of $198,735. The expense is included in general and administrative expenses and was recognized on the date the stock was issued or vested. Issuances of Common Stock During the Year ended June 30, 2019 Convertible Notes Payable During the fiscal year ended June 30, 2019 the Company issued 1,985,327 shares of its common stock related to the conversion of $201,054 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.101 per share. Sale of Restricted Common Stock During the fiscal year ended June 30, 2019 the Company issued 2,505,000 shares of its common stock related to the sale of its common stock resulting in proceeds of $250,501, at an average price of $0.10 per share. Acquisition of Threat Surface Solutions Group, LLC During the fiscal year ended June 30, 2019 the Company issued 1,538,387 shares of its common stock related to its acquisition of Threat Surface Solutions Group, LLC, valued at $500,000, or an average price of $0.325 per share. Stock Based Compensation During the fiscal year ended June 30, 2019 the Company issued 23,427,772 shares of its $0.0001 par value common stock as compensation to its directors and officers related to the vesting of restricted stock grants. The shares were valued at $1,901,500, or $0.081 per share, based on the share price at the time of the transactions. During 3,233,341 shares of its common stock to consultants, as compensation. The shares were valued at $0.054, the market price on the date of issuance for a total value of $174,500. The expense is included in general and administrative expenses and was recognized on the date the stock was issued or vested. Preferred Stock Series A and B issued and outstanding shares of the Company’s convertible preferred stock have a par value of $0.001. 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. Series A Convertible Preferred Stock The Series A Preferred Stock has a stated value of $750 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 Convertible Preferred Stock Thirty million (30,000,000) shares of preferred stock were designated as a new Series B Preferred stock in April 2016. This new Series B Preferred Stock has a $0.001 par value, and each 300 shares is convertible into one share of the Company’s common stock, with a stated value of $375 per share. Series AA Convertible Preferred Stock In March 2019, the Company authorized and issued one (1) share of Series AA convertible preferred stock which provides for the holder to vote on all matters as a class with the holders of Common Stock and each share of Series AA Convertible Preferred Stock shall be entitled to 51% of the common votes on any matters requiring a shareholder vote of the Company. Each one share of Series AA Convertible Preferred Stock is convertible into one (1) share of Common Stock. Mark Lucky, our Chief Executive Officer, is the holder of the one (1) share of Series AA Convertible Preferred Stock. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holder of a restricted stock award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a shareholder of the Company, including the right to vote the shares. The value of stock awards that vest over time was established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the year ended June 30, 2020 For the Year ended June 30, 2020 June 30, 2019 Weighted Weighted Average Average Grant Date Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period 3,544,447 $ 0.06 13,836,108 $ 0.06 Granted - $ - 1,500,000 $ 0.37 Forfeited (1,227,788 ) 0.06 (930,955 ) 0.36 Vested (1,650,000 ) $ 0.06 (10,861,106 ) $ 0.08 Unvested at end of period 666,659 $ 0.06 3,544,447 $ 0.06 Unrecognized compensation expense related to outstanding restricted stock awards to consultants as of June 30, 2020 |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
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, 2020 and 2019 was $0. The difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows: 2020 2019 Statutory federal rate (21.7 )% (21.0 )% State income tax rate, net of federal benefit (3.6 )% (3.6 )% Permanent differences, including stock-based compensation 8.6 % 8.6 % Change in valuation allowance 16.7 % 16.0 % Effective tax rate 0.0 % 0.0 % At June 30, 2020 and 2019 the Company’s deferred tax assets were as follows: June 30, 2020 June 30, 2019 Tax benefit of net operating loss carry forward $ 7,047,000 $ 6,961,000 Intangible - 85,000 Total deferred tax assets 7,047,000 7,046,000 Less: valuation allowance (7,047,000 ) (7,046,000 ) Net deferred tax assets $ - $ - As of June 30, 2020, the Company had unused net operating loss carry forwards of approximately $33.6 million available to reduce future federal taxable income. Net operating loss carryforwards expire through fiscal years ending 2038. 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 Company’s valuation allowance at June 30, 2020 and 2019 was $7,047,000 and $7,046,000, respectively. The change in the valuation allowance during the year ended June 30, 2020 was an increase of approximately $105,000. The change in the valuation allowance during the year ended June 30, 2019 was a decrease of $720,000. Effective December 22, 2018 a new tax bill was signed into law that reduced the federal income tax rate for corporations from 35% to 21.7% for the year ended June 30, 2019. Going forward the blended rate will be 25.4% for future years. The change in blended tax rate reduced the 2019 net operating loss carry forward deferred tax assets by approximately $3.3 million. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Equity transactions with related parties are described in Note 7. From time to time we have borrowed operating funds from Mr. Mark Lucky, our Chief Executive Officer and from certain Directors, for working capital. The advances were payable upon demand and were interest free. During year ended June 30, 2020 Mr. Lucky advanced $40,340 to the Company. $102,340 in advances remain outstanding as of June 30, 2020. Mr. Lucky is owed $11,805 for out-of-pocket expenses as of June 30, 2020, which is included on the balance sheet in Accounts payable and accrued expenses. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Operating Leases The Company operates virtually, with no office space rented. The Company has no future minimum annual payments under non-cancelable operating leases at June 30, 2020. Contingencies The Company accounts for contingent liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies License Contingent Consideration Our license agreements with the sellers of Threat Surface Solutions Group, LLC includes a provision for a royalty payment based on . As of June 30, 2020, we have not generated any revenue related to these license agreements. Our license agreements with George Mason University and The MITRE Corporation include provisions for a royalty payment on revenues collected of 5% and 6%, respectively. As of June 30, 2020, we have not generated any revenue related to these license agreements. Legal Claims In July 2018, the Company was named as the defendant in a legal proceeding brought by Tarpon Bay Partners LLC (the “Plaintiff”) in the Judicial District Court of Danbury, Connecticut. Plaintiff asserts that the Company failed to convert two convertible notes held by Plaintiff. The Company is vigorously contesting this claim. The Company is subject to litigation, claims, investigations, and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair value measurements At June 30, 2020 and 2019, the fair value of derivative liabilities is estimated using the Cox, Ross & Rubinstein Binomial Tree valuation model using inputs that include the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate. The derivative liabilities are the only Level 3 fair value measures. At June 30, 2020, the estimated fair values of the liabilities measured on a recurring basis are as follows: Fair Value Measurements at June 30, 2020: (Level 1) (Level 2) (Level 3) Derivative liability – Convertible notes 438,303 Derivative liability – Warrants $ - $ - $ 250 Total derivative liabilities $ - $ - $ 438,553 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | In August 2020, the Company issued 110,432,492 shares of its common stock upon the conversion of principal of $15,769, and $1,182 of accrued interest on its outstanding convertible notes, valued at $0.00017 per share. In September 2020, the Company issued 95,958,168 shares of its common stock upon the conversion of principal of $21,599, and $681 of accrued interest on its outstanding convertible notes, valued at $0.00024 per share. In July and August 2020, 200,001 restricted shares which were previously issued to consultants have vested. In July 2020, the Company issued 30,000,000 shares to consultants for services rendered. The share shares were valued at the market price on the date of issuance, at $0.0005/share, or $15,000. In July 2020, the Company issued 90,000,000 shares to officers and directors as compensation. The share shares were valued at the market price on the date of issuance, at $0.0005/share, or $45,000. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of consolidated 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 Cox, Ross & Rubinstein Binomial Tree stock-based compensation and derivative liabilities 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 or investments 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, 2020 and 2019. |
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, 2020 and 2019, 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, 2020 and 2019, 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. 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, the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any. The Company recorded a derivative liability as of June 30, 2020 of $438,553. |
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. 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 through 2020 the Company’s issued convertible securities with variable conversion provisions that resulted in derivative liabilities. See discussion above under derivative liabilities that resulted in a change in derivative liability accounting. |
Revenue Recognition | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). |
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 | The Company accounts for stock-based compensation in accordance with ASU 2020-07, Compensation – Stock Compensation (Topic 718). This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. Under 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 Cox, Ross & Rubinstein Binomial Tree valuation 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 focused on cybersecurity. |
Recent Accounting Pronouncements | In May 2019, the FASB issued ASU No. 2020-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, regarding the accounting implications of the recently issued Tax Cuts and Jobs Act (the “Act”). This standard is effective immediately. The update clarifies that in a company’s financial statements that include the reporting period in which the Act was enacted, the company must first reflect the income tax effects of the Act in which the accounting under GAAP is complete. These amounts would not be provisional amounts. The company would also report provisional amounts for those specific income tax effects for which the accounting under GAAP is incomplete, but a reasonable estimate can be determined. Technical corrections or other forthcoming guidance could change how the Company interprets provisions of the Act, which may impact its effective tax rate and could affect its deferred tax assets, tax positions and/or its tax liabilities. In July 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-11. “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception (“ASU 2017-11”) ASU 2017-11 revises the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities. ASU 2017-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted, including adoption in an interim period. ASU 2017-11 provides that upon adoption, an entity may apply this standard retrospectively to outstanding financial instruments with a down round feature by means of a cumulative- effect adjustment to the opening balance of accumulated deficit in the fiscal year and interim period adoption. The Company has adopted ASU 2017-11 retrospectively as of January 1, 2020. The adoption of this ASU did not have any impact on its financial statements. |
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 in-the-money 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, 2020 and 2019 as their effect would be anti-dilutive. Potential common shares that would be as follows: For the Years ended June 30, 2020 2019 Weighted average common shares outstanding 312,626,670 22,992,865 Effect of dilutive securities-when applicable: Convertible promissory notes 1,014,701,330 14,604,829 Preferred Stock 13,996,767 13,996,767 Warrants 500,000 500,000 Fully diluted earnings per share—adjusted weighted-average shares and assumed conversions 1,341,824,767 52,094,461 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Potential dilutive common shares | For the Years ended June 30, 2020 2019 Weighted average common shares outstanding 312,626,670 22,992,865 Effect of dilutive securities-when applicable: Convertible promissory notes 1,014,701,330 14,604,829 Preferred Stock 13,996,767 13,996,767 Warrants 500,000 500,000 Fully diluted earnings per share—adjusted weighted-average shares and assumed conversions 1,341,824,767 52,094,461 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Liability [Abstract] | |
Derivative liabilities valuation assumptions | Year Ended June 30, 2020 2019 Effective exercise price $ 0.00024 – $0.00039 $ 0.0355 - $ 0.0449 Effective market price $ 0.0007 $ 0.0745 Expected volatility 275.5% to 338.5 % 329.6% to 411.42 % Risk-free interest 0.14 % 1.92% - 2.18 % Expected terms 60 - 559 days 92 - 946 days Expected dividend rate 0 % 0 % |
Changes in derivative liabilities | Derivative liability at June 30, 2019 $ 807,053 Derivative liability reduced as a result of note conversions (92,529 ) Gain on change in fair value of derivative liabilities (385,367 ) Increase due to issuance of convertible note 109,396 Derivative liability at June 30, 2020 $ 438,553 |
Convertible Notes Payable and_2
Convertible Notes Payable and Note Payable (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible debentures | June 30, 2020 2019 Convertible notes payable $ 852,962 $ 1,075,428 Discount on convertible notes - (158,333 ) Convertible notes, net 852,962 917,095 Convertible notes payable to ASC Recap 147,965 147,965 Total $ 1,000,927 $ 1,065,060 |
Conversion of debt for common shares | Amount of Amount of Adjustment Conversion Shares Converted Converted Conversion To Price Name Issued Principal Interest Expense Fair Value Total Per Share Auctus Funds, LLC 364,978,008 $ 85,856 $ 22,167 $ 21,000 $ 313,405 $ 442,428 $ $0.0012 FirstFire Global Opportunities Fund LLC 268,413,286 133,710 0 19,000 253,849 406,559 $0.0015 Power Up 309,918,093 48,000 2,880 0 95,388 146,268 $0.0005 Mark Lucky 10,901,131 32,900 7,707 0 23,710 64,317 $0.0059 TOTAL 954,210,518 $ 300,466 $ 32,754 $ 40,000 $ 686,351 $ 1,059,572 $ $0.0011 |
Adjustment to fair value | Loss on settlement of debt $ 593,907 Change in fair value of derivative liability related to debt conversions 92,444 $ 686,351 |
Accrued Interest Payable (Table
Accrued Interest Payable (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Changes in accrued interest payable | Accrued interest payable at June 30, 2019 $ 593,838 Interest expense on notes payable for the year ended June, 2020 116,772 Conversion of accrued interest into common stock (32,753 ) Accrued interest payable at June 30, 2020 $ 677,857 |
Interest expense | Interest expense for the year ended June 30, 2020 $ 116,772 Amortization of debt discount 206,249 Total interest expense for the year ended June 30, 2020 $ 323,021 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Restricted stock activity | For the Year ended June 30, 2020 June 30, 2019 Weighted Weighted Average Average Grant Date Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period 3,544,447 $ 0.06 13,836,108 $ 0.06 Granted - $ - 1,500,000 $ 0.37 Forfeited (1,227,788 ) 0.06 (930,955 ) 0.36 Vested (1,650,000 ) $ 0.06 (10,861,106 ) $ 0.08 Unvested at end of period 666,659 $ 0.06 3,544,447 $ 0.06 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate | 2020 2019 Statutory federal rate (21.7 )% (21.0 )% State income tax rate, net of federal benefit (3.6 )% (3.6 )% Permanent differences, including stock-based compensation 8.6 % 8.6 % Change in valuation allowance 16.7 % 16.0 % Effective tax rate 0.0 % 0.0 % |
Deferred tax assets | June 30, 2020 June 30, 2019 Tax benefit of net operating loss carry forward $ 7,047,000 $ 6,961,000 Intangible - 85,000 Total deferred tax assets 7,047,000 7,046,000 Less: valuation allowance (7,047,000 ) (7,046,000 ) Net deferred tax assets $ - $ - |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value of liabilities measured on a recurring basis | Fair Value Measurements at June 30, 2020: (Level 1) (Level 2) (Level 3) Derivative liability – Convertible notes 438,303 Derivative liability – Warrants $ - $ - $ 250 Total derivative liabilities $ - $ - $ 438,553 |
Organization, Description of _2
Organization, Description of Business and Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ (1,542,450) | $ (1,757,932) |
Net cash used in operating activities | (106,757) | $ (566,745) |
Working capital deficit | $ (3,380,760) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||
Weighted average common shares outstanding | 312,626,670 | 22,992,865 |
Effect of dilutive securities-when applicable: convertible promissory notes | 1,014,701,330 | 14,604,829 |
Effect of dilutive securities-when applicable: preferred stock | 13,996,767 | 13,996,767 |
Effect of dilutive securities-when applicable: warrants | 500,000 | 500,000 |
Fully diluted earnings per share - adjusted weighted-average shares and assumed conversions | 1,341,824,767 | 52,094,461 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Accounting Policies [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
FDIC insured amount | 250,000 | 250,000 |
Derivative liability | $ 438,553 | $ 807,053 |
Derivative Liability (Details)
Derivative Liability (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Effective market price | $ 0.0007 | $ 0.0745 |
Risk-free interest | 0.14% | |
Expected dividend rate | 0.00% | 0.00% |
Minimum | ||
Effective exercise price | $ .00024 | $ .0355 |
Volatility | 275.50% | 329.60% |
Risk-free interest | 1.92% | |
Terms | 60 days | 92 days |
Maximum | ||
Effective exercise price | $ .00039 | $ .0449 |
Volatility | 338.50% | 411.42% |
Risk-free interest | 2.18% | |
Terms | 559 days | 946 days |
Derivative Liability (Details 1
Derivative Liability (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Liability [Abstract] | ||
Derivative liability, beginning | $ 807,053 | |
Derivative liability expense | (92,529) | |
Gain on change in fair value of derivative liabilities | (385,367) | $ 183,130 |
Derivative liability attributed to discount on notes payable | 109,396 | |
Derivative liability, ending | $ 438,553 | $ 807,053 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Liability [Abstract] | ||
Gain (loss) on change in fair value of derivative liabilities | $ 385,367 | $ 183,130 |
Fair value of warrants | 250 | 37,200 |
Derivative liabilities | $ 438,553 | $ 807,053 |
Convertible Notes Payable and_3
Convertible Notes Payable and Note Payable (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Debt Disclosure [Abstract] | ||
Convertible notes payable | $ 852,962 | $ 1,075,428 |
Discount on convertible notes | 0 | (158,333) |
Convertible notes, net | 852,962 | 917,095 |
Convertible notes payable to ASC Recap | 147,965 | 147,965 |
Total | $ 1,000,927 | $ 1,065,060 |
Convertible Notes Payable and_4
Convertible Notes Payable and Note Payable (Details 1) | 12 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Shares issued | shares | 954,210,518 |
Amount converted principal | $ 300,466 |
Amount converted interest | 32,754 |
Conversion expense | 40,000 |
Adjustment to fair value | 686,351 |
Amount converted total | $ 1,059,572 |
Conversion price per share | $ / shares | |
Auctus Funds | |
Shares issued | shares | 364,978,008 |
Amount converted principal | $ 85,856 |
Amount converted interest | 22,167 |
Conversion expense | 21,000 |
Adjustment to fair value | 313,405 |
Amount converted total | $ 442,428 |
Conversion price per share | $ / shares | $ 0 |
FirstFire Global Opportunities Fund LLC | |
Shares issued | shares | 268,413,286 |
Amount converted principal | $ 133,710 |
Amount converted interest | 0 |
Conversion expense | 19,000 |
Adjustment to fair value | 253,849 |
Amount converted total | $ 406,559 |
Conversion price per share | $ / shares | $ 0 |
Power Up | |
Shares issued | shares | 309,918,093 |
Amount converted principal | $ 48,000 |
Amount converted interest | 2,880 |
Conversion expense | 0 |
Adjustment to fair value | 95,388 |
Amount converted total | $ 146,268 |
Conversion price per share | $ / shares | $ 0 |
Mark Lucky | |
Shares issued | shares | 10,901,131 |
Amount converted principal | $ 32,900 |
Amount converted interest | 7,707 |
Conversion expense | 0 |
Adjustment to fair value | 23,710 |
Amount converted total | $ 64,317 |
Conversion price per share | $ / shares | $ 0.01 |
Convertible Notes Payable and_5
Convertible Notes Payable and Note Payable (Details 2) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Disclosure [Abstract] | ||
Loss on settlement of debt | $ 593,907 | $ (2,303,147) |
Change in fair value of derivative liability related to debt conversions | 92,444 | $ 0 |
Fair value | $ 686,351 |
Convertible Notes Payable and_6
Convertible Notes Payable and Note Payable (Details Narrative) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Convertible promissory notes | $ 1,000,927 | $ 1,065,060 |
Promissory notes | 205,000 | 205,000 |
Accrued interest | $ 503,068 | 434,835 |
Convertible debt instrument conversion price per share | ||
Convertible promissory notes in default and remain unpaid | $ 841,000 | $ 0 |
Convertible Notes Payable | Minimum | ||
Debt instrument interest rate percentage | 0.00% | |
Convertible debt instrument conversion price per share | $ .00024 | |
Convertible Notes Payable | Maximum | ||
Debt instrument interest rate percentage | 18.00% | |
Convertible debt instrument conversion price per share | $ 22,500 |
Accrued Interest Payable (Detai
Accrued Interest Payable (Details) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Payables and Accruals [Abstract] | |
Accrued interest payable, beginning | $ 593,838 |
Interest expense on notes payable | 116,772 |
Conversion of accrued interest into common stock | (32,753) |
Accrued interest payable, ending | $ 677,857 |
Accrued Interest Payable (Det_2
Accrued Interest Payable (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Payables and Accruals [Abstract] | ||
Interest expense | $ 116,772 | |
Amortization of debt discount | 206,249 | $ 141,667 |
Total interest expense | $ (323,021) | $ (276,087) |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Common stock, shares authorized | 10,000,000,000 | 10,000,000,000 |
Common stock, shares issued | 1,544,793,446 | 45,610,716 |
Common stock, shares outstanding | 1,544,126,787 | 42,066,269 |
Shares issued for conversion of notes payable, shares | 954,210,518 | 1,985,327 |
Shares issued for conversion of notes payable, amount | $ 1,059,572 | $ 201,054 |
Proceeds from sale of common stock, shares | 2,505,000 | |
Proceeds from sale of common stock, amount | $ 250,501 | |
Acquisition of TSSG, shares | 1,538,387 | |
Acquisition of TSSG, amount | 0 | $ 500,000 |
Shares issued as compensation, amount | $ 148,000 | $ 1,901,500 |
Directors | ||
Shares issued as compensation, shares | 348,000,000 | 23,427,772 |
Shares issued as compensation, amount | $ 148,000 | $ 1,901,500 |
Consultants | ||
Shares issued as compensation, shares | 199,850,000 | 3,233,341 |
Shares issued as compensation, amount | $ 198,735 | $ 174,500 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Restricted stock awards, unvested, beginning | 3,544,447 | 13,836,108 |
Restricted stock awards, granted | 0 | 1,500,000 |
Restricted stock awards, forfeited | (1,227,788) | (930,955) |
Restricted stock awards, vested | (1,650,000) | (10,861,106) |
Restricted stock awards, unvested, ending | 666,659 | 3,544,447 |
Weighted average grant date fair value, unvested, beginning | $ .06 | $ 0.06 |
Weighted average grant date fair value, granted | .00 | .37 |
Weighted average grant date fair value, forfeited | 0.06 | .36 |
Weighted average grant date fair value, vested | 0.06 | .08 |
Weighted average grant date fair value, unvested, ending | $ 0.06 | $ .06 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details Narrative) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Unrecognized compensation expense, restricted stock awards | $ 40,000 |
Unrecognized compensation expense, restricted stock awards, period of recognition | 9 months 29 days |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal rate | (21.70%) | (21.00%) |
State income tax rate, net of federal benefit | (3.60%) | (3.60%) |
Permanent differences, including stock-based compensation | 8.60% | 8.60% |
Change in valuation allowance | 16.70% | 16.00% |
Effective tax rate | 0.00% | 0.00% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Tax benefit of net operating loss carry forward | $ 7,047,000 | $ 6,961,000 |
Intangible | 0 | 85,000 |
Total deferred tax assets | 7,047,000 | 7,046,000 |
Less: valuation allowance | (7,047,000) | (7,046,000) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 0 | $ 0 |
Net operating loss carryforwards | $ (33,600,000) | |
Net operating loss carryforwards expiration date | Jan. 1, 2038 | |
Deferred tax assets valuation allowance | $ 7,047,000 | 7,046,000 |
Increase (decrease) in deferred tax assets | $ 105,000 | $ 720,000 |
Statutory federal rate | 21.70% | 21.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Due to officer | $ 102,340 | $ 62,000 |
Mr. Mark Lucky | ||
Related party advances | 40,340 | |
Due to officer | $ 11,805 |
Fair Value Measurement (Details
Fair Value Measurement (Details) | Jun. 30, 2020USD ($) |
Level 1 | |
Derivative liability | $ 0 |
Level 2 | |
Derivative liability | 0 |
Level 3 | |
Derivative liability | 438,553 |
Convertible Notes | Level 1 | |
Derivative liability | 0 |
Convertible Notes | Level 2 | |
Derivative liability | 0 |
Convertible Notes | Level 3 | |
Derivative liability | 438,303 |
Warrants | Level 1 | |
Derivative liability | 0 |
Warrants | Level 2 | |
Derivative liability | 0 |
Warrants | Level 3 | |
Derivative liability | $ 250 |