Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | VERITEC INC | |
Entity Central Index Key | 773,318 | |
Document Type | 10-K | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 573,194 | |
Entity Common Stock, Shares Outstanding | 39,538,007 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current Assets: | ||
Cash | $ 60,953 | $ 52,762 |
Accounts receivable | 9,309 | 38,749 |
Inventories | 14,461 | |
Prepaid expenses | 1,897 | 18,234 |
Total Current Assets | 72,159 | 124,206 |
Restricted cash | 0 | 63,029 |
Property and Equipment, net | 171 | 583 |
Intangibles, net | 80,208 | 144,375 |
Total Assets | 152,538 | 332,193 |
Current Liabilities: | ||
Notes payable | 548,384 | 521,610 |
Notes payable, related party | 1,484,211 | 3,041,097 |
Accounts payable | 624,153 | 630,490 |
Accounts payable, related party | 96,110 | 96,110 |
Customer deposits | 25,000 | 25,482 |
Deferred revenues | 138,760 | 492,603 |
Payroll tax liabilities | 238,718 | 453,277 |
Accrued expenses | 75,374 | 22,957 |
Total Current Liabilities | 3,230,710 | 5,283,626 |
Contingent earnout liability | 155,000 | 155,000 |
Total Liabilities | 3,385,710 | 5,438,626 |
Stockholders' Deficiency: | ||
Convertible preferred stock, par value $1.00; authorized 10,000,000 shares, 276,000 shares of Series H authorized, 1,000 shares issued and outstanding as of June 30, 2016 and June 30, 2015, respectively | 1,000 | 1,000 |
Common stock, par value $.01; authorized 50,000,000 shares, 39,538,007 and 16,530,088 shares issued and outstanding as of June 30, 2016 and June 30, 2015, respectively | 395,380 | 165,301 |
Common stock to be issued, 145,000 shares and 940,000 shares, respectively | 12,500 | 51,800 |
Additional paid-in capital | 17,939,576 | 14,959,006 |
Accumulated deficit | (21,581,628) | (20,283,540) |
Total Stockholders' Deficiency | (3,233,172) | (5,106,433) |
Total Liabilities and Stockholders' Deficiency | $ 152,538 | $ 332,193 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Jun. 30, 2015 |
Convertible preferred stock, par value | $ 1 | $ 1 |
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Convertible preferred stock, shares issued | 1,000 | 1,000 |
Convertible preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 39,538,007 | 16,530,088 |
Common stock, shares outstanding | 39,538,007 | 16,530,088 |
Common stock, shares to be issued | 145,000 | 940,000 |
Series H Convertible | ||
Convertible preferred stock, shares authorized | 276,000 | 276,000 |
Convertible preferred stock, shares issued | 1,000 | 1,000 |
Convertible preferred stock, shares outstanding | 1,000 | 1,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue: | ||
Mobile banking technology revenue | $ 478,239 | $ 437,847 |
Barcode technology revenue | 133,714 | 507,960 |
Other revenue, related party | 69,135 | |
Total revenue | 681,088 | 945,807 |
Cost of Sales | 322,981 | 329,703 |
Gross Profit | 358,107 | 616,104 |
Operating Expenses: | ||
General and administrative | 707,856 | 841,816 |
Sales and marketing | 19,631 | 83,863 |
Research and development | 68,794 | 98,412 |
Total Operating Expenses | 796,281 | 1,024,091 |
Loss from Operations | (438,174) | (407,987) |
Other Expense: | ||
Interest expense and financing costs, including $832,914 and $152,501, respectively, to related parties | (859,914) | (499,487) |
Net Loss | $ (1,298,088) | $ (907,474) |
Net Income (Loss) Per Common Share | ||
Basic | $ (0.04) | $ (0.06) |
Diluted | $ (0.04) | $ (0.06) |
Weighted Average Number of Shares Outstanding | ||
Basic | 33,738,751 | 16,351,956 |
Diluted | 33,738,751 | 16,351,956 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||
Interest expense, related parties | $ 832,914 | $ 152,501 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficiency - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Preferred Stock | ||
Beginning balance, Shares | 1,000 | 1,000 |
Beginning balance, Amount | $ 1,000 | $ 1,000 |
Shares issued for acquisition, shares | ||
Shares issued for acquisition, amount | ||
Shares issued on conversion of notes payable, Shares | ||
Shares issued on conversion of notes payable, Amount | ||
Shares issued for common stock to be issued, shares | ||
Shares issued for common stock to be issued, amount | ||
Shares to be issued for services, shares | ||
Shares to be issued for services, amount | ||
Stock based compensation | ||
Beneficial conversion feature on issuance of convertible notes payable | ||
Fair value of shares issued as inducement for conversion of notes payable | ||
Modification cost of conversion feature of note payable | ||
Gain on sale of assets to related party treated as a capital contribution | ||
Net loss | ||
Ending balance, Shares | 1,000 | 1,000 |
Ending balance, Amount | $ 1,000 | $ 1,000 |
Common Stock | ||
Beginning balance, Shares | 16,530,088 | 15,920,088 |
Beginning balance, Amount | $ 165,301 | $ 159,201 |
Shares issued for acquisition, shares | 250,000 | |
Shares issued for acquisition, amount | $ 2,500 | |
Shares issued on conversion of notes payable, Shares | 22,192,919 | |
Shares issued on conversion of notes payable, Amount | $ 221,929 | |
Shares issued for common stock to be issued, shares | 815,000 | 225,000 |
Shares issued for common stock to be issued, amount | $ 8,150 | $ 2,250 |
Shares to be issued for services, shares | 135,000 | |
Shares to be issued for services, amount | $ 1,350 | |
Stock based compensation | ||
Beneficial conversion feature on issuance of convertible notes payable | ||
Fair value of shares issued as inducement for conversion of notes payable | ||
Modification cost of conversion feature of note payable | ||
Gain on sale of assets to related party treated as a capital contribution | ||
Net loss | ||
Ending balance, Shares | 39,538,007 | 16,530,088 |
Ending balance, Amount | $ 395,380 | $ 165,301 |
Common Stock to be Issued | ||
Beginning balance, Amount | 51,800 | 39,596 |
Shares issued for acquisition, amount | ||
Shares issued on conversion of notes payable, Amount | ||
Shares issued for common stock to be issued, amount | (41,400) | (25,250) |
Shares to be issued for services, amount | 2,100 | 9,300 |
Stock based compensation | 28,154 | |
Beneficial conversion feature on issuance of convertible notes payable | ||
Fair value of shares issued as inducement for conversion of notes payable | ||
Modification cost of conversion feature of note payable | ||
Gain on sale of assets to related party treated as a capital contribution | ||
Net loss | ||
Ending balance, Amount | 12,500 | 51,800 |
Additional Paid-In Capital | ||
Beginning balance, Amount | 14,959,006 | 14,594,181 |
Shares issued for acquisition, amount | 35,000 | |
Shares issued on conversion of notes payable, Amount | 1,553,505 | |
Shares issued for common stock to be issued, amount | 33,250 | 23,000 |
Shares to be issued for services, amount | 8,950 | |
Stock based compensation | ||
Beneficial conversion feature on issuance of convertible notes payable | 135,045 | 297,875 |
Fair value of shares issued as inducement for conversion of notes payable | 452,770 | |
Modification cost of conversion feature of note payable | 136,000 | |
Gain on sale of assets to related party treated as a capital contribution | 670,000 | |
Net loss | ||
Ending balance, Amount | 17,939,576 | 14,959,006 |
Retained Earnings / Accumulated Deficit | ||
Beginning balance, Amount | (20,283,540) | (19,376,066) |
Shares issued for acquisition, amount | ||
Shares issued on conversion of notes payable, Amount | ||
Shares issued for common stock to be issued, amount | ||
Shares to be issued for services, amount | ||
Stock based compensation | ||
Beneficial conversion feature on issuance of convertible notes payable | ||
Fair value of shares issued as inducement for conversion of notes payable | ||
Modification cost of conversion feature of note payable | ||
Gain on sale of assets to related party treated as a capital contribution | ||
Net loss | (1,298,088) | (907,474) |
Ending balance, Amount | (21,581,628) | (20,283,540) |
Beginning balance, Amount | (5,106,433) | (4,582,088) |
Shares issued for acquisition, amount | 37,500 | |
Shares issued on conversion of notes payable, Amount | 1,775,434 | |
Shares issued for common stock to be issued, amount | ||
Shares to be issued for services, shares | 135,000 | |
Shares to be issued for services, amount | 2,100 | $ 19,600 |
Stock based compensation | 28,154 | |
Beneficial conversion feature on issuance of convertible notes payable | 135,045 | 297,875 |
Fair value of shares issued as inducement for conversion of notes payable | 452,770 | |
Modification cost of conversion feature of note payable | 136,000 | |
Gain on sale of assets to related party treated as a capital contribution | 670,000 | |
Net loss | (1,298,088) | (907,474) |
Ending balance, Amount | $ (3,233,172) | $ (5,106,433) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,298,088) | $ (907,474) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation | 412 | 411 |
Amortization | 64,167 | 48,125 |
Allowance for inventory obsolescence | 14,461 | |
Shares issued for services | 2,100 | 19,600 |
Beneficial conversion feature on convertible notes payable | 135,045 | 297,875 |
Fair value of shares issued as inducement for conversion of notes payable | 452,770 | |
Modification cost of conversion feature of note payable | 136,000 | |
Interest accrued on notes payable | 136,100 | 199,489 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11,623) | 31,751 |
Restricted cash | 63,029 | (11,072) |
Inventories | (6,632) | |
Prepaid expenses | 16,337 | (1,091) |
Deferred revenues | (353,843) | 233,839 |
Payroll tax liabilities | (214,559) | (85,941) |
Customer deposits | (482) | (65,778) |
Accounts payables and accrued expenses | 46,080 | 25,841 |
Net cash used in operating activities | (812,094) | (192,903) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable, related party | 822,785 | 365,000 |
Payments on notes payable, related party | (2,500) | (144,000) |
Net cash provided by financing activities | 820,285 | 221,000 |
Net Increase in Cash | 8,191 | 28,097 |
Cash at Beginning of Year | 52,762 | 24,665 |
Cash at End of Year | 60,953 | 52,762 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | ||
NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Related party capital contribution on sale of assets offset to related party notes payable balance | 670,000 | |
Related party accounts receivable offset to related party notes payable | 41,063 | |
Conversion of notes payable into common stock | 1,775,434 | |
Common stock issued for acquisition | 37,500 | |
Contingent earnout liability from acquisitions | $ 155,000 |
Operations and Summary of Signi
Operations and Summary of Significicant Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
Operations And Summary Of Significicant Accounting Policies | |
Nature of Business | NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Veritec, Inc. (Veritec) was formed in the State of Nevada on September 8, 1982. Veritec’s wholly owned subsidiaries include, Vcode Holdings, Inc. (Vcode®), and Veritec Financial Systems, Inc. (VTFS) (collectively the “Company”). Nature of Business The Company is primarily engaged in the development, marketing, sales and licensing of products and rendering of professional services related to its mobile banking solutions. Prior to its sale on September 30, 2015, the Company was also focused on its proprietary two-dimensional matrix symbology (also commonly referred to as “two-dimensional barcodes” or “2D barcodes”). Mobile Banking Solutions In January 12, 2009, Veritec formed VTFS, a Delaware corporation, to bring its Mobile Banking Technology, products and related professional services to market. In 2009 through 2016, the Company has had agreements with various banks, including Security First Bank (terminated in October 2010), Palm Desert National Bank (which was later assigned to First California Bank and subsequently Pacific Western Bank that terminated in June 2013), and Central Bank of Kansas City. Late in the fiscal year ended June 30, 2016, the relationship between CBKC and the Company ended and the Company is currently seeking a bank to sponsor its Prepaid Card programs (see Note 12). As a Cardholder Independent Sales Organization, Veritec is able to promote and sell Visa branded card programs. As a Third-Party Servicer, Veritec provides back-end cardholder transaction processing services for Visa branded card programs on behalf of its sponsoring bank. On September 30, 2014, Veritec and Tangible Payments LLC entered into an Asset Purchase Agreement pursuant to which Veritec acquired certain assets and liabilities of the Tangible Payments LLC (See Note 5). The Company has a portfolio of five United States and eight foreign patents. In addition, we have seven U.S. and twenty-eight foreign pending patent applications. Barcode Technology (Sold September 30, 2015) The Company’s Barcode Technology was originally invented by the founders of Veritec and as a product identification system for identification and tracking of manufactured parts, components and products mostly in the liquid crystal display (LCD) markets and is ideal for secure identification documents, financial cards, medical records and other high security applications. Veritec developed software to send, store, display, and read Barcode Technology on a mobile phone. On September 30, 2015, the Company sold all of its assets of its Barcode Technology, which was comprised solely of its intellectual property. The sale allows the Company to focus its efforts solely on its growing Mobile Banking Technology (See Note 6). Joint Venture Agreement On January 17, 2016, Veritec Inc. (the “Company”) entered into an agreement with Vietnam Alliance Capital (“VAC”), which is domiciled in Vietnam, to form a joint venture (“JV’) to operate a debit card business in Vietnam. The JV will be named Veritec Asia. The Company will be a 30% member in the JV and VAC will be a 70% member in the JV. Pursuant to the agreement, the Company will grant a license of certain products to the JV, and provide certain technologies and technological support to the JV. VAC will manage, control, and conduct its day-to-day business and development activities. In addition VAC has agreed to raise all funds to capitalize the JV. As of June 30, 2016, the JV has not received funding and anticipates receipt of funding in fiscal year 2017. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long lived assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Accounts Receivable The Company sells to domestic and foreign companies and grants uncollateralized credit to customers, but requires deposits on unique orders. Management periodically reviews its accounts receivable and provides an allowance for doubtful accounts after analyzing the age of the receivable, payment history and prior experience with the customer. The estimated loss that management believes is probable is included in the allowance for doubtful accounts. While the ultimate loss may differ, management believes that any additional loss will not have a material impact on the Company's financial position. Due to uncertainties in the settlement process, however, it is at least reasonably possible that management's estimate will change during the near term. Inventories Inventories, consisting of purchased components for resale, are stated at the lower of cost or market, applying the first-in, first-out (FIFO) method. Inventory is net of reserves of $38,361 and $23,900 at June 30, 2016 and 2015, respectively. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of 3 to 7 years. When assets are retired or otherwise disposed, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. Maintenance and repairs are expensed as incurred; significant renewals and betterments are capitalized. Concentrations The Company’s cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. The Company may be exposed to risk for the amounts of funds held in one bank in excess of the insurance limit. In assessing the risk, the Company’s policy is to maintain cash balances with high quality financial institutions. The Company did not have cash balances in excess of the guarantee during the year ended June 30, 2016. Major Customers The Company has two customers in fiscal 2016 that represented an aggregate of 47% (37% and 10%) of our revenue, and two customers in 2015 that represented 23% (12% and 11%) of our revenue. As of June 30, 2016, the Company had approximately $3,520 (38%), $1,500 (16%), $1,200 (13%), $1,000 (11%) and $1,000 (11%) of accounts receivable due from certain customers. As of June 30, 2015, the Company had approximately $6,025 (16%), $5,650 (15%), and $4,575 (12%) of accounts receivable due from certain customers. Foreign Revenues Foreign revenues accounted for 19% of the Company’s total revenues in fiscal 2016 and 41% in fiscal 2015. (6% Korea, 8% Taiwan, and 5% others in fiscal 2016 and 10% Korea, 21% Taiwan, and 10% others in fiscal 2015). Fair Value of Financial Instruments Fair Value Measurements are adopted by the Company based on the authoritative guidance provided by the Financial Accounting Standards Board, with the exception of the application of the statement to non-recurring, non-financial assets and liabilities as permitted. The adoption based on the authoritative guidance provided by the Financial Accounting Standards Board did not have a material impact on the Company's fair value measurements. Based on the authoritative guidance provided by the Financial Accounting Standards Board defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FASB authoritative guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 - Unobservable inputs based on the Company's assumptions. The Company had no such assets or liabilities recorded to be valued on the basis above at June 30, 2016 or 2015. For certain financial instruments, the carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, and current liabilities, including notes payable and convertible notes, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Revenue Recognition Revenues from licenses and identification cards are recognized when the product is shipped, the Company no longer has any service or other continuing obligations, and collection is reasonably assured. The process typically begins with a customer purchase order detailing its specifications so the Company can import its software into the customer's hardware. Once importation is completed, if the customer only wishes to purchase a license, the Company typically transmits the software to the customer via the Internet. Revenue is recognized at that point. If the customer requests both license and hardware, once the software is imported into the hardware and the process is complete, the product is shipped, and revenue is recognized at time of shipment. Once the software and/or other products are either shipped or transmitted, the customers do not have a right of refusal or return. Under some conditions, the customers remit payment prior to the Company having completed importation of the software. In these instances, the Company delays revenue recognition and reflects the prepayments as customer deposits. The Company, as a processor and a distributor, recognizes revenue from transaction fees charged cardholders for the use of its issued mobile debit cards. The fees are recognized on a monthly basis after all cardholder transactions have been summarized and reconciled with third party processors. Shipping and Handling Fees and Costs For the years ended June 30, 2016 and 2015, shipping and handling fees billed to customers of $216 and $997, respectively were included in revenues and shipping and handling costs of $3,089 and $997, respectively were included in cost of sales. Research and Development Research and development costs were expensed as incurred. Advertising Advertising costs are expensed as incurred and are included in sales and marketing expense in the amount of $1,100 and $2,100 for the years ended June 30, 2016 and 2015, respectively. Loss per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the years ended June 30, 2016 and 2015, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. As of June 30, 2016 and 2015, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. June 30, 2016 2015 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 11,815,803 19,563,168 Options 2,510,000 2,520,000 Total 14,335,803 22,093,168 Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for stock option and stock warrant grants to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) where the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Company’s common stock option and warrant grants are estimated using a Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods. Intangible Assets The Company accounts for intangible assets in accordance with the authoritative guidance issued by the FASB. Intangibles are valued at their fair market value and are amortized taking into account the character of the acquired intangible asset and the expected period of benefit. The Company evaluates intangible assets for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated undiscounted future cash flows. Recoverability of intangible assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. At June 30, 2016, the intangibles assets of $80,208 relates to our acquisition of Tangible Payments LLC during fiscal year 2015 (see Note 5). Management believes there were no indications of impairment based on management’s assessment of these assets at June 30, 2016. Factors we consider important that could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of the use of our assets or the strategy for our overall business, and significant negative industry or economic trends. If current economic conditions worsen causing decreased revenues and increased costs, we may have to record an impairment to our intangible assets. Income Taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases In March 2016, the FASB issued the ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 - GOING CONCERN The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company experienced a loss of $1,298,088 during the year ended June 30, 2016, and at June 30, 2016, the Company had a working capital deficit of $3,158,551 and a stockholdersÂ’ deficiency of $3,233,172. The Company is in default of $2,032,595 of its note payable obligations and is also delinquent in payment of certain amounts due of $238,718 for payroll taxes and accrued interest and penalties as of June 30, 2016. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The Company believes it will require additional funds to continue its operations through fiscal 2017 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the CompanyÂ’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock. The consolidated financial statements do not include any adjustments that may result from this uncertainty. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Restricted Cash | NOTE 3 – RESTRICTED CASH The Company entered into Store Value Prepaid Card Sponsorship Agreements with certain banks whereas the Company markets and sells store value prepaid card programs. The programs are marketed and managed daily at the direction of the bank, for which the Company receives a transaction fee. In connection with the agreements the Company was required to establish a reserve account controlled by the bank. During fiscal year 2016, the agreement with the bank was terminated. At June 30, 2016 and 2015, the restricted cash totaled $0 and $63,029, respectively. Since this amount was restricted for the purposes related to the programs, it was classified as restricted cash on the consolidated balance sheets as of June 30, 2015. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consists of the following as of: June 30, 2016 2015 Furniture and equipment $ 140,316 $ 140,316 Software 73,000 73,000 Vehicles 23,301 23,301 236,617 236,617 Less accumulated depreciation (236,446 ) (236,034 ) Total $ 171 $ 583 Depreciation expense for the years ended June 30, 2016 and 2015 was $412 and $411, respectively. |
Intangible Assets and Contingen
Intangible Assets and Contingent Earnout Liability | 12 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 5 – INTANGIBLE ASSETS AND CONTINGENT EARNOUT LIABILITY On September 30, 2014, the Company and Tangible Payments LLC, a Maryland Limited Liability Company, entered into an Asset Purchase Agreement pursuant to which the Company acquired certain assets and liabilities of the Tangible Payments LLC. Tangible Payments LLC developed online payment technology that encrypts sensitive information securely between customers and merchants during online transactions. The purchase price for the acquisition was comprised of 250,000 shares of restricted common stock of Veritec valued at $37,500, issued on closing, and an earnout payment of $155,000 for an aggregate purchase price of $192,500. The earnout payment is payable on a monthly basis from the net profits derived from the acquired assets commencing three months after the closing. The earnout payment is accelerated and the balance of the earnout payment shall be due in full at such time as Veritec receives equity investments aggregating $1.3 million. For the years ended June 30, 2016 and 2015, there was no net profit derived from the acquired assets and accordingly, no payments were made on the earnout. The Company assigned $192,500 of the purchase price to contract commitments which will be amortized over a three year period. As of June 30, 2016 and 2015, the unamortized balance of contract commitments was $80,208 and $144,375, respectively. For the years ended June 30, 2016 and 2015, the Company recorded $64,167 and $48,125 of amortization expense related to this intangible which is included in general and administrative expense in the Consolidated Statements of Operations. Total estimated amortization expense with respect to intangible assets for 2017 through 2018 is as follows: Years Ending June 30, Amount 2017 $ 64,167 2018 16,041 Total $ 80,208 The following table presents our unaudited pro forma combined historical results of operations as if we had consummated the acquisition as of July 1, 2014. Year Ended June 30, 2015 (Unaudited) Revenues $ 1,007,932 Net Loss $ (919,775 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 – RELATED PARTY TRANSACTIONS The Matthews Group is owned 50% by Ms. Van Tran, the Company’s CEO/Executive Chair and a director, and 50% by Larry Johanns, a significant stockholder of the Company. The Company has relied on The Matthews Group, LLC for funding (see Note 7). At various times throughout the Company’s history, the Company received various unsecured, non-interest bearing, due on demand advances from its Chief Executive Officer, Ms. Van Tran, a related party. The balances due Ms. Tran as of June 30, 2016 and 2015 were $96,110 and $96,110, respectively. These advances have been classified as accounts payable, related party on the accompanying consolidated balance sheets. The Company leases its office facilities from Ms. Tran. For the year ended June 30, 2016 and 2015, rental payments to Ms. Van Tran totaled $50,400 and $50,400, respectively. On September 30, 2015, the Company agreed to convert $1,775,434 of various convertible notes payable to The Matthews Group into 22,192,919 shares of common stock, or $0.08 per share (see Note 7). The transaction included $702,797 of notes that were converted at less than their stated conversion prices which ranged from $0.10 per share to $0.33 per share. The Company determined this was an induced conversion and calculated an inducement expense of $452,770, which represents the fair value of the additional number of common shares issued as a result of the lower conversion price. The Company recorded the $452,770 in interest expense and additional paid in capital. No similar expense occurred during the same period of the prior year. On September 30 2015, the Company sold its Barcode Technology assets to The Matthews Group for $670,000 in settlement of various convertible notes payables due to The Matthews Group (see Note 7). The cost basis of the Barcode Technology assets were zero, resulting in a gain of $670,000. As the transaction was between the Company and The Matthews Group, a related party, the Company accounted for the gain as a capital contribution. On September 28, 2015, the Company agreed to replace a convertible note payable for $200,000 due to The Matthews Group that was in default (the original note) with another convertible note payable for $200,000 due to The Matthews Group (the replacement note) (see Note7). The original note was for $200,000, secured, 8% interest rate, and convertible into common stock at a rate of $0.25 per share. The replacement note is for $200,000, unsecured, 10% interest rate, and convertible into common stock at a rate of $0.08 per share. The Company determined that the change in the fair value of the conversion option was more than 10% of the carrying value of the original note and recorded a loss on extinguishment of $136,000. The $136,000 is included in interest expense and finance costs and additional paid in capital. No similar expense occurred during the same period of the prior year. During the year ended June 30, 2016, the Company issued $549,389 of convertible notes payable to The Matthews Group and $25,000 of convertible notes payable to Van Tran (see Note 7). The convertible notes payable-related party can be converted at a price of $0.08 per share. The market price on the date some of the convertible notes payable-related party were issued was in excess of the conversion price, and as a result the Company recognized an expense of $135,045 which is included in interest expense. Effective October 1, 2015, the Company entered into a management services agreement with The Matthews Group for which the Company will manage all facets of its previous barcode technology operations, on behalf of The Matthews Group, from October 1, 2015 to May 30, 2016. Per the terms of the management services agreement, the Company earns a fee of 20% of all revenues, or $69,135, from the barcode technology operations through May 30, 2017. Additionally all cash flow (all revenues collected less direct costs paid) will be retained by the Company and classified as unsecured note payable-related party, due on demand, bearing interest at 10% per annum. At June 30, 2016, the total of note payable-related party related to this agreement, including interest of $9,315, was $260,711 (see Note 7). The Matthews Group bears the risk of loss from the barcode operations and has the right to the residual benefits of the barcode operations. |
Notes Payable
Notes Payable | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 7 – NOTES PAYABLE Notes payable includes accrued interest and consists of the following as of June 30, 2016 and June 30, 2015: June 30, 2016 June 30, 2015 Convertible notes payable, including $1,264,563 and $2,326,609 due to related parties at June 30, 2016 and June 30, 2015, respectively. At June 30, 2016, $1,460,218 of the convertible notes, including $467,695 due to related parties, are in default. The notes are unsecured, interest at 5% to 10%, and due on various dates through 2011 or on demand. The principal and accrued interest are convertible at conversion prices ranging from $0.08 per share to $0.40 per share. $ 1,460,218 $ 2,512,267 Notes payable, including $219,648 and $714,488 due to related parties at June 30, 2016 and June 30, 2015, respectively. The notes are both secured by the Company’s intellectual property, and unsecured, interest at 0% to 10%, and due on various dates through 2012 or on demand. At June 30, 2016, $352,729 of notes payable due to unrelated parties are in default. 572,377 1,049,740 Total $ 2,032,595 $ 3,562,707 During the year ended June 30, 2016 and 2015, the Company recorded interest expense on its convertible notes payable and notes payable of $271,145 inlcuding $135,045 beneficial conversion feature that was expensed, and $199,489, respectively. For the purposes of Balance Sheet presentation notes payable have been presented as follows: June 30, 2016 June 30, 2015 Notes payable $ 548,384 $ 521,610 Notes payable, related party 1,484,211 3,041,097 Total $ 2,032,595 $ 3,562,707 |
Stockholders' Deficiency
Stockholders' Deficiency | 12 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | NOTE 8 - STOCKHOLDERSÂ’ DEFICIENCY Preferred Stock The articles of incorporation of Veritec authorize 10,000,000 shares of preferred stock with a par value of $1.00 per share. The Board of Directors is authorized to determine any number of series into which shares of preferred stock may be divided and to determine the rights, preferences, privileges and restrictions granted to any series of the preferred stock. In 1999, a new Series H convertible preferred stock was authorized. Each share of Series H convertible preferred stock is convertible into 10 shares of the VeritecÂ’s common stock at the option of the holder. As of June 30, 2016 and 2015, there were 1,000 shares of Series H convertible preferred stock issued and outstanding. Common Stock Shares issued to consultants for services During the year ended June 30, 2015, the Company granted and issued 135,000 shares of common stock for services received. The common shares, based on the fair value on the dates granted, were valued at $0.05 to $0.51 per share, for an aggregate of $19,600. Common Stock to be issued Shares to be issued to consultants for services rendered During the year ended June 30, 2015, the Company recorded an obligation to issue 55,000 shares of common stock with an aggregate fair value of $8,150 of which 5,000 shares of common stock were issued in December 2014. As of June 30, 2015, the remaining 50,000 shares of common stock with a value of $7,400 During the year ended June 30, 2015, the Company recorded an obligation to issue 35,000 shares of common stock with an aggregate fair value of $4,050 of which 20,000 shares of common stock were issued in December 2014. As of June 30, 2015, the remaining 15,000 shares of common stock with a value of $1,900 had not been issued and were reflected as common shares to be issued in the accompanying consolidated balance sheet. The shares were issued in December 2015. On July 15, 2014, the Company entered into a consulting agreement with a consultant, which included, among other things, monthly compensation of 5,000 shares of common stock. As of June 30, 2015, 50,000 shares of common stock with a value of $7,400 have not been issued and are included in common shares to be issued in the accompanying consolidated balance sheet. The consulting agreement was terminated on October 31, 2015. During the year ended June 30, 2016, the Company recorded an obligation to issue an additional 20,000 shares of common stock with an aggregate fair value of $2,100. As of June 30, 2016, the 70,000 shares of common stock with a value of $9,500 have not been issued and are included in common shares to be issued in the accompanying consolidated balance sheet. Shares to be issued to directors and employees for services During the year ended June 30, 2012, the Company granted an aggregate of 75,000 shares of the CompanyÂ’s common stock to the CompanyÂ’s directors for services rendered and recognized as stock based compensation expense during the year ended June 30, 2012 based on their fair value at grant dates in the aggregate amount of $3,000. The shares due were not issued as of June 30, 2016 and were reflected as common shares to be issued in the accompanying consolidated balance sheet. During the year ended June 30, 2015, the Company granted an aggregate of 750,000 shares of the CompanyÂ’s common stock to four of the CompanyÂ’s directors and certain employees for services rendered and recognized as stock based compensation expense during the year ended June 30, 2015 based on their fair value at grant dates in the aggregate amount of $28,154. The shares due were not issued as of June 30, 2015 and were reflected as common shares to be issued in the accompanying consolidated balance sheet. The shares were issued in December 2015. |
Stock Options
Stock Options | 12 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | NOTE 9 – STOCK OPTIONS A summary of stock options as of June 30, 2016 and for the two years then ended is as follows: Number of Weighted - Average Shares Exercise Price Outstanding at June 30, 2014 3,056,500 $ 0.08 Granted — — Forfeited (536,500 ) $ 0.08 Outstanding at June 30, 2015 2,520,000 $ 0.08 Granted — — Forfeited (10,000 ) $ 0.08 Outstanding at June 30, 2016 2,510,000 $ 0.08 Exercisable at June 30, 2016 2,510,000 $ 0.08 The Company has agreements with certain employees that provide for five years of annual grants of options, on each employment anniversary date, to purchase shares of the Company’s common stock. The option price is determined based on the market price on the date of grant, the options vest one year from the date of grant, and the options expire five years after vesting. The Company granted 2,500,000 options under this arrangement 2013. There were no options granted in 2016 and 2015 under this agreement. The Company recognized no stock-based compensation expense related to stock options during the years ended June 30, 2016 and 2015, respectively. As of June 30, 2016, there was no remaining unrecognized compensation costs related to stock options. The intrinsic value of both outstanding and exercisable stock options was approximately $100,000 at June 30, 2016. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the weighted-average assumptions noted in the following table. The risk-free rate for periods within the contractual life of the options is based on the U. S. Treasury yield in effect at the time of the grant. Volatility was based on the historical volatility of the Company’s common stock. The Company estimated the expected life of options based on historical experience and other averaging methods. Additional information regarding options outstanding as of June 30, 2016 is as follows: Options Outstanding at June 30, 2016 Options Exercisable at June 30, 2016 Range of Exercise Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Exercise Price $0.13 - $1.45 2,510,000 3.64 $ 0.08 2,510,000 $ 0.08 2,510,000 2,510,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 - INCOME TAXES For the years ended June 30, 2016 and 2015, our net losses were $1,298,088 and $907,474, respectively, and no provision for income taxes was recorded. We made no provision for income taxes due to our utilization of federal net operating loss carry forwards to offset both regular taxable income and alternative minimum taxable income. Reconciliation between the expected federal income tax rate and the actual tax rate is as follows: Year Ended June 30, 2016 2015 Federal statutory tax rate 35 % 35 % State tax, net of federal benefit 6 % 6 % Total tax rate 40 % 40 % Allowance (40 %) (40 %) Effective tax rate -% -% The following is a summary of the deferred tax assets: Year Ended June 30, 2016 2015 Net operating loss carryforwards 4,350,000 $ 4,224,000 Valuation allowance (4,350,000 ) (4,224,000 ) Net deferred tax asset $ — $ — The Company has provided a valuation allowance on the deferred tax assets at June 30, 2016 and 2015 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted. The net change in the valuation allowance for the year ended June 30, 2015 was an increase of $126,000. Veritec has net operating loss carryforwards of approximately $10.9 million for federal purposes available to offset future taxable income that expire in varying amounts through 2034. The ability to utilize the net operating loss carry forwards could be limited by Section 382 of the Internal Revenue Code which limits their use if there is a change in control (generally a greater than 50% change in ownership). The Company is subject to examination by tax authorities for all years for which a loss carry forward is utilized in subsequent periods. The Company follows FASB guidelines that address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. This guidance also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2016 and 2015, the Company did not have a liability for unrecognized tax benefits. The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2016 and 2015, the Company has no accrued interest or penalties related to uncertain tax positions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 11 – COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases approximately 4,200 square feet of office and laboratory space at 2445 Winnetka Avenue North, Golden Valley, Minnesota, which serves as our primary place of business. This lease is with Van Thuy Tran, the Strategic Partnership Agreements On October 25, 2010, the Company entered into a Strategic Services Agreement with a customer. The term of the license is for 5 years commencing on the effective date, which was the date of the first payment, or September 28, 2011. The customer has paid the total fee of $250,000 in two installments. The Company initially classified this fee as deferred revenue to be recognized over the license term of 5 years as the Company has a continuing obligation. As of June 30, 2015, the amount of deferred revenues was $65,347. During the year ended June 30, 2016, the Company recognized revenue of $50,000 relating to this agreement. As of June 30, 2016, the balance remaining to be recognized was $15,347. On November 14, 2012 (effective date), the Company entered into a Strategic Product License Agreement with a customer for a $100,000 license fee. The term of the license is for 5 years commencing on the effective date. The Company has classified the license fee as deferred revenue to be recognized ratably over the license term of 5 years as the Company has a continuing obligation. As of June 30, 2015, the amount of deferred revenue was $52,500. During the year ended June 30, 2016, the Company recognized revenue of $20,000 relating to this agreement. As of June 30, 2016, the balance remaining to be recognized was $32,500. On July 1, 2014 (effective date), the Company entered into a Strategic Product License Agreement with one its customers for a $150,000 license fee. The term of the license is for 5 years commencing on the effective date. The Company has classified the license fee as deferred revenue to be recognized ratably over the license term of 5 years as the Company has a continuing obligation. During the year ended June 30, 2016, the Company recognized revenue of $30,000 relating to this agreement. As of June 30, 2016, the balance remaining to be recognized was $90,000. On August 14, 2014 (effective date), the Company entered into a Pilot Program Agreement with one its customers for a $175,000 fee, which was paid in advance of completion. The Company is responsible for certain deliveries as defined in the agreement. The Company partially completed a portion of its deliverables under the agreement and recognized $86,361 as revenues. The Company had not completed its remaining obligations as of June 30, 2015, and has classified the remaining balance as deferred revenue to be recognized as revenue upon completion of its obligations. As of June 30, 2015, the balance remaining to be recognized was $88,639. During fiscal year 2016, the Company completed its remaining obligations under the agreement and recorded revenue of $88,639 leaving no remaining deferred revenue balance as of June 30, 2016. On April 4, 2015 (effective date), the Company entered into a Continuing Services Agreement with one its customers for a $142,500 fee, which was paid in advance of completion. The Company is responsible for certain deliveries as defined in the agreement. As the Company had not completed its obligations as of June 30, 2015, the Company has classified the fees as deferred revenue to be recognized upon completion of its obligations. During fiscal year 2016, the Company completed its remaining obligations under the agreement and recorded revenue of $142,500 leaving no remaining deferred revenue balance as of June 30, 2016. Incentive Compensation Bonus Plan On December 5, 2008, the Company adopted an incentive compensation bonus plan to provide payments to key employees in the aggregated amount of 10% of pre-tax earnings in excess of $3,000,000 after the end of each fiscal year to be distributed annually to employees. As of June 30, 2016, the Company had not achieved an annual pre-tax earnings in excess of $3,000,000. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 – SUBSEQUENT EVENTS Settlement Agreement On September 21, 2016, the Company entered into a settlement agreement with an individual who is convertible note holder. The individual loaned the Company $250,000 in prior years and was also issued 500,000 shares of common stock for services. The Company alleged that the individual used the Company's intellectual property without approval. Under the terms of the settlement agreement, the individual agreed to relinquish the convertible note payable, including unpaid interest, which had a current estimated outstanding balance of $365,000, and return 500,000 shares of common stock issued to him. In turn, the Company agreed to release and discharge the individual against all claims arising on or prior to the date of the settlement agreement. The Company currently anticipates that it will record this settlement as a gain in its upcoming Consolidated Statement of Operations for the three months ended September 30, 2016. Non-Binding Letter of Intent On September 22, 2016, the Company announced that it has entered into a Non-Binding Letter of Intent (“LOI”) to acquire all of Flathead Bancorporation, Inc.’s (“FB”) issued and outstanding shares. FB is the majority owner of First Citizens Bank of Polson, Montana (“Citizens Bank”). Under the proposed terms of the LOI, Veritec would acquire 9.9 percent of FB’s issued and outstanding shares for $320,000 at the closing date. Veritec plans to purchase the remaining 90.1 percent of FB’s outstanding common shares within three years of the closing date for $2,880,000. The total purchase price for FB’s outstanding common shares (including the 9.9 percent discussed above) would be $3,200,000 and is subject to, among other things, Veritec being able to obtain funding and obtain regulatory approval from applicable banking authorities. The Company currently plans to raise funds from investors by issuing its common shares, debt, or both. There is no assurance that the Company can be successful in raising such funds, or if the Company is successful in raising such funds from sales of common shares, the terms of these sales may cause significant dilution to existing holders of common stock. Pursuant to the LOI, Veritec would also provide loans to FB to be used for capital purposes of $280,000 at the closing date, $500,000 on or before January 31, 2017 and $400,000 on or before April 1, 2017, for a total of $1,180,000. The loans would mature in five years and require annual interest only payments at interest rates to be determined. |
Operations and Summary of Sig20
Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Operations And Summary Of Significicant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long lived assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. |
Accounts Receivable | Accounts Receivable The Company sells to domestic and foreign companies and grants uncollateralized credit to customers, but requires deposits on unique orders. Management periodically reviews its accounts receivable and provides an allowance for doubtful accounts after analyzing the age of the receivable, payment history and prior experience with the customer. The estimated loss that management believes is probable is included in the allowance for doubtful accounts. While the ultimate loss may differ, management believes that any additional loss will not have a material impact on the Company's financial position. Due to uncertainties in the settlement process, however, it is at least reasonably possible that management's estimate will change during the near term. |
Inventories | Inventories Inventories, consisting of purchased components for resale, are stated at the lower of cost or market, applying the first-in, first-out (FIFO) method. Inventory is net of reserves of $38,361 and $23,900 at June 30, 2016 and 2015, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of 3 to 7 years. When assets are retired or otherwise disposed, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. Maintenance and repairs are expensed as incurred; significant renewals and betterments are capitalized. |
Concentrations | Concentrations The CompanyÂ’s cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. The Company may be exposed to risk for the amounts of funds held in one bank in excess of the insurance limit. In assessing the risk, the CompanyÂ’s policy is to maintain cash balances with high quality financial institutions. The Company did not have cash balances in excess of the guarantee during the year ended June 30, 2016. |
Major Customers | Major Customers The Company has two customers in fiscal 2016 that represented an aggregate of 47% (37% and 10%) of our revenue, and two customers in 2015 that represented 23% (12% and 11%) of our revenue. As of June 30, 2016, the Company had approximately $3,520 (38%), $1,500 (16%), $1,200 (13%), $1,000 (11%) and $1,000 (11%) of accounts receivable due from certain customers. As of June 30, 2015, the Company had approximately $6,025 (16%), $5,650 (15%), and $4,575 (12%) of accounts receivable due from certain customers. |
Foreign Revenues | Foreign Revenues Foreign revenues accounted for 19% of the CompanyÂ’s total revenues in fiscal 2016 and 41% in fiscal 2015. (6% Korea, 8% Taiwan, and 5% others in fiscal 2016 and 10% Korea, 21% Taiwan, and 10% others in fiscal 2015). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair Value Measurements are adopted by the Company based on the authoritative guidance provided by the Financial Accounting Standards Board, with the exception of the application of the statement to non-recurring, non-financial assets and liabilities as permitted. The adoption based on the authoritative guidance provided by the Financial Accounting Standards Board did not have a material impact on the Company's fair value measurements. Based on the authoritative guidance provided by the Financial Accounting Standards Board defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FASB authoritative guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 - Unobservable inputs based on the Company's assumptions. The Company had no such assets or liabilities recorded to be valued on the basis above at June 30, 2016 or 2015. For certain financial instruments, the carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, and current liabilities, including notes payable and convertible notes, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Revenue Recognition | Revenue Recognition Revenues from licenses and identification cards are recognized when the product is shipped, the Company no longer has any service or other continuing obligations, and collection is reasonably assured. The process typically begins with a customer purchase order detailing its specifications so the Company can import its software into the customer's hardware. Once importation is completed, if the customer only wishes to purchase a license, the Company typically transmits the software to the customer via the Internet. Revenue is recognized at that point. If the customer requests both license and hardware, once the software is imported into the hardware and the process is complete, the product is shipped, and revenue is recognized at time of shipment. Once the software and/or other products are either shipped or transmitted, the customers do not have a right of refusal or return. Under some conditions, the customers remit payment prior to the Company having completed importation of the software. In these instances, the Company delays revenue recognition and reflects the prepayments as customer deposits. The Company, as a processor and a distributor, recognizes revenue from transaction fees charged cardholders for the use of its issued mobile debit cards. The fees are recognized on a monthly basis after all cardholder transactions have been summarized and reconciled with third party processors. |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs For the years ended June 30, 2016 and 2015, shipping and handling fees billed to customers of $216 and $997, respectively were included in revenues and shipping and handling costs of $3,089 and $997, respectively were included in cost of sales. |
Research and Development | Research and Development Research and development costs were expensed as incurred. |
Advertising | Advertising Advertising costs are expensed as incurred and are included in sales and marketing expense in the amount of $1,100 and $2,100 for the years ended June 30, 2016 and 2015, respectively. |
Loss per Common Share | Loss per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the years ended June 30, 2016 and 2015, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. As of June 30, 2016 and 2015, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. June 30, 2016 2015 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 11,815,803 19,563,168 Options 2,510,000 2,520,000 Total 14,335,803 22,093,168 |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for stock option and stock warrant grants to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) where the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the CompanyÂ’s common stock option and warrant grants are estimated using a Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods. |
Intangible Assets | Intangible Assets The Company accounts for intangible assets in accordance with the authoritative guidance issued by the FASB. Intangibles are valued at their fair market value and are amortized taking into account the character of the acquired intangible asset and the expected period of benefit. The Company evaluates intangible assets for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated undiscounted future cash flows. Recoverability of intangible assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. At June 30, 2016, the intangibles assets of $80,208 relates to our acquisition of Tangible Payments LLC during fiscal year 2015 (see Note 5). Management believes there were no indications of impairment based on managementÂ’s assessment of these assets at June 30, 2016. Factors we consider important that could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of the use of our assets or the strategy for our overall business, and significant negative industry or economic trends. If current economic conditions worsen causing decreased revenues and increased costs, we may have to record an impairment to our intangible assets. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Recent Accounting Pronouncements | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases In March 2016, the FASB issued the ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an EntityÂ’s Ability to Continue as a Going Concern Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Operations and Summary of Sig21
Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Operations And Summary Of Significicant Accounting Policies | |
Summary of securities excluded from EPS calculation | June 30, 2016 2015 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 11,815,803 19,563,168 Options 2,510,000 2,520,000 Total 14,335,803 22,093,168 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | June 30, 2016 2015 Furniture and equipment $ 140,316 $ 140,316 Software 73,000 73,000 Vehicles 23,301 23,301 236,617 236,617 Less accumulated depreciation (236,446 ) (236,034 ) Total $ 171 $ 583 |
Intangible Assets and Conting23
Intangible Assets and Contingent Earnout Liability (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Amortization expense | Years Ending June 30, Amount 2017 $ 64,167 2018 16,041 Total $ 80,208 |
Unaudited results of operations | Three months ended March 31, 2015 Nine months ended March 31, 2015 (Unaudited) (Unaudited) Revenues 172,185 787,064 Net loss (231,841 ) (596,285 ) |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | June 30, 2016 June 30, 2015 Convertible notes payable, including $1,264,563 and $2,326,609 due to related parties at June 30, 2016 and June 30, 2015, respectively. At June 30, 2016, $1,460,218 of the convertible notes, including $467,695 due to related parties, are in default. The notes are unsecured, interest at 5% to 10%, and due on various dates through 2011 or on demand. The principal and accrued interest are convertible at conversion prices ranging from $0.08 per share to $0.40 per share. $ 1,460,218 $ 2,512,267 Notes payable, including $219,648 and $714,488 due to related parties at June 30, 2016 and June 30, 2015, respectively. The notes are both secured by the CompanyÂ’s intellectual property, and unsecured, interest at 0% to 10%, and due on various dates through 2012 or on demand. At June 30, 2016, $352,729 of notes payable due to unrelated parties are in default. 572,377 1,049,740 Total $ 2,032,595 $ 3,562,707 |
Notes payable- Balance Sheet presentation | June 30, 2016 June 30, 2015 Notes payable $ 548,384 $ 521,610 Notes payable, related party 1,484,211 3,041,097 Total $ 2,032,595 $ 3,562,707 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options | Number of Weighted - Average Shares Exercise Price Outstanding at June 30, 2014 3,056,500 $ 0.08 Granted — — Forfeited (536,500 ) $ 0.08 Outstanding at June 30, 2015 2,520,000 $ 0.08 Granted — — Forfeited (10,000 ) $ 0.08 Outstanding at June 30, 2016 2,510,000 $ 0.08 Exercisable at June 30, 2016 2,510,000 $ 0.08 |
Additional information regarding outstanding options | Options Outstanding at June 30, 2016 Options Exercisable at June 30, 2016 Range of Exercise Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Exercise Price $0.13 - $1.45 2,510,000 3.64 $ 0.08 2,510,000 $ 0.08 2,510,000 2,510,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Reconciliation between the federal and actual tax rate | Year Ended June 30, 2016 2015 Federal statutory tax rate 35 % 35 % State tax, net of federal benefit 6 % 6 % Total tax rate 40 % 40 % Allowance (40 %) (40 %) Effective tax rate -% -% |
Deferred tax assets | Year Ended June 30, 2016 2015 Net operating loss carryforwards 4,350,000 $ 4,224,000 Valuation allowance (4,350,000 ) (4,224,000 ) Net deferred tax asset $ — $ — |
Operations and Summary of Sig27
Operations and Summary of Significant Accounting Policies - Summary of securities excluded from EPS calculation (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Operations And Summary Of Significicant Accounting Policies | ||
Series H Preferred Stock | 10,000 | 10,000 |
Convertible Notes Payable | $ 11,815,803 | $ 19,563,168 |
Options | 2,510,000 | 2,520,000 |
Total | 14,335,803 | 22,093,168 |
Operations and Summary of Sig28
Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jan. 17, 2016 | |
Inventory | $ 38,361 | $ 23,900 | |
Foreign revenues | 19.00% | 41.00% | |
Advertising | $ 1,100 | $ 2,100 | |
Intangible assets | $ 80,208 | ||
Korea | |||
Foreign revenues | 6.00% | 10.00% | |
Taiwan | |||
Foreign revenues | 8.00% | 21.00% | |
Other | |||
Foreign revenues | 5.00% | 10.00% | |
38% | |||
Accounts receivable | $ 3,520 | ||
16% | |||
Accounts receivable | 1,500 | $ 6,025 | |
13% | |||
Accounts receivable | 1,200 | ||
11% | |||
Accounts receivable | $ 1,000 | ||
15% | |||
Accounts receivable | 5,650 | ||
12% | |||
Accounts receivable | $ 4,575 | ||
Customer 1 | |||
Sales percentage from major customers | 37.00% | 12.00% | |
Customer 2 | |||
Sales percentage from major customers | 10.00% | 11.00% | |
Veritec, Inc. | |||
Joint venture ownership percentage | 30.00% | ||
Vietnam Alliance Capital | |||
Joint venture ownership percentage | 70.00% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 21, 2016 | Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net income (loss) | $ (1,298,088) | $ (907,474) | ||
Working capital deficit | 3,158,551 | |||
Stockholders' deficiency | (3,233,172) | (5,106,433) | $ (4,582,088) | |
Note payable obligations - in default | 2,032,595 | $ 325,000 | ||
Payroll taxes and accrued interest and penalties | $ 238,718 | $ 453,277 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Accounting Policies [Abstract] | ||
Restricted Cash | $ 0 | $ 63,029 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Property and Equipment | $ 171 | $ 583 |
Less accumulated depreciation | (236,446) | (236,034) |
Furniture and equipment | ||
Property and Equipment | 140,316 | 140,316 |
Software | ||
Property and Equipment | 73,000 | 73,000 |
Vehicles | ||
Property and Equipment | $ 23,301 | $ 23,301 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 412 | $ 411 |
Intangible Assets and Conting33
Intangible Assets and Contingent Earnout Liability - Amortization expense (Details) | 12 Months Ended |
Jun. 30, 2016USD ($) | |
Business Combinations [Abstract] | |
2,017 | $ 64,167 |
2,018 | 16,041 |
Amortization Expense | $ 80,208 |
Intangible Assets and Conting34
Intangible Assets and Contingent Earnout Liability - Unaudited results of operations (Details) | 12 Months Ended |
Jun. 30, 2015USD ($) | |
Business Combinations [Abstract] | |
Revenues | $ 1,007,932 |
Net income (loss) | $ (919,775) |
Intangible Assets and Conting35
Intangible Assets and Contingent Earnout Liability (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | |
Business Combinations [Abstract] | |||
Shares issued | 250,000 | ||
Value of shares issued | $ 37,500 | ||
Earnout Payment | $ 155,000 | ||
Aggregate purchase price | 192,500 | ||
Equity investments received | 1,300,000 | ||
Contract commitments | $ 192,500 | ||
Unamortized balance of contract commitments | 144,375 | $ 80,208 | |
Amortization expense | $ 16,042 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($)$ / sharesshares | Mar. 30, 2016USD ($) | Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2015USD ($)shares | Sep. 28, 2015USD ($) | |
Rental payments | $ 50,400 | $ 50,400 | |||
Accounts payable, related party | 96,110 | 96,110 | |||
Other revenue, related party | $ 69,135 | ||||
Unsecured related party note, interest | 10.00% | ||||
Unsecured related party note | $ 260,711 | ||||
Convertible notes | 11,815,803 | $ 19,563,168 | |||
Interest expense | $ 135,045 | ||||
Common stock issued upon conversion | shares | 39,538,007 | 16,530,088 | |||
Management Agreement | |||||
Managament fee, percent of revenue | 0.20 | ||||
Other revenue, related party | $ 69,135 | ||||
The Matthews Group | |||||
Unsecured related party note, interest | 10.00% | ||||
Unsecured related party note | $ 200,000 | ||||
Convertible notes | $ 1,775,434 | $ 549,389 | |||
Conversion Price | $ / shares | $ 0.08 | $ .08 | |||
Common stock issued upon conversion | shares | 22,192,919 | ||||
Note value converted at less than stated conversion price | $ 702,797 | ||||
Inducement expense | 452,770 | ||||
Proceeds from sale of Barcode Technology assets | 670,000 | ||||
Matthews Group #2 | |||||
Loss on extinguishment | $ 136,000 | ||||
Minimum | |||||
Conversion Price | $ / shares | $ .10 | ||||
Max | |||||
Conversion Price | $ / shares | $ .33 | ||||
Van Tran | |||||
Convertible notes | $ 25,000 | ||||
Conversion Price | $ / shares | $ .08 | ||||
Larry Johanns | |||||
Ownership of TMG | 50.00% | ||||
Van Tran | |||||
Ownership of TMG | 50.00% |
Notes Payable - Notes Payable (
Notes Payable - Notes Payable (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Debt Disclosure [Abstract] | ||
Convertible notes payable | $ 1,460,218 | $ 2,512,267 |
Notes payable | 572,377 | 1,049,740 |
Total | $ 2,032,595 | $ 3,562,707 |
Notes Payable - Notes Payable38
Notes Payable - Notes Payable (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Convertible notes issued | $ 574,389 | |
Payments to convertible notes | 2,500 | |
Accrued interest added to principal | 101,745 | $ 34,355 |
Convertible notes and accrued interest | 574,389 | 2,512,267 |
Convertible note due to related parties | 1,264,563 | 2,326,609 |
Convertible note in default | 1,460,218 | |
Convertible note due to related parties in default | 467,695 | |
Notes payable and accrued interest | 1,049,740 | |
Notes payable due to related party | 219,648 | 714,488 |
Notes payable in default | 352,729 | |
Reduction to related party notes payable | $ 41,063 | |
Convertible Notes | Minimum | ||
Interest rate | 5.00% | |
Conversion price | $ 0.08 | |
Convertible Notes | Max | ||
Interest rate | 10.00% | |
Conversion price | $ 0.40 | |
Notes Payable | Minimum | ||
Interest rate | 0.00% | |
Notes Payable | Max | ||
Interest rate | 10.00% | |
Matthews Group | ||
Notes payable and accrued interest | $ 248,396 |
Notes Payable - Notes payable-
Notes Payable - Notes payable- Balance Sheet presentation (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Debt Disclosure [Abstract] | ||
Notes payable | $ 548,384 | $ 521,610 |
Notes payable, related party | 1,484,211 | 3,041,097 |
Total | $ 2,032,595 | $ 3,562,707 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Debt Disclosure [Abstract] | ||
Recorded interest on notes | $ 271,145 | $ 199,489 |
Beneficial conversion feature | $ 135,045 |
Stockholders' Deficiency (Detai
Stockholders' Deficiency (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2012 | |
Convertible preferred stock, par value | $ 1 | $ 1 | ||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Convertible preferred stock, shares issued | 1,000 | 1,000 | ||
Convertible preferred stock, shares outstanding | 1,000 | 1,000 | ||
Series H convertible preferred stock to common stock | 10 | |||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||
Common stock, shares issued | 39,538,007 | 16,530,088 | ||
Common stock, shares outstanding | 39,538,007 | 16,530,088 | ||
Shares issued for services, shares | 135,000 | |||
Shares issued for services, fair value | $ 2,100 | $ 19,600 | ||
Obligation to issue stock, Shares | 20,000 | |||
Stock issued, aggregate fair value | $ 2,100 | |||
Shares authorized but unissued | 70,000 | |||
Shares authorized but unissued, value | $ 9,500 | |||
Consulting Agreement | ||||
Obligation to issue stock, Shares | 55,000 | |||
Stock issued, aggregate fair value | $ 8,150 | |||
Shares authorized but unissued | 50,000 | |||
Shares authorized but unissued, value | $ 7,400 | |||
Advisory Agreement | ||||
Stock issued | 20,000 | |||
Obligation to issue stock, Shares | 35,000 | |||
Stock issued, aggregate fair value | $ 4,050 | |||
Shares authorized but unissued | 15,000 | |||
Shares authorized but unissued, value | $ 1,900 | |||
Company's Directors | ||||
Shares issued for services, shares | 75,000 | |||
Shares issued for services, fair value | $ 3,000 | |||
Stock issued | 750,000 | |||
Stock issued, aggregate fair value | $ 28,154 | |||
Series H Convertible | ||||
Convertible preferred stock, shares authorized | 276,000 | 276,000 | ||
Convertible preferred stock, shares issued | 1,000 | 1,000 | ||
Convertible preferred stock, shares outstanding | 1,000 | 1,000 |
Stock Options - Summary of Stoc
Stock Options - Summary of Stock Options (Details) - $ / shares | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Beginning number of shares; outstanding | 2,520,000 | 3,056,500 | |
Beginning weighted-average exercise price; outstanding | $ 0.08 | $ 0.08 | |
Options Granted | 2,510,000 | ||
Options granted, weighted average exercise price | $ 0 | ||
Options Forfeited | (10,000) | (536,500) | |
Options Forfeited, weighted average exercise price | $ 0.08 | $ 0.08 | |
Ending number of shares; outstanding | 2,510,000 | 2,520,000 | |
Ending weighted-average exercise price; outstanding | $ 0.08 | $ 0.08 | |
Number of Shares; exercisable | 2,510,000 | ||
Weighted-average exercise price; exercisable | $ 0.08 |
Stock Options - Additional info
Stock Options - Additional information regarding outstanding options (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | |
Options outstanding, shares | 2,510,000 | |
Weighted average remaining contractual life | 3 years 7 months | |
Weighted average exercise price | $ 0.08 | |
Options excercisable | 2,510,000 | |
Options exercisable, weighted average exercise price | $ 0.08 | |
Minimum | ||
Weighted average exercise price | $ 0.13 | |
Max | ||
Weighted average exercise price | $ 1.45 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options granted | 2,510,000 | ||
Weighted average remaining contractual life | 3 years 7 months | ||
Stock options outstanding | $ 100,000 |
Income Taxes - Reconciliation b
Income Taxes - Reconciliation between the federal and actual tax rate (Details) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal Statutory tax rate | 35.00% | 35.00% |
State tax, net of federal benefit | 6.00% | 6.00% |
Change in valuation | 40.00% | 40.00% |
Allowance | (40.00%) | (40.00%) |
Effective tax rate |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 4,350,000 | $ 4,224,000 |
Valuation allowance | (4,350,000) | (4,224,000) |
Net deferred tax asset |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Net Loss | $ (1,298,088) | $ (907,474) |
Net change in the valuation allowance | $ 126,000 | |
Net operating loss carryforwards | $ 10,900,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | ||
Sep. 28, 2013 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 05, 2010 | |
Monthly lease payments | $ 4,200 | $ 4,200 | ||
Future annual minimum lease payments | 50,400 | |||
Deferred revenue | 138,760 | 492,603 | ||
Received from major customer | 552,600 | |||
Incentive compensation plan percentage | 10.00% | |||
Incentive Compensation Bonus, Minimum Threshold | $ 3,000,000 | |||
NIS | ||||
Term of license | 5 years | |||
Total fee | $ 250,000 | |||
Deferred revenue | 65,347 | |||
Revenue | 50,000 | |||
Remaining revenue recognized | $ 15,347 | |||
AAA | ||||
Term of license | 5 years | |||
Total fee | $ 100,000 | |||
Deferred revenue | 52,500 | |||
Revenue | 20,000 | |||
Remaining revenue recognized | $ 32,500 | |||
Strategic Product License Agreement | ||||
Term of license | 5 years | |||
Total fee | $ 150,000 | |||
Revenue | 30,000 | |||
Remaining revenue recognized | 90,000 | |||
Pilot Program Agreement | ||||
Total fee | 175,000 | |||
Deferred revenue | 88,639 | |||
Revenue | 88,639 | |||
Remaining revenue recognized | $ 0 | |||
Continuing Services Agreement | ||||
Total fee | 142,500 | |||
Revenue | 142,500 | |||
Remaining revenue recognized | $ 0 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 01, 2017 | Jan. 31, 2017 | Sep. 22, 2016 | Sep. 21, 2016 | Jun. 30, 2016 |
Convertible notes payable, relinquished | $ 325,000 | $ 2,032,595 | |||
Loans for capital purposes | $ 400,000 | $ 500,000 | 280,000 | ||
Total Loan to FB | $ 1,180,000 | ||||
Interest rate, secured by common stock | 38.00% | ||||
Acquired | |||||
Common shares, percentage | 9.90% | ||||
Common shares outstanding | $ 320,000 | ||||
Remaining | |||||
Common shares, percentage | 90.10% | ||||
Common shares outstanding | $ 2,880,000 | ||||
Total | |||||
Common shares, percentage | 100.00% | ||||
Common shares outstanding | $ 3,200,000 |