Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | SANGUI BIOTECH INTERNATIONAL INC | |
Document Type | 10-K | |
Document Period End Date | Jun. 30, 2018 | |
Trading Symbol | sgbi | |
Amendment Flag | false | |
Entity Central Index Key | 1,104,280 | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 192,951,503 | |
Entity Public Float | $ 192,951,503 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | No | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
CURRENT ASSETS | ||
Cash | $ 20,943 | $ 56,990 |
Tax refunds receivable | 2,143 | 3,183 |
Accounts receivable, net | 49,107 | 468 |
Note receivable, related party | 7,062 | 6,470 |
Prepaid expenses and other assets | 22,774 | 26,662 |
Total Current Assets | 102,029 | 93,773 |
TOTAL ASSETS | 102,029 | 93,773 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 189,739 | 188,855 |
Accrued interest - related party | 19,088 | 12,214 |
Note payable | 40,025 | 39,118 |
Notes payable - related party | 204,321 | 114,109 |
Total Current Liabilities | 453,173 | 354,296 |
STOCKHOLDERS' EQUITY (Deficit) | ||
Common stock, no par value; 250,000,000 shares authorized 191,951,503 and 184,881,503 shares issued and 191,897,747 and 184,827,747 shares outstanding respectively | 32,864,356 | 32,709,868 |
Additional paid-in capital | 4,513,328 | 4,513,328 |
Treasury stock, at cost | (19,387) | (19,387) |
Accumulated other comprehensive income | 92,921 | 122,227 |
Accumulated deficit | (37,180,108) | (36,978,298) |
Non-controlling interest | (622,254) | (608,261) |
Total Stockholders' Equity (Deficit) | (351,144) | (260,523) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 102,029 | $ 93,773 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
REVENUES | ||
Product sales | $ 77,152 | $ 67,653 |
COST OF SALES | 62 | 693 |
GROSS MARGIN | 77,090 | 66,960 |
OPERATING EXPENSES | ||
Research and development | 23,003 | 16,530 |
Professional fees | 121,478 | 225,901 |
General and administrative | 140,654 | 141,328 |
Total Operating Expenses | 285,135 | 383,759 |
OPERATING LOSS | (208,045) | (316,799) |
OTHER INCOME (EXPENSE) | ||
Gain (Loss) of foreign exchange | 549 | (3,596) |
Interest expense | (8,307) | (9,211) |
Total other income (expense) | (7,758) | (12,807) |
LOSS BEFORE INCOME TAXES AND NON-CONTROLLING INTEREST | (215,803) | (329,606) |
COMPREHENSIVE INCOME (LOSS) | $ (245,109) | $ (330,168) |
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 188,204,782 | 178,461,623 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Profit (loss) | $ (215,803) | $ (329,606) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Common stock issued for services | 9,620 | |
Gain on foreign currency exchange transactions | 99 | $ 3,169 |
Changes in operating assets and liabilities | ||
Trade accounts receivable | (48,628) | 48 |
Prepaid expenses and other current assets | 4,282 | 4,294 |
Tax refunds receivable | 1,113 | 929 |
Accounts payable and accrued expenses | (1,254) | (14,546) |
Related party accounts payable | 6,873 | 3,792 |
Related party advances | (443) | (803) |
Net Cash Used in Operating Activities | (253,761) | (323,103) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party note payable | 90,113 | |
Proceeds from common stock issued for cash | 154,489 | 307,590 |
Net Cash Provided by Financing Activities | 244,602 | 307,590 |
EFFECTS OF EXCHANGE RATES | (26,888) | 2,428 |
NET CHANGE IN CASH | (36,047) | (13,085) |
CASH AT BEGINNING OF PERIOD | 56,989 | 70,074 |
CASH AT END OF PERIOD | 20,943 | 56,989 |
CASH PAID FOR: | ||
Interest | $ 1,647 | $ 1,542 |
Note 1 - Organization and Summa
Note 1 - Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 1 - Organization and Summary of Significant Accounting Policies | NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Business Sangui Biotech International, Inc. (the Company) was incorporated in Colorado in 1995. Since 2003 when a comprehensive restructuring of the group was completed, all operations have been carried out by Sangui BioTech GmbH, its 90% owned subsidiary which is headquartered in Witten, Germany. Sangui Biotech International, Inc., (the Parent Company) acts as a holding company whose purpose it is to secure financing and access to the capital markets. Effective from June 18, 2018 Sangui BioTech GmbH together with Sastomed GmbH founded Sangui Know-How- und Patentverwertungsgesellschaft mbH & Co. KG (Sangui KG). Sangui KG is a limited partnership, with Sangui BioTech GmbH as the general partner (owing 99.8%) and Sastomed GmbH as a limited partner (owning 0.2%). Sangui BioTech GmbH is engaged in the development of technologies aimed at improved supply of oxygen to the human body such as wound management products in particular a wound spray based on natural hemoglobin, wound dressings based on Chitosan (a natural polymer), artificial oxygen carriers (external applications of hemoglobin, blood substitutes and blood additives) and cosmetics. The cosmetics products are currently being sold via the Companys internet shop, yielding a small amount of revenues. Otherwise, the Company does not produce nor market its products. It has adopted the strategy to license its technologies to industry partners in exchange for royalties. In the pursuit of this strategy, the Company established a joint venture company in December 2010 for the purposes of marketing and selling the wound spray product in Germany and of preparing its market entry in several other European countries and Mexico. As consideration for the license, the Company is paid royalties on all sales of this product and is entitled to a 25 percent share of all future profits of the joint venture. Effective December 31, 2017 the Company sold its 25% share of the joint venture to its co-partner. On June 22, 2018, Sangui KG has acquired all rights in the license agreement concluded on December 17, 2010 with Sastomed GmbH from Sangui BioTec GmbH. Going Concern The Company incurred a net loss attributable to common stockholders of $ 201,810 253,761 Additional financing may not be available on terms favorable to the Company or at all. If these funds are not available the Company may not be able to execute its business plan or take advantage of business opportunities. The Companys ability to obtain such additional financing and to achieve its operating goals is uncertain. In the event that the Company does not obtain additional capital or is not able to increase cash flow through the increase of sales, there is a substantial doubt of its being able to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Principles of Consolidation The consolidated financial statements include the accounts of Sangui BioTech International, Inc., its 90% owned foreign subsidiaries, Sangui BioTech GmbH and Sangui KG. All intercompany accounts and transactions have been eliminated in consolidation. 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 reported amounts of revenues and expenses during the respective reporting period. As future events and their effects cannot be determined with precision, actual results could differ from those estimates. Significant estimates made by management are, among others, the realization of receivables, inventories, long-lived assets, and valuation allowance on deferred tax assets. Due to the current dependence of Sangui on the revenue from the license agreement with Sastomed GmbH, the management places the highest priority on the sales development in this area in order to be able to recognize potential risks in good time and to take appropriate measures if necessary. These measures include regular and ad hoc discussions with the licensee about its planned business development. Risks and Uncertainties The Company's line of future pharmaceutical and cosmetic products (artificial oxygen carriers or blood substitute and additives) as well as other medical products being developed by Sangui BioTech GmbH, are deemed as medical devices or biologics, and as such are governed by the Federal Food and Drug and Cosmetics Act and by the regulations of state agencies and various foreign government agencies. The pharmaceutical products will be subject to stringent regulatory requirements because they are in vivo products for humans. The Company and its subsidiaries have limited experience in obtaining regulatory clearance on these types of products. Therefore, the Company could be subject to risks of delays in obtaining or failing to obtain regulatory clearance. Financial Instruments Pursuant to ASC 820, Fair Value Measurements and Disclosures Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.The Companys financial instruments consist principally of cash, accounts and notes receivable, accounts payable and accrued liabilities, notes payable and amounts due to related parties. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. Foreign Currency Translation The functional currency of the Companys Sangui GmbH subsidiary and Sangui KG subsidiary is the local currency, the Euro. Accordingly, assets and liabilities of the subsidiary are translated into U.S. dollars at period-end exchange rates. All equity account balances have been translated at the historical rates. Revenues and expenses are translated at the average exchange rates in effect for the period. The resulting translation gains or losses are recorded as a component of accumulated other comprehensive income in the consolidated statement of stockholders equity. For the years ended June 30, 2018 and 2017, the Company recognized a loss 29,306 loss 562 549 respectively 3,596 The exchange rates used to calculate values and results of operations for the years ended June 30, 2018 and 2017, were as follows: Year-end Rates Average Period Rates June 30, 2018 0.856494 0.838296 June 30, 2017 0.876355 0.917966 Pursuant to ASC 830-20-35, Foreign Currency Matters Cash and Cash Equivalents The Company considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. The Company maintains its cash in uninsured bank accounts in Germany. Cash and cash equivalents include time deposits for which the Company has no requirements for compensating balances. The Company has not experienced any losses in its uninsured bank accounts. The Company had no cash equivalents outstanding as of June 30, 2018 and 2017. Property and Equipment Property and equipment are recorded at cost and are depreciated or amortized using the straight-line method over the expected useful lives, which range from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Depreciation expense for the years ended June 30, 2018 and 2017 was $0 and $0, respectively. Expenditures for normal maintenance and routine repairs are charged to expense, and significant improvements are capitalized. The cost and related accumulated depreciation of assets are removed from the accounts upon retirement or other disposition; any resulting gain or loss is reflected in the statement of operations. Impairment of Long-Lived Assets Long-lived assets, including property and equipment and certain identifiable intangibles to be held and used are reviewed by the management of the Company for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. On a regular basis and at least annually, the Company evaluates whether events and circumstances have occurred that indicate possible impairment and relies on a number of factors, including business plans, economic projections, and anticipated future cash flows. Measurement of the amount of impairment, if any, is based upon the difference between the assets carrying value and estimated fair value. As of June 30, 2018 and 2017, management of the Company believes that no impairment has been indicated. There can be no assurance, however, that market conditions will not change or demand for the Company's products will continue which could result in impairment of long-lived assets in the future. Revenue Recognition The Company derives revenue primarily from licensing fees on sales of its wound spray product as well as from the sale of its cosmetics products. The wound spray technology is licensed to an entity, in which the Company held a 25 percent equity interest, as a Joint Venture (See Note 2). Effective December 31, 2015 the Company sold its 25 % share of the joint venture to its co-partner. The Company presently is entitled to royalties on net sales of the wound spray product. Licensing fees are invoiced on a quarterly basis and are recognized as revenue during the quarter that the sales were reported by the licensee. The Companys product sales (amounting to less than 10% of total revenues in the current year) are generated via online orders, with credit card payment. The Company recognizes revenues when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed and determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured generally when products are shipped to the customer, except in situations in which title passes upon receipt of the products by the customer. In this case, revenues are recognized upon notification that customer receipt has occurred. The Company does not have customer acceptance provisions, but it does provide its customers a limited right of return. The Company accrues an estimated amount for sales returns and allowances at the time of sale, based on its ability to estimate sales returns and allowances using historical information. Shipping and handling fees are included as part of net sales. The related freight costs and supplies associated with shipping products to customers are included as a component of cost of goods sold. Trade Accounts Receivable Accounts receivable are reflected at estimated net realizable value, do not bear interest and generally require collateral. The Company maintains an allowance for doubtful accounts based upon a variety of factors. The Company reviews all open accounts and provides specific reserves for customer collection issues when it believes a loss is probable.. The reserve estimate includes consideration of such factors as the length of time receivables are past due, the financial condition of the customer, and historical experience. The Company also records a reserve for all customers, excluding those that have been specifically reserved for, based upon evaluation of historical losses which exceeded the specific reserves the Company had established. For the years ended June 30, 2018 and 2017, the Company recognized bad debt expense in the amounts of $0 and $0, respectively. Inventory Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or market value. Provisions to value the inventory at the lower of the actual cost to purchase or manufacture the inventory, or the current estimated market value of the inventory, are based upon assumptions about future demand and market conditions. The Company also performs evaluations of inventory and records a provision or impairment for estimated excess and obsolete items based upon demand, and any other known factors at the time. As of June 30, 2018 and 2017, all inventory balances had been reserved against in full. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Sales to the Company's largest customer represents over 95% of the Company's revenues. Sales Tax Collected from Customers As a part of the Companys normal course of business, sales taxes are collected from customers. Sales taxes collected are remitted, in a timely manner, to the appropriate governmental tax authority on behalf of the customer. The Companys policy is to present revenue and costs net of sales taxes. Income Taxes The Company accounts for income taxes in accordance with ASC 740. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce deferred income tax assets when it is more likely than not that such deferred tax assets will not be realized. The Company has foreign subsidiaries formed or acquired to conduct or support its business outside the United States. The Company provides for income taxes, net of applicable foreign tax credits, on temporary differences in its investment in foreign subsidiaries which are not considered to be permanently invested outside of the United States. The Company adopted ASC 740 which defines the threshold for recognizing the benefits of tax return positions in the financial statements as more-likely-than-not to be sustained by the taxing authority. A tax position that meets the more-likely-than-not criterion shall be measured at the largest amount of benefit that is more than 50 percent likely of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. ASC 740 applies to all tax positions accounted for under ASC 740. Estimated interest and penalties related to the underpayment of income taxes are recorded as a component of provision for income taxes in the consolidated statements of operations. For the years ended June 30, 2018 and 2017, the Company did not recognize any such interest or penalties, nor were any interest fees or penalties accrued as of June 30, 2018 and 2017. Research and Development Research and development costs are charged to operations as they are incurred. Legal fees and other direct costs incurred in obtaining and protecting patents are also expensed as incurred, due to the uncertainty with respect to future cash flows resulting from the patents. Research and development costs totaled $ 23,003 16,530 Basic and Diluted Loss per Common Share Basic loss per common share excludes dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted loss per share gives effect to all potential dilutive common shares outstanding during the period of compensation. The computation of diluted loss per share does not assume conversion, exercise or contingent exercise of securities that would have an antidilutive effect on earnings. As of June 30, 2018 and 2017, the Company had no potentially dilutive securities that would affect the loss per share if they were to be included in the loss per share. Comprehensive Loss Total comprehensive loss represents the net change in stockholders' equity during a period from sources other than transactions with stockholders and as such, includes net loss. For the Company, the components of other comprehensive loss are the changes in the cumulative foreign currency translation adjustments. Segments of an Enterprise and Related Information The Company adopted ASC 280, "Disclosures about Segments of an Enterprise and Related Information." ASC 280 establishes standards for the way public companies report information about segments of their business in their annual financial statements and requires them to report selected segment information in their quarterly reports issued to stockholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers, if any. As of June 30, 2018 and 2017, the Company has one business segment, which is includes the manufacturing and sales of its wound treatment and cosmetic products as well as the licensing of business partners to do the same. Non-controlling Interests On June 11, 2008, the Companys wholly-owned German subsidiary, Sangui Biotech GmbH (GmbH) issued 11,400 shares of its previously unissued common stock for cash proceeds of $1,140,759. These shares amount to 10 percent of the GmbHs total outstanding common stock, which totaled 113,800 shares of as June 30, 2018 and 2017, respectively. The Company accounts for these non-controlling interests pursuant to ASC 810 whereby gains or losses in a subsidiary with a non-controlling interest are allocated to the non-controlling interest based on the ownership percentage of the non-controlling interest, even if that allocation results in a deficit non-controlling interest balance. As stated above, effective June 18, 2018 GmbH founded Sangui KG as a limited partnership. As a result, the business activity and operations of Sangui KG are included in those of GmbH and are therefore subject to the same non-controlling interests accounting guidance as that of GmbH, adjusted for GmbH's 0.2% non-controlling interest in Sangui KG. Due to the fact that there were relatively few days in the period between its founding and the end of the business year, the business activity of Sangui KG were negligible. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (ASU 2016-08); ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (ASU 2016-10); ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (ASU 2016-12); and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (ASU 2016-20). The Company must adopt ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 with ASU 2014-09 (collectively, the new revenue standards). The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company will adopt the new revenue standards in its first quarter of fiscal year 2019. The new revenue standards are not expected to have a material impact on the amount and timing of revenue recognized in the Companys consolidated financial statements. Financial Statement Reclassifications The Company has reclassified certain prior-year account balances in order to comply with current-period classifications and increase comparability. |
Note 2 - Investment in Joint Ve
Note 2 - Investment in Joint Venture | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 2 - Investment in Joint Venture | NOTE 2 INVESTMENT IN JOINT VENTURE During December 2010, the Companys subsidiary Sangui BioTech GmbH established a joint venture company with SanderStrothmann GmbH, under the name of SastoMed GmbH (the Joint Venture). The Company owned 25 percent of the Joint Venture and accounted for its interest in the Joint Venture using the equity method of accounting. The Company invested $8,508 in the Joint Venture during the year ended June 30, 2011. The Company has written the investment down to $0 for its share of the Joint Ventures losses, amounting to $112,819 during the calendar year ending December 31, 2014. The Company entered into an agreement which is cancellable by either party, with 14 days written notice. The agreement includes payments to its joint venture partner (SastoMed GmbH) by the Company of $7,760 per month for research and development consulting services. The agreement was terminated September 30, 2017. On June 9, 2015, the Company entered into a note payable with the Joint Venture for 32,863 Euros. The note payable accrues interest at 4% annum and is due June 30, 2018. Effective December 31, 2015 the company sold its interest in the SastoMed joint venture for Euro 6,250, resulting in a gain reported in Other Income of $6,936. The sale of the joint venture terminated the relationship with SastoMed however, the licensing agreement is still in effect. Accordingly the note payable of 34,282 Euros, which was previously recorded as a related party note payable, is now reclassified as non-related party note payable. As of June 30, 2018 and 2017 the balance due was $ 40,025 |
Note 3 - Property and Equipment
Note 3 - Property and Equipment | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 3 - Property and Equipment | NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consist of the following at June 30, 2018 and 2017: June 30, 2018 2017 Technical and laboratory equipment $ 641,326 $ 641,326 Leasehold improvements 285,189 285,189 Office equipment and furniture 311,371 311,371 Total property and equipment 1,237,886 1,237,886 Less accumulated depreciation and amortization (1,237,886) (1,237,886) Total property and equipment, net $ - $ - |
Note 4 - Related Party Transact
Note 4 - Related Party Transactions | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 4 - Related Party Transactions | NOTE 4 RELATED PARTY TRANSACTIONS As of June 30, 2018 and 2017, the Company has recorded $ 19,088 12,214 Related Party Loans Payable Prior to 2016, the Company entered into a note payable with a Company Director for 100,000 Euros ($ 116,755 18,335 On December 12, 2017 a Company Director advanced an amount of 25,000 Euros ($ 29,189 320 On January 19, 2018 a Company Director advanced an amount of 25,000 Euros ($ 29,189 259 On March 13, 2018 a Company Director advanced an amount of 25,000 Euros ($ 29,189 174 |
Note 5 - Stockholders' Equity
Note 5 - Stockholders' Equity | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 5 - Stockholders' Equity | NOTE 5 STOCKHOLDERS' EQUITY Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock. The authorized preferred shares are non-voting and the Board of Directors has not designated any liquidation value or dividend rates. During the financial years ended June 30, 2018 and 2017 no shares of preferred stock were issued or outstanding. Common Stock The Company is authorized to issue 250,000,000 shares of common stock with no par value. The holders of the Company's common stock are entitled to one vote for each share held of record on all matters to be voted on by those stockholders. Common Stock Issuances During the year ended June 30, 2018 the Company issued 7,070,000 0.0219 154,488 During the year ended June 30, 2017 the Company issued 834,000 shares of common stock for services at an average of $0.0115 per share for a total cost of $9,620. In addition, the Company issued 18,675,000 shares of common stock for cash at an average of $0.0165 per share, yielding total cash proceeds of $307,590. The shares issued for services were valued at the trading price of the common stock on the date the shares were issued. On May 11, 2015, the Company entered into an equity purchase agreement (the EPA) with an unrelated investor (the Investor). The EPA is a put option contract wherein, at the Companys sole discretion, up to $5,000,000 of common stock may be sold to the Investor for a period of 3 years ending May 2018. A note payable was entered into as consideration to the Investor for execution of the EPA. On August 14, 2015, the company issued 43,189 shares of common stock to the investor in pursuit of the EPA yielding total cash proceeds of $1,500 which was received by the company on September 15, 2015. The EPA expired during the year and no additional common shares were issued. Stock Options From time to time, the Company may issue stock options pursuant to various agreements and other contemporary agreements. At June 30, 2018 and 2017, and during the years ended June 30, 2018 and 2017, no options were issued or outstanding. |
Note 6 - Income Tax Provision
Note 6 - Income Tax Provision | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 6 - Income Tax Provision | NOTE 6 - INCOME TAX PROVISION Treasury Shares The Company holds 53,756 of its common stock as treasury stock, which is valued at cost of $19,387, at June 30, 2018 and 2017. The Companys provision for income taxes was $-0- and $-0- for the years ended June 30, 2018 and 2017 respectively, since the Company incurred net operating losses through June 30, 2018. Income tax expense for the years ended June 30, 2018 and 2017 differed from the amounts computed by applying the U.S. federal income tax rate of 21 percent as follows: June 30, June 30, 2018 2017 Income tax benefit at U.S. federal statutory rates $ (42,380) $ (64,886) Effect of: Changes in derivative liability - - Loss on sale of asset - - Increase (decrease) in valuation allowance 42,380 64,886 Provision for income taxes $ - $ - The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at June 30, 2018 and 2017 are presented below: June 30, June 30, 2018 2017 Deferred tax assets Net operating losses $ (7,789,678) (7,747,298) Common stock issued for services 130,273 130,273 Debt issued for financing costs 10,500 10,500 Impairment of related parties receivables 269,541 269,541 Change in derivative liabilities 5,892 5,892 Gain on sale of assets 1,456 1,456 Increase (decrease) in valuation allowances 7,372,017 7,329,637 Net deferred taxes $ - $ - As of June 30, 2018, the Company had net operating loss carryforwards of approximately $35.1million which is available to offset future taxable federal, state and foreign income. The federal and state carryforward amounts expire in varying amounts between 2018 and 2030. The foreign net operating loss carryforwards do not have an expiration period. The Company has evaluated its uncertain tax positions and determined that any required adjustments for unrecognized tax benefits would not have a material impact on the Companys balance sheet, income statement, or statement of cash flows. The Companys tax filings for 2012 through 2017 remain subject to examination by tax authorities for federal income tax purposes and by other major taxing jurisdictions to which we are subject. The Company has identified potential penalties for the late filing of reports to taxing authorities. The Company believes that it is more likely than not the penalties will be waived and accordingly has not accrued the penalties in the financial statements. |
Note 7 - Commitments and Contin
Note 7 - Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 7 - Commitments and Contingencies | NOTE 7 COMMITMENTS AND CONTINGENCIES Indemnities and Guarantees During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the Company's officers, under which the Company may be required to indemnify such person for liabilities arising out of their employment relationship. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations. The Company has recorded a reserve for indemnities and guarantees of $-0- as of June 30, 2018 and 2017. Leases The Company leases office facilities from an unrelated third party at Euro 2,491 per month. The office lease contract is maintained on a month-to-month basis. The Company also leases an automobile under an operating lease. The lease provides for a lease payment of 669 Euros per month beginning August 2015 expiring July 2018. |
Note 8 - Stock-based Compensati
Note 8 - Stock-based Compensation | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 8 - Stock-based Compensation | NOTE 8 STOCK-BASED COMPENSATION The Company has applied the disclosure provisions of ASC 718 for the years ended June 30, 2018 and 2017. There were no common shares or stock options outstanding, issued or granted to employees during these reporting periods. On April 28, 2004, the Company adopted the 2004 Employee Stock Incentive Plan (the Plan). Under the terms of this plan the Board was authorized to issue up to 1,000,000 shares of common stock to certain eligible employees of the Company or its subsidiaries. All of these shares were issued pursuant to the plan prior to June 30, 2007. On September 22, 2008 the Company adopted the 2008 Amended and Restated Long-Term Equity Incentive Plan, whereby the Board was authorized to issue up to 10,000,000 shares of common stock (including incentive stock options) to certain eligible employees, directors, and/or consultants of the Company or its subsidiaries. During the years ended June 30, 2018 and 2017, respectively, the Company issued no shares pursuant to this Plan. All shares available under the 2008 Long-Term Equity Incentive Plan had been issued as of June 30, 2018. |
Note 9 - Note Payable
Note 9 - Note Payable | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 9 - Note Payable | NOTE 9 NOTE PAYABLE On June 9, 2015, the Company entered into a note payable with the Joint Venture for 32,863 Euros (see note 2). The note payable accrues interest at 4% annum and is due June 30, 2018. Accordingly the note payable and accrued interest of 34,282 Euros, which was previously recorded as a related party note payable, is now reclassified as non-related party note payable. The principal and accrued interest of the note at June 30, 2018 was $ 40,025 |
Note 10 - Subsequent Events
Note 10 - Subsequent Events | 12 Months Ended |
Jun. 30, 2018 | |
Notes | |
Note 10 - Subsequent Events | NOTE 10 SUBSEQUENT EVENTS Subsequent to the year ended June 30, 2018, the Company issued 1,000,000 0.02054 20,537 On September 10, 2018 a Company Director advanced an amount of 25,000 Euros ($29,189; converted with exchange rate of June 30, 2018) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. |