v3.20.4
Fair Value Measurements
 3 Months Ended 12 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Fair Value Disclosures [Abstract]    
Fair Value Measurements

Note 7– Fair Value Measurements

 

The following table presents information about the assets and liabilities that are measured at fair value on a recurring basis at September 30, 2020 and June 30, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.


At September 30, 2020

     
  

Total

Level 1

Level 2

Level 3

Assets

     
 

Customer List

$704,803

-

-

$704,803

 

Vendor Relationship

383,203

-

-

383,203

 

Development Costs

287,797

-

-

287,797

      
  

$1,355,803

-

-

$1,355,803

Liabilities

     
 

Original Issue discount, convertible debt

$1,276,312

-

-

$1,276,312

      

At June 30, 2020

     
  

Total

Level 1

Level 2

Level 3

Assets

     
 

Customer list

$748,847

-

-

$748,847

 

Vendor relationship

407,153

-

-

407,153

 

Development costs

280,315

-

-

280,315

      
  

$1,436,315

-

-

$1,436,315

Liabilities

     
 

Original issue discount, convertible debt

$213,300

-

-

$213,300

 

Derivative liability warrants

33,312

-

-

33,312

Total

 

$246,612

-

-

$246,612

 

As of September 30, 2020 and June 30, 2020, the only asset required to be measured on a nonrecurring basis was goodwill and the fair value of the asset amounted to $834,220 using level 3 valuation techniques.

 

The Company measures the fair market value of the Level 3 liability components using the Monte Carlo model and projected discounted cash flows, as appropriate. These models were prepared by an independent third party and consider management's best estimate of the conversion price of the stock, an estimate of the expected time to conversion, an estimate of the stock's volatility, and the risk-free rate of return expected for an instrument with a term equal to the duration of the convertible note.

 

The derivative liability was valued using the Monte Carlo pricing model with the following inputs:

 

At September 30, 2020

  
 

Risk-free interest rate:

 

0.08%

 

Expected dividend yield:

 

0.00%

 

Expected stock price volatility:

 

325.00%

 

Expected option life in years:

 

0.48 to 1.44 years

At June 30, 2020

  
 

Risk-free interest rate:

 

0.09%

 

Expected dividend yield:

 

0.00%

 

Expected stock price volatility:

 

300.00%

 

Expected option life in years:

 

.085 to 1.69 years

 

The following table sets forth a reconciliation of changes in the fair value of the Company's convertible debt components classified as Level 3 in the fair value hierarchy at September 30, 2020 and June 30, 2020:

 

Balance at June 30, 2020

 

 $            246,612

Additional convertible securities at inception

 

       2,000

Realized

 

(5,300)

Unrealized

 

1,033,000

Ending balance at September 30, 2020

 

$          1,276,312

   

Balance at June 30, 2019

 

 $          1,025,944

Additional convertible securities at inception

 

 2,027,000

Settlement of conversion features and warrants

 

     (152,374)

Realized

 

        (240,903)

Unrealized

 

   (2,413,055)

Ending balance at June 30, 2020

 

 $           246,612

   

Note 5 – Fair Value Measurements

 

The following table presents information about the assets and liabilities that are measured at fair value on a recurring basis at June 30, 2020 and 2019 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

 

At June 30, 2020

    

Assets:

Total

Level 1

Level 2

Level 3

Goodwill

$   834,220

$ -

$ -

$   834,220

Customer list

748,853

-

-

748,853

Vendor relationship

407,153

-

-

407,153

Development costs

280,315

-

-

280,315

 

$1,990,226

$ -

$ -

$1,990,226

Liabilities:

Original issue discount, convertible debt

$   213,300

$ -

$ -

$   213,300

Derivative liability, warrants

33,312

-

-

33,312

Total:

$   246,612

$ -

$ -

$   246,612


At June 30, 2019

    

Liabilities:

Total

Level 1

Level 2

Level 3

Original issue discount, convertible debt

$979,569

$ -

$ -

$ 979,569

Derivative liability, warrants

46,375

-

-

46,375

Total:

$   1,025,944

$-

$-

$ 1,025,944

As of June 30, 2020, the only asset required to be measured on a nonrecurring basis was goodwill and the fair value of the asset amounted to $834,220 using level 3 valuation techniques.

 

The Company measures the fair market value of the Level 3 liability components using the Monte Carlo model and projected discounted cash flows, as appropriate. These models were initially prepared by an independent third party and consider management’s best estimate of the conversion price of the stock, an estimate of the expected time to conversion, an estimate of the stock’s volatility, and the risk-free rate of return expected for an instrument with a term equal to the duration of the convertible note.

 

The significant unobservable valuation inputs for the convertible notes include an expected rate of return of 0%, a risk-free rate of 0.09% and volatility of 300%.

 

The derivative liability was valued using the Monte Carlo pricing model with the following inputs:

At June 30, 2020

 

Risk-free interest rate:

0.09%

Expected dividend yield:

0.00%

Expected stock price volatility:

300.00%

Expected option life in years:

.089 to 1.69 years

 

At June 30, 2019

Risk-free interest rate:


1.72 -2.83%

Expected dividend yield:

0.00%

Expected stock price volatility:

180.00%

Expected option life in years:

2.80 to 3.00 years

 

The following table sets forth a reconciliation of changes in the fair value of the Company’s convertible debt components classified as Level 3 in the fair value hierarchy at June 30, 2020:

 

Balance at June 30, 2019

$    1,025,944

Convertible securities at inception

2,027,000

Settlement of conversion features and warrants

(152,374)

Realized

(240,903)

Unrealized

(2,413,055)

Balance at June 30, 2020

 $     246,612


Balance at June 30, 2018

$           -

Convertible securities at inception

1,238,359

Settlement of conversion features and warrants

(301,613)

Realized

(83,487)

Unrealized

172,685

Balance at June 30, 2019

 $ 1,025,944