Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2019 | Feb. 14, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | LEAFBUYER TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001643721 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Dec. 31, 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 79,414,534 | |
EntityFileNumber | 333-206745 | |
EntityAddressAddressLine1 | 6888 S. Clinton Street, | |
EntityAddressAddressLine2 | Suite 300 | |
EntityAddressPostalZipCode | 80112 | |
EntityTaxIdentificationNumber | 383944821 | |
EntityAddressCityOrTown | Greenwood Village, CO | |
LocalPhoneNumber | 235-0099 | |
CityAreaCode | 720 | |
EntityAddressStateOrProvince | NEVADA |
CONDENSED CONSOLDIATED BALANCE
CONDENSED CONSOLDIATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 864,917 | $ 181,647 |
Accounts receivable (net of allowance for doubtful accounts of $7,452 and $53,815, respectively) | 43,273 | 68,821 |
Inventory | 622 | 1,230 |
Prepaid expenses and other current assets | 204,344 | 129,323 |
Total current assets | 1,113,156 | 381,021 |
Fixed assets (net of accumulated depreciation and amortization of $726,355 and $389,257, respectively) | 3,603,695 | 3,534,174 |
Right of use assets | 328,608 | |
Total assets | 5,045,459 | 3,915,195 |
Current liabilities: | ||
Accounts Payable | 407,330 | 290,032 |
Accrued liabilities | 394,797 | 530,968 |
Deferred revenue | 160,404 | 275,624 |
Lease obligation | 74,618 | |
Debt, current | 1,581,288 | 2,182,247 |
Total current liabilities | 2,618,437 | 3,278,871 |
Lease obligation | 255,481 | |
Total liabilities | 2,873,918 | 3,278,871 |
Commitments and contingencies (Note 6) | ||
Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 3,000,000 and 3,000,000 shares issued and outstanding for class A convertible preferred stock and 1,120,000 and 1,120,000 shares issued and outstanding for class B convertible preferred stock at December 31, 2019 and June 30, 2019, respectively | 4,120 | 4,120 |
Common stock, $0.001 par value; 150,000,000 shares authorized; 78,581,632 shares issued and outstanding at December 31, 2019 and 47,914,967 shares issued and outstanding at June 30, 2019 | 78,582 | 47,915 |
Additional paid in capital | 15,953,097 | 11,076,165 |
Accumulated deficit | (13,864,258) | (10,491,876) |
Total equity | 2,171,541 | 636,324 |
Total liabilities and equity | $ 5,045,459 | $ 3,915,195 |
CONDENSED CONSOLDIATED BALANC_2
CONDENSED CONSOLDIATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Accounts receivable, net of allowance for doubtful accounts | $ 7,452 | $ 53,815 |
Fixed assets, net of accumulated depreciation and amortization | $ 726,355 | $ 389,257 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 78,581,632 | 47,914,967 |
Common stock, shares outstanding | 78,581,632 | 47,914,967 |
Class A Convertible Preferred Stock [Member] | ||
Preferred stock, shares issued | 3,000,000 | 3,000,000 |
Preferred stock, shares outstanding | 3,000,000 | 3,000,000 |
Class B Convertible Preferred Stock [Member] | ||
Preferred stock, shares issued | 1,120,000 | 1,120,000 |
Preferred stock, shares outstanding | 1,120,000 | 1,120,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||
Sales revenue | $ 805,281 | $ 419,713 | $ 1,295,516 | $ 807,230 |
Cost of sales | ||||
Gross profit | 805,281 | 419,713 | 1,295,516 | 807,230 |
Operating expenses: | ||||
Selling expenses | 111,354 | 55,079 | 198,955 | 130,275 |
General and administrative | 871,901 | 824,498 | 1,787,074 | 1,527,327 |
Personnel expenses | 776,107 | 483,189 | 1,504,966 | 886,410 |
Stock based compensation expense | 1,502 | 597,293 | 607,211 | 1,195,369 |
Total operating expenses | 1,760,864 | 1,960,059 | 4,098,206 | 3,739,381 |
Loss from operations | (955,583) | (1,540,346) | (2,802,690) | (2,932,151) |
Other income (expense): | ||||
Interest expense | (314,257) | (137,524) | (569,692) | (174,622) |
Other income | ||||
Other income (expense), net | (314,257) | (137,524) | (569,692) | (174,622) |
Net loss | $ (1,269,840) | $ (1,677,870) | $ (3,372,382) | $ (3,106,773) |
Net loss per common share: | ||||
Basic and diluted | $ (0.02) | $ (0.04) | $ (0.05) | $ (0.07) |
Weighted average common shares outstanding: | ||||
Basic and diluted | 78,581,632 | 43,989,750 | 72,861,221 | 45,234,512 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Preferred Stock [Member] | Common Stock [Member] | APIC [Member] | Acc Deficit [Member] |
Balance, shares at Jun. 30, 2018 | 4,120,000 | 42,661,228 | |||
Balance, amount at Jun. 30, 2018 | $ (757,898) | $ 4,120 | $ 42,661 | $ 3,133,531 | $ (3,938,210) |
Issuance of common stock for exercise of options, shares | 86,000 | ||||
Issuance of common stock for exercise of options, amount | 21,500 | $ 86 | 21,414 | ||
Issuance of common stock in conversion of notes payable and accrued interest, shares | 123,324 | ||||
Issuance of common stock in conversion of notes payable and accrued interest, amount | 119,923 | $ 123 | 119,800 | ||
Stock based compensation | 598,076 | 598,076 | |||
Issuance of warrant in connection with convertible notes payable | 85,724 | 85,724 | |||
Net Loss | $ (1,428,903) | $ (1,428,903) | |||
Balance, shares at Sep. 30, 2018 | 4,120,000 | 42,870,552 | |||
Balance, amount at Sep. 30, 2018 | $ (1,361,578) | $ 4,120 | $ 42,870 | $ 3,958,545 | $ (5,367,113) |
Issuance of common stock for exercise of options, amount | 23,237 | 93 | 23,144 | ||
Stock based compensation | 597,293 | 597,293 | |||
Issuance of warrant in connection with convertible notes payable | 171,447 | 171,447 | |||
Net Loss | (1,677,870) | $ (1,677,870) | |||
Issuance of common stock for cash, shares | 1,116,738 | ||||
Issuance of common stock for cash, amount | 1,045,000 | $ 1,117 | 1,043,883 | ||
Issuance of common stock for services, shares | 60,000 | ||||
Issuance of common stock for services, amount | 39,600 | $ 60 | 39,540 | ||
Issuance of common stock for exercise of options, shares | 92,947 | ||||
Issuance of common stock for acquisition, shares | 2,666,667 | ||||
Issuance of common stock for acquisition, amount | $ 2,560,000 | $ 2,667 | $ 2,557,333 | ||
Balance, shares at Dec. 31, 2018 | 4,120,000 | 46,806,904 | |||
Balance, amount at Dec. 31, 2018 | $ 1,397,129 | $ 4,120 | $ 46,807 | $ 8,391,185 | $ (7,044,983) |
Balance, shares at Jun. 30, 2019 | 4,120,000 | 47,914,967 | |||
Balance, amount at Jun. 30, 2019 | $ 636,324 | $ 4,120 | $ 47,915 | $ 11,076,165 | $ (10,491,876) |
Stock based compensation | 605,709 | 605,709 | |||
Net Loss | (2,102,542) | $ (2,102,542) | |||
Issuance of common stock for cash, shares | 30,299,998 | ||||
Issuance of common stock for cash, amount | 4,037,888 | $ 30,300 | 4,007,588 | ||
Issuance of common stock in settlement of acquisition, shares | 366,667 | ||||
Issuance of common stock in settlement of acquisition, amount | $ 262,500 | $ 367 | $ 262,133 | ||
Balance, shares at Sep. 30, 2019 | 4,120,000 | 78,581,632 | |||
Balance, amount at Sep. 30, 2019 | $ 3,439,879 | $ 4,120 | $ 78,582 | $ 15,951,595 | $ (12,594,418) |
Stock based compensation | 1,502 | 1,502 | |||
Net Loss | $ (1,269,840) | $ (1,269,840) | |||
Balance, shares at Dec. 31, 2019 | 4,120,000 | 78,581,632 | |||
Balance, amount at Dec. 31, 2019 | $ 2,171,541 | $ 4,120 | $ 78,582 | $ 15,953,097 | $ (13,864,258) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (3,372,382) | $ (3,106,773) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Stock based compensation | 607,211 | 1,195,369 |
Provision of bad debt expenses | 7,452 | 39,600 |
Amortization of note payable discount | 206,459 | 138,606 |
Depreciation and amortization | 336,471 | 110,580 |
Amortization of right of use asset | 76,774 | |
Changes in assets and liabilities: | ||
Accounts receivable | 18,096 | (43,867) |
Inventory | 608 | |
Prepaid expenses and other | (75,021) | (24,187) |
Accounts payable | 117,298 | (189,330) |
Lease obligation, net | (65,655) | |
Accrued liabilities | 1,481 | 281,677 |
Net cash used in operating activities | (2,141,208) | (1,598,325) |
Cash flows from investing activities: | ||
Capitalized software | (405,992) | (229,180) |
Net cash used in investing activities | (405,992) | (229,180) |
Cash flows from financing activities: | ||
Procceeds from issuance of stock | 4,037,888 | 1,089,737 |
Procceeds from issuance of debts | 1,200,000 | |
Repayment of debt | (807,418) | (220,000) |
Net cash provided by financing activities | 3,230,470 | 2,069,737 |
Net change in cash and cash equivalents | 683,270 | 242,232 |
Cash and cash equivalents, beginning of period | 181,647 | 375,938 |
Cash and cash equivalents, end of period | 864,917 | 618,170 |
Cash paid for interest | 8,619 | |
Cash paid for taxes | ||
Supplemental information for non-cash investing and financing activities: | ||
Conversion of debt and interest | 377,094 | |
Software Acquisition | $ 2,860,000 |
Description of Business
Description of Business | 6 Months Ended |
Dec. 31, 2019 | |
Description of Business | |
Note 1 - Description of Business | Formation of the Company On March 23, 2017, AP Event Inc. (“AP” or the “Registrant”) consummated an Agreement and Plan of Merger (the “Merger Agreement”) with LB Media Group, LLC, a Colorado limited liability Company (“LB Media”), August Petrov (the principal stockholder of AP), and LB Acquisition Corp., a Colorado corporation and a wholly-owned subsidiary of AP (“Acquisition”) whereby Acquisition was merged with and into LB Media (the “Merger”). As a result of the Merger, LB Media became a wholly-owned subsidiary of the Registrant, and immediately following the consummation of the Merger and giving effect to the securities sold in the Offering, the members of LB Media beneficially owned approximately fifty-five percent (55%) of the issued and outstanding Common Stock of the Registrant. The Merger Agreement contains customary representations, warranties, and covenants of the Registrant and LB Media for like transactions. As a result of the reorganization and name change discussed later, Leafbuyer Technologies, Inc. (“Leafbuyer”) became the publicly quoted parent holding company with LB Media becoming a wholly owned subsidiary of Leafbuyer. Upon consummation of the Agreement, Leafbuyer common stock was deemed to be registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 12g-3(a) promulgated thereunder. For purposes of Rule 12g-3(a), Leafbuyer is the successor issuer to AP. AP was established under the corporation laws in the State of Nevada on October 16, 2014. On March 24, 2017, the Registrant changed its name to Leafbuyer Technologies, Inc. All references herein to “us,” “we,” “our,” “Leafbuyer,” or the “Company” refer to Leafbuyer Technologies, Inc. and its subsidiary, LB Media. Description of Business We are focused on providing valuable information for the savvy cannabis consumer looking to make a purchase via deals and a dispensary database. We connect consumers with dispensaries by working alongside businesses to showcase their unique products and build a network of loyal patrons. Our national network of cannabis deals and information reaches millions of consumers monthly. LB Media was founded in 2012 by a group of technology and industry veterans and provides online resources for cannabis deals and specials. Our headquarters is located in Greenwood Village, Colorado. Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2019, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements being audited and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto. Going Concern As shown in the accompanying condensed consolidated financial statements, we had an equity balance of $2,171,541 and a working capital deficit of $1,505,281 as of December 31, 2019. We reported a net loss of $3,372,382 for the six months ended December 31, 2019, and we anticipate further losses in the development of our business. Accordingly, there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and / or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management believes that actions presently being taken to further implement our business plan and generate additional revenues provide opportunity for the Company to continue as a going concern. While we believe in the viability of our strategy to generate additional revenues and our ability to raise additional funds, there can be no assurances to that effect. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Note 2 - Summary of Significant Accounting Policies | Significant Accounting Policies Fair Value Measurements The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis. Revenue Recognition The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” which is effective as of the annual reporting period beginning after December 15, 2017 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at July 1, 2018. For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. We recognize revenue upon completion of our performance obligations or expiration of the contractual time to use services such as bulk texting. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, LB Media. All significant inter-company transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents For purposes of the condensed consolidated statements of cash flows, cash and cash equivalents includes demand deposits, time deposits, certificates of deposit and short-term liquid investments with original maturities of three months or less when purchased. As of December 31, 2019, and June 30, 2019, the Company did not hold any cash equivalents. The Federal Deposit Insurance Corporation provides coverage for all accounts of up to $250,000. As of December 31, 2019, none of the Company’s cash was in excess of federally insured limits. Accounts Receivable, Net Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is doubtful due to credit issues. These allowances together reflect the Company’s estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that an allowance is required at December 31, 2019 and June 30, 2019 of $7,452 and $53,815, respectively. During the six months ended December 31, 2019, the Company wrote off accounts receivable of approximately $53,815. The Company does not accrue interest on past due receivables. Inventory Inventory consists of merchandise and is stated at the lower of cost, determined by last-in, first-out method or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At December 31, 2019 and June 30, 2019, the Company had $622 and $1,230 of inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at December 31, 2019 and at June 30, 2019. Use of Estimates Management uses estimates and assumptions in preparing these condensed consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Examples of estimates include loss contingencies; useful lives of our tangible and intangible assets; allowances for doubtful accounts; and stock-based compensation forfeiture rates. Examples of assumptions include: the elements comprising a software arrangement, including the distinction between upgrades or enhancements and new products; when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized in our financial statements or tax returns. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform with the current period presentation. Internal Use Software The Company capitalizes certain development costs related to upgrades and enhancements to its cloud commerce platform when it is probable the expenditures will result in additional functionality. Such development costs are capitalized when the preliminary project stage is completed and it is probable that the project will be completed and the software will be used to perform the function intended. These capitalized costs include external direct costs of services consumed in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with and who devote time to internal-use software projects. Capitalization of these costs cease once the project is substantially complete and the software is ready for its intended purpose. Post configuration training and maintenance costs are expensed as incurred. Capitalized internal use software costs are recorded as part of fixed assets and amortized using a straight-line method, over the estimated useful life of the software, generally three to seven years, commencing when the software is ready for its intended use. Impairment Assessment of Long-Lived Assets The Company reviews identified intangible assets and long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. As of December 31, 2019 and June 30, 2019, there were no impairments of long-lived assets. Convertible Debt and Securities The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option's in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. See Note 7 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Earnings or Loss per Share Basic earnings or loss per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. We have prepared the calculation of earnings or loss per share using the weighted-average number of common shares of the Company that were outstanding for the three and six months ended December 31, 2019 and 2018. Dilutive instruments had no effect on the calculation of earnings or loss per share during the three and six months ended December 31, 2019 and 2018. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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 recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. As of December 31, 2019, the Company had approximately $12,088,000 of net operating loss carry forward that was unrecognized tax benefits, these unrecognized tax benefits begin to expire in 2036. Under Internal Revenue Code 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We have not completed a study to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since we became a “loss corporation” as defined in Section 382. Future changes in our stock ownership, which may be outside of our control, may trigger an “ownership change”. In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” If an “ownership change” has occurred or does occur in the future, utilization of the NOL carryforwards or other tax attributes may be limited, which could potentially result in increased future tax liability to us. ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There are no material uncertain tax positions at December 31, 2019. On December 22, 2017, the U.S. government enacted the Tax Act, which made significant changes to the Internal Revenue Code of 1986, as amended, including, but not limited to, reducing the U.S. corporate statutory tax rate and the net operating loss incurred after December 31, 2017 can be carried forward indefinitely and the two year net operating loss carried back was eliminated (prohibited). Leases In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases.” The amendments in ASU 2018-10 clarify, correct or remove inconsistencies in the guidance provided under ASU 2016-02 related to sixteen specific issues identified. Also in July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvement” which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The effective date and transition requirements for these two ASUs are the same as the effective date and transition requirements as ASU 2016-02. The standard is effective for the Company for the fiscal year beginning July 1, 2019. The adoption of this standard increased assets and liabilities by approximately $409,900, which is accreted over the remainder of the lease agreements. New Accounting Pronouncements Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company’s present or future condensed consolidated financial statements. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Dec. 31, 2019 | |
Property and Equipment | |
Note 3 - Property and Equipment | Property and equipment consist of the following: December 31, 2019 June 30, 2019 Software platform $ 4,328,550 $ 3,922,558 Furniture and fixtures 1,500 1,500 Less accumulated amortization (726,355 ) (389,884 ) Property and equipment, net $ 3,603,695 $ 3,534,174 On November 6, 2018, the Company acquired an identified intangible asset (“Loyalty Software”) through a Stock Purchase Agreement, where the Company acquired all the issued and outstanding capital stock of Greenlight Technologies, Inc. (“GTI”) from its shareholders. At the time of the transaction, there were no employees working for GTI, no systems and no assets, other than the Loyalty Software. GTI’s legal entity currently has no activity and will be dissolved and the Loyalty Software has been assumed by the Company. Management determined that the purchase of GTI did not constitute a business purchase and recorded the transaction as a purchase of software. The consideration for the Loyalty Software was 2,666,667 shares of common stock, par value $0.001 per share and cash of approximately $450,000. Total value of the Loyalty Software was estimated at approximately $3,010,000. The additional consideration for future developments will be evaluated and considered enhancements which will either be capitalized to the software or expensed as research and development costs. The additional Incentive Shares is approximately $1,152,000. During the period ended December 31, 2019 the Company capitalized approximately $405,992 of software enhancements. GTI provides cannabis consumers real-time mobile ordering and loyalty rewards through an internally developed application that integrates with the local dispensary’s point of sale system. The Company plans to fully integrate this technology into the current platform and create an “Ultimate Bundle” of services for the cannabis industry. The current revenues of GTI are minimal, and the Company expects higher sales in the California market as the system is fully integrated. During the six months ended December 31, 2019, amortization expense related to internal use software totaled $336,219. During the six months ended December 31, 2018, the Company capitalized approximately $3 million of software acquisition costs. Amortization expense related to internal use software totaled $110,328 during the six months ended December 31, 2018. |
Capital Stock and Equity Transa
Capital Stock and Equity Transactions | 6 Months Ended |
Dec. 31, 2019 | |
Capital Stock and Equity Transactions | |
Note 4 - Capital Stock and Equity Transactions | The Company has 150,000,000 shares of common stock authorized with a par value of $0.001 per share as of December 31, 2019. In addition, the Company has 10,000,000 preferred stock authorized with a par value of $0.001 per share as of December 31, 2019. Series A Convertible Preferred Stock was originally convertible into 3,000,000 common shares based on the total outstanding equity as of March 23, 2017. As of December 31, 2019, the Series A Convertible Preferred Stock would be convertible into approximately 5,371,630 common shares, based on 47,914,967 common shares outstanding as of December 31, 2019. The Series B Convertible Preferred Stock is convertible into 1,480,000 common shares. On April 19, 2018, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN Ltd. (“Investor”), a Cayman Island exempt limited partnership and an affiliate of Yorkville Advisors Global, LLC, whereby the Company sold and the Investor purchased 869,565 shares (the “Initial Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) for the purchase price of One Million Dollars ($1,000,000), Additionally, under the SEDA the Company may sell to the Investor up to $5 million of shares of Common Stock over a two-year commitment period. Under the terms of the SEDA, the Company may from time to time, in its discretion, sell newly issued shares of its common stock to the Investor at a discount to market of 8% of the lowest daily volume weighted average price during the relevant pricing period. The Company is obligated to register the Initial Shares, the Commitment Shares (as defined below), and the shares of Common Stock issuable under the SEDA pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”). The Company is not obligated to utilize any portion of the SEDA and there are no minimum commitments or minimum use penalties provided the Company does not terminate the SEDA by October 2020 wherein the Company would be required to pay a termination fee of $100,000. The Company issued One Hundred Thousand (100,000) shares of Common Stock as a commitment fee (the “Commitment Shares”) to an affiliate of the Investor. The total amount of funds that ultimately can be raised under the SEDA over the two-year term will depend on the market price for the Company’s common stock and the number of shares actually sold. The SEDA does not impose any restrictions on the Company’s operating activities. During the term of the SEDA, the Investor is prohibited from engaging in any short selling or hedging transactions related to the Common Stock. In connection with the SEDA, the Company engaged Garden State Securities, Inc. (“GSS”) as its exclusive selling/placement agent. In connection with the transactions set forth in the SEDA, GSS shall receive a fee equal to 10% of the purchase price of the Initial Shares in cash plus warrants to purchase 86,957 shares of Common Stock at an exercise price of $1.15 per share, expiring in five years. GSS will also receive a cash fee equal to 5% of the amount paid by the Investor for each Advance under the SEDA. On October 9, 2018, the Company used the SEDA to receive $400,000. The Company issued 274,292 common shares for a per share price of the issuance of approximately $1.46 per common share. On October 22, 2018, the Company used the SEDA to receive $300,000. The Company issued 300,000 common shares for a per share price of the issuance of approximately $1.00 per common share. On July 2, 2019, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell directly to the Investors in a private offering (the “Offering”), an aggregate of 7,211,538 shares of common stock (the “Shares”), par value $0.001 per share, at $0.624 per Share or a 20% discount to the closing price as of July 2, 2019, for gross proceeds of approximately $4,500,000 before deducting offering expenses. The Purchase Agreement contains customary representations and warranties. The Shares were offered by the Company pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder. The Company is obligated in accordance with the terms of a Registration Rights Agreement (the “Rights Agreement”) to register the Shares and the shares of common stock underlying the warrants described below, within 90 days from the date of the Purchase Agreement. All shares of common stock and shares of common stock underlying the warrants have been registered. As additional consideration for the purchase of the Shares, the Company agreed to issue to the Investors Series A Warrants, Series B Warrants, and Series C Warrants (collectively, the “Warrants”). The number of shares for the Warrants and exercise price of the Warrants is subject to adjustment; provided, however, on each of (i) the 3rd Trading Day following the effective date (the “Effective Date”) of the Registration Statement to be filed by the Company (the “Interim True-Up Date”), and (ii) the 6th Trading Day following the Effective Date (the “Final True-Up Date”), the Exercise Price shall be reduced, and only reduced, to equal the lower of (1) the then Exercise Price and (2) 100% of the lowest VWAP during the 2 Trading Days prior to the Interim True-Up Date or 5 Trading Days prior to the Final True-Up Date, as applicable, immediately following the Effective Date. The Series C Warrants, which are considered pre-funded, allow each Investor to purchase an amount of shares equal to the sum of (a) any shares purchased by the Investor pursuant to the Purchase Agreement that would have resulted in the beneficial ownership of greater than 4.99% of the outstanding common shares of the Company, (b) on the 3 rd th The Company issued 30,299,998 shares of common stock for the private placement, the issuance of the Series C Warrants and fees paid in shares of common stock. The Company received approximately $4,038,000, net of the placement fees, legal and other expenses incurred for the placement of the share. The investors received Series A Warrants to allow the Investors to purchase an aggregate of 7,018,091 shares of common stock, and Series B Warrants to allow the Investors to purchase an aggregate of 28,072,364 shares of common stock at a purchase price of $0.1603 per common share. Issuance of Common Stock During the six months ended December 31, 2018, the Company issued 178,947 shares of Common Stock to employees and consultants related to the exercise of stock options. The company received $44,737 for the issuance of these shares. During the six months ended December 31, 2018, the Company accepted subscriptions for the issuance of 1,116,738 shares of Common Stock for total subscriptions of $1,045,000 in cash. During the six months ended December 31, 2018, the Company issued 60,000 shares of Common Stock to vendors for services rendered. These shares were valued at fair market value of $39,600 and expensed in the accompanying Condensed Consolidated Statement of Operations. |
Debt
Debt | 6 Months Ended |
Dec. 31, 2019 | |
Debt | |
Note 5 - Debt | The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. During February 2018, the Company entered into two promissory notes with an investor of the Company in the amount of $28,000 and $84,000 in exchange for $25,000 and $75,000, respectively. Each of the notes have an original issue discount of $3,000 and $9,000, respectively that was amortized to interest expense over the term of the notes. The principle and interest were converted into common stock during the quarter. The Company issued 123,324 shares of Common Stock in full satisfaction of the notes. During February 2018, the Company issued a promissory note in favor of an investor of the Company in the amount of $150,000 in exchange for $132,000 cash. The note has an original issue discount of $18,000 that is being amortized to interest expense over the term of the note. As of March 31, 2019, the loan maturity date was extended to August 8, 2019, the discount is fully amortized and total unpaid principal and interest is approximately $184,077, accruing at 12% at December 31, 2019, and is payable upon demand. On September 21, 2018, the Company entered into a promissory note with an investor of the Company with a face value of $440,000 in exchange for $400,000 cash payment (“the Convertible Note”), the discount of the Convertible Note will be amortized over the life of the Convertible Note and have an interest rate of 10%. The Convertible Note has a twelve-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principle in six equal installments. The principle and interest of the note is convertible into the Company’s common stock at a purchase price of $0.70 per common share after the six months. If the Company defaults on the Convertible Note, the interest is increased to 12% and at the investors’ option, the principle and interest can be converted into the Company common stock at a 20% discount to the then current market. In addition, the Company issued five-year warrants to purchase up to 200,000 common shares of the Company at a price of $0.75 per share. The cash for this Convertible Note was received prior to September 30, 2018. As of December 31, 2019, the Convertible Notes are payable upon demand. On September 21, 2018, the Company entered several promissory notes with various investors of the Company with a face value of $880,000 in exchange for $800,000 cash payment (“the Notes”), the discount of the Notes will be amortized over the life of the Note and have an interest rate of 10%. The Notes have a twelve-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principle in six equal installments. The principle and interest of the note is convertible into the Company’s common stock at a purchase price of $0.70 per common share after the six months. If the Company defaults on the Notes, the interest is increased to 12% and at the investors’ option, the principle and interest can be converted into the Company common stock at a 20% discount to the then current market price. In addition, the Company issued five-year warrants to purchase up to 400,000 of the Company’s common shares at a price of $0.75 per share. The cash for these Notes was received prior to September 30, 2018. As of December 31, 2019, $440,000 of the Notes have been fully extinguished and the remaining $440,000, in two separate investor notes of $220,000 each, are in default and payable upon demand. During the year ended June 30, 2019, the Company entered into several promissory notes with various investors of the Company with a face value of $960,000 in exchange for a total of $900,000 cash payments (“the Notes”). The Notes have a beneficial conversion feature valued at $839,378, which is recorded as a discount. The total discount on the Notes will be amortized over the life of the Notes and recorded as interest expense. The notes have an interest rate of 7% and have an eighteen-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principle in twelve equal installments. The principle and interest of the note is convertible into the Company’s common stock at a purchase price of $0.75 per common share at any time after the Original Issue Date. If the Company defaults on the Notes, the interest is increased to 15% and at the investors’ option, the principle and interest can be converted into the Company common stock at a 20% discount to the then current market price. The Company recognized $570,787 and $174,744 of interest expense for the six months ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, accrued interest on the above notes was $117,616 and $48,023, respectively. Notes payable and long-term debt outstanding as of December 31, 2019 and June 30, 2019 are summarized below: Maturity Date December 31, 2019 June 30, 2019 12% $150,000 Convertible Note Payable, net of unamortized discount of $0 and $14,320, respectively Due on Demand (2) $ 150,000 $ 150,000 12% $440,000 Convertible Note Payable, net of unamortized discount of $28,589 Due on Demand (2) 440,000 411,411 12% $220,000 Convertible Note Payable, net of unamortized discount of $14,295 Due on Demand (2) 220,000 205,705 12% $220,000 Convertible Note Payable, net of unamortized discount of $14,295 Due on Demand (2) 165,884 205,705 7% $426,667 Convertible Note Payable, net of unamortized discount of $314,401 August 15, 2020 (2) 199,021 112,266 7% $106,667 Convertible Note Payable, net of unamortized discount of $78,601 August 15, 2020 (2) — 28,066 7% $213,333 Convertible Note Payable, net of unamortized discount of $153,786 September 20, 2020 (2) 56,383 59,547 7% $213,333 Convertible Note Payable, net of unamortized discount of $153,786 September 20, 2020 — 59,547 5% Note Payable Due on Demand — 600,000 5% Note Payable Due on Demand (1) 350,000 350,000 Total notes payable 1,581,288 2,182,247 Less current portion of notes payable 1,581,288 2,182,247 Notes payable, less current portion $ — $ — ______ (1) (2) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Note 6 - Commitments and Contingencies | The Company leases office space. Future minimum lease payments are as follows: June 30, 2020 $ 85,122 June 30, 2021 $ 174,254 June 30, 2022 $ 89,042 The Company does not have a concentration of revenues from any individual customer (less than 10%). The Company records tax contingencies when the exposure item becomes probable and reasonably estimable. As of December 31, 2019, the Company had a tax contingency related to stock options granted below the fair market value on date of grant. The Company is in the process of determining the possible exposure and necessary expense accrual for the related tax, penalties and interest. Management has not been able to determine the amount as of the date of this report, however, does not expect the amount to be material to the financial statements. To the best of the Company’s knowledge and belief, no legal proceedings of merit are currently pending or threatened against the Company. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Dec. 31, 2019 | |
Stock Based Compensation | |
Note 7 - Stock Based Compensation | The equity incentive plan of the Company was established in February of 2017. The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares, provided that the number of options issued do not exceed 10,000,000. The options are exercisable for a period of up to 10 years from the date of the grant. The number of options to purchase common shares was increased from 5,000,000 to 10,000,000 through a consent of stockholders to amend and restate the equity incentive plan. The following table reflects the continuity of stock options for the six months ended December 31, 2019: A summary of stock option activity is as follows: December 31, 2019 Number of options outstanding: Beginning of year 4,598,823 Granted - Exercised, converted - Forfeited / exchanged / modification (4,553,823 ) End of period 45,000 Number of options exercisable at end of period 45,000 Number of options available for grant at end of period 9,131,613 Weighted average option prices per share: Granted during the period $ 0.00 Exercised during the period $ 0.00 Terminated during the period $ 0.37 Outstanding at end of period $ 0.45 Exercisable at end of period $ 0.45 Stock-based compensation expense attributable to stock options was approximately $605,709 for the six-month period ended December 31, 2019. As of December 31, 2019, there was approximately $11,234 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 3 years. Warrants At December 31, 2019, the Company had outstanding warrants to purchase the Company’s common stock which were issued in connection with multiple financing arrangements. Information relating to these warrants is summarized as follows: Warrants Remaining Number Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Warrants-Financing 86,957 3.3 $ 1.15 Warrants-Issued with Convertible Notes 600,000 3.73 $ 0.75 Warrants - Financing 360,577 4.52 $ 0.78 Warrants A - Financing 7,018,090 .8 $ 0.16 Warrants B – Financing 28,072,364 4.52 $ 0.16 Total 36,137,988 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Note 8 - Subsequent Events | The Company has evaluated subsequent events through February 14, 2020 and has not identified any items requiring additional disclosure. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Fair Value Measurements | The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis. |
Revenue Recognition | The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” which is effective as of the annual reporting period beginning after December 15, 2017 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at July 1, 2018. For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. We recognize revenue upon completion of our performance obligations or expiration of the contractual time to use services such as bulk texting. |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, LB Media. All significant inter-company transactions and balances have been eliminated in consolidation. |
Cash and Cash Equivalents | For purposes of the condensed consolidated statements of cash flows, cash and cash equivalents includes demand deposits, time deposits, certificates of deposit and short-term liquid investments with original maturities of three months or less when purchased. As of December 31, 2019, and June 30, 2019, the Company did not hold any cash equivalents. The Federal Deposit Insurance Corporation provides coverage for all accounts of up to $250,000. As of December 31, 2019, none of the Company’s cash was in excess of federally insured limits. |
Accounts Receivable, Net | Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is doubtful due to credit issues. These allowances together reflect the Company’s estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that an allowance is required at December 31, 2019 and June 30, 2019 of $7,452 and $53,815, respectively. During the six months ended December 31, 2019, the Company wrote off accounts receivable of approximately $53,815. The Company does not accrue interest on past due receivables. |
Inventory | Inventory consists of merchandise and is stated at the lower of cost, determined by last-in, first-out method or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At December 31, 2019 and June 30, 2019, the Company had $622 and $1,230 of inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at December 31, 2019 and at June 30, 2019. |
Use of Estimates | Management uses estimates and assumptions in preparing these condensed consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Examples of estimates include loss contingencies; useful lives of our tangible and intangible assets; allowances for doubtful accounts; and stock-based compensation forfeiture rates. Examples of assumptions include: the elements comprising a software arrangement, including the distinction between upgrades or enhancements and new products; when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized in our financial statements or tax returns. Actual results could differ from those estimates. |
Reclassifications | Certain prior period amounts have been reclassified to conform with the current period presentation. |
Internal Use Software | The Company capitalizes certain development costs related to upgrades and enhancements to its cloud commerce platform when it is probable the expenditures will result in additional functionality. Such development costs are capitalized when the preliminary project stage is completed and it is probable that the project will be completed and the software will be used to perform the function intended. These capitalized costs include external direct costs of services consumed in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with and who devote time to internal-use software projects. Capitalization of these costs cease once the project is substantially complete and the software is ready for its intended purpose. Post configuration training and maintenance costs are expensed as incurred. Capitalized internal use software costs are recorded as part of fixed assets and amortized using a straight-line method, over the estimated useful life of the software, generally three to seven years, commencing when the software is ready for its intended use. |
Impairment Assessment of Long-Lived Assets | The Company reviews identified intangible assets and long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. As of December 31, 2019 and June 30, 2019, there were no impairments of long-lived assets. |
Convertible Debt and Securities | The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option's in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. |
Stock-Based Compensation | The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. See Note 7 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Improvements to Nonemployee Share-Based Payment Accounting |
Earnings or Loss per Share | Basic earnings or loss per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. We have prepared the calculation of earnings or loss per share using the weighted-average number of common shares of the Company that were outstanding for the three and six months ended December 31, 2019 and 2018. Dilutive instruments had no effect on the calculation of earnings or loss per share during the three and six months ended December 31, 2019 and 2018. |
Income Taxes | The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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 recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. As of December 31, 2019, the Company had approximately $12,088,000 of net operating loss carry forward that was unrecognized tax benefits, these unrecognized tax benefits begin to expire in 2036. Under Internal Revenue Code 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We have not completed a study to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since we became a “loss corporation” as defined in Section 382. Future changes in our stock ownership, which may be outside of our control, may trigger an “ownership change”. In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” If an “ownership change” has occurred or does occur in the future, utilization of the NOL carryforwards or other tax attributes may be limited, which could potentially result in increased future tax liability to us. ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There are no material uncertain tax positions at December 31, 2019. On December 22, 2017, the U.S. government enacted the Tax Act, which made significant changes to the Internal Revenue Code of 1986, as amended, including, but not limited to, reducing the U.S. corporate statutory tax rate and the net operating loss incurred after December 31, 2017 can be carried forward indefinitely and the two year net operating loss carried back was eliminated (prohibited). |
Leases | In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases.” The amendments in ASU 2018-10 clarify, correct or remove inconsistencies in the guidance provided under ASU 2016-02 related to sixteen specific issues identified. Also in July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvement” which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The effective date and transition requirements for these two ASUs are the same as the effective date and transition requirements as ASU 2016-02. The standard is effective for the Company for the fiscal year beginning July 1, 2019. The adoption of this standard increased assets and liabilities by approximately $409,900, which is accreted over the remainder of the lease agreements. |
Recently Issued Accounting Pronouncements | In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company’s present or future condensed consolidated financial statements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Property and Equipment (Tables) | |
Schedule of Property and equipment | December 31, 2019 June 30, 2019 Software platform $ 4,328,550 $ 3,922,558 Furniture and fixtures 1,500 1,500 Less accumulated amortization (726,355 ) (389,884 ) Property and equipment, net $ 3,603,695 $ 3,534,174 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Debt (Tables) | |
Schedule of Notes payable and long-term debt outstanding | Maturity Date December 31, 2019 June 30, 2019 12% $150,000 Convertible Note Payable, net of unamortized discount of $0 and $14,320, respectively Due on Demand (2) $ 150,000 $ 150,000 12% $440,000 Convertible Note Payable, net of unamortized discount of $28,589 Due on Demand (2) 440,000 411,411 12% $220,000 Convertible Note Payable, net of unamortized discount of $14,295 Due on Demand (2) 220,000 205,705 12% $220,000 Convertible Note Payable, net of unamortized discount of $14,295 Due on Demand (2) 165,884 205,705 7% $426,667 Convertible Note Payable, net of unamortized discount of $314,401 August 15, 2020 (2) 199,021 112,266 7% $106,667 Convertible Note Payable, net of unamortized discount of $78,601 August 15, 2020 (2) — 28,066 7% $213,333 Convertible Note Payable, net of unamortized discount of $153,786 September 20, 2020 (2) 56,383 59,547 7% $213,333 Convertible Note Payable, net of unamortized discount of $153,786 September 20, 2020 — 59,547 5% Note Payable Due on Demand — 600,000 5% Note Payable Due on Demand (1) 350,000 350,000 Total notes payable 1,581,288 2,182,247 Less current portion of notes payable 1,581,288 2,182,247 Notes payable, less current portion $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments | June 30, 2020 $ 85,122 June 30, 2021 $ 174,254 June 30, 2022 $ 89,042 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Stock Based Compensation (Tables) | |
Stock option activity | December 31, 2019 Number of options outstanding: Beginning of year 4,598,823 Granted - Exercised, converted - Forfeited / exchanged / modification (4,553,823 ) End of period 45,000 Number of options exercisable at end of period 45,000 Number of options available for grant at end of period 9,131,613 Weighted average option prices per share: Granted during the period $ 0.00 Exercised during the period $ 0.00 Terminated during the period $ 0.37 Outstanding at end of period $ 0.45 Exercisable at end of period $ 0.45 |
Summary of warrant outstanding | Warrants Remaining Number Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Warrants-Financing 86,957 3.3 $ 1.15 Warrants-Issued with Convertible Notes 600,000 3.73 $ 0.75 Warrants - Financing 360,577 4.52 $ 0.78 Warrants A - Financing 7,018,090 .8 $ 0.16 Warrants B – Financing 28,072,364 4.52 $ 0.16 Total 36,137,988 |
Description of Business (Detail
Description of Business (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 23, 2017 | |
State of incorporation | Nevada | ||||||||
Date of incorporation | Oct. 16, 2014 | ||||||||
Net loss | $ (1,269,840) | $ (1,677,870) | $ (3,372,382) | $ (3,106,773) | |||||
Working capital deficit | (1,505,281) | (1,505,281) | |||||||
Total equity (deficit) | $ 2,171,541 | $ 1,397,129 | $ 2,171,541 | $ 1,397,129 | $ 3,439,879 | $ 636,324 | $ (1,361,578) | $ (757,898) | |
LB Media Group, LLC [Member] | |||||||||
Ownership percentage | 55.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | |
Summary of Significant Accounting Policies (Details Narrative) | ||
Inventory | $ 622 | $ 1,230 |
Allowance for doubtful accounts receivable write offs | 53,815 | |
Federal Deposit Insurance Corporation, coverage | 250,000 | |
Accounts receivable, net of allowance for doubtful accounts | 7,452 | $ 53,815 |
Net operating loss carry forward | $ 12,088,000 | |
Net operating loss carry forward expiration year | begin to expire in 2036. | |
Increase in assets and liabilities | $ 409,900 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Less accumulated amortization | $ (726,355) | $ (389,884) |
Property and equipment, net | 3,603,695 | 3,534,174 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 1,500 | 1,500 |
Software Platform [Member] | ||
Property and equipment, gross | $ 4,328,550 | $ 3,922,558 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | Nov. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 |
Common stock par value | $ 0.001 | $ 0.001 | ||
Software acquisition costs | $ 2,860,000 | |||
Loyalty Software [Member] | ||||
Purchase of software consideration transferred or transferrable, shares issued | $ 2,666,667 | |||
Purchase of software consideration paid in cash | 450,000 | |||
Software acquisition costs | 3,000,000 | |||
Amortization expense, related to internal use software | 336,219 | $ 110,328 | ||
Operating expenses | ||||
Purchase of software total consideration paid or payable | $ 3,010,000 | |||
Purchase of software additional incentive shares issued or issuable | 1,152,000 | |||
Amount of software enhancement cost capitalized | $ 405,992 |
Capital Stock and Equity Tran_2
Capital Stock and Equity Transactions (Details Narrative) - USD ($) | Oct. 09, 2018 | Jul. 02, 2019 | Oct. 22, 2018 | Apr. 19, 2018 | Mar. 23, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 |
Issuance of common stock for cash, shares | 1,116,738 | |||||||
Issuance of common stock for cash, amount | $ 1,045,000 | |||||||
Issuance of common stock for services, shares | 60,000 | |||||||
Issuance of common stock for services, amount | $ 39,600 | |||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||
Common stock shares issued to employees and consultants, shares | 178,947 | |||||||
Series C warrant exercise price | $ 0.001 | |||||||
Common stock shares issued to employees and consultants, Amount | $ 44,737 | |||||||
Common stock shares issued | 78,581,632 | 47,914,967 | ||||||
Proceeds from issuance common stock, for service rendered | $ 4,037,888 | $ 1,089,737 | ||||||
Common stock, shares outstanding (in shares) | 78,581,632 | 47,914,967 | ||||||
Investments [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issuable description | The Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell directly to the Investors in a private offering (the “Offering”), an aggregate of 7,211,538 shares of common stock (the “Shares”), par value $0.001 per share, at $0.624 per Share or a 20% discount to the closing price as of July 2, 2019, for gross proceeds of approximately $4,500,000 before deducting offering expenses | |||||||
Receivable from private offering | $ 4,500,000 | |||||||
Garden State Securities, Inc. ("GSS") [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Series C warrant exercise price | $ 1.15 | |||||||
Percentage of purchase price of common stock | 10.00% | |||||||
Warrant to purchase shares of common stock (in shares) | 86,957 | |||||||
Warrant expiration period | 5 years | |||||||
Percentage of amount paid by investor | 5.00% | |||||||
Standby Equity Distribution Agreement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ 1.46 | $ 1 | ||||||
Common stock shares issued | 274,292 | 300,000 | ||||||
Proceeds from issuance of stock | $ 400,000 | $ 300,000 | ||||||
Private Placement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares issued | 30,299,998 | |||||||
Proceeds from issuance common stock, for service rendered | $ 4,038,000 | |||||||
Series B Warrants to purchase common shares | 28,072,364 | |||||||
Series A Warrants to purchase common shares | 7,018,091 | |||||||
Series B Warrants to purchase common stock purchase price, per share | $ 0.1603 | |||||||
Yorkville Advisors Global, LLC [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||
Stock subscriptions (in shares) | 869,565 | |||||||
Value of shares authorized for sale | $ 5,000,000 | |||||||
Sale of stock, commitment period | 2 years | |||||||
Sale of stock at discount rate | 8.00% | |||||||
Termination period of SEDA | 18 months | |||||||
Termination fee of SEDA | $ 100,000 | |||||||
Shares issued as commitment fees (in shares) | 100,000 | |||||||
Commitment period | 2 years | |||||||
Yorkville Advisors Global, LLC [Member] | Initial Shares [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from issuance of stock | $ 1,000,000 | |||||||
Series B Convertible Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued upon conversion of stock | 300,000 | 1,480,000 | ||||||
Series A Convertible Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 47,914,967 | |||||||
Common stock issued upon conversion of stock | 300,000 | 5,371,630 | ||||||
Common stock, shares reserved upon conversion |
Debt (Details)
Debt (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | |
Total notes payable | $ 1,581,288 | $ 2,182,247 |
Less current portion of notes payable | 1,581,288 | 2,182,247 |
Notes payable, less current portion | ||
Convertible Notes Payable [Member] | ||
Total notes payable | $ 150,000 | 150,000 |
Debt instrument, maturity date | Due on Demand | |
Convertible Notes Payable Five [Member] | ||
Total notes payable | 28,066 | |
Debt instrument, maturity date | Aug. 15, 2020 | |
Convertible Notes Payable One [Member] | ||
Total notes payable | $ 440,000 | 411,411 |
Debt instrument, maturity date | Due on Demand | |
Convertible Notes Payable Two [Member] | ||
Total notes payable | $ 220,000 | 205,705 |
Debt instrument, maturity date | Due on Demand | |
Convertible Notes Payable Three [Member] | ||
Total notes payable | $ 165,884 | 205,705 |
Debt instrument, maturity date | Due on Demand | |
Convertible Notes Payable Four [Member] | ||
Total notes payable | $ 199,021 | 112,266 |
Debt instrument, maturity date | Aug. 15, 2020 | |
Convertible Notes Payable Six [Member] | ||
Total notes payable | $ 56,383 | 59,547 |
Debt instrument, maturity date | Sep. 20, 2020 | |
Convertible Notes Payable Seven [Member] | ||
Total notes payable | 59,547 | |
Debt instrument, maturity date | Sep. 20, 2020 | |
Convertible Notes Payable Eight [Member] | ||
Total notes payable | 600,000 | |
Debt instrument, maturity date | Due on Demand | |
Convertible Notes Payable Nine [Member] | ||
Total notes payable | $ 350,000 | $ 350,000 |
Debt instrument, maturity date, description | Due on Demand |
Debt (Details Narrative)
Debt (Details Narrative) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Sep. 21, 2018USD ($)integer$ / sharesshares | Feb. 28, 2018USD ($)integershares | Dec. 31, 2019USD ($)integershares | Dec. 31, 2018USD ($)integer | Jun. 30, 2019USD ($)integershares | Jan. 31, 2018USD ($) | |
Interest expense | $ 570,787 | $ 174,744 | |||||
Accrued interest | $ 117,616 | $ 48,023 | |||||
Number of promissory notes | integer | 2 | ||||||
Common stock, shares issued | shares | 78,581,632 | 47,914,967 | |||||
Loans Payable Five [Member] | |||||||
Face amount of note | $ 150,000 | ||||||
Stated interest rate | 12.00% | ||||||
Debt instrument, exchange amount | 132,000 | ||||||
Debt instrument, discount | $ 18,000 | ||||||
Maturity date extended | Aug. 8, 2019 | ||||||
Amount of unpaid principal and interest balance | $ 184,077 | ||||||
Loans Payable Four [Member] | |||||||
Common stock, shares issued | shares | 123,324 | ||||||
Face amount of note | $ 84,000 | ||||||
Stated interest rate | 12.00% | ||||||
Debt instrument, exchange amount | $ 75,000 | ||||||
Debt instrument, discount | 9,000 | ||||||
Loans Payable Three [Member] | |||||||
Face amount of note | 28,000 | ||||||
Debt instrument, exchange amount | 25,000 | ||||||
Debt instrument, discount | $ 3,000 | ||||||
Several promissory notes [Member] | |||||||
Face amount of note | $ 880,000 | ||||||
Interest rate | 10.00% | ||||||
Exchange for cash payment | $ 800,000 | ||||||
Debt Instrument, Term | 12 months | ||||||
Common stock purchase price per share | $ / shares | $ 0.70 | ||||||
Number of installments | integer | 6 | ||||||
Increased in interest | 12.00% | ||||||
Discount on conversion common stock | 20.00% | ||||||
Warrant to purchase shares of common stock | shares | 200,000 | ||||||
Warrant period | 5 years | ||||||
Several promissory notes [Member] | Warrant [Member] | |||||||
Common stock purchase price per share | $ / shares | $ 0.75 | ||||||
Warrant to purchase shares of common stock | shares | 400,000 | ||||||
Warrant period | 5 years | ||||||
Several promissory notes [Member] | Investors [Member] | |||||||
Face amount of note | $ 960,000 | $ 960,000 | |||||
Interest rate | 7.00% | ||||||
Exchange for cash payment | $ 900,000 | ||||||
Convertible debt, beneficial conversion feature | $ 839,378 | ||||||
Debt Instrument, Term | 18 months | ||||||
Description for the repayment of debt | After six months, the Company will repay the investors interest and principle in twelve equal installments. | ||||||
Convertible debt, terms of conversion feature | The principle and interest of the note is convertible into the Company’s common stock at a purchase price of $0.75 per common share at any time after the Original Issue Date. | ||||||
Debt default, description | $440,000 of the Notes have been fully extinguished and the remaining $440,000, in two separate investor notes of $220,000 each, are in default and payable upon demand. | If the Company defaults on the Notes, the interest is increased to 15% and at the investors’ option, the principle and interest can be converted into the Company common stock at a 20% discount to the then current market price. | |||||
Promissory note [Member] | |||||||
Face amount of note | $ 440,000 | ||||||
Interest rate | 10.00% | ||||||
Exchange for cash payment | $ 400,000 | ||||||
Debt Instrument, Term | 12 months | ||||||
Common stock purchase price per share | $ / shares | $ 0.70 | ||||||
Number of installments | integer | 6 | ||||||
Increased in interest | 12.00% | ||||||
Discount on conversion common stock | 20.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - Lease Payments [Member] | Dec. 31, 2019USD ($) |
June 30, 2020 | $ 85,122 |
June 30, 2021 | 174,254 |
June 30, 2022 | $ 89,042 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) | 6 Months Ended |
Dec. 31, 2019 | |
Capital Stock and Equity Transactions | |
Description of commitments and contingencies | The Company does not have a concentration of revenues from any individual customer (less than 10%). |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 6 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of options outstanding: | |
Beginning of year | 4,598,823 |
Granted | |
Exercised, converted | |
Forfeited / exchanged / modification | (4,553,823) |
End of period | 45,000 |
Number of options exercisable at end of period | 45,000 |
Number of options available for grant at end of period | 9,131,613 |
Weighted average option prices per share: | |
Granted during the period | $ / shares | $ 0 |
Exercised during the period | $ / shares | 0 |
Terminated during the period | $ / shares | 0.37 |
Outstanding at end of period | $ / shares | 0.45 |
Exercisable at end of period | $ / shares | $ 0.45 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 2) | 6 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Total [Member] | |
Remaining Number Outstanding | 36,137,988 |
Weighted Average Remaining Life (Years) | |
Warrants-Issued with Convertible Notes [Member] | |
Remaining Number Outstanding | 600,000 |
Weighted Average Remaining Life (Years) | 3 years 8 months 23 days |
Weighted Average Exercise Price | $ / shares | $ 0.75 |
Warrants-Financing One [Member] | |
Remaining Number Outstanding | 360,577 |
Weighted Average Remaining Life (Years) | 4 years 6 months 7 days |
Weighted Average Exercise Price | $ / shares | $ 0.78 |
Warrants A - Financing [Member] | |
Remaining Number Outstanding | 7,018,090 |
Weighted Average Remaining Life (Years) | 9 months 18 days |
Weighted Average Exercise Price | $ / shares | $ 0.16 |
Warrants B - Financing [Member] | |
Remaining Number Outstanding | 28,072,364 |
Weighted Average Remaining Life (Years) | 4 years 6 months 7 days |
Weighted Average Exercise Price | $ / shares | $ 0.16 |
Warrants-Financing [Member] | |
Remaining Number Outstanding | 86,957 |
Weighted Average Remaining Life (Years) | 3 years 3 months 18 days |
Weighted Average Exercise Price | $ / shares | $ 1.15 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details Narrative) - Stock Options [Member] | 6 Months Ended |
Dec. 31, 2019USD ($)shares | |
Stock-based compensation expense attributable to stock option | $ 605,709 |
Unrecognized compensation expense | $ 11,234 |
Weighted average vesting period | 3 years |
Equity Incentive Plan 2017 [Member] | |
Stock options exercisable period | 10 years |
Description for shares issuable upon exercise of options | The number of options to purchase common shares was increased from 5,000,000 to 10,000,000 through a consent of stockholders to amend and restate the equity incentive plan. |
Equity Incentive Plan 2017 [Member] | Maximum [Member] | |
Options issued for purchase of common shares | shares | 10,000,000 |