Cover
Cover - shares | 3 Months Ended | |
Sep. 30, 2021 | Nov. 15, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | TEGO CYBER INC. | |
Entity Central Index Key | 0001815632 | |
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 | false | |
Entity Current Reporting Status | No | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 23,908,893 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 333-248929 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 84-2678167 | |
Entity Address Address Line 1 | 8565 South Eastern Avenue | |
Entity Address Address Line 2 | Suite 150 | |
Entity Address City Or Town | Las Vegas | |
Entity Address State Or Province | NV | |
Entity Address Postal Zip Code | 89123 | |
City Area Code | 855 | |
Local Phone Number | 939-0100 |
INTERIM CONDENSED BALANCE SHEET
INTERIM CONDENSED BALANCE SHEET - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 |
Current assets | ||
Cash | $ 1,484,587 | $ 583,015 |
Accounts receivable | 1,150 | 1,450 |
Prepaid expense | 104,189 | 113,462 |
Total current assets | 1,589,926 | 697,927 |
Software | 112,700 | 75,750 |
TOTAL ASSETS | 1,702,626 | 773,677 |
Current liabilities | ||
Accounts payable and accrued liabilities | 39,754 | 23,010 |
Convertible debts | 51,836 | 22,621 |
TOTAL LIABILITIES | 91,590 | 45,631 |
SHAREHOLDERS' EQUITY | ||
Common shares 50,000,000 shares authorized $0.001 par value 23,755,321 issued and outstanding at September 30, 2021 18,296,511 shares issued and outstanding at June 30, 2021 | 23,756 | 18,297 |
Additional paid in capital | 3,079,874 | 1,720,631 |
Subscriptions receivable | (20,000) | (10,500) |
Accumulated deficit | (1,472,594) | (1,000,382) |
TOTAL SHAREHOLDERS' EQUITY | 1,611,036 | 728,046 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ 1,702,626 | $ 773,677 |
INTERIM CONDENSED BALANCE SHE_2
INTERIM CONDENSED BALANCE SHEET (Parenthetical) - $ / shares | Sep. 30, 2021 | Jun. 30, 2020 |
INTERIM CONDENSED BALANCE SHEET | ||
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, issued | 23,755,321 | 18,296,511 |
Common stock, outstanding | 23,755,321 | 18,296,511 |
INTERIM CONDENSED STATEMENT OF
INTERIM CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUE | ||
Consulting fees | $ 0 | $ 2,900 |
OPERATING EXPENSES | ||
Advertising and promotion | 58,879 | 15,170 |
Contractors and consultants | 112,283 | 0 |
Interest and bank charges | 3,098 | 815 |
Investor relations and shareholder communications | 62,776 | 0 |
Legal and accounting | 54,498 | 33,490 |
Management fees | 77,500 | 25,500 |
Office and administration | 7,377 | 1,195 |
Software subscription & platform costs | 12,466 | |
Subscriptions and dues | 3,111 | 25 |
Transfer agent and filing fees | 17,614 | 4,321 |
Travel, meals and entertainment | 6,503 | 146 |
Wages and benefits | 26,892 | 0 |
TOTAL OPERATING EXPENSES | 442,997 | 80,662 |
LOSS FROM OPERATIONS | (442,997) | (77,762) |
OTHER INCOME (EXPENSE) | ||
Accretion expense | (29,215) | 0 |
TOTAL OTHER INCOME (EXPENSE) | (29,215) | 0 |
NET LOSS | $ (472,212) | $ (77,762) |
BASIC AND DILUTED LOSS PER COMMON SHARE | $ (0.02) | $ (0.01) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 19,335,634 | 8,203,039 |
INTERIM CONDENSED STATEMENT O_2
INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Subscription Receivable | Accumulated Deficit |
Balance, shares at Jun. 30, 2020 | 12,406,236 | ||||
Balance, amount at Jun. 30, 2020 | $ 86,610 | $ 12,406 | $ 175,906 | $ (24,500) | $ (77,202) |
Shares issued for cash, shares | 500,000 | ||||
Shares issued for cash, amount | 47,500 | $ 500 | 24,500 | 22,500 | 0 |
Net loss for the period | (77,762) | $ 0 | 0 | 0 | (77,762) |
Balance, shares at Sep. 30, 2020 | 12,906,236 | ||||
Balance, amount at Sep. 30, 2020 | 56,348 | $ 12,906 | 200,406 | (2,000) | (154,964) |
Balance, shares at Jun. 30, 2021 | 18,296,511 | ||||
Balance, amount at Jun. 30, 2021 | 728,046 | $ 18,297 | 1,720,631 | (10,500) | (1,000,382) |
Shares issued for cash, shares | 5,458,810 | ||||
Shares issued for cash, amount | 1,355,202 | $ 5,459 | 1,359,243 | (9,500) | 0 |
Net loss for the period | (472,212) | $ 0 | 0 | 0 | (472,212) |
Balance, shares at Sep. 30, 2021 | 23,755,321 | ||||
Balance, amount at Sep. 30, 2021 | $ 1,611,036 | $ 23,756 | $ 3,079,874 | $ (20,000) | $ (1,472,594) |
INTERIM CONDENSED STATEMENT O_3
INTERIM CONDENSED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss for the period | $ (472,212) | $ (77,762) |
Items not affecting cash | ||
Interest on short term debt | 1,816 | 0 |
Accretion expense | 29,215 | 0 |
Changes in non-cash working capital items: | ||
Accounts receivable | 300 | (2,000) |
Prepaid expenses | 9,273 | 0 |
Accounts payable and accrued liabilities | 14,928 | (12,054) |
NET CASH USED IN OPERATING ACTIVITIES | (416,680) | (91,816) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Software | (36,950) | (14,250) |
NET CASH USED IN INVESTING ACTIVITIES | (36,950) | (14,250) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from shares issued | 1,355,202 | 47,500 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,355,202 | 47,500 |
NET INCREASE IN CASH | 901,572 | (58,566) |
CASH AT BEGINNING OF THE PERIOD | 583,015 | 81,872 |
CASH AT END OF THE PERIOD | $ 1,484,587 | $ 23,306 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Sep. 30, 2021 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
1. ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Tego Cyber Inc. (the “Company”) was incorporated on September 6, 2019 in the State of Nevada. The Company has developed an automated threat intelligence defense platform that provides real-time protection against cyber-threats. The Company is focused on filling the cyber-security skills gap with automated cyber defense solutions, including a monthly software subscription to users of the multiple router and firewall manufacturers. The Company’s head office is at 8565 S. Eastern Ave. #150, Las Vegas, Nevada, 89123. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Sep. 30, 2021 | |
BASIS OF PRESENTATION | |
2. BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION The accompanying interim condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). In the opinion of management, the financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the results for the period presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to US GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited interim condensed financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s audited financial statements for the year ended June 30, 2021. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended June 30, 2021. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, 2022. |
GOING CONCERN UNCERTAINTY
GOING CONCERN UNCERTAINTY | 3 Months Ended |
Sep. 30, 2021 | |
GOING CONCERN UNCERTAINTY | |
3. GOING CONCERN UNCERTAINTY | NOTE 3 – GOING CONCERN UNCERTAINTY The accompanying unaudited interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of the business. The Company has incurred material losses from operations and has an accumulated deficit. At September 30, 2021, the Company had a working capital surplus of $1,498,336 and has an accumulated deficit of $1,472,594. For the period ended September 30, 2021, the Company sustained net losses and generated negative cash flows from operations. In March 2020, the World Health Organization recognized the outbreak of COVID-19 as a global pandemic. The COVID-19 pandemic and government actions implemented to contain the further spread of COVID-19 have severely restricted economic activity around the world. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. These adjustments could be material. The Company’s continuation as a going concern is contingent upon its ability to earn adequate revenues from operations and to obtain additional financing. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to assist in understanding the interim condensed financial statements. The interim condensed financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to US GAAP and have been consistently applied in the preparation of the financial statements. Basis of Preparation The accompanying interim condensed financial statements have been prepared to present the balance sheet, the statement of operations and comprehensive loss, statement of changes in shareholders’ equity and statement of cash flows of the Company for the three-month period ended September 30, 2021 and have been prepared in accordance with US GAAP. Use of Estimates In preparing interim condensed financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. As at September 30, 2021, substantially all of the Company’s cash was held by major financial institutions located in the United States, which management believes are of high credit quality. With respect to accounts receivable, the Company extended credit based on an evaluation of the customer’s financial condition. The Company generally did not require collateral for accounts receivable and maintained an allowance for doubtful accounts of accounts receivable if necessary. Cash Cash consists of cash held at major financial institutions and is subject to insignificant risk of changes in value. Receivables and Allowance for Doubtful Accounts Trade accounts receivable are recorded at net realizable value and do not bear interest. No allowance for doubtful accounts was made during the three-month period ended September 30, 2021, based on management’s best estimate of the amount of probable credit losses in accounts receivable. The Company evaluates its allowance for doubtful accounts based upon knowledge of its customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis. The review process evaluates all account balances with amounts outstanding for more than 60 days and other specific amounts for which information obtained indicates that the balance may be uncollectible. As of September 30, 2021, there was no allowance for doubtful accounts and the Company does not have any off-balance-sheet credit exposure related to its customers. Software Software is stated at cost less accumulated amortization and is depreciated using the straight-line method over the estimated useful life of the asset. The estimated useful life of the asset is 5 years and is not depreciated until it is available for use by the Company. Leases The Company determines if an arrangement is a lease at inception. Operating and financing right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at the commencement date, in determining the present value of future lease payments. Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. The lease terms may include options to extend or terminate the lease is it is reasonably certain the Company will exercise that option. As at September 30, 2021, the Company had no leases. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, adopted January 1, 2008, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The Company’s financial instruments include cash, current receivables and payables. These financial instruments are measured at their respective fair values. The three levels are defined as follows: Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. For cash, accounts receivable, accounts payable and accrued liabilities and due to related parties, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. For convertible debts, the carrying values, excluding any unamortized discounts, approximate the respective fair value. The convertible debts have been discounted to reflect their net present value as at September 30, 2021. The carrying values of embedded conversion features not considered to be derivative instruments were determined by allocating the remaining carrying value of the convertible debt after deducting the estimated carrying value of the liability portion. Estimating fair value for warrants require determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate requires determining the most appropriate inputs to the valuation model including the expected life of the warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them. Revenue Recognition Revenue from providing consulting and management services is recognized in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements: - executed contracts with the Company’s customers that it believes are legally enforceable; - identification of performance obligations in the respective contract; - determination of the transaction price for each performance obligation in the respective contract; - allocation of the transaction price to each performance obligation; and - recognition of revenue only when the Company satisfies each performance obligation. These five elements as applied to the Company’s consulting services results in revenue recorded as services are provided. Income Taxes The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities. Foreign Currency Translation The Company’s functional and reporting currency is United States dollars (“USD”). The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss). Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted earnings (loss) per share assume the conversion, exercise or issuance of all common stock instruments unless the effect is to reduce a loss or increase earnings (loss) per share. The Company had no dilutive securities for the three-month period ended September 30, 2021. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-2, Simplifying the Accounting for Income Taxes Income Taxes Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) did not or are not expected to have a material impact on the Company’s present or future financial statements. |
SOFTWARE
SOFTWARE | 3 Months Ended |
Sep. 30, 2021 | |
SOFTWARE | |
5. SOFTWARE | NOTE 5 – SOFTWARE Balance, June 30, 2020 $ 21,500 Additions 54,250 Depreciation - Balance, June 30, 2021 75,750 Additions 36,950 Depreciation - Balance, September 30, 2021 $ 112,700 As at September 30, 2021, the software is not in use and no depreciation has been recorded. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
6. RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related parties are natural persons or other entities that have the ability, directly, or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences. During the three-month period ended September 30, 2021, there were transactions incurred between the Company and Shannon Wilkinson, Director, CEO, CFO, Secretary and Treasurer of the Company, for management fees of $45,000 (September 30, 2020 - $25,500) and net wages of $15,443 (September 30, 2020 - $Nil). During the three-month period ended September 30, 2021, there were transactions incurred between the Company and Troy Wilkinson, Director and President of the Company, for management fees of $20,000 (September 30, 2020 - $Nil). During the three-month period ended September 30, 2021, there were transactions incurred between the Company and Chris White, Director and CISO of the Company, for management fees of $12,500 (September 30, 2020 - $Nil) and net wages of $11,449 (September 30, 2020 - $Nil). |
COMMON SHARES
COMMON SHARES | 3 Months Ended |
Sep. 30, 2021 | |
SHAREHOLDERS' EQUITY | |
7. COMMON SHARES | NOTE 7 – COMMON SHARES Common Stock At September 30, 2021, the Company’s authorized capital consisted of 50,000,000 of common shares with a $0.001 par value and 23,755,321 shares were issued and outstanding. During the period ended September 30, 2021, the Company incurred the following transactions: During the period ended September 30, 2021, the Company completed various private placements whereby a total of 5,458,810 common shares were issued at a price of $0.25 per share for a total value of $1,364,702. As at September 30, 2021, $20,000 of the subscriptions still remained receivable. During the year ended June 30, 2021, the Company incurred the following transactions: During the period from July 2, 2020 to July 31, 2020, the Company completed various private placements whereby a total of 500,000 common shares were issued at a price of $0.05 per share for a total value of $25,000. During the period from November 24, 2020 to June 30, 2021, the Company completed various private placements whereby a total of 4,541,190 common shares were issued at a price of $0.25 per share for a total value of $1,135,298. As at June 31, 2021, $10,500 of the subscriptions still remained receivable. On December 28, 2020, the Company issued 110,000 shares to a non-related party at a price of $0.10 per share for a total value of $11,000 as commitment shares in exchange for services related to the issuance of convertible debt on Note 8 (c). On March 29, 2021, the Company issued 88,000 shares to a non-related party at a price of $0.25 per share for a total value of $22,000 as debt issuance costs related to the issuance of convertible debt on Note 8 (d). On March 29, 2021, the Company issued 100,000 shares to a director of the Company at a price of $0.25 per share for a total value of $25,000 in exchange for services. On April 12, 2021, the Company issued 400,000 shares to a non-related party at a price of $0.25 per share for a total value of $100,000 in exchange for services. A portion of the services are yet to be incurred and have been recorded as prepaid expenses for a total value of $56,312. On April 15, 2021, the Company issued 100,000 shares to a non-related party at a price of $0.25 per share for a total value of $25,000 in exchange for services. A portion of the services are yet to be incurred and have been recorded as prepaid expenses for a total value of $18,750. On June 21, 2021, the Company issued 41,085 shares to a non-related party at a price of $0.73 per share for a total value of $30,000 as settlement of debt. On June 25, 2021, the Company issued 10,000 shares to a non-related party at a price of $0.85 per share for a total value of $8,500 as settlement of debt. Warrants On December 28, 2020, the Company granted 1,100,000 warrants with a contractual life of two years and exercise price of $0.25 per share to a lender as part of the convertible debt financing transaction (Note 8 (b)). The warrants were valued at $145,744 using the Black Scholes Option Pricing Model. On March 25, 2021, the Company granted 1,100,000 warrants with a contractual life of two years and exercise price of $0.25 per share to a lender as part of the convertible debt financing transaction (Note 8 (c)). The warrants were valued at $147,266 using the Black Scholes Option Pricing Model. On April 22, 2021, the Company granted 506,838 warrants with a contractual life of two years and exercise price of $0.25 per share to a lender as part of the convertible debt financing transaction (Note 8 (a)). The warrants were valued at $399,087 using the Black Scholes Option Pricing Model. On April 28, 2021, the Company granted 307,408 warrants with a contractual life of two years and exercise price of $0.25 per share to a lender as part of the convertible debt financing transaction (Note 8 (a)). The warrants were valued at $196,399 using the Black Scholes Option Pricing Model. The Black Scholes Option Pricing Model assumptions used in the valuation of the warrants are outlined below. The stock price was based on recent issuances. Expected life was based on the expiry date of the warrants as the Company did not have historical exercise data of such warrants. June 30, 2021 Stock price $0.85 - $0.25 Risk-free interest rate 0.13%-0.17 % Expected life 2 Years Expected dividend rate 0 Expected volatility 102.03% - 206.63 % Continuity of the Company’s common stock purchase warrants issued and outstanding is as follows: Number of Warrants Weighted Average Exercise Price Outstanding, June 30, 2021 - $ - Granted 3,014,246 0.25 Exercised - - Expired - - Outstanding, September 30, 2021 3,014,246 $ 0.25 As at September 30, 2021, the weighted average remaining contractual life of warrants outstanding was 0.96 years with an intrinsic value of $0.25. |
COVERTIBLE DEBTS
COVERTIBLE DEBTS | 12 Months Ended |
Jun. 30, 2021 | |
COVERTIBLE DEBTS | |
8. COVERTIBLE DEBTS | NOTE 8 – CONVERTIBLE DEBTS (a) On November 10, 2020, the Company issued a convertible debt in the principal amount of $20,000 each in exchange for cash. The convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days lapsed, is convertible at $0.10 per 1 common share, and has a maturity date of May 10, 2021. The carrying value of beneficial conversion features not considered to be derivative instruments were determined by allocating the intrinsic value of the conversion features from proceeds. As a result, total proceeds of $20,000 were allocated to the beneficial conversion feature, recorded as equity portions of convertible debt and there were no remaining proceeds available for allocation to the liability portion of the convertible debt. The convertible debt was discounted by the amounts allocated to the conversion features. On April 22, 2021, the Company renegotiated the terms of the convertible debt in exchange for a new convertible debt in the principal amount of $55,245 at $50,684, with $4,561 original issue discount, for additional cash proceeds of $30,000 and surrender of the convertible note previously issued. In connection with the note, the Company issued 506,838 warrants exercisable at $0.25 per share, expiring on April 22, 2023. The warrants were calculated to have a relative fair value of $44,088. The convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days elapsed, is convertible at $0.10 per 1 common share, and matures on January 22, 2022. The terms of the new convertible debt were substantially different and deemed extinguished resulting in a gain of $18,049 recorded on extinguishment of convertible debt. The proceeds were allocated between the convertible debt and warrants on a relative fair value basis, and the issuance costs were proportioned accordingly. The fair value of the convertible debt was calculated using the present value of the debt and related interest at 12% incremental borrowing rate as the discount rate. The warrants were valued using the Black Scholes Option Pricing Model (Note 7). The carrying value of beneficial conversion feature not considered to be a derivative instrument was determined by allocating $5,912 for the intrinsic value of the conversion features from the remaining proceeds allocated to the convertible debt after deducting the amount allocated to the warrants. As such, there were no remaining proceeds available for allocating to the liability portion of the convertible debt. As at September 30,2021, the carrying value of this convertible debt was $32,627 (June 30, 2021 - $14,374) net of $20,618 unamortized discounts. (b) On November 10, 2020, the Company issued a convertible debt in the principal amount of $20,000 each in exchange for cash. The convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days lapsed, is convertible at $0.10 per 1 common share, and has a maturity date of May 10, 2021. The carrying value of beneficial conversion features not considered to be derivative instruments were determined by allocating the intrinsic value of the conversion features from proceeds. As a result, total proceeds of $20,000 were allocated to the beneficial conversion feature, recorded as equity portions of convertible debt and there were no remaining proceeds available for allocation to the liability portion of the convertible debt. The convertible debt was discounted by the amounts allocated to the conversion features. On April 28, 2021, the Company renegotiated the terms of the convertible debt in exchange for a new convertible debt in the principal amount of $33,508 at $30,741, with $2,767 original issue discount, for additional cash proceeds of $10,000 and surrender of the convertible note previously issued. In connection with the note, the Company issued 307,408 warrants exercisable at $0.25 per share, expiring on April 28, 2023. The warrants were calculated to have a relative fair value of $25,745. The convertible debt is unsecured, bears interest at 8% per annum compounded on the basis of a 365-day year and actual days elapsed, is convertible at $0.10 per 1 common share, and matures on January 28, 2022. The terms of the new convertible debt were substantially different and deemed extinguished resulting in a gain of $18,682 recorded on extinguishment of convertible debt. The proceeds were allocated between the convertible debt and warrants on a relative fair value basis, and the issuance costs were proportioned accordingly. The fair value of the convertible debt was calculated using the present value of the debt and related interest at 12% incremental borrowing rate as the discount rate. The warrants were valued using the Black Scholes Option Pricing Model (Note 7). The carrying value of beneficial conversion features not considered to be derivative instruments was determined by allocating $4,255 for the intrinsic value of the conversion features from the remaining proceeds allocated to the convertible debt after deducting the amount allocated to the warrants. As such, there were no remaining proceeds available for allocating to the liability portion of the convertible debt. As at September 30, 2021, the carrying value of this convertible debt was $19,209 (June 30, 2021 - $8,247) net of $14,298 unamortized discounts. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
9. COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES The Company leases its corporate office located at 8565 S. Eastern Ave. #150, Las Vegas, Nevada. The initial lease term is for 12 months commencing on September 8, 2019 after which the term is on a month-to-month basis. After the initial term, the Company may cancel the lease agreement at any time by providing 30 days written notice. The Company has elected the short-term lease practical expedient of 12 months and has not recorded a lease. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2021 | |
INCOME TAXES | |
10. INCOME TAXES | NOTE 10 – INCOME TAXES As of September 30, 2021, the Company was in a loss position; therefore, no deferred tax liability was recognized related to the undistributed earnings subject to withholding tax. Net operating loss carry forward of the Company, amounted to $1,472,593 (June 30, 2020 - $1,000,382) for the three-months period ended September 30, 2021. The net operating loss carry forwards are available to be utilized against future taxable income for years through calendar year 2041. In assessing the reliability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled projected future taxable income, and tax planning strategies in making this assessment. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS | |
11. SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS On October 12, 2021, the first version of the Company’s threat intelligence application was commercially launched. On October 15, 2021, the Company entered into a Consulting Agreement with North Equities Corp. (“North”), whereby the Company issued North 125,000 common shares in exchange for social media marketing services to be provided to the Company for a period of six months. On October 28, 2021, the Company entered into a Debt Settlement Agreement with Lockett and Horwitz for a settlement of debt of $30,000 which will be settled by the issuance of $10,000 in cash, and 28,572 common shares of the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Preparation | The accompanying interim condensed financial statements have been prepared to present the balance sheet, the statement of operations and comprehensive loss, statement of changes in shareholders’ equity and statement of cash flows of the Company for the three-month period ended September 30, 2021 and have been prepared in accordance with US GAAP. |
Use of Estimates | In preparing interim condensed financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. |
Concentrations of Credit Risk | Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. As at September 30, 2021, substantially all of the Company’s cash was held by major financial institutions located in the United States, which management believes are of high credit quality. With respect to accounts receivable, the Company extended credit based on an evaluation of the customer’s financial condition. The Company generally did not require collateral for accounts receivable and maintained an allowance for doubtful accounts of accounts receivable if necessary. |
Cash | Cash consists of cash held at major financial institutions and is subject to insignificant risk of changes in value. |
Receivables and Allowance for Doubtful Accounts | Trade accounts receivable are recorded at net realizable value and do not bear interest. No allowance for doubtful accounts was made during the three-month period ended September 30, 2021, based on management’s best estimate of the amount of probable credit losses in accounts receivable. The Company evaluates its allowance for doubtful accounts based upon knowledge of its customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis. The review process evaluates all account balances with amounts outstanding for more than 60 days and other specific amounts for which information obtained indicates that the balance may be uncollectible. As of September 30, 2021, there was no allowance for doubtful accounts and the Company does not have any off-balance-sheet credit exposure related to its customers. |
Software | Software is stated at cost less accumulated amortization and is depreciated using the straight-line method over the estimated useful life of the asset. The estimated useful life of the asset is 5 years and is not depreciated until it is available for use by the Company. |
Leases | The Company determines if an arrangement is a lease at inception. Operating and financing right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at the commencement date, in determining the present value of future lease payments. Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. The lease terms may include options to extend or terminate the lease is it is reasonably certain the Company will exercise that option. As at September 30, 2021, the Company had no leases. |
Fair Value of Financial Instruments | Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, adopted January 1, 2008, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The Company’s financial instruments include cash, current receivables and payables. These financial instruments are measured at their respective fair values. The three levels are defined as follows: Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. For cash, accounts receivable, accounts payable and accrued liabilities and due to related parties, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. For convertible debts, the carrying values, excluding any unamortized discounts, approximate the respective fair value. The convertible debts have been discounted to reflect their net present value as at September 30, 2021. The carrying values of embedded conversion features not considered to be derivative instruments were determined by allocating the remaining carrying value of the convertible debt after deducting the estimated carrying value of the liability portion. Estimating fair value for warrants require determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate requires determining the most appropriate inputs to the valuation model including the expected life of the warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them. |
Revenue Recognition | Revenue from providing consulting and management services is recognized in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements: - executed contracts with the Company’s customers that it believes are legally enforceable; - identification of performance obligations in the respective contract; - determination of the transaction price for each performance obligation in the respective contract; - allocation of the transaction price to each performance obligation; and - recognition of revenue only when the Company satisfies each performance obligation. These five elements as applied to the Company’s consulting services results in revenue recorded as services are provided. |
Income Taxes | The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities. |
Foreign Currency Translation | The Company’s functional and reporting currency is United States dollars (“USD”). The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss). |
Earnings (Loss) per Share | Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted earnings (loss) per share assume the conversion, exercise or issuance of all common stock instruments unless the effect is to reduce a loss or increase earnings (loss) per share. The Company had no dilutive securities for the three-month period ended September 30, 2021. |
Recently Issued Accounting Pronouncements | In December 2019, the FASB issued ASU 2019-2, Simplifying the Accounting for Income Taxes Income Taxes Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) did not or are not expected to have a material impact on the Company’s present or future financial statements. |
SOFTWARE (Tables)
SOFTWARE (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
SOFTWARE | |
Software | Balance, June 30, 2020 $ 21,500 Additions 54,250 Depreciation - Balance, June 30, 2021 75,750 Additions 36,950 Depreciation - Balance, September 30, 2021 $ 112,700 |
COMMON SHARES (Tables)
COMMON SHARES (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
SHAREHOLDERS' EQUITY | |
Warrant assumptions | June 30, 2021 Stock price $0.85 - $0.25 Risk-free interest rate 0.13%-0.17 % Expected life 2 Years Expected dividend rate 0 Expected volatility 102.03% - 206.63 % |
Warrant activity | Number of Warrants Weighted Average Exercise Price Outstanding, June 30, 2021 - $ - Granted 3,014,246 0.25 Exercised - - Expired - - Outstanding, September 30, 2021 3,014,246 $ 0.25 |
GOING CONCERN UNCERTAINTY (Deta
GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 |
GOING CONCERN UNCERTAINTY | ||
Working capital (deficit) surplus | $ 1,498,336 | |
Accumulated deficit | $ (1,472,594) | $ (1,000,382) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Allowance for doubtful accounts | $ 0 |
Software [Member] | |
Estimated useful life | 5 years |
SOFTWARE (Details)
SOFTWARE (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Jun. 30, 2021 | |
SOFTWARE | ||
Software, beginning | $ 21,500 | $ 75,750 |
Additions | 36,950 | 54,250 |
Depreciation | 0 | 0 |
Software, ending | $ 112,700 | $ 75,750 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Chris White [Member] | ||
Management fees | $ 12,500 | $ 0 |
Net wages | 11,449 | 0 |
Shannon Wilkinson [Member] | ||
Management fees | 45,000 | 25,500 |
Net wages | 15,443 | 0 |
Troy Wilkinson [Member] | ||
Management fees | $ 20,000 | $ 0 |
COMMON SHARES (Details)
COMMON SHARES (Details) | 12 Months Ended |
Jun. 30, 2021$ / shares | |
Expected life | 2 years |
Expected dividend rate | 0.00% |
Maximum [Member] | |
Stock price | $ 0.25 |
Risk-free interest rate | 0.17% |
Expected volatility | 102.03% |
Minimum [Member] | |
Stock price | $ 0.85 |
Risk-free interest rate | 0.13% |
Expected volatility | 206.63% |
COMMON SHARES (Details 1)
COMMON SHARES (Details 1) | 3 Months Ended |
Sep. 30, 2021$ / sharesshares | |
SHAREHOLDERS' EQUITY | |
Number of warrants outstanding, beginning | shares | 0 |
Number of warrants granted | shares | 3,014,246 |
Number of warrants exercised | shares | 0 |
Number of warrants expired | shares | 0 |
Number of warrants outstanding, ending | shares | 3,014,246 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 0 |
Weighted average exercise price granted | $ / shares | 0.25 |
Weighted average exercise price exercised | $ / shares | 0 |
Weighted average exercise price expired | $ / shares | 0 |
Weighted average exercise price outstanding, ending | $ / shares | $ 0.25 |
COMMON SHARES (Details Narrativ
COMMON SHARES (Details Narrative) - USD ($) | Jun. 25, 2021 | Jun. 21, 2021 | Apr. 28, 2021 | Apr. 22, 2021 | Apr. 15, 2021 | Apr. 12, 2021 | Mar. 29, 2021 | Mar. 25, 2021 | Dec. 28, 2020 | Jul. 31, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Common stock, authorized | 50,000,000 | 50,000,000 | |||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||||
Common stock, issued | 23,755,321 | 18,296,511 | |||||||||||
Common stock, outstanding | 23,755,321 | 18,296,511 | |||||||||||
Subscriptions receivable | $ 20,000 | ||||||||||||
Number of warrants granted | 3,014,246 | ||||||||||||
Weighted average exercise price granted | $ 0.25 | ||||||||||||
Common Shares [Member] | |||||||||||||
Proceeds from share issued | $ 25,000 | $ 1,364,702 | |||||||||||
Stock issued | 500,000 | 5,458,810 | 4,541,190 | ||||||||||
Share price | $ 0.05 | $ 0.25 | $ 0.25 | ||||||||||
Amount receivable | $ 10,500 | ||||||||||||
Common Shares [Member] | Director [Member] | |||||||||||||
Proceeds from share issued | $ 25,000 | ||||||||||||
Stock issued | 100,000 | ||||||||||||
Share price | $ 0.25 | ||||||||||||
Common Shares [Member] | Non-Related Party [Member] | |||||||||||||
Proceeds from share issued | $ 8,500 | $ 30,000 | $ 25,000 | $ 100,000 | $ 22,000 | $ 11,000 | $ 1,135,298 | ||||||
Stock issued | 10,000 | 41,085 | 100,000 | 400,000 | 88,000 | 110,000 | 4,541,190 | ||||||
Share price | $ 0.85 | $ 0.73 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.10 | $ 0.25 | ||||||
Prepaid expenses | $ 18,750 | $ 56,312 | |||||||||||
Warrant [Member] | |||||||||||||
Number of warrants granted | 307,408 | 506,838 | 1,100,000 | 1,100,000 | |||||||||
Weighted average exercise price granted | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | |||||||||
Weighted average remaining contractual life of warrants outstanding | 2 years | 2 years | 2 years | 2 years | 11 months 15 days | ||||||||
Fair value of warrant granted | $ 196,399 | $ 399,087 | $ 147,266 | $ 145,744 | |||||||||
Intrinsic value | $ 0.25 |
COVERTIBLE DEBTS (Details Narra
COVERTIBLE DEBTS (Details Narrative) - USD ($) | Nov. 10, 2020 | Apr. 28, 2021 | Apr. 22, 2021 | Sep. 30, 2021 | Jun. 30, 2021 |
Convertible Debt [Member] | |||||
Convertible debt in exchange for cash | $ 20,000 | $ 55,245 | |||
Additional cash proceeds | $ 30,000 | ||||
Warrants issued | 506,838 | ||||
Warrant exercisable | $ 0.25 | ||||
Original issue discount | $ 4,561 | ||||
Convertible interest rate | 8.00% | 8.00% | |||
Total proceeds issued a convertible debt | $ 20,000 | ||||
Fair value | $ 44,088 | ||||
Extinguishment of convertible debt | $ 18,049 | ||||
Beneficial conversion features | $ 5,912 | ||||
Carrying value of convertible debt | 32,627 | $ 14,374 | |||
unamortized discounts | 20,618 | ||||
Convertible Debt One [Member] | |||||
Convertible debt in exchange for cash | $ 20,000 | $ 33,508 | |||
Additional cash proceeds | $ 10,000 | ||||
Warrants issued | 307,408 | ||||
Warrant exercisable | $ 0.25 | ||||
Original issue discount | $ 2,767 | ||||
Convertible interest rate | 8.00% | 8.00% | |||
Total proceeds issued a convertible debt | $ 20,000 | ||||
Fair value | $ 25,745 | ||||
Extinguishment of convertible debt | $ 18,682 | ||||
Beneficial conversion features | 4,255 | ||||
Carrying value of convertible debt | 19,209 | $ 8,247 | |||
unamortized discounts | $ 14,298 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
INCOME TAXES | ||
Net operating loss carry forward | $ 1,472,593 | $ 1,000,382 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Oct. 15, 2021 | Oct. 28, 2021 |
Common shares issued | 125,000 | |
Settlement of debt | $ 30,000 | |
Restricted common shares | 28,572 | |
Restricted common shares, amount | $ 10,000 |