NEVADA
|
87-0535207
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
1501 INDUSTRIAL ROAD, BOULDER CITY, NEVADA
|
89005
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
Page
|
PART I
|
||
Item 1.
|
Financial Statements
|
3
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation
|
11
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
19
|
Item 4.
|
19
|
|
PART II
|
||
Item 1.
|
Legal Proceedings
|
20
|
Item 1A.
|
Risk Factors
|
20
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
20
|
Item 3.
|
Defaults Upon Senior Securities
|
20
|
Item 4.
|
Mine Safety Disclosures
|
20
|
Item 5.
|
Other Information
|
20
|
Item 6.
|
Exhibits
|
20
|
|
|
|
SIGNATURES
|
21
|
|
December 31,
2017
|
June 30,
2017
|
||||||
|
(Unaudited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$
|
|
$
|
|
||||
Accounts receivable
|
|
|
||||||
Inventory - net
|
|
|
||||||
Prepaid and other current assets
|
|
|
||||||
Total Current Assets
|
|
|
||||||
|
||||||||
PROPERTY AND EQUIPMENT
|
||||||||
Leasehold improvements
|
|
|
||||||
Molds and models
|
|
|
||||||
Equipment
|
|
|
||||||
Furniture and fixtures
|
|
|
||||||
Construction in progress
|
|
|
||||||
Software
|
|
|
||||||
Less - accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Total Property and Equipment
|
|
|
||||||
|
||||||||
OTHER ASSETS
|
||||||||
Patents and trademarks - net
|
|
|
||||||
Non-current inventory
|
|
|
||||||
Deposits
|
|
|
||||||
Total Other Assets
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable and accrued expenses
|
$
|
|
$
|
|
||||
Current portion of long-term debt
|
|
|
||||||
Current portion of lease liability
|
|
|
||||||
Deferred revenue
|
|
|
||||||
Total Current Liabilities
|
|
|
||||||
|
||||||||
Long-term debt
|
|
|
||||||
Long-term lease liability
|
|
|
||||||
Total Long-Term Liabilities
|
|
|
||||||
TOTAL LIABILITIES
|
|
|
||||||
|
||||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Preferred stock:
|
|
|
||||||
Common Stock:
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Stock payable
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total Stockholders’ Equity
|
|
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
|
$
|
|
|
For the Three Months Ended
December 31,
|
For the Six Months Ended
December 31,
|
||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
|
||||||||||||||||
NET SALES
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
||||||||||||||||
COST OF GOODS SOLD
|
|
|
|
|
||||||||||||
|
||||||||||||||||
GROSS PROFIT
|
|
|
|
|
||||||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Research and development
|
|
|
|
|
||||||||||||
Sales and marketing
|
|
|
|
|
||||||||||||
General and administrative
|
|
|
|
|
||||||||||||
|
||||||||||||||||
Total Expenses
|
|
|
|
|
||||||||||||
|
||||||||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
||||||||||||||||
OTHER (EXPENSE)/INCOME
|
||||||||||||||||
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Interest income
|
|
|
|
|
||||||||||||
Loss on asset abandonment
|
|
|
(
|
)
|
|
|||||||||||
Total Other (Expense)/Income
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
||||||||||||||||
NET (LOSS) INCOME
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
||||||||||||||||
Preferred Stock Dividend
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
||||||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
||||||||||||||||
BASIC AND DILUTED LOSS PER SHARE
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
||||||||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
|
|
|
|
|
|
For the Six Months Ended
December 31,
|
|||||||
|
2017
|
2016
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
|
||||||||
Depreciation and amortization expense
|
|
|
||||||
Stock based compensation
|
|
|
||||||
Loss on asset abandonment
|
|
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(
|
)
|
|
|||||
Inventory and inventory reserve
|
|
|
||||||
Prepaid and other current assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable and accrued expenses
|
(
|
)
|
(
|
)
|
||||
Net Cash Provided (Used) by Operating Activities
|
(
|
)
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Net Cash Used by Investing Activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Payments on lease liability
|
(
|
)
|
(
|
)
|
||||
Payments on notes payable
|
(
|
)
|
(
|
)
|
||||
Net Cash (Used) by Financing Activities
|
(
|
)
|
(
|
)
|
||||
NET INCREASE (DECREASE) IN CASH
|
(
|
)
|
|
|||||
CASH AT BEGINNING OF PERIOD
|
|
|
||||||
CASH AT END OF PERIOD
|
$
|
|
$
|
|
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
|
||||||||
|
||||||||
Interest paid
|
$
|
|
$
|
|
||||
Income taxes paid
|
$
|
|
$
|
|
||||
|
||||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
||||||||
|
||||||||
Write off of previously reserved forklift tires
|
$
|
|
$
|
|
||||
Purchase of fixed assets through debt
|
$
|
|
$
|
|
||||
Accrued preferred stock dividends
|
$
|
|
$
|
|
||||
Issuance of stock for stock payable
|
$
|
|
$
|
|
||||
Write off fully depreciated fixed assets no longer in use
|
$
|
|
$
|
|
|
December 31, 2017
|
June 30, 2017
|
||||||
|
(Unaudited)
|
|||||||
Raw Materials
|
$
|
|
$
|
|
||||
Finished Goods
|
|
|
||||||
Inventory reserve
|
(
|
)
|
(
|
)
|
||||
Inventory - net
|
$
|
|
|
|
Payments due by period
|
|||||||||||||||||||
|
Total
|
Less than
1 year
|
1 to 3 years
|
3 to 5 years
|
After
5 years
|
|||||||||||||||
|
||||||||||||||||||||
Bank debt (both US Bank facilities above)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
||||||||||||||||||||
Total cash obligations
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
2018
|
$
|
|
||
2019
|
|
|||
2020
|
|
|||
Total minimum lease payments
|
|
|||
Less: executory costs
|
|
|||
Net minimum lease payments
|
|
|||
Less: amount representing interest
|
(
|
)
|
||
Present value of net minimum payments
|
$
|
|
|
December 31, 2017
|
June 30, 2017
|
||||||||||||||||||||||
|
Weight Average
|
Intrinsic
|
Weight Average
|
Intrinsic
|
||||||||||||||||||||
|
Shares
|
Exercise Price
|
Value
|
Shares
|
Exercise Price
|
Value
|
||||||||||||||||||
Outstanding beginning of period
|
|
$
|
|
|
$
|
|
||||||||||||||||||
Granted
|
|
$
|
|
|
$
|
|
||||||||||||||||||
Expired/Cancelled
|
(
|
)
|
$
|
(
|
)
|
|
$
|
|
||||||||||||||||
Exercised
|
|
$
|
|
|
$
|
|
||||||||||||||||||
Outstanding end of period
|
|
$
|
|
$ |
|
|
$
|
|
$
|
|
||||||||||||||
Exercisable
|
|
$
|
|
$ |
|
|
$
|
|
$
|
|
Outstanding
|
Exercisable
|
|||||||||||||||||||||
Range of
Exercise Prices
|
Number Outstanding
at
December 31, 2017
|
Weighted
Average
Remaining
Contractual Life
|
Weighted
Average
Exercise Price
|
Number
Exercisable at
December 31, 2017
|
Weighted
Average Remaining
Contractual Life
|
|||||||||||||||||
$
|
|
|
|
$
|
|
|
|
|||||||||||||||
$
|
|
|
|
$
|
|
|
|
|||||||||||||||
$
|
|
|
|
$
|
|
|
|
|||||||||||||||
|
|
• |
Cost of sales, which consists primarily of raw materials, components and production of our products, including applied labor costs and benefits expenses, maintenance, facilities and other operating costs associated with the production of our products;
|
• |
Selling, general and administrative expenses, which consist primarily of salaries, commissions and related benefits paid to our employees and related selling and administrative costs including professional fees;
|
• |
Research and development expenses, which consist primarily of direct labor conducting research and development, equipment and materials used in new product development and product improvement using our technologies;
|
• |
Consulting expenses, which consist primarily of amounts paid to third-parties for outside services;
|
• |
Depreciation and amortization expenses which result from the depreciation of our property and equipment, including amortization of our intangible assets; and
|
• |
Stock based compensation expense related to stock and stock option awards issued to employees and consultants for services performed for the Company.
|
• |
any changes in the market relating to the patents that would decrease the life of the asset;
|
• |
any adverse change in the extent or manner in which the patents are being used;
|
• |
any significant adverse change in legal factors relating to the use of the patents;
|
• |
current period operating or cash flow loss combined with our history of operating or cash flow losses;
|
• |
future cash flow values based on the expectation of commercialization through licensing; and
|
• |
current expectations that, more likely than not, the patents will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
|
• |
Revenues, net of returns and trade discounts, which consists of product sales and services and is an indicator of our overall business growth and the success of our sales and marketing efforts;
|
• |
Gross profit, which is an indicator of both competitive pricing pressures and the cost of goods sold of our products and the mix of product and license fees, if any;
|
• |
Growth in our customer base, which is an indicator of the success of our sales efforts; and
|
• |
Distribution of sales across our products offered.
|
|
For the Three Months Ended
December 31,
|
For the Six Months Ended
December 31
|
||||||||||||||||||||||
|
(in 000’s)
|
Change
|
(in 000’s)
|
Change
|
||||||||||||||||||||
|
2017
|
2016
|
2017 vs. 2016
|
2017
|
2016
|
2017 vs. 2016
|
||||||||||||||||||
Net revenues
|
$
|
867
|
$
|
879
|
(1.4
|
%)
|
$
|
1,793
|
$
|
1,716
|
4.5
|
%
|
||||||||||||
Cost of revenues
|
(592
|
)
|
(612
|
)
|
(3.3
|
%)
|
(1,244
|
)
|
(1,168
|
)
|
6.5
|
%
|
||||||||||||
Gross profit
|
275
|
267
|
2.7
|
%
|
549
|
548
|
0.1
|
%
|
||||||||||||||||
Research and development expenses
|
(53
|
)
|
(56
|
)
|
(5.7
|
%)
|
(111
|
)
|
(109
|
)
|
1.9
|
%
|
||||||||||||
Sales and marketing expense
|
(50
|
)
|
(59
|
)
|
(15.9
|
%)
|
(115
|
)
|
(126
|
)
|
(8.7
|
%)
|
||||||||||||
General and administrative expense
|
(173
|
)
|
(147
|
)
|
17.5
|
%
|
(368
|
)
|
(339
|
)
|
8.6
|
%
|
||||||||||||
Loss on asset abandonment
|
-
|
-
|
0.0
|
%
|
(17
|
)
|
-
|
100.0
|
%
|
|||||||||||||||
Other income (expense)
|
(2
|
)
|
(2
|
)
|
0.0
|
%
|
(4
|
)
|
(5
|
)
|
(20.0
|
%)
|
||||||||||||
Net income (loss)
|
(3
|
)
|
3
|
(200.0
|
%)
|
(65
|
)
|
(31
|
)
|
106.9
|
%
|
|||||||||||||
Preferred stock dividend
|
(25
|
)
|
(25
|
)
|
0.0
|
%
|
(50
|
)
|
(50
|
)
|
0.0
|
%
|
||||||||||||
Net loss attributable to common shareholders
|
$
|
(28
|
)
|
$
|
(22
|
)
|
24.3
|
%
|
$
|
(115
|
)
|
$
|
(81
|
)
|
42.0
|
%
|
|
Six Months ended Dec. 31,
|
|||||||
|
(in 000’s)
|
|||||||
|
2017
|
2016
|
||||||
Net cash (used) provided by operating activities
|
$
|
(191
|
)
|
$
|
51
|
|||
Net cash used in investing activities
|
(6
|
)
|
(11
|
)
|
||||
Net cash used by financing activities
|
(13
|
)
|
(9
|
)
|
||||
Net (decrease) increase in cash during the period
|
$
|
(210
|
)
|
$
|
31
|
|
Payments due by period
|
|||||||||||||||||||
|
Total
|
Less than
1 year
|
1 to 3 years
|
3 to 5 years
|
After
5 years
|
|||||||||||||||
|
||||||||||||||||||||
Facility lease (1)
|
$
|
345,000
|
$
|
138,000
|
$
|
207,000
|
$
|
-
|
$
|
-
|
||||||||||
Capital lease (2)
|
4,755
|
4,755
|
-
|
-
|
-
|
|||||||||||||||
Bank debt (3)
|
88,614
|
21,349
|
67,265
|
-
|
-
|
|||||||||||||||
Total contractual cash obligations
|
$
|
438,369
|
$
|
164,104
|
$
|
274,265
|
$
|
-
|
$
|
-
|
(1) |
In May 2015, we negotiated a five (5) year extension of the lease on our executive office and manufacturing facility located at 1501 Industrial Road, Boulder City, Nevada. The property consists of a 49,200 square foot building. We currently occupy all 49,200, inclusive of approximately 5,500 square feet of office space, situated on approximately 4.15 acres. All other terms and conditions of the building lease remain in effect.
|
(2) |
In July 2015 we entered into a capital lease for research and development equipment for $19,337.
|
(3) |
In June and July 2016, in two separate bank promissory notes, we financed critical manufacturing and facility equipment and operating enhancements, the majority of which was placed in service in fiscal year 2017.
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101 INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
101 SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101 CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101 DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101 LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101 PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
AMERITYRE CORPORATION
|
|
|
|
By:
|
|
|
|
/s/ Michael F. Sullivan
|
|
/s/ Lynda R. Keeton-Cardno
|
|
Michael F. Sullivan
Chief Executive Officer
(Principal Executive Officer)
|
|
Lynda R. Keeton-Cardno
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Feb. 14, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Amerityre Corp | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 43,976,346 | |
Amendment Flag | false | |
Entity Central Index Key | 0000945828 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 |
Balance Sheets (Parentheticals) - $ / shares |
Dec. 31, 2017 |
Jun. 30, 2017 |
---|---|---|
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | 2,000,000 | 2,000,000 |
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 43,312,107 | 43,312,107 |
Common stock, shares outstanding | 43,312,107 | 43,312,107 |
Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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NET SALES | $ 866,944 | $ 879,607 | $ 1,792,660 | $ 1,715,760 |
COST OF GOODS SOLD | 592,335 | 612,336 | 1,244,152 | 1,167,788 |
GROSS PROFIT | 274,609 | 267,271 | 548,508 | 547,972 |
EXPENSES | ||||
Research and development | 53,002 | 56,185 | 111,143 | 109,044 |
Sales and marketing | 49,583 | 58,961 | 115,318 | 126,191 |
General and administrative | 173,328 | 147,477 | 368,279 | 339,783 |
Total Expenses | 275,913 | 262,623 | 594,740 | 575,018 |
(LOSS) INCOME FROM OPERATIONS | (1,304) | 4,648 | (46,232) | (27,046) |
OTHER (EXPENSE)/INCOME | ||||
Interest expense | (1,331) | (1,879) | (2,814) | (5,064) |
Interest income | 66 | 47 | 174 | 100 |
Loss on asset abandonment | 0 | 0 | (17,352) | 0 |
Total Other (Expense)/Income | (1,265) | (1,832) | (19,992) | (4,964) |
NET (LOSS) INCOME | (2,569) | 2,816 | (66,224) | (32,010) |
Preferred Stock Dividend | (25,000) | (25,000) | (50,000) | (50,000) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (27,569) | $ (22,184) | $ (116,224) | $ (82,010) |
BASIC AND DILUTED LOSS PER SHARE (in Dollars per share) | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (in Shares) | 43,312,107 | 42,325,287 | 43,312,107 | 42,313,874 |
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION |
6 Months Ended |
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Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. We believe the disclosures and information presented are adequate to make the information not misleading. These interim condensed financial statements should be read in conjunction with our most recent audited financial statements and notes thereto included in our June 30, 2017 Annual Report on Form 10-K. Operating results for the quarter ended December 31, 2017 are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, 2018.
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies disclosed therein have not changed since our audited financial statements and notes thereto included in our June 30, 2017 Annual Report on Form 10-K, except as noted below. Revenue Recognition The majority of our revenue is derived from short-term sales contracts. We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, which we adopted on July 1, 2017, using the modified retrospective method. Revenue for our products is recognized at the time in which our performance obligation is satisfied which we have defined as “control” of the product by the customer. “Control” is defined as a customer having “rights/obligations of physical control over the product or has the rights and intention to control the product.” Based on the terms of our contracts, a customer’s “control” is based on analysis of the following; (i) when a customer arranges their own shipping, and once the product has left our dock, Amerityre recognizes revenue for the product. In effect by arranging their own shipping the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange their own shipping we cannot recognize revenue until it is delivered and the customer takes “control” of the product. This establishes a “deferred revenue” event until such time as delivery of the product has been completed and we have proof from the shipper of the delivery (and change in control). We invoice the customer at shipping, starting the accounts receivable process. Our Company collection policies on products does not change (this includes any prepayment and credit establishment processes). Nor do our refund and return policies change where credit is provided on account for the next purchase as no refunds are given. The result of this accounting change, and the routine December plant shut down, resulted in no deferred revenue for the period ended December 31, 2017 as all items were shipped and received by customers. Shipping and Handling Shipping and Handling Fees require that freight costs charged to customers be classified as revenues. Freight expenses are included in costs of sales and are recognized as incurred. However, due to our adoption of ASC 606 as discussed above, we defer the revenues of shipping and handling until the related revenue is also recognized. The result of this accounting change, and the routine December plant shut down, resulted in no deferral as of December 31, 2017. Basic and Fully Diluted Net Loss Per Share Basic and Fully Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period. Our outstanding stock options and warrants and shares issuable upon conversion of outstanding convertible notes have been excluded from the basic and fully diluted net loss per share calculation. We excluded 3,730,000 and 3,800,000 common stock equivalents for the periods ended December 31, 2017 and 2016, respectively, because they are anti-dilutive. Recent Accounting Pronouncements Recently Adopted and Recently Issued Accounting Guidance Issued In February 2016, the FASB issued ASU No. 2016-02, “Leases”, (“ASU 2016-02”) which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. If early adopted, an entity must adopt all of the amendments in the same period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company’s financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” Issued to provide clarity and reduce diversity on practice and the cost and complexity to a change in the terms and conditions of a share-based payment award. ASU 2017-09 is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company’s financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows.
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NOTE 3 - INVENTORY |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Text Block] | NOTE 3 - INVENTORY Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or net realizable value. The inventory consists primarily of chemicals, finished goods produced in our plant and products purchased for resale.
Our inventory reserve reflects items that were deemed to be defective or obsolete based on an analysis of all inventories on hand. In fiscal years 2018 and 2017, the Company critically reviewed all slow moving inventory to determine if defective or obsolete. If not defective or obsolete we presented these items as non-current inventory, although all inventory is ready and available for sale at any moment.
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NOTE 4 - DEBT |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | NOTE 4 - DEBT A former board member, Silas O. Kines, was the principal owner of Forklift Tire of Florida and K-2 Industrial Tire, Inc. In accordance with the Commission Agreement with Forklift Tire of Florida, dated February 2, 2011, between Amerityre Corporation and K-2 Industrial Tire, Inc., K-2 is due a five percent (5%) commission on all forklift tire sales. In exchange for the forklift models transferred to Amerityre under that agreement, the first $96,000 in commission payments will be used to extinguish the long term liability recorded on the transaction. As of December 31, 2017, $2,000 and $62,651 (June 30, 2017, $2,000 and $62,940) were recorded for the current and long-term portion, respectively, of the related liability. In June 2016, the Company executed a term note with U.S. Bank to finance critical manufacturing equipment and operating enhancements. Manufacturing equipment of approximately $29,000 was place in service in July 2016. Various operating enhancement, inclusive of a website redesign, were implemented in fiscal 2017. In the first quarter of fiscal 2018 the last operational enhancement related to a sales customer relation management (“CRM”) system was abandoned due to challenges with the selected implementation vendor. The Company is pursuing other options to address its CRM system needs and the amount we financed for the CRM system ($15,000) through this debt instrument remains the Company’s liability to pay. Total amount financed for the CRM system, website upgrade, and manufacturing equipment was $55,068, at 5.59% interest, with payments of $1,059 due for 60 months starting July 2016. In July 2016, the Company executed a term note with U.S. Bank to finance critical plant facility equipment which was placed into service in July 2017. The total amount financed was $37,666 at 5.59% interest, with payments of $720 due for 60 months starting October 2016.
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NOTE 5 - CAPITAL LEASE |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Debt and Capital Leases Disclosures [Text Block] | NOTE 5 - CAPITAL LEASE In July 2015 the Company entered into a capital lease for research and development equipment for $19,337. The following is a schedule by years of future minimum lease payments under capital leases together with present value of the net minimum lease payments as of December 31, 2017:
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NOTE 6 - STOCK OPTIONS AND WARRANTS |
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Disclosure Text Block Supplement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity and Share-based Payments [Text Block] | NOTE 6 - STOCK OPTIONS AND WARRANTS Prior Issuances of options On December 1, 2016, 480,000 options were granted to the Company’s Chief Executive Officer as part of his employment offer. The options have a strike price of $0.10, vest December 1, 2017 and expire December 1, 2020. Year to date expense related to these options is $729 as of December 31, 2017. A summary of the status of our outstanding stock options as of December 31, 2017 and June 30, 2017 and changes during the periods then ended is presented below:
The following table summarizes the range of outstanding and exercisable options as of December 31, 2017:
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NOTE 7 - SUBSEQUENT EVENTS |
6 Months Ended |
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Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 7 - SUBSEQUENT EVENTS On January 21, 2018, 60,000 shares were granted to the Company’s Chief Financial Officer as part her employment renewal. The shares are valued as of January 21, 2018 and vest ratably through December 2018. In addition to the stock, her base compensation was adjusted to $36,000 per annum.
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Accounting Policies, by Policy (Policies) |
6 Months Ended |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The majority of our revenue is derived from short-term sales contracts. We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, which we adopted on July 1, 2017, using the modified retrospective method. Revenue for our products is recognized at the time in which our performance obligation is satisfied which we have defined as “control” of the product by the customer. “Control” is defined as a customer having “rights/obligations of physical control over the product or has the rights and intention to control the product.” Based on the terms of our contracts, a customer’s “control” is based on analysis of the following; (i) when a customer arranges their own shipping, and once the product has left our dock, Amerityre recognizes revenue for the product. In effect by arranging their own shipping the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange their own shipping we cannot recognize revenue until it is delivered and the customer takes “control” of the product. This establishes a “deferred revenue” event until such time as delivery of the product has been completed and we have proof from the shipper of the delivery (and change in control). We invoice the customer at shipping, starting the accounts receivable process. Our Company collection policies on products does not change (this includes any prepayment and credit establishment processes). Nor do our refund and return policies change where credit is provided on account for the next purchase as no refunds are given. The result of this accounting change, and the routine December plant shut down, resulted in no deferred revenue for the period ended December 31, 2017 as all items were shipped and received by customers. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Shipping and Handling Fees require that freight costs charged to customers be classified as revenues. Freight expenses are included in costs of sales and are recognized as incurred. However, due to our adoption of ASC 606 as discussed above, we defer the revenues of shipping and handling until the related revenue is also recognized. The result of this accounting change, and the routine December plant shut down, resulted in no deferral as of December 31, 2017. |
Earnings Per Share, Policy [Policy Text Block] | Basic and Fully Diluted Net Loss Per Share Basic and Fully Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period. Our outstanding stock options and warrants and shares issuable upon conversion of outstanding convertible notes have been excluded from the basic and fully diluted net loss per share calculation. We excluded 3,730,000 and 3,800,000 common stock equivalents for the periods ended December 31, 2017 and 2016, respectively, because they are anti-dilutive. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Recently Adopted and Recently Issued Accounting Guidance Issued In February 2016, the FASB issued ASU No. 2016-02, “Leases”, (“ASU 2016-02”) which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. If early adopted, an entity must adopt all of the amendments in the same period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company’s financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” Issued to provide clarity and reduce diversity on practice and the cost and complexity to a change in the terms and conditions of a share-based payment award. ASU 2017-09 is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company’s financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows.
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NOTE 3 - INVENTORY (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory [Table Text Block] | Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or net realizable value. The inventory consists primarily of chemicals, finished goods produced in our plant and products purchased for resale.
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NOTE 4 - DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] |
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NOTE 5 - CAPITAL LEASE (Tables) |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Capital Leased Assets [Table Text Block] | The following is a schedule by years of future minimum lease payments under capital leases together with present value of the net minimum lease payments as of December 31, 2017:
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NOTE 6 - STOCK OPTIONS AND WARRANTS (Tables) |
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Disclosure Text Block Supplement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the status of our outstanding stock options as of December 31, 2017 and June 30, 2017 and changes during the periods then ended is presented below:
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The following table summarizes the range of outstanding and exercisable options as of December 31, 2017:
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
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Accounting Policies [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,730,000 | 3,800,000 |
NOTE 3 - INVENTORY (Details) - Schedule of Inventory - USD ($) |
Dec. 31, 2017 |
Jun. 30, 2017 |
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Schedule of Inventory [Abstract] | ||
Raw Materials | $ 249,264 | $ 262,187 |
Finished Goods | 557,793 | 595,910 |
Inventory reserve | (55,437) | (53,503) |
Inventory - net | $ 751,620 | $ 804,594 |
NOTE 4 - DEBT (Details) - USD ($) |
1 Months Ended | 6 Months Ended | |||
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Jul. 31, 2016 |
Jun. 30, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jun. 30, 2017 |
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NOTE 4 - DEBT (Details) [Line Items] | |||||
Long-term Debt, Current Maturities | $ 19,872 | $ 19,382 | |||
Long-term Debt, Excluding Current Maturities | 115,133 | 124,482 | |||
Property, Plant and Equipment, Transfers and Changes | $ 29,000 | ||||
Notes Issued | $ 0 | $ 95,625 | |||
Notes Payable, Other Payables [Member] | |||||
NOTE 4 - DEBT (Details) [Line Items] | |||||
Sales Commission, Percentage | 5.00% | ||||
Debt Instrument, Face Amount | $ 96,000 | ||||
Long-term Debt, Current Maturities | 2,000 | 2,000 | |||
Long-term Debt, Excluding Current Maturities | $ 62,651 | $ 62,940 | |||
Notes Payable to Banks [Member] | |||||
NOTE 4 - DEBT (Details) [Line Items] | |||||
Debt Instrument, Face Amount | 37,666 | $ 55,068 | |||
Notes Issued | $ 15,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.59% | 5.59% | |||
Debt Instrument, Periodic Payment | $ 720 | $ 1,059 | |||
Debt Instrument, Term | 60 months | 60 months |
NOTE 4 - DEBT (Details) - Schedule of Maturities of Long-term Debt |
Dec. 31, 2017
USD ($)
|
---|---|
NOTE 4 - DEBT (Details) - Schedule of Maturities of Long-term Debt [Line Items] | |
Total | $ 88,614 |
Less than 1 year | 21,349 |
1 to 3 years | 67,265 |
3 to 5 years | 0 |
After 5 years | 0 |
Notes Payable to Banks [Member] | |
NOTE 4 - DEBT (Details) - Schedule of Maturities of Long-term Debt [Line Items] | |
Total | 88,614 |
Less than 1 year | 21,349 |
1 to 3 years | 67,265 |
3 to 5 years | 0 |
After 5 years | $ 0 |
NOTE 5 - CAPITAL LEASE (Details) - USD ($) |
Dec. 31, 2017 |
Jul. 31, 2015 |
---|---|---|
Disclosure Text Block Supplement [Abstract] | ||
Capital Leases, Future Minimum Payments Due | $ 5,074 | $ 19,337 |
NOTE 5 - CAPITAL LEASE (Details) - Schedule of Capital Leased Assets - USD ($) |
Dec. 31, 2017 |
Jul. 31, 2015 |
---|---|---|
Schedule of Capital Leased Assets [Abstract] | ||
2018 | $ 4,349 | |
2019 | 725 | |
2020 | 0 | |
Total minimum lease payments | 5,074 | $ 19,337 |
Less: executory costs | 0 | |
Net minimum lease payments | 5,074 | |
Less: amount representing interest | (345) | |
Present value of net minimum payments | $ 4,729 |
NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) - USD ($) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 01, 2016 |
Dec. 31, 2017 |
Jun. 30, 2017 |
|
NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 480,000 | |
Chief Executive Officer [Member] | |||
NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 480,000 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Option Exercise Price | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Date | Dec. 01, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Dec. 01, 2020 | ||
Options Granted January 19, 2016 [Member] | Chief Financial Officer [Member] | |||
NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | |||
Allocated Share-based Compensation Expense | $ 729 |
NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2017 |
Jun. 30, 2017 |
|
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Outstanding beginning of period | 4,280,000 | 3,800,000 |
Outstanding beginning of period | $ 0.12 | $ 0.13 |
Granted | 0 | 480,000 |
Granted | $ 0.00 | $ 0.10 |
Expired/Cancelled | (550,000) | 0 |
Expired/Cancelled | $ (0.10) | $ (0.00) |
Exercised | 0 | 0 |
Exercised | $ 0.00 | $ 0.00 |
Outstanding end of period | 3,730,000 | 4,280,000 |
Outstanding end of period | $ 0.13 | $ 0.12 |
Outstanding end of period | $ 0 | $ 0 |
Exercisable | 3,730,000 | 4,080,000 |
Exercisable | $ 0.13 | $ 0.12 |
Exercisable | $ 0 | $ 0 |
NOTE 7 - SUBSEQUENT EVENTS (Details) - USD ($) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jan. 21, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
|
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 480,000 | |
Subsequent Event [Member] | Chief Financial Officer [Member] | |||
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 60,000 | ||
Share-based Compensation | $ 36,000 |
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