10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

Commission File Number: 000-52956

QUANTUM MATERIALS CORP.

(Exact name of Registrant as specified in its charter)

Nevada	20-8195578
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

3055 Hunter Road

San Marcos, Texas 78666

(Address of principal executive offices)

512-245-6646

(Registrant’s telephone number)

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the 12 preceding months (or such shorter period that the registrant was required to submit and post such file). Yes [X] No [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer [  ] Accelerated Filer [  ] Non-Accelerated Filer [  ] Smaller Reporting Company [X]

As of June 27, 2017, there were 367,614,831 shares of common stock, $0.001 par value per share, outstanding.

Explanatory Note: The original Form 10-Q for the quarter ended March 31, 2017 was filed without the independent auditors completing their review. This Form 10-Q/A has been filed after the completion of such review.

QUANTUM MATERIALS CORP.

Table of Contents

	Page
PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Stockholders’ (Deficit) Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures about Market Risk	28
Item 4. Controls and Procedures	29
PART II – OTHER INFORMATION	29
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3. Defaults upon Senior Securities	30
Item 4. Mine Safety Disclosures	30
Item 5. Other Information	30
Item 6. Exhibits	31
Signatures	33

2 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

QUANTUM MATERIALS CORP.

CONSOLIDATED BALANCE SHEETS

	March 31, 2017			June 30, 2016
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	321,656		$	266,985
Accounts receivable		-			8,835
Prepaid expenses and other current assets		557,113			102,100
TOTAL CURRENT ASSETS		878,769			377,920
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $222,351 and $150,142		735,336			774,674
LICENSES AND PATENTS, net of accumulated amortization of $104,167 and $75,256		88,576			117,487
TOTAL ASSETS	$	1,702,681		$	1,270,081
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,663,531		$	617,292
Accrued salaries		428,150			238,182
Notes payable, net of unamortized discount		17,374			10,093
Current portion of convertible debentures, net of unamortized discount		1,115,164			407,702
TOTAL CURRENT LIABILITIES		3,224,219			1,273,269
CONVERTIBLE DEBENTURES, net of current portion, unamortized discount and debt issuance costs		1,693,448			1,039,656
TOTAL LIABILITIES		4,917,667			2,312,925
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT
Common stock, $.001 par value, authorized 400,000,000 shares, 344,755,437 and 324,563,789 issued and outstanding at March 31, 2017 and June 30, 2016, respectively		344,755			324,564
Additional paid-in capital		31,172,343			28,415,843
Accumulated deficit		(34,732,084	)		(29,783,251	)
TOTAL STOCKHOLDERS’ DEFICIT		(3,214,986	)		(1,042,844	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,702,681		$	1,270,081

The accompanying notes are an integral part of these consolidated financial statements.

3 

QUANTUM MATERIALS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
	(unaudited)						(unaudited)
REVENUES	$	2,500		$	225,000		$	27,000		$	225,000
OPERATING EXPENSES
General and administrative		737,022			903,795			3,750,806			4,212,120
Research and development		136,786			19,210			408,588			165,265
TOTAL OPERATING EXPENSES		873,808			923,005			4,159,394			4,377,385
LOSS FROM OPERATIONS		(871,308	)		(698,005	)		(4,132,394	)		(4,152,385	)
OTHER EXPENSE (INCOME)
Gain on settlement		-			-			-			(174,568	)
Beneficial conversion expense		102,797			-			197,095			-
Interest expense, net		90,013			10,452			218,921			32,023
Accretion of debt discount		100,566			43,903			400,423			129,127
TOTAL OTHER EXPENSE (INCOME)		293,376			54,355			816,439			(13,418	)
NET LOSS	$	(1,164,684	)	$	(752,360	)	$	(4,948,833	)	$	(4,138,967	)
LOSS PER COMMON SHARE
Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		339,943,771			322,675,999			333,385,603			316,418,240

The accompanying notes are an integral part of these consolidated financial statements.

4 

QUANTUM MATERIALS CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common Stock						Additional Paid-in		Accumulated			Total Stockholders'
	Shares			Amount			Capital		Deficit			Deficit
Balances at June 30, 2016		324,563,789		$	324,564		$	28,415,843	$	(29,783,251	)	$	(1,042,844	)
Common stock issued for cash		833,333			833			99,167		-			100,000
Common stock issued for warrant and option exercises		10,000,000			10,000			415,000		-			425,000
Common stock issued for services		6,466,666			6,467			572,033		-			578,500
Common stock issued for debenture interest		102,374			102			12,183					12,285
Common stock issued for debenture conversions		2,083,334			2,083			247,917					250,000
Cancellation of shares		(194,059	)		(194	)		194		-			-
Stock-based compensation		500,000			500			821,674		-			822,174
Beneficial conversion feature of debenture		-			-			197,095		-			197,095
Allocated value of common stock and warrants related to debenture		400,000			400			391,237		-			391,637
Net loss		-			-			-		(4,948,833	)		(4,948,833	)
Balances at March 31, 2017		344,755,437		$	344,755		$	31,172,343	$	(34,732,084	)	$	(3,214,986	)

The accompanying notes are an integral part of these consolidated financial statements.

5 

QUANTUM MATERIALS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	March 31,
	2017			2016
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,948,833	)	$	(4,138,967	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		101,120			92,764
Amortization of debt issuance costs		47,469			-
Stock-based compensation		822,174			2,080,892
Stock issued for services		286,113			158,345
Stock issued for interest		12,285			-
Gain on settlement		-			(174,568	)
Beneficial conversion feature		197,095			-
Accretion of debt discount		400,423			129,127
Effects of changes in operating assets and liabilities:
Accounts receivable		8,835			-
Prepaid expenses and other current assets		54,654			237,899
Accounts payable and accrued expenses		1,236,207			321,258
NET CASH USED IN OPERATING ACTIVITIES		(1,782,458	)		(1,293,250	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(32,871	)		(47,459	)
Change in restricted cash investments		-			65,330
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(32,871	)		17,871
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		525,000			460,500
Proceeds from issuance of convertible debentures / promissory note		1,360,000			-
Proceeds from issuance of note payable		100,000			150,000
Principal payments on note payable		(100,000	)		-
Debt issuance costs		(15,000	)		-
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,870,000			610,500
NET INCREASE (DECREASE) IN CASH		54,671			(664,879	)
CASH AND CASH EQUIVALENTS, beginning of period		266,985			673,839
CASH AND CASH EQUIVALENTS, end of period	$	321,656		$	8,960

The accompanying notes are an integral part of these consolidated financial statements.

6 

QUANTUM MATERIALS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

General

The accompanying consolidated financial statements include the accounts of Quantum Materials Corp. and its wholly owned subsidiary, Solterra Renewable Technologies, Inc. (collectively referred to as the “Company”).

The consolidated financial statements of the Company as of and for the nine months ended March 31, 2017 are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended June 30, 2016. The year-end balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the accompanying unaudited financial information includes all adjustments necessary for a fair presentation of the interim financial information. Operating results for the interim periods are not necessarily indicative of the results of any subsequent periods. Certain information in the footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) has been condensed or omitted for the interim periods presented under the United States Securities and Exchange Commission (“SEC”) rules and regulations. As such, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016.

Nature of Operations

The Company is a nanotechnology company specializing in the design, development, production and supply of quantum dots, including tetrapod quantum dots, a high-performance variant of quantum dots, and highly uniform nanoparticles, using its patented automated continuous flow production process. Quantum dots and other nanoparticles are expected to be increasingly utilized in a range of applications in the life sciences, television and display, solid state lighting, solar energy, battery, security ink, and sensor sectors of the market. Key uncertainties and risks to the Company include, but are not limited to, if and how quickly various industries adopt and fully embrace quantum dot technology and technological changes, including those developed by the Company’s competitors, rendering the Company’s technology uncompetitive or obsolete.

Going Concern

The Company recorded losses from continuing operations in the current period presented and has a history of losses. As of March 31, 2017, the Company had a working capital deficit of $2,345,450 and net cash used in operating activities was $1,782,458 for the nine months ended March 31, 2017. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, obtain revenues from operations, raise additional capital, and/or obtain debt financing.

In conjunction with anticipated revenue streams, management is currently negotiating equity and debt financing, the proceeds from which would be used to settle outstanding debts, to finance operations, and for general corporate purposes. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern.

The accompanying unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

7 

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31, 2017		June 30, 2016
	(unaudited)
Furniture and fixtures	$	1,625	$	1,625
Computers and software		11,447		11,447
Machinery and equipment		944,615		911,744
		957,687		924,816
Less: accumulated depreciation		222,351		150,142
Total property and equipment, net	$	735,336	$	774,674

Depreciation expense for the three months ended March 31, 2017 and 2016 was $25,257 and $21,853, respectively, and $72,209 and $63,853 for the nine months ended March 31, 2017 and 2016, respectively.

NOTE 3 – LICENSES AND PATENTS

Licenses and patents consisted of the following:

	March 31, 2017		June 30, 2016
	(unaudited)
William Marsh Rice University	$	40,000	$	40,000
University of Arizona		15,000		15,000
Bayer acquired patents		137,743		137,743
		192,743		192,743
Less: accumulated amortization		104,167		75,256
Total licenses and patents, net	$	88,576	$	117,487

Amortization expense for the three months ended March 31, 2017 and 2016 was $9,637 and $9,637, respectively, and $28,911 and $28,911 for the nine months ended March 31, 2017 and 2016, respectively.

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2011-04 “Fair Value Measurement” as it relates to financial assets and financial liabilities, which defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements.

This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Hierarchical levels, as defined in this guidance and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities are as follows:

8 

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Inputs that are both significant to the fair value measurement and unobservable. The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2017 and June 30, 2016 or that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement.

The carrying amounts of cash and cash equivalents, accounts payable and current debt approximate their fair value due to the short maturity of those instruments.

Convertible Debentures

The Company measured the estimated fair value of the convertible debentures using significant other observable inputs, representative of a Level 2 fair value measurement, including the interest and conversion rates for the instruments. The following table sets forth the fair value of the Company’s convertible debentures as of March 31, 2017, and June 30, 2016:

	March 31, 2017				June 30, 2016
	(unaudited)
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Convertible debentures issued in September 2014	$	25,050	$	44,093	$	25,050	$	21,710
Convertible debentures issued in January 2015	$	500,000	$	1,166,667	$	500,000	$	1,083,333
Convertible debentures issued in April - June 2016	$	1,465,000	$	1,958,670	$	1,565,000	$	1,695,417
Convertible debenture issued in August 2016	$	200,000	$	253,711	$	-	$	-
Convertible debenture issued in November 2016	$	200,000	$	245,990	$	-	$	-
Convertible debentures issued in January - March 2017	$	260,000	$	303,334	$	-	$	-
Convertible debenture issued in February 2017	$	100,000	$	116,667	$	-	$	-
Convertible debenture issued in March 2017	$	150,000	$	175,000	$	-	$	-
Convetible promissory notes issued in March 2017	$	541,850	$	632,158	$	-	$	-

The Company is not a party to any hedge arrangements or commodity swap agreements.

9 

NOTE 5 – CONVERTIBLE DEBENTURES

The following table sets forth activity associated with the convertible debentures:

	March 31, 2017		June 30, 2016
	(unaudited)
Convertible debentures issued in September 2014	$	25,050	$	25,050
Convertible debentures issued in January 2015		500,000		500,000
Convertible debentures issued in April - June 2016		1,565,000		1,565,000
Convertible debenture issued in August 2016		200,000		-
Convertible promissory note issued in September 2016		100,000		-
Convertible debenture issued in October 2016		50,000		-
Convertible debenture issued in November 2016		200,000		-
Convertible debentures issued in January - March 2017		260,000		-
Convertible debenture issued in February 2017		100,000		-
Convertible debenture issued in March 2017		150,000		-
Convertible promissory notes issued in March 2017		541,850		-
		3,691,900		2,090,050
Less: amount converted to shares		250,000		-
Total convertible debentures outstanding		3,441,900		2,090,050
Less: unamortized discount		550,415		527,350
Less: debt issuance costs		82,873		115,342
		2,808,612		1,447,358
Less: current portion		1,115,164		407,702
Total convertible debentures, net of current portion	$	1,693,448	$	1,039,656

September 2014 Convertible Debenture

Between September 16, 2014 and October 28, 2014, the Company entered into Convertible Debenture Agreements to obtain a total of $500,050 in gross proceeds from five non-affiliated parties (collectively hereinafter referred to as the “Debenture Holders”). The Debentures have terms of five years maturing between September 16, 2019 and October 30, 2019. The Debentures bear interest at the rate of 6% per annum and are pre-payable by the Company at any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.15 per share at any date, and will receive an equal number of warrants having a strike price of $0.30 per share and a term of five years.

Interest expense for the three months ended March 31, 2017 and 2016 was $376 and $380, respectively, and $1,144 and $1,148 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $25,050 of principal was outstanding.

January 2015 Convertible Debenture

On January 15, 2015, the Company entered into Convertible Debenture Agreements to obtain $500,000 in gross proceeds from two non-affiliated parties (collectively hereinafter referred to as the “Debenture Holders”). The Debentures have a term of two years maturing on January 15, 2017 and bear interest at the rate of 8% per annum. The debentures are pre-payable by the Company at any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.06 per share at any date. The Debenture Holders received 6,250,000 common stock warrants exercisable at $0.06 per share through January 15, 2017. The debt is secured by a security interest in certain microreactor equipment. The Agreement also provides for the investors to have the right to appoint one member to the Company’s Board of Directors in the event that any one of the aforementioned debentures are converted into common stock of the Company. On October 10, 2016, the maturity date of the debentures was extended to January 15, 2018 and the 6,250,000 warrants were converted into common stock for total proceeds of $375,000.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $348,105, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, two years. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $0 and $43,903, respectively, and $92,298 and $129,127 for the nine months ended March 31, 2017 and 2016, respectively.

10 

Interest expense for the three months ended March 31, 2017 and 2016 was $9,863 and $9,973, respectively, and $30,027 and $30,137 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $500,000 of principal was outstanding.

April – June, August, October and November 2016 Convertible Debentures

During the fourth quarter of the year ended June 30, 2016, the Company sold 1,565 Units for total proceeds of $1,565,000 from three affiliated and fourteen non-affiliated parties. In August 2016, the Company sold 200 additional Units for total proceeds of $200,000. In October and November 2016, the Company sold 50 and 200, respectively, additional units for total proceeds of $50,000 and $200,000, respectively. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company. In evaluating the accounting treatment of this anti-dilution feature, the Company believes that is has control over whether or not the anti-dilution feature will be exercised. The Company is able to decide on which type of financing is raised, and thus the Company can prevent the issuance of shares at a price below the anti-dilution strike price. The number of Warrants and exercise price is proportionately adjustable for events including subdivisions, combinations or consolidations, reclassifications, exchanges, mergers, and reorganizations.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $609,595, recorded as debt discount and is amortized using the effective interest rate method over the life of the loans, two years. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $69,156 and $0, respectively, and $235,697 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

The Company recognized a beneficial conversion expense for the three months ended March 31, 2017 and 2016 of $0 and $0, respectively, and $64,775 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

Interest expense for the three months ended March 31, 2017 and 2016 of $37,300 and $0, respectively, and $108,276 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

During the nine months ended March 31, 2017, $150,000 of principal was converted into 1,250,000 shares of common stock.

As of March 31, 2017, $1,865,000 of principal was outstanding.

September 2016 Convertible Promissory Note

In September 2016, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for 200,000 unregistered and restricted shares of common stock of the Company and a convertible promissory note in the principal amount of $100,000. The Note Holder received 250,000 common stock warrants exercisable at $0.12 per share through September 15, 2019. The promissory note has a term of eight months maturing on May 15, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note. In March 2017, the note and accrued interest were converted into 833,333 and 66,667 shares of common stock, respectively.

11 

In accounting for the convertible promissory note, the Company allocated the fair value of the common stock and warrants to the proceeds received in the amount of $29,522, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $14,957 and $0, respectively, and $29,522 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

The Company recognized a beneficial conversion expense for the three months ended March 31, 2017 and 2016 of $0 and $0, respectively, and $29,523 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

Interest expense for the three months ended March 31, 2017 and 2016 of $2,622 and $0, respectively, and $8,000 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $0 of principal was outstanding.

January-March, 2017 Convertible Debentures

During the third quarter of the year ended June 30, 2017, the Company sold 2,600 Units for total proceeds of $260,000 from five non-affiliated parties. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company. In evaluating the accounting treatment of this anti-dilution feature, the Company believes that is has control over whether or not the anti-dilution feature will be exercised. The Company is able to decide on which type of financing is raised, and thus the Company can prevent the issuance of shares at a price below the anti-dilution strike price. The number of Warrants and exercise price is proportionately adjustable for events including subdivisions, combinations or consolidations, reclassifications, exchanges, mergers, and reorganizations.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $73,250, recorded as debt discount and is amortized using the effective interest rate method over the life of the loans, two years. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $6,985 and $0, respectively.

The Company recognized a beneficial conversion expense for the three and nine months ended March 31, 2017 and 2016 of $62,400 and $0, respectively.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $3,343 and $0, respectively.

As of March 31, 2017, $260,000 of principal was outstanding.

February 2017 Convertible Promissory Note

In March 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for 200,000 unregistered and restricted shares of common stock of the Company and a convertible promissory note in the principal amount of $100,000. The Note Holder received 250,000 common stock warrants exercisable at $0.12 per share through February 1, 2020. The promissory note has a term of eight months maturing on October 1, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

12 

In accounting for the convertible promissory note, the Company allocated the fair value of the common stock and warrants to the proceeds received in the amount of $24,733, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $6,060 and $0, respectively.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $8,000 and $0, respectively.

As of March 31, 2017, $100,000 of principal was outstanding.

March 2017 Convertible Debenture

In March 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $150,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $150,000. The Note Holder received 375,000 common stock warrants exercisable at $0.12 per share through March 28, 2020. The promissory note has a term of eight months maturing on November 28, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $27,897, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $3,407 and $0, respectively.

The Company recognized a beneficial conversion expense for the three and nine months ended March 31, 2017 and 2016 of $40,397 and $0, respectively.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $12,000 and $0, respectively.

As of March 31, 2017, $150,000 of principal was outstanding.

March 2017 Convertible Promissory Notes

In March 2017, the Company entered into Convertible Promissory Notes with SBI Investment LLC, 2014-1 (“SBI”) and L2 Capital, LLC (“L2 Capital”) to obtain $285,000 in gross proceeds. In connection with the first funding tranche, SBI and L2 received 253,525 and 760,576 common stock warrants, respectively, exercisable at $0.13 per share through March 28, 2022. At each subsequent funding to the first tranche, the Company will issue to each of SBI and L2 Capital warrants to purchase 50% of the total amount of each tranche funded plus the applicable original issue discount, divided by the lesser of (i) the closing bid of the common stock on March 29, 2017 and (ii) the closing bid price of the common stock on the funding date of each respective tranche. The promissory notes have a term of six months from the issuance date and bear interest at the rate of 6% per annum. The promissory notes are not pre-payable by the Company without penalty. The promissory notes are convertible into unregistered and restricted shares of Common Stock only if there is an Event of Default as defined in the notes.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $86,673, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company also recorded original issue discount (“OID”) of $31,850 as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $0 and $0, respectively.

In March 2017, the Company entered into an equity purchase agreement (“Eloc”) with SBI and L2 Capital, allowing them to purchase up to $5,000,000 of the Company’s common stock. As consideration for SBI and L2 Capital, the Company agreed to pay SBI and L2 Capital commitment fees of $63,000 and $147,000, respectively. These commitment fees were issued in the form of promissory notes, which bear interest at 8% per annum and have mature nine months from the date of issuance. The promissory notes are convertible into unregistered and restricted shares of Common Stock only if there is an Event of Default as defined in the notes.

13 

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $138 and $0, respectively.

As of March 31, 2017, $541,850 of principal was outstanding.

Debt Issuance Costs

The costs related to the issuance of debt are presented on the balance sheet as a direct deduction from the related debt and amortized to interest expense using the effective interest method over the maturity period of the related debt. Amortization expense for the three months ended March 31, 2017 and 2016 was $16,139 and $0, respectively, and $47,469 and $0 for the nine months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, the balance of debt issuance costs was $82,873.

NOTE 6 – NOTES PAYABLE

Promissory Notes

In September 2016, the Company issued an unsecured promissory note for proceeds of $100,000. The note bears 0% interest and the Company issued 416,667 common stock warrants exercisable at $0.15 per share through September 29, 2021. The note was due October 13, 2016 and was repaid on October 11, 2016.

In accounting for the promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $26,454, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, fourteen days. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $0 and $0, respectively, and $26,454 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $0 of principal was outstanding. See Note 13 for additional information.

Note Payable – Insurance

In August 2016, to finance an insurance premium, the Company issued a negotiable promissory note for $13,959 at an interest rate of 4.87% per annum. The note is due in May 5, 2017. The balance outstanding at March 31, 2017 was $0.

In March, 2017, to finance an insurance premium, the Company issued a negotiable promissory note for $17,434 at an interest rate of 6.89% per annum. The note is due November 11, 2017. The balance outstanding at March 31, 2017 was $17,434.

NOTE 7 – EQUITY TRANSACTIONS

Common Stock

During the nine months ended March 31, 2017, the Company issued 833,333 shares of common stock for cash proceeds of $100,000. Additionally, investors exercised options and warrants to purchase 10,000,000 shares of common stock for cash proceeds of $425,000. Included were cashless exercises of 5,000,000 warrants that resulted in the issuance of 2,500,000 shares of common stock.

During the nine months ended March 31, 2017, the Company granted 3,250,000 shares of common stock to consultants at the fair market value of $262,500. This was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

During the nine months ended March 31, 2017, the Company issued 3,216,666 shares to lenders as commitment fees at the fair market value of $316,000, of which $175,000 was recognized as general and administrative expense and $141,000 was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

14 

During the nine months ended March 31, 2017, holders of convertible notes elected to convert debt of $250,000 into 2,083,334 shares of common stock.

During the nine months ended March 31, 2017, the Company issued 102,374 shares of common stock to a lender, in exchange for interest due, in the amount of $12,285.

During the nine months ended March 31, 2017, the Company issued 400,000 shares in connection with the issuance of the September 2016 promissory note and the February 2017 convertible debenture.

During the nine months ended March 31, 2017, the Company cancelled 194,059 common shares.

Stock Warrants

A summary of activity of the Company’s stock warrants for the nine months ended March 31, 2017 is presented below:

						Weighted
	Weighted					Average		Weighted
	Average					Remaining		Average
	Exercise		Number of			Contractual		Grant Date
	Price		Warrants			Term in Years		Fair Value
Balance as of June 30, 2016	$	0.11		39,262,305				$	0.15
Expired		0.18		(555,555	)				0.14
Granted		0.16		8,013,628					0.11
Exercised		0.06		(12,500,000	)				0.15
Cancelled		0.13		(2,104,637	)				0.15
Balance as of March 31, 2017	$	0.13		32,115,741			3.12	$	0.14
Vested and exercisable as of March 31, 2017	$	0.13		32,115,741			3.12	$	0.14

Outstanding warrants at March 31, 2017 expire during the period April 2017 to March 2022 and have exercise prices ranging from $0.06 to $0.30.

NOTE 8 – STOCK-BASED COMPENSATION

The Company follows FASB Accounting Standards Codification (“ASC”) 718 “Compensation — Stock Compensation” for share-based payments which requires all stock-based payments, including stock options, to be recognized as an operating expense over the vesting period, based on their grant date fair values.

In October 2009, the Board of Directors authorized the approval of a stock option plan covering 7,500,000 shares of common stock, which was increased to 10,000,000 shares in December 2009 and approved by stockholders in January 2010. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2017, 9,200,000 options have been granted, with terms ranging from five to ten years, and 800,000 have been cancelled. The balance outstanding at March 31, 2017 was 8,400,000.

In March 2012, 3,500,000 stock options, with a term of five years, were granted outside of a stock option plan. In March, 2017, the term of these options was extended for an additional five years.

In January 2013, the Board of Directors authorized the approval of a stock option plan covering 20,000,000 shares of common stock, which was increased to 60,000,000 shares in March 2013 and approved by stockholders in March 2013. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2017, 72,653,473 options have been granted, with terms ranging from five to ten years, 3,325,000 have been exercised and 15,886,559 have been cancelled. The balance outstanding at March 31, 2017 was 53,441,914.

On February 17, 2016, the Shareholders approved the 2015 Employee Benefit and Consulting Services Compensation Plan covering 15,000,000 shares. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2017, 2,800,000 options have been granted with a term of five years, and 1,625,000 have been cancelled. The balance outstanding at March 31, 2017 was 1,175,000.

15 

In June 2016, 6,000,000 stock options, with a term of ten years, were granted outside of a stock option plan. During the nine months ended March 31, 2017, 3,000,000 options were cancelled.

Incentive Stock Options: The Company estimates the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model. The volatility is based on expected volatility over the expected life of thirty-six to sixty months. Compensation cost is recognized based on awards that are ultimately expected to vest, therefore, the Company has reduced the cost for estimated forfeitures based on historical forfeiture rates, which were between 14% and 17% during the nine months ended March 31, 2017. As the Company has not historically declared dividends, the dividend yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions. There is no assurance the value realized by an optionee will be at or near the value estimated by the Black-Scholes-Merton model.

The following assumptions were used for the periods indicated:

	Nine Months Ended
	March 31,
	2017			2016
Expected volatility		140.73	%		142.05	%
Expected dividend yield		-			-
Risk-free interest rates		1.25	%		1.19	%
Expected term (in years)		3.0 to 5.0			3.0 to 5.0

The computation of expected volatility during the nine months ended March 31, 2017 and 2016 was based on the historical volatility. Historical volatility was calculated from historical data for the time approximately equal to the expected term of the option award starting from the grant date. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for the period corresponding with the expected life of the option.

A summary of the activity of the Company’s stock options for the nine months ended March 31, 2017 is presented below:

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value
Balance as of June 30, 2016	$	0.08		75,375,248				$	0.11	$	3,771,601
Expired		-		-					-
Granted		0.12		2,500,000					0.10
Exercised		-		-					-
Cancelled		0.12		(8,358,334	)				0.12
Balance as of March 31, 2017	$	0.08		69,516,914			5.15	$	0.11	$	4,340,520
Vested and exercisable as of March 31, 2017	$	0.07		64,608,580			4.64	$	0.11	$	4,309,020

Outstanding options at March 31, 2017, expire during the period January 2018 to June 2026 and have exercise prices ranging from $0.05 to $0.17.

Compensation expense associated with stock options for the three months ended March 31, 2017 and 2016 was $(76,259) and $98,316, respectively, and $664,530 and $1,439,221 for the nine months ended March 31, 2017 and 2016, respectively, and was included in general and administrative expenses in the consolidated statements of operations.

16 

At March 31, 2017, the Company had 4,908,334 shares of nonvested stock option awards. The total cost of nonvested stock option awards which the Company had not yet recognized was $403,944 at March 31, 2017. Such amounts are expected to be recognized over a period of 2.5 years.

Restricted Stock: To encourage retention and performance, the Company granted certain employees restricted shares of common stock with a fair value per share determined in accordance with conventional valuation techniques, including but not limited to, arm’s length transactions, net book value or multiples of comparable company earnings before interest, taxes, depreciation and amortization, as applicable. Generally, the stock vests over a 3 year period. A summary of the activity of the Company’s restricted stock awards for the nine months ended March 31, 2017 is presented below:

	Number of
	Nonvested,			Weighted
	Nonissued			Average
	Restricted			Grant Date
	Share Awards			Fair Value
Nonvested, nonissued restricted shares outstanding at June 30, 2016		1,000,000		$	0.42
Granted		-			-
Vested		(500,000	)		0.42
Forfeited		-			-
Nonvested, nonissued restricted shares outstanding at March 31, 2017		500,000		$	0.42

Compensation expense associated with restricted stock for the three months ended March 31, 2017, and 2016, was $51,781 and $52,356, respectively, and $157,644 and $193,219 for the nine months ended March 31, 2017, and 2016, respectively, and was included in general and administrative expenses in the consolidated statements of operations. The total cost of nonvested stock awards which the Company had not yet recognized was $60,411 at March 31, 2017. This amount is expected to be recognized over a period of 0.5 years.

Agreements with Officers and Employees: In June 2016, the Company’s officers and certain employees owning options to purchase 56,087,599 shares of the Company’s common stock entered into an agreement with the Company that such persons cannot exercise their options and the Company does not have to reserve for the issuance of shares of common stock underlying their options until the earlier of June 30, 2017 or the Company having unreserved shares sufficient for all outstanding options to be exercised. On May 1, 2017, the Company’s shareholders approved an increase in the number of authorized common shares to 750,000,000. As a result of this increase all 56,087,599 options will be exercisable as of May 1, 2017.

NOTE 9 – LOSS PER SHARE

The Company follows ASC 260, “Earnings Per Share”, for share-based payments that are considered to be participating securities within the definition provided by the standard. All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

17 

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
	(unaudited)						(unaudited)
Net loss	$	(1,164,684	)	$	(752,360	)	$	(4,948,833	)	$	(4,138,967	)
Weighted average common shares outstanding:
Basic and diluted		339,943,771			322,675,999			333,385,603			316,418,240
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

For the three and nine months ended March 31, 2017 and 2016, 32,115,741 and 35,466,779 stock warrants, respectively, were excluded from diluted earnings per share because they are considered anti-dilutive.

For the three and nine months ended March 31, 2017 and 2016, 69,516,914 and 64,625,248 stock options, respectively, were excluded from diluted earnings per share because they are considered anti-dilutive.

NOTE 10- REVENUE

During the three months ended March 31, 2017, the Company recognized revenues of $2,500 compared with revenues of $225,000 recognized during the three months ended March 31, 2016. For the nine months ended March 31, 2017, the Company recognized revenues of $27,000 from merchandise samples compared with revenues of $225,000 from a development assistance contract recognized in the comparable period of 2016.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Agreement with Rice University

On August 20, 2008, Solterra entered into a License Agreement with Rice University, which was amended and restated on September 26, 2011; also on September 26, 2011, QMC entered into a new License Agreement with Rice (collectively the “Rice License Agreements”). On August 21, 2013, QMC and Solterra each entered into a second amended license agreements with Rice University. QMC and Solterra entered into third amended license agreements with Rice University on March 15 and 24, 2016, respectively.

The Rice License Agreements, as amended, require the payment of certain patent fees to Rice and for QMC and Solterra to meet certain milestones by specific dates. Pursuant to the Solterra Rice License Agreement, as amended, Rice is entitled to receive, during the term, certain royalties of adjusted gross sales (as defined therein) ranging from 2% to 4% for photovoltaic cells and 7.5% of adjusted gross sales for QDs sold in electronic and medical applications.

The Company had verbal agreements with Rice University to modify the minimum royalty due dates that results in the Company being in full compliance with the agreements at March 31, 2017. On June 11, 2017 , the Company executed the revised agreements. Per the revised agreements, both Quantum Materials and Solterra shall pay to Rice a non-refundable, non-creditable annual maintenance fee of $10,000 (“Maintenance Fee”) each January 1, beginning on January 1, 2018 and each year thereafter until the first Sale of a Rice Licensed Product. Licensee’s obligation to pay the Maintenance Fee shall terminate upon first Sale of a Rice Licensed Product unless otherwise specified. In addition, Quantum Materials and Solterra shall pay to Rice an annual minimum royalty payment of $50,000 (“Annual Minimum Royalty”) on January 1 immediately following the first Sale of a Rice Licensed Product and each January 1 of every year thereafter for the term of the revised agreements, regardless of whether sales occur on an ongoing basis. The Annual Minimum Royalty shall be creditable towards royalties due in each respective royalty year, January 1 to December 31, following the due date.

18 

Agreement with University of Arizona

Solterra entered into an exclusive Patent License Agreement with the University of Arizona (“UA”) in July 2009. On March 3, 2017, Solterra entered into an amended license agreement with UA. Pursuant to UA License Agreement, as amended, Solterra is obligated to pay minimum annual royalties of $50,000 by June 30, 2017, $125,000 by September 15, 2017 and $200,000 on each June 30th thereafter, subject to adjustments for increases in the consumer price index. Such minimum royalty payments shall be credited against royalties due in each respective royalty year, July 1 to June 30, following the due date. Royalties based on net sales are 2% of net sales of licensed products for non-display electronic component applications and 2.5% of net sales of licensed products for printed electronic displays. The UA License Agreements and subsequent amendments have been filed on Form 8-K and are incorporated by reference herein. The Company is in the process of renegotiating the minimum royalty commitments and while oral modifications have been agreed to a final amendment has not been finalized. As of March 31, 2017, no royalties have been accrued for this obligation.

Agreement with Texas State University

The Company entered into a Service Agreement with Texas State University (“TSU”) by which the Company occupies certain office and lab space at TSU’s STAR Park (Science Technology and Advanced Research) Facility. The agreement is month-to-month and can be terminated with 60-days written notice of either party.

NOTE 12 – INCOME TAX

The Company follows ASC 740 “Income Taxes” regarding the accounting for deferred tax assets and liabilities. Under the asset and liability method required by this guidance, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A deferred tax asset will be reduced by a valuation allowance when, based on the Company’s estimates, it is more likely than not that a portion of those assets will not be realized in a future period.

The Company assesses the likelihood that deferred tax assets will be recovered from the existing deferred tax liabilities or future taxable income. To the extent the Company believes that recovery will not meet the more likely than not threshold, it establishes a valuation allowance. The Company has recorded valuation allowances in the U.S. for its net deferred tax assets since management believes it is more likely than not that these assets will not be realized because future taxable income necessary to utilize these losses cannot be established or projected.

The Company had approximately $25,560,000 in U.S. net operating loss (“NOL”) carryforwards that expire beginning in 2029 as of its fiscal year ending June 30, 2016, and $29,079,000 in NOL’s available as of March 31, 2017 prior to any reductions under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”). Section 382 provides that a corporation that undergoes an “ownership change”, as defined therein, is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income.

The Company completed an evaluation study whether an “ownership change” had occurred and determined that the limitation would be approximately $750,000, thereby reducing the net operating loss at March 31, 2017 to approximately $28,329,000. The Company has recorded a valuation allowance on the entire NOL as it believes that it is more likely than not that all of the deferred tax asset associated with the NOLs will not be realized regardless of whether an “ownership change” has occurred.

When a company operates in a jurisdiction that generates ordinary losses but does not expect to realize them, ASC 740-270-30-36(a) requires the exclusion of the respective jurisdiction from the overall annual effective tax rate (“AETR”) calculation and instead, a separate AETR should be computed. The Company operates in one jurisdiction and has determined that its deferred tax assets are not realizable on a more likely than not basis and has recorded a full valuation allowance. The effective income tax rate for the three months and nine months ended March 31, 2017 and 2016 was 0%.

19 

NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Nine Months Ended
	March 31,
	2017		2016
	(unaudited)
Cash paid for interest	$	20,584	$	20,055
Cash paid for income taxes	$	-	$	-

The following is supplemental disclosure of non-cash investing and financing activities:

	Nine Months Ended March 31,
	2017		2016
	(unaudited)
Conversion of debentures into shares of common stock	$	250,000	$	-
Allocated value of common stock and warrants issued with convertible debentures	$	391,237	$	-
Stock warrants issued for conversion of accrued salaries	$	-	$	409,667
Prepaid expense paid in shares of common stock	$	292,387	$	131,655
Prepaid expense financed with debt	$	210,000	$	-
Cancellation of shares	$	194	$	-
Financing of prepaid insurance	$	7,281	$	20,024

NOTE 14 – TRANSACTIONS WITH AFFILIATED PARTIES

During the nine months ended March 31, 2017, the Company issued a convertible debenture to a family member of a key executive for proceeds of $200,000. This transaction is described in more detail in Note 5 under the heading April – June, August, October and November 2016 Convertible Debentures.

In September 2016, the Company’s former Chief Financial Officer loaned the Company $100,000 to provide short-term bridge financing. This transaction is described in more detail in Note 6 under the heading “Promissory Note”. The Company repaid the loan on October 11, 2016.

NOTE 15 – RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting. The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements.

20 

In February 2016, the FASB issued ASU 2016-02, Leases, which updates guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods after December 15, 2018 with early adoption permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes. This ASU requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. It thus simplifies the current guidance, which requires entities to separately present deferred tax assets and deferred tax liabilities as current and noncurrent. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company adopted this guidance effective for the year ended June 30, 2016.

In August 2014, the FASB issued ASU No. 2014-15 Preparation of Financial Statements — Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The Company will continue to evaluate the going concern considerations in this ASU, however, at this time, the Company has not adopted this standard. The Company does not anticipate or expect adoption of this ASU will have a material effect to the consolidated financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction and industry-specific revenue recognition guidance under current generally accepted accounting principles (GAAP) and replaces it with a principle-based approach for determining revenue recognition. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing. Early adoption of this updated guidance is permitted as of the original effective date of December 31, 2016. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

NOTE 16 – EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS

Equity Purchase Agreement

On March 29, 2017, the Company entered into an equity purchase agreement (“Eloc”) with SBI and L2 Capital to purchase from them up to $5,000,000 of the Company’s common stock. Pursuant to the terms of the equity agreement, for a period of up to four years, SBI and L2 Capital are committed to purchase at the election of the Company, assuming an effective registration statement, and upon delivery by the Company of a put notice to Put Shares (as defined in the Eloc) (i) in a minimum amount of not less than $25,000 and (ii) in a maximum amount up to the lesser of (a) $250,000 or (b) 150% of the average daily trading value; provided such minimum amount of Put Shares may be decreased and such maximum amount of Put Shares may be increased, subject to the Company’s approval. Unless otherwise agreed to in writing by SBI and L2 Capital, the amount in the Put Notice shall be allocated pro rata among the participating investors based upon the Maximum Commitment Amount as defined in the Eloc. The purchase price of the Put Shares shall mean 80% of the market price (i.e. the lowest closing bid price for any trading day during the Valuation Period as defined in the Eloc). If 80% of the lowest closing bid price on the OTCQB for any trading day during the respective Valuation Period (as defined in Eloc) is less than the Company minimum price of $.12 per share, then SBI and/or L2 Capital may elect to purchase all or none of the Put Shares at the Company minimum price.

21 

As further consideration for SBI and L2 Capital entering into the Eloc, the Company agreed to pay SBI and L2 Capital $63,000 and $147,000, respectively, in promissory notes. These promissory notes bear interest at 8% per annum and have a maturity date of nine months from the date of issuance. These notes are not convertible unless there is an Event of Default as defined in the notes.

Registration Rights Agreement

On March 29, 2016, the Company entered into a registration rights agreement with SBI and L2 Capital. Pursuant to said agreement, the Company is required to file a registration statement with the Securities and Exchange Commission to register the shares of common stock under the Eloc and all shares of common stock underlying the notes and warrants issued to SBI and L2 Capital in connection with the Eloc and loan transactions described above.

NOTE 17 - SUBSEQUENT EVENTS

In April 2017, the Company issued 2,500,000 common shares for consulting services. The cost of this issuance was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

In April 2017, the Company issued 595,238 common shares for consulting services. The cost of this issuance was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

On or about April 27, 2017 the Company executed a funded collaboration agreement by which Quantum will work with Freschfield to integrate Quantum Materials Corp advanced Nanomaterials including quantum dot-based solar photovoltaics into Freschfield’s SmartSkinz. Freschfield has synthesized solar and hydrogen fuel cell technologies into an outer layer building skin – SmartSkinz – which creates a perpetual carbon-free energy source, under any weather condition, time of day and location. Quantum Materials’ development will focus on developing and deploying advanced nanomaterials to optimize system performance on several levels including the building-integrated photovoltaics (BIPV) component of SmartSkinz. Under terms of the agreement, Freschfield will fund development by providing $1 million over four quarters to Quantum Materials beginning June 2017.

On May 1, 2017, a Special Meeting of Stockholders was held by Quantum Materials Corp. At the Stockholder Meeting a quorum of 215,995,100 shares of common stock were present in person or by proxy. At the Special Meeting, the stockholders approved the filing of an amendment to the Corporation’s Articles of Incorporation to increase the number of authorized shares of $.001 par value common stock from 400,000,000 shares to 750,000,000 shares. Of the 215,995,100 shares of common stock that were present at the meeting in person or by proxy, 199,175,046 shares of common stock were voting in favor of the proposal, 15,870,085 shares against and 949,969 shares abstained from voting.

On May 4, 2017, the Company received $200,000 from L2 Capital and SBI in conjunction with their equity purchase agreement.

On May 5, 2017, the Company issued a total of 6,125,000 common shares for consulting services. The cost of these issuances were recognized as a prepaid asset and will be amortized to expense over the life of the agreements.

On May 19, 2017, the Company entered into two waiver and consent agreements with Lincoln Park Capital Fund, LLC (“Lincoln Park”) whereby the parties agreed that the prior equity line of credit agreement entered into on November 8, 2016 is canceled and various covenants made with respect to a $200,000 loan were waived in connection with certain loan transactions and in consideration thereof, the Company agreed to issue 1,000,000 shares of common stock to Lincoln Park in settlement of all claims.

In June 2017, the Company issued 771,211 shares for the conversion of $85,000 of convertible debentures plus accrued interest.

In June 2017, the Company issued 3,500,000 shares for consulting services. The cost of this issuance will be expensed during the three months ended June 30, 2017.

In June 2017, the Company issued a total of 5,333,333 shares for consulting services. The cost of these issuances was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

In June 2017, the Company issued a total of 717,945 common shares to various noteholders in payment of interest on convertible debentures.

22 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q/A contains “forward-looking statements” relating to us which represent our current expectations or beliefs, including statements concerning our operations, performance, financial condition and growth. For this purpose, any statements contained in this report that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “anticipation”, “intend”, “could”, “estimate”, or “continue” or the negative or other comparable terminology are intended to identify forward-looking statements.

Statements contained herein that are not historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and those actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: well-established competitors who have substantially greater financial resources and longer operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.

The following discussion should be read in conjunction with the Company’s risk factors, consolidated financial statements and notes thereto included elsewhere in this Form 10-Q/A and our Form 10-K filed September 23, 2016 for the fiscal year ended June 30, 2016. Except for the historical information contained herein, the discussion in this Form 10-Q/A contains certain forward looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-Q/A should be read as being applicable to all related forward-looking statements wherever they appear herein. The Company’s actual results could differ materially from those discussed here.

The financial information furnished herein has not been audited by an independent accountant; however, in the opinion of management, all adjustments (only consisting of normal recurring accruals) necessary for a fair presentation of the results of operations for the nine month periods ended March 31, 2017 and March 31, 2016 have been included.

Business Overview

We are a nanotechnology company specializing in the design, development, production and supply of nanomaterials, including quantum dots (“QDs”), tetrapod quantum dots (“TQDs”), and other nanoparticles for a range of applications in televisions, displays and other optoelectronics, photovoltaics, solid state lighting, life sciences, security ink, battery, and sensor sectors of the market. We are currently trading in the over-the-counter marketplace on the OTCQB under the ticker symbol “QTMM.” Our wholly-owned subsidiary, Solterra Renewable Technologies, Inc. (“Solterra”) is a wholly-owned operating subsidiary of QMC that is focused on the photovoltaic (solar cell) market.

QDs are nanoscale semiconductor crystals typically between 10 and 100 atoms in diameter. Approximately 10,000 would fit across the diameter of a human hair. Their small size makes it possible for them to exhibit certain quantum mechanical properties. QDs emit either photons or electrons when excited. In the case of photons, the wavelength (color) of light emitted varies depending on the size of the quantum dot. As such, the photonic emissions can be tuned by the creation of QDs of different sizes. Their unique properties as highly efficient, next generation semiconductors have led to the use of QDs in a range of electronic and other applications in the biomedical, display, and lighting industries. QDs also have applications in solar cells, where their characteristics enable conversion of light energy into electricity with the potential for significantly higher efficiencies and lower costs than existing technologies, thereby creating the opportunity for a step change in the solar energy industry through the use of QDs in printed photovoltaic cells.

23 

QDs were first discovered in the early 1980s and the industry has developed to the point where QDs are now being used in an increasing range of applications, including the television and display industries, the light emitting diode (“LED”) lighting (also known as solid-state lighting) industry, and the biomedical industry. LG, Samsung, and other manufacturers have recently launched new televisions using QDs to enhance the picture color quality and power efficiency. A number of major lighting companies are developing product applications using QDs to create a more natural light for LEDs. The biomedical industry is using QDs in diagnostic and therapeutic applications; and applications are being developed to print highly efficient photovoltaic solar cells in mass quantities at a low cost.

A key challenge for the quantum dot industry has been and may continue to be its ability to scale up production volumes sufficiently to meet growing demand for QDs while maintaining product quality and consistency and reducing the overall costs of supply to stimulate new applications. QDs remain an expensive product, however a number of recent market research reports have forecasted rapid growth of the QD market, including an April 2016 report by Credence Research which states “The quantum dots market is expected to cross US$ 8.0 Bn by 2022, expanding at a CAGR of 51.3% during the forecast period 2015 to 2022,” and a report published by Transparency Market Research, also in April 2014, which forecasts that “the market will develop at an exceptional 53.8% CAGR between 2013 and 2023. If the projections hold true, the market could rise from a valuation of US$88.5 mn in 2011 to US$8.2 bn by 2023.”

In 2014, we acquired several patents and patent applications in five diverse sets of patent families from Bayer Technology Services GmbH, the global technological backbone and major innovation driver for Bayer AG of Leverkusen, Germany (the “Bayer Patents”). The Bayer Patents acquired provide broad intellectual property protection for advances we have achieved in economical high-volume QD manufacturing. In addition, the Bayer Patents cover volume production technology for cadmium-free QDs and nanoparticles; increasing quantum yields; and hybrid organic quantum dot solar cell (“QDSC”) production as well as a surface modification process for increased efficiency of high performance solar cells and printed electronics.

In addition to the Bayer Patents, we have a worldwide exclusive license from William Marsh Rice University (“Rice”) to a patented chemical process that permits it to produce high performance TQDs using a lower cost and environmentally friendly solvent for greater manufacturing flexibility.

We have developed proprietary equipment that allows it to mass produce consistent quantities of QDs and TQDs in a continuous process at lower capital costs than other existing processes. We also have the exclusive license from the University of Arizona (“UA”) to a patented technique for printing LEDs. We believe that these intellectual properties and proprietary technologies position us to become a leader in the overall nanomaterials and quantum dot industry and a preferred supplier of high performance QDs and TQDs to an expanding range of applications.

Plan of Operations

We currently operate from a leased facility in San Marcos, Texas at the STAR Park Technology Center, an extension of Texas State University (the “San Marcos Facility”). This location provides us with convenient access to university faculty and specialized laboratory facilities that can support joint research and development efforts with Texas State University. Located approximately 30 miles south of Austin, Texas, this location is also in close proximity to a number of leading companies in the electronics, lighting, solar, and life sciences markets.

The Company has established commercial-scale manufacturing equipment at the San Marcos facility and now has the capacity to produce more than two metric tons (2,000kg) per year of quantum dots and other nanomaterials for supply to its customers. Management believes that the production capacity of the San Marcos facility is similar to, or greater than its largest competitors’ operating factories which are much larger and required significantly higher capital expenditures. This efficiency is the direct result of our patented continuous flow process and proprietary manufacturing knowhow and equipment. While we plan to work extensively with its current provider of equipment, we own all rights to the designs and intellectual property resulting from the development project, and could contract with one or more other competent suppliers of equipment, if necessary.

We expect to commence generating revenues from the production of materials at the San Marcos facility in the fourth quarter of 2017. Such revenues are expected to be modest at first and will be dependent upon our ability to generate purchase orders from development partners.

Our marketing strategy is to engage in strategic arrangements with manufacturers, distributors, and others to jointly develop applications using its patented continuous production process. Such joint collaborations will involve us working closely with its industry counterparts to optimize the performance of our materials in each application or device and to use the results from product development and testing to further enhance product specifications. On July 15, 2015 we entered into a joint development agreement with a major display panel manufacturer and on September 11, 2015 we entered into a funded product development agreement with a leading global optical film manufacturer, Nitto Denko Corporation. In June 2016 we entered into a development agreement with an unnamed company in the oil and natural gas sector to produce novel technology for use in that industry. To date, we have not entered into any formal commercial supply agreements, joint ventures, or licensing agreements.

24 

These collaborations will support our internal research and development activities which will continue to be a primary part our business. Our principal revenue streams are expected to come from (i) sales of quantum dots and other nanomaterials, (ii) royalties from sales of products and components by third parties incorporating the Company’s products, (iii) milestone payments under joint development arrangements with product developers and manufacturers, and (iv) sublicensing fees where we engage in sublicensing arrangements for its owned and/or licensed technology.

On January 29, 2016 Quantum Materials Corp. (QMC) announced the formation of a Joint Venture with Guanghui Technology Group (GTG) to establish infrastructure in China to both produce quantum dots and to further develop quantum dot based technology solutions for display, solid state lighting (SSL), lithium ion batteries, security and solar energy markets. GTG is a Financial Advisory and Services Company that assists advanced technological companies enter the China market. GTG is investing US$20 million into the joint venture to build out QDXTM quantum dot production facilities and fund quantum dot application development in China.

On January 30, 2017, Guanghui Technology Group (GTG) reported an investment commitment from the China Government Guidance Fund of 150 million RMB (US $21.8 million) for the benefit of the QMA partnership. Quantum Materials Asia intends to initiate production in the second quarter of our fiscal year ending June 30, 2018. The initial focus will be the delivery of quantum dot materials to the China Display industry. Quantum Materials Corp. is currently training key personnel intended to be deployed to support QMA’s schedule and is providing sample materials to a number of Chinese display industry companies. Quantum Materials Corp. will supply production knowledge and personnel to the joint venture in return for a 50% profit interest and a 25% ownership interest in QMA.

Our ongoing research and development functions are considered key to maintaining and enhancing its competitive position in the growing nanomaterials and quantum dot market. Nanomaterial and quantum dot technology continues to evolve, with new discoveries and refinements being made on an ongoing basis. We intend to be at the forefront of technological development, and intend to focus a significant part of our efforts on this, as we have done historically. Continuing R&D activities at the San Marcos facility and our collaboration with Texas State University, Rice, UA, and the numerous other research centers and departments with which we have relationships will be important aspects of our strategy.

Solterra plans to utilize QMC’s patented low-cost, high-volume quantum dot production combined with TQD technology licensed from Rice to commercialize quantum dot solar cells at a cost that is competitive with conventional fossil fuel generation on an unsubsidized basis.

Our business is subject to various types of government regulations, including restrictions on the chemical composition of nanomaterials used in life sciences and other sensitive applications, and regulation of hazardous materials used in or produced by the manufacture or use of QDs. Management believes the patented (owned and licensed) processes and proprietary manufacturing equipment employed allow us to comply with current regulations. However, new regulations or requirements may develop which could adversely affect the Company or its products in the future.

Liquidity and Capital Resources

As of March 31, 2017, we had a working capital deficit of $2,345,450, with total current assets and liabilities of $878,769 and $3,224,219, respectively. Included in the liabilities are $428,150 that is owed to our officers, directors and employees for services rendered and accrued through March 31, 2017, $1,115,164 of convertible debentures, net of unamortized discount and $17,374 of notes payable, net of unamortized discount, that are due within one year.

As of March 31, 2017, we have cash and cash equivalent assets of $321,656 primarily obtained from recent debt offerings and we will continue to incur losses in operations until we generate revenues from scaled up production. Over the past five years we have primarily relied on sales of common stock and debt instruments to support operations as well as employees and consultants agreeing to defer payment of wages and fees owed to them and/or converting such wages and fees into securities of the Company. Management believes it will be necessary for the Company to rely on external financing to supplement working capital in order to meet the Company’s liquidity needs in the balance of fiscal year 2017 and in fiscal 2018; the success of securing such financing on terms acceptable to the Company cannot be assured. The Company is seeking to raise to $5,000,000 in equity and/or debt financings to support operations over the next twelve months from our Eloc financing agreement. These financings, plus the potential exercise of stock options and stock purchase warrants previously issued, coupled with material reductions in general & administrative expenses, should provide sufficient working capital to scale up to full production over the next nine months. If we are unable to achieve the financing necessary to continue our plan of operations, our stockholders may lose their entire investment in the Company.

25 

The following table summarizes the net cash provided by (used in) operating, investing and financing activities for the periods indicated:

	Nine Months Ended
	March 31,
	2016			2015
	(unaudited)
Operating activities	$	(1,782,458	)	$	(1,293,250	)
Investing activities	$	(32,871	)	$	17,871
Financing activities	$	1,870,000		$	610,500

Operating Activities: Net cash used in operating activities was $1,782,458 for the nine months ended March 31, 2017 compared to $1,293,250 for the same period of 2016, an increase of $489,208. The increase was due to primarily driven by an increase of research and development costs.

Investing Activities: Net cash used in investing activities was $32,871 for the nine months ended March 31, 2017 compared to net cash provided by investing activities of $17,871 for the same period of 2016, a net decrease of cash provided by $50,742. The decrease was due to the Company having freed up cash in the nine months ended March 31, 2016 that had been previously restricted. No such cash was received during the nine months ended March 31, 2017.

Financing Activities: Net cash provided by financing activities was $1,870,000 for the nine months ended March 31, 2017 compared to $610,500 for the same period of 2016, an increase of $1,259,500. The increase is due primarily to proceeds received from the issuance of convertible debentures and promissory notes.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes we will be able to meet our obligations and continue our operations for the next fiscal year. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to reflect the carrying value and classification of assets and liabilities should we be unable to continue as a going concern. As of March 31, 2017, we had not yet achieved profitable operations, had a working capital deficit of $2,345,450 and expect to incur further losses in the development of the business, all of which casts substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. We continue to explore available financing options, including, without limitation, the sale of equity, debt borrowing and/or the receipt of product licensing fees and royalties. We can provide no assurances that future financing, if needed, will be obtained on terms satisfactory to us, if at all. In this respect, see Note 1 in our notes to the unaudited consolidated financial statements for additional information as to the possibility that we may not be able to continue as a going concern.

Results of Operations

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016

General and administrative expenses

During the three months ended March 31, 2017, the Company incurred $737,022 of general and administrative expenses compared with $903,795 incurred in the three-month period ended March 31, 2016, an decrease of $166,773. The decrease in general and administrative expenses was primarily due to decreases in stock-based compensation of $175,150.

26 

Included in general and administrative expenses for the three months ended March 31, 2017 was employee compensation of $293,658, legal and audit fees of $130,771, other professional fees of $110,589, travel expense of $7,209, corporate expenses of $184,379 and stock-based compensation of $(24,478).

Included in general and administrative expenses for the three months ended March 31, 2016 was employee compensation of $294,602, legal and audit fees of $100,393, other professional fees of $148,763, travel expense of $31,957, corporate expense of $145,918 and stock-based compensation of $150,672.

Research and development expenses

During the three months ended March 31, 2017, the Company incurred $136,786 of research and development expenses, an increase of $117,576 from the $19,210 recorded for the three months ended March 31, 2016. The increase is primarily due to increased expenditures for lab equipment, chemicals and consumables in the San Marcos facility.

Beneficial conversion feature on convertible debenture

During the three months ended March 31, 2017 the Company incurred $102,797 of beneficial conversion expense compared to $0 recorded for the three months ended March 31, 2016. The increase in beneficial conversion expenses was due to the issuance of new convertible debentures during the three months ended March 31, 2017.

Interest expense, net

Interest expense recorded for the three months ended March 31, 2017 was $90,013 compared to $10,452 in the three months ended March 31, 2016, an increase of $79,561. The increased interest expense recorded in the three months ended March 31, 2017 was primarily related to the 8% interest on the April to June, August, October and November 2016 debentures as well as the convertible debentures issued during the three months ended March 31, 2017.

Accretion of debt discount

During the three months ended March 31, 2017 the Company recorded $100,566 of accretion of debt discount expense, an increase of $56,663 from the $43,903 recorded for the three months ended March 31, 2016. The increase in accretion of debt discount expense is related to the issuance of convertible debentures during and prior to the three months ended March 31, 2017.

The following table sets forth our consolidated results of operations for the periods indicated:

	Three Months Ended
	March 31,
	2017		2016
Statement of Operations Information:	(unaudited)
Revenues	$	2,500	$	225,000
General and administrative		737,022		903,795
Research and development		136,786		19,210
Beneficial conversion expense		102,797		-
Interest expense, net		90,013		10,452
Accretion of debt discount		100,566		43,903

Nine Months Ended March 31, 2017 Compared to Nine Months Ended March 31, 2016

General and administrative

During the nine months ended March 31, 2017, the Company incurred $3,750,806 of general and administrative expenses compared with $4,212,120 incurred in the nine-month period ended March 31, 2016, a decrease of $461,314. The decrease in general and administrative expenses was primarily due to a decrease in stock-based compensation of $1,258,718, offset by increases in compensation of $517,458, legal and audit of $187,532 and corporate expenses of $147,427.

27 

Included in general and administrative expenses for the nine months ended March 31, 2017 was employee compensation of $1,294,852, legal and audit fees of $557,696, other professional fees of $464,721, travel expense of $30,639, corporate expense of $479,604 and stock-based compensation of $822,174.

Included in general and administrative expenses for the nine months ended March 31, 2016 was employee compensation of $777,394, legal and audit fees of $370,164, other professional fees of $477,884, travel expense of $80,845, corporate expense of $332,177 and stock based compensation of $2,080,892.

Research and development expenses

During the nine months ended March 31, 2017 the Company incurred $408,588 of research and development expenses, an increase of $243,323 from the $165,265 recorded for the nine months ended March 31, 2016. The increase is primarily due to increased expenditures for lab equipment, chemicals and consumables in the San Marcos facility as the Company prepares for full production.

Beneficial conversion feature on convertible debenture

During the nine months ended March 31, 2017 the Company incurred $197,095 of beneficial conversion expense compared to $0 recorded for the nine months ended March 31, 2016. The increase in beneficial conversion expenses was due to the issuance of new convertible debentures during the nine months ended March 31, 2017.

Interest expense

Interest expense recorded in the nine months ended March 31, 2017 was $218,921 compared to interest expense of $32,023, for the nine months ended March 31, 2016, an increase of $186,898. The increased interest expense recorded in the nine months ended March 31, 2017 was primarily related to the 8% interest on the April to June, August, October and November 2016 debentures as well as the convertible debentures issued during the nine months ended March 31, 2017.

Accretion of debt discount

Accretion of debt discount expense recorded in the nine months ended March 31, 2017, was $400,423 compared with $129,127 for the period ended March 31, 2016, an increase of $271,296. The increase in accretion of debt discount expense is related to the issuance of convertible debentures during and prior to the nine months ended March 31, 2017.

The following table sets forth our consolidated results of operations for the periods indicated:

	Nine Months Ended
	March 31,
	2017		2016
Statement of Operations Information:	(unaudited)
Revenues	$	27,000	$	225,000
General and administrative		3,750,806		4,212,120
Research and development		408,588		165,265
Gain on settlement		-		(174,568	)
Beneficial conversion expense		197,095		-
Interest expense, net		218,921		32,023
Accretion of debt discount		400,423		129,127

Off-balance sheet arrangements

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

28 

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on their evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective at March 31, 2017.

Change in Accounting Staff

Subsequent to December 31, 2016 and prior to the filing of this Form 10-Q/A, there has been a complete change in the Company’s accounting staff, including the Chief Financial Officer. Prior to March 31, 2017, the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) conducted an evaluation of the Company’s disclosure controls and internal controls which include a review of the controls’ (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in quarterly and annual reports. In the course of the evaluation, the CEO and CFO will seek to identify data errors, control problems, acts of fraud, and if appropriate, then seek to confirm that appropriate corrective action, including process improvements to be undertaken. This type of evaluation will be done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on Form 10-Q/A and annual reports on Form 10-K. The overall goals of these various evaluation activities are to monitor our disclosure controls and internal controls, and to make modifications if and as necessary.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting except as set forth above.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company was served in Hays County, Texas in a compliant for breach of contract in February 2017. In April 2017, the Company settled this complaint for $129,000 payable over a 4 month period. The entire $129,000 was accrued as an expense during the nine-month period ended March 31, 2017.

Item 1A. Risk Factors

As a Smaller Reporting Company as defined Rule 12b-2 of the Exchange Act and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 1A.

29 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

From July 1, 2016 to March 31, 2017, we had the following sales and issuances of unregistered equity securities:

Date of Sale	Title of Security	Number Sold		Consideration Received and Description of Underwriting or Other Discounts to Market Price or Convertible Security Afforded to Purchases	Exemption from Registration Claimed	If Option, Warrant or Convertible Security, Terms of Exercise or Conversion
August 2016	Common Stock		500,000	Shares issued as stock-based compensation; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
August 2016	Common Stock		250,000	Shares issued for services; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
August 2016	Common Stock Warrants		833,200	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.15 per share through August 23, 2021
September 2016	Common Stock		200,000	Shares issued with convertible promissory note	Section 4(2); and/or Rule 506	Not applicable
September 2016	Common Stock Options		2,450,000	Issuance of stock options	Section 4(2); and/or Rule 506	Options exercisable at $0.12 per share through September 20, 2021
September 2016	Common Stock Warrants		250,000	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.12 per share through September 15, 2019
September 2016	Common Stock Warrants		416,667	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.15 per share through September 29, 2021
October 2016	Common Stock		6,250,000	Shares issued for warrants exercised; $375,000 cash received; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
October 2016	Common Stock		2,500,000	Shares issued for warrants in cashless exercise; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
October 2016	Common Stock		833,334	Shares issued upon conversion of $100,000 of debentures; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
October 2016	Common Stock		17,899	Shares issued in exchange for $2,147 of interest; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
October 2016	Common Stock Warrants		208,300	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.15 per share through October 6, 2021
October 2016	Common Stock Warrants		1,916,667	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable between $0.20 and $0.24 per share through April 25, 2017
November 2016	Common Stock		416,667	Shares issued upon conversion of $50,000 of debentures; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
November 2016	Common Stock		17,808	Shares issued in exchange for $2,137 of interest; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
November 2016	Common Stock		1,750,000	Shares issued for services; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
November 2016	Common Stock Warrants		833,200	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.15 per share through November 7, 2021
January 2017	Common Stock		1,000,000	Shares issued for services; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
January 2017	Common Stock Warrants		666,560	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.15 per share through January 17 - 31, 2022
February 2017	Common Stock		833,333	$100,000 cash received; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
February 2017	Common Stock		200,000	Shares issued with convertible promissory note	Section 4(2); and/or Rule 506	Not applicable
February 2017	Common Stock		3,466,666	Shares issued for services; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
February 2017	Common Stock Warrants		416,600	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.15 per share through February 14 - 28, 2022
February 2017	Common Stock Warrants		250,000	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.12 per share through February 1, 2020
February 2017	Common Stock Warrants		833,333	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.12 per share through February 13, 2019
March 2017	Common Stock		1,250,000	Shares issued for warrants exercised; $50,000 cash received; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
March 2017	Common Stock		833,333	Shares issued upon conversion of $100,000 of debentures; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
March 2017	Common Stock		66,667	Shares issued in exchange for $8,000 of interest; no commissions paid	Section 4(2); and/or Rule 506	Not applicable
March 2017	Common Stock Warrants		375,000	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.12 per share through March 27, 2020
March 2017	Common Stock Warrants		1,014,101	Issuance of stock warrants	Section 4(2); and/or Rule 506	Warrants exercisable at $0.13 per share through March 29, 2022

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On May 19, 2017, the Company entered into two waiver and consent agreements with Lincoln Park Capital Fund, LLC (“Lincoln Park”) whereby the parties agreed that the prior equity line of credit agreement entered into on November 8, 2016 is canceled and various covenants made with respect to a $200,000 loan were waived in connection with certain loan transactions and in consideration thereof, the Company agreed to issue 1,000,000 shares of common stock to Lincoln Park in settlement of all claims.

30 

Item 6. Exhibits (items indicated by an (*) are filed herewith)

The following exhibits are all previously filed in connection with our Form 8-K filed November 10, 2008, unless otherwise noted.

2.1	Agreement and Plan of Merger and Reorganization, dated as of October 15, 2008, by and among Quantum Materials Corp., Solterra Renewable Technologies, Inc., the shareholders of Solterra and Greg Chapman, as Indemnitor.
3.1	Articles of Incorporation. (Incorporated by reference to Form SB-2 Registration Statement filed October 5, 2007.)
3.2	2010 Amendment to Articles of Incorporation. (Incorporated by reference to the Form 10-K filed for the fiscal year ended June 30, 2014 filed on September 29, 2014.)
3.3	2013 Amendment to Articles of Incorporation. (Incorporated by reference to the Form 10-K filed for the fiscal year ended June 30, 2014 filed on September 29, 2014.)
3.4	Bylaws. (Incorporated by reference to Form SB-2 Registration Statement filed October 5, 2007.)
10.1	License Agreement by and between William Marsh Rice University and Solterra Renewable Technologies, Inc. dated August 20, 2008.
10.2	Letter dated October 2, 2008 from Rice University amending the License Agreement contained in Exhibit 10.1.
10.3	Agreement with Arizona State University executed by ASU on October 8, 2008 and executed by Solterra on September 18, 2008.
10.4	Letters dated November 5, 2009 and November 5, 200 amending Rice University Agreement. (Incorporated by reference to Form 10-K filed for the year ended June 30, 2009.)
10.5	License Agreement between The University of Arizona and the issuer dated July 2009. (Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 30, 2009.)
10.6	Letter dated December 16, 2010 from Rice University amending the License Agreement contained in Exhibit 10.1 (Incorporated by reference to the Registrant’s Form 10-K for its fiscal year ended June 30, 2010.)
10.7	Amendment to Exclusive Patent License Agreement between University of Arizona and Solterra Renewable Technologies (i.e. amendment to exhibit 10.7). (Incorporated by reference to the Registrant’s Form 10-K for its fiscal year ended June 30, 2010 filed on February 14, 2011.)
10.8	Amended License Agreement by and between William Marsh Rice University and Solterra Renewable Technologies, Inc. (Incorporated by reference to Form 8-K dated September 19, 2013.)
10.9	License Agreement by and between William Marsh Rice University and Quantum Materials Corp. (Incorporated by reference to Form 8-K dated September 19, 2013.)
10.10	Second Amendment to Issuer’s Agreement with University of Arizona. (Incorporated by reference to Form 10-K for the fiscal year ended June 30, 2012.)
10.11	Employment Agreement — Stephen Squires. (Incorporated by reference to Form 8-K filed January 23, 2013.)
10.12	Employment Agreement — David Doderer (Incorporated by reference to Form 8-K filed January 23, 2013.)
10.13	Employment Agreement – Craig Lindberg (Incorporated by reference to Form 8-K filed June 17, 2015.)
10.14	Agreement with Christopher Benjamin, former officer/director (Incorporated by reference to Form 10-Q for the quarter ended September 30, 2015.)

31 

10.15	Amended and Restated Employment Agreement – Stephen Squires (Incorporated by reference to Form 8-K filed December 15, 2015.)
10.16	Amended and Restated Employment Agreement – David Doderer (Incorporated by reference to Form 8-K filed December 15, 2015.)
10.17	Amended and Restated Employment Agreement – Craig Lindberg (Incorporated by reference to Form 8-K filed December 15, 2015.)
10.18	Amended License Agreement by and between William Marsh Rice University and Solterra Renewable Technologies, Inc. (Incorporated by reference to Form 8-K filed April 1, 2016.)
10.19	Amended License Agreement by and between William Marsh Rice University and Quantum Materials Corp. (Incorporated by reference to Form 8-K filed April 1, 2016.)
10.20	Amended License Agreement by and between The University of Arizona and Solterra Renewable Technologies, Inc. (Incorporated by reference to Form 8-K filed June 9, 2016.)
10.21	Employment Agreement – Sri Peruvemba (Incorporated by reference to Form 8-K filed June 16, 2016.)
10.22	Amended and Restated Employment Agreement – Stephen Squires (Incorporated by reference to Form 8-K filed June 16, 2016.)
10.23	Amended and Restated Subscription Agreement dated January 15, 2015 by and among Quantum Materials Corp., Carson Diversified Investments, LP and Carson Haysco Holdings, LP. (Incorporated by reference to Form 8-K filed October 14, 2016.)
10.24	Agreement dated October 10, 2016 by and among Quantum Materials Corp., Carson Diversified Investments, LP and Carson Haysco Holdings, LP. (Incorporated by reference to Form 8-K filed October 14, 2016.)
10.25	Resignation Agreement of Sriram Peruvemba dated December 22, 2016. (Incorporated by reference to Form 8-K filed December 30, 2016.)
10.26	Resignation Agreement of Craig Lindberg dated as of February 1, 2017. (Incorporated by reference to Form 8-K filed February 3, 2017.)
10.27	Waiver and Consent - $200,000 loan – Lincoln Park (Incorporated by reference to Form 10-Q for the quarter ended March 31, 2017 filed May 15, 2017).
10.28	Waiver and Consent – Eloc – Lincoln Park (Incorporated by reference to Form 10-Q for the quarter ended March 31, 2017 filed May 15, 2017).
21.1	Subsidiaries of Registrant listing state of incorporation (Incorporated by reference to Form 10-K for fiscal year ended June 30, 2011.)
31(a)	Rule 13a-14(a) Certification — Principal Executive Officer *
31(b)	Rule 13a-14(a) Certification — Principal Financial Officer *
32(a)	Section 1350 Certification — Principal Executive Officer *
32(b)	Section 1350 Certification — Principal Financial Officer *
101.INS	XBRL Instance Document *
101.SCH	Document, XBRL Taxonomy Extension *
101.CAL	Calculation Linkbase, XBRL Taxonomy Extension Definition *
101.DEF	Linkbase, XBRL Taxonomy Extension Labels *
101.LAB	Linkbase, XBRL Taxonomy Extension *
101.PRE	Presentation Linkbase *

32 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	QUANTUM MATERIALS CORP.
Date: July 6, 2017	/s/ Stephen Squires
	Stephen Squires
	Principal Executive Officer
Date: July 6, 2017	/s/ E. J. Schloss
	E.J. Schloss
	Principal Financial Officer

33 

EX-31.A

Exhibit 31(a)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Stephen Squires, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of Quantum Materials Corp. for the period ending March 31, 2017:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer (if any) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 6, 2017	/s/ STEPHEN SQUIRES
	Stephen Squires, Principal Executive Officer

EX-31.B

Exhibit 31(b)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, E.J. Schloss, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of Quantum Materials Corp. for the period ending March 31, 2017;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer (if any) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 6, 2017	/s/ E. J. SCHLOSS
	E.J. Schloss, Principal Financial Officer

EX-32.A

Exhibit 32(a)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18U.S.C. SECTION 1350

In connection with the Quarterly Report of Quantum Materials Corp. (the “Company”) on Form 10-Q/A for the period ending March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen Squires, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act, that:

(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.

By:	/s/ STEPHEN SQUIRES
	Stephen Squires
	Principal Executive Officer
	July 6, 2017

EX-32.B

Exhibit 32(b)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18U.S.C. SECTION 1350

In connection with the Quarterly Report of Quantum Materials Corp. (the “Company”) on Form 10-Q/A for the period ending March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, E.J. Schloss, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act, that:

(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.

By:	/s/ E. J. SCHLOSS
	E.J. Schloss
	Principal Financial Officer
	July 6, 2017

XML

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2017	Jun. 27, 2017
Document And Entity Information
Entity Registrant Name	QUANTUM MATERIALS CORP.
Entity Central Index Key	0001403570
Document Type	10-Q/A
Document Period End Date	Mar. 31, 2017
Amendment Flag	true
Amendment Description	The original Form 10-Q for the quarter ended March 31, 2017 was filed without the independent auditors completing their review. This Form 10-Q/A has been filed after the completion of such review.
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		367,614,831
Trading Symbol	QTMM
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2017

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Jun. 30, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 321,656	$ 266,985
Accounts receivable		8,835
Prepaid expenses and other current assets	557,113	102,100
TOTAL CURRENT ASSETS	878,769	377,920
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $222,351 and $150,142	735,336	774,674
LICENSES AND PATENTS, net of accumulated amortization of $104,167 and $75,256	88,576	117,487
TOTAL ASSETS	1,702,681	1,270,081
CURRENT LIABILITIES
Accounts payable and accrued expenses	1,663,531	617,292
Accrued salaries	428,150	238,182
Notes payable, net of unamortized discount	17,374	10,093
Current portion of convertible debentures, net of unamortized discount	1,115,164	407,702
TOTAL CURRENT LIABILITIES	3,224,219	1,273,269
CONVERTIBLE DEBENTURES, net of current portion, unamortized discount and debt issuance costs	1,693,448	1,039,656
TOTAL LIABILITIES	4,917,667	2,312,925
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT
Common stock, $.001 par value, authorized 400,000,000 shares, 344,755,437 and 324,563,789 issued and outstanding at March 31, 2017 and June 30, 2016, respectively	344,755	324,564
Additional paid-in capital	31,172,343	28,415,843
Accumulated deficit	(34,732,084)	(29,783,251)
TOTAL STOCKHOLDERS’ DEFICIT	(3,214,986)	(1,042,844)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$ 1,702,681	$ 1,270,081

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 222,351	$ 150,142
Licenses and patents, accumulated amortization	$ 104,167	$ 75,256
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	344,755,437	324,563,789
Common stock, shares outstanding	344,755,437	324,563,789

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
REVENUES	$ 2,500	$ 225,000	$ 27,000	$ 225,000
OPERATING EXPENSES
General and administrative	737,022	903,795	3,750,806	4,212,120
Research and development	136,786	19,210	408,588	165,265
TOTAL OPERATING EXPENSES	873,808	923,005	4,159,394	4,377,385
LOSS FROM OPERATIONS	(871,308)	(698,005)	(4,132,394)	(4,152,385)
OTHER EXPENSE (INCOME)
Gain on settlement				(174,568)
Beneficial conversion expense	102,797		197,095
Interest expense, net	90,013	10,452	218,921	32,023
Accretion of debt discount	100,566	43,903	400,423	129,127
TOTAL OTHER EXPENSE (INCOME)	293,376	54,355	816,439	(13,418)
NET LOSS	$ (1,164,684)	$ (752,360)	$ (4,948,833)	$ (4,138,967)
LOSS PER COMMON SHARE
Basic and diluted	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted	339,943,771	322,675,999	333,385,603	316,418,240

XML

Consolidated Statements of Stockholders' Deficit (Unaudited) - 9 months ended Mar. 31, 2017 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balances at Jun. 30, 2016	$ 324,564	$ 28,415,843	$ (29,783,251)	$ (1,042,844)
Balances, shares at Jun. 30, 2016	324,563,789
Common stock issued for cash	$ 833	99,167		$ 100,000
Common stock issued for cash, shares	833,333			833,333
Common stock issued for warrant and option exercises	$ 10,000	415,000		$ 425,000
Common stock issued for warrant and option exercises, shares	10,000,000
Common stock issued for services	$ 6,467	572,033		$ 578,500
Common stock issued for services, shares	6,466,666			1,750,000
Common stock issued for debenture interest	$ 102	12,183		$ 12,285
Common stock issued for debenture interest, shares	102,374
Common stock issued for debenture conversions	$ 2,083	247,917		250,000
Common stock issued for debenture conversions, shares	2,083,334
Cancellation of shares	$ (194)	194
Cancellation of shares, shares	(194,059)
Stock-based compensation	$ 500	821,674		822,174
Stock-based compensation, shares	500,000
Beneficial conversion feature of debenture		197,095		197,095
Allocated value of common stock and warrants related to debenture	$ 400	391,237		$ 391,637
Allocated value of common stock and warrants related to debenture, shares	400,000			200,000
Net loss			(4,948,833)	$ (4,948,833)
Balances at Mar. 31, 2017	$ 344,755	$ 31,172,343	$ (34,732,084)	$ (3,214,986)
Balances, shares at Mar. 31, 2017	344,755,437

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (4,948,833)	$ (4,138,967)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	101,120	92,764
Amortization of debt issuance costs	47,469
Stock-based compensation	822,174	2,080,892
Stock issued for services	286,113	158,345
Stock issued for interest	12,285
Gain on settlement		(174,568)
Beneficial conversion feature	197,095
Accretion of debt discount	400,423	129,127
Effects of changes in operating assets and liabilities:
Accounts receivable	8,835
Prepaid expenses and other current assets	54,654	237,899
Accounts payable and accrued expenses	1,236,207	321,258
NET CASH USED IN OPERATING ACTIVITIES	(1,782,458)	(1,293,250)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(32,871)	(47,459)
Change in restricted cash investments		65,330
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	(32,871)	17,871
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock	525,000	460,500
Proceeds from issuance of convertible debentures / promissory note	1,360,000
Proceeds from issuance of note payable	100,000	150,000
Principal payments on note payable	(100,000)
Debt issuance costs	(15,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES	1,870,000	610,500
NET INCREASE (DECREASE) IN CASH	54,671	(664,879)
CASH AND CASH EQUIVALENTS, beginning of period	266,985	673,839
CASH AND CASH EQUIVALENTS, end of period	$ 321,656	$ 8,960

XML

Basis of Presentation

9 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

NOTE 1 – BASIS OF PRESENTATION

General

The accompanying consolidated financial statements include the accounts of Quantum Materials Corp. and its wholly owned subsidiary, Solterra Renewable Technologies, Inc. (collectively referred to as the “Company”).

The consolidated financial statements of the Company as of and for the nine months ended March 31, 2017 are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended June 30, 2016. The year-end balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the accompanying unaudited financial information includes all adjustments necessary for a fair presentation of the interim financial information. Operating results for the interim periods are not necessarily indicative of the results of any subsequent periods. Certain information in the footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) has been condensed or omitted for the interim periods presented under the United States Securities and Exchange Commission (“SEC”) rules and regulations. As such, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016.

Nature of Operations

The Company is a nanotechnology company specializing in the design, development, production and supply of quantum dots, including tetrapod quantum dots, a high-performance variant of quantum dots, and highly uniform nanoparticles, using its patented automated continuous flow production process. Quantum dots and other nanoparticles are expected to be increasingly utilized in a range of applications in the life sciences, television and display, solid state lighting, solar energy, battery, security ink, and sensor sectors of the market. Key uncertainties and risks to the Company include, but are not limited to, if and how quickly various industries adopt and fully embrace quantum dot technology and technological changes, including those developed by the Company’s competitors, rendering the Company’s technology uncompetitive or obsolete.

Going Concern

The Company recorded losses from continuing operations in the current period presented and has a history of losses. As of March 31, 2017, the Company had a working capital deficit of $2,345,450 and net cash used in operating activities was $1,782,458 for the nine months ended March 31, 2017. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, obtain revenues from operations, raise additional capital, and/or obtain debt financing.

In conjunction with anticipated revenue streams, management is currently negotiating equity and debt financing, the proceeds from which would be used to settle outstanding debts, to finance operations, and for general corporate purposes. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern.

The accompanying unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

XML

Property and Equipment

9 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31, 2017		June 30, 2016
	(unaudited)
Furniture and fixtures	$	1,625	$	1,625
Computers and software		11,447		11,447
Machinery and equipment		944,615		911,744
		957,687		924,816
Less: accumulated depreciation		222,351		150,142
Total property and equipment, net	$	735,336	$	774,674

Depreciation expense for the three months ended March 31, 2017 and 2016 was $25,257 and $21,853, respectively, and $72,209 and $63,853 for the nine months ended March 31, 2017 and 2016, respectively.

XML

Licenses and Patents

9 Months Ended

Mar. 31, 2017

Finite-Lived Intangible Assets, Net [Abstract]

Licenses and Patents

NOTE 3 – LICENSES AND PATENTS

Licenses and patents consisted of the following:

	March 31, 2017		June 30, 2016
	(unaudited)
William Marsh Rice University	$	40,000	$	40,000
University of Arizona		15,000		15,000
Bayer acquired patents		137,743		137,743
		192,743		192,743
Less: accumulated amortization		104,167		75,256
Total licenses and patents, net	$	88,576	$	117,487

Amortization expense for the three months ended March 31, 2017 and 2016 was $9,637 and $9,637, respectively, and $28,911 and $28,911 for the nine months ended March 31, 2017 and 2016, respectively.

XML

Fair Value of Financial Instruments

9 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Financial Instruments

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2011-04 “Fair Value Measurement” as it relates to financial assets and financial liabilities, which defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements.

This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Hierarchical levels, as defined in this guidance and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities are as follows:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Inputs that are both significant to the fair value measurement and unobservable. The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2017 and June 30, 2016 or that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement.

The carrying amounts of cash and cash equivalents, accounts payable and current debt approximate their fair value due to the short maturity of those instruments.

Convertible Debentures

The Company measured the estimated fair value of the convertible debentures using significant other observable inputs, representative of a Level 2 fair value measurement, including the interest and conversion rates for the instruments. The following table sets forth the fair value of the Company’s convertible debentures as of March 31, 2017, and June 30, 2016:

	March 31, 2017				June 30, 2016
	(unaudited)
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Convertible debentures issued in September 2014	$	25,050	$	44,093	$	25,050	$	21,710
Convertible debentures issued in January 2015	$	500,000	$	1,166,667	$	500,000	$	1,083,333
Convertible debentures issued in April - June 2016	$	1,465,000	$	1,958,670	$	1,565,000	$	1,695,417
Convertible debenture issued in August 2016	$	200,000	$	253,711	$	-	$	-
Convertible debenture issued in November 2016	$	200,000	$	245,990	$	-	$	-
Convertible debentures issued in January - March 2017	$	260,000	$	303,334	$	-	$	-
Convertible debenture issued in February 2017	$	100,000	$	116,667	$	-	$	-
Convertible debenture issued in March 2017	$	150,000	$	175,000	$	-	$	-
Convetible promissory notes issued in March 2017	$	541,850	$	632,158	$	-	$	-

The Company is not a party to any hedge arrangements or commodity swap agreements.

XML

Convertible Debentures

9 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Convertible Debentures

NOTE 5 – CONVERTIBLE DEBENTURES

The following table sets forth activity associated with the convertible debentures:

	March 31, 2017		June 30, 2016
	(unaudited)
Convertible debentures issued in September 2014	$	25,050	$	25,050
Convertible debentures issued in January 2015		500,000		500,000
Convertible debentures issued in April - June 2016		1,565,000		1,565,000
Convertible debenture issued in August 2016		200,000		-
Convertible promissory note issued in September 2016		100,000		-
Convertible debenture issued in October 2016		50,000		-
Convertible debenture issued in November 2016		200,000		-
Convertible debentures issued in January - March 2017		260,000		-
Convertible debenture issued in February 2017		100,000		-
Convertible debenture issued in March 2017		150,000		-
Convertible promissory notes issued in March 2017		541,850		-
		3,691,900		2,090,050
Less: amount converted to shares		250,000		-
Total convertible debentures outstanding		3,441,900		2,090,050
Less: unamortized discount		550,415		527,350
Less: debt issuance costs		82,873		115,342
		2,808,612		1,447,358
Less: current portion		1,115,164		407,702
Total convertible debentures, net of current portion	$	1,693,448	$	1,039,656

September 2014 Convertible Debenture

Between September 16, 2014 and October 28, 2014, the Company entered into Convertible Debenture Agreements to obtain a total of $500,050 in gross proceeds from five non-affiliated parties (collectively hereinafter referred to as the “Debenture Holders”). The Debentures have terms of five years maturing between September 16, 2019 and October 30, 2019. The Debentures bear interest at the rate of 6% per annum and are pre-payable by the Company at any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.15 per share at any date, and will receive an equal number of warrants having a strike price of $0.30 per share and a term of five years.

Interest expense for the three months ended March 31, 2017 and 2016 was $376 and $380, respectively, and $1,144 and $1,148 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $25,050 of principal was outstanding.

January 2015 Convertible Debenture

On January 15, 2015, the Company entered into Convertible Debenture Agreements to obtain $500,000 in gross proceeds from two non-affiliated parties (collectively hereinafter referred to as the “Debenture Holders”). The Debentures have a term of two years maturing on January 15, 2017 and bear interest at the rate of 8% per annum. The debentures are pre-payable by the Company at any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.06 per share at any date. The Debenture Holders received 6,250,000 common stock warrants exercisable at $0.06 per share through January 15, 2017. The debt is secured by a security interest in certain microreactor equipment. The Agreement also provides for the investors to have the right to appoint one member to the Company’s Board of Directors in the event that any one of the aforementioned debentures are converted into common stock of the Company. On October 10, 2016, the maturity date of the debentures was extended to January 15, 2018 and the 6,250,000 warrants were converted into common stock for total proceeds of $375,000.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $348,105, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, two years. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $0 and $43,903, respectively, and $92,298 and $129,127 for the nine months ended March 31, 2017 and 2016, respectively.

Interest expense for the three months ended March 31, 2017 and 2016 was $9,863 and $9,973, respectively, and $30,027 and $30,137 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $500,000 of principal was outstanding.

April – June, August, October and November 2016 Convertible Debentures

During the fourth quarter of the year ended June 30, 2016, the Company sold 1,565 Units for total proceeds of $1,565,000 from three affiliated and fourteen non-affiliated parties. In August 2016, the Company sold 200 additional Units for total proceeds of $200,000. In October and November 2016, the Company sold 50 and 200, respectively, additional units for total proceeds of $50,000 and $200,000, respectively. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company. In evaluating the accounting treatment of this anti-dilution feature, the Company believes that is has control over whether or not the anti-dilution feature will be exercised. The Company is able to decide on which type of financing is raised, and thus the Company can prevent the issuance of shares at a price below the anti-dilution strike price. The number of Warrants and exercise price is proportionately adjustable for events including subdivisions, combinations or consolidations, reclassifications, exchanges, mergers, and reorganizations.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $609,595, recorded as debt discount and is amortized using the effective interest rate method over the life of the loans, two years. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $69,156 and $0, respectively, and $235,697 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

The Company recognized a beneficial conversion expense for the three months ended March 31, 2017 and 2016 of $0 and $0, respectively, and $64,775 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

Interest expense for the three months ended March 31, 2017 and 2016 of $37,300 and $0, respectively, and $108,276 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

During the nine months ended March 31, 2017, $150,000 of principal was converted into 1,250,000 shares of common stock.

As of March 31, 2017, $1,865,000 of principal was outstanding.

September 2016 Convertible Promissory Note

In September 2016, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for 200,000 unregistered and restricted shares of common stock of the Company and a convertible promissory note in the principal amount of $100,000. The Note Holder received 250,000 common stock warrants exercisable at $0.12 per share through September 15, 2019. The promissory note has a term of eight months maturing on May 15, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note. In March 2017, the note and accrued interest were converted into 833,333 and 66,667 shares of common stock, respectively.

In accounting for the convertible promissory note, the Company allocated the fair value of the common stock and warrants to the proceeds received in the amount of $29,522, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $14,957 and $0, respectively, and $29,522 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

The Company recognized a beneficial conversion expense for the three months ended March 31, 2017 and 2016 of $0 and $0, respectively, and $29,523 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

Interest expense for the three months ended March 31, 2017 and 2016 of $2,622 and $0, respectively, and $8,000 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $0 of principal was outstanding.

January-March, 2017 Convertible Debentures

During the third quarter of the year ended June 30, 2017, the Company sold 2,600 Units for total proceeds of $260,000 from five non-affiliated parties. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company. In evaluating the accounting treatment of this anti-dilution feature, the Company believes that is has control over whether or not the anti-dilution feature will be exercised. The Company is able to decide on which type of financing is raised, and thus the Company can prevent the issuance of shares at a price below the anti-dilution strike price. The number of Warrants and exercise price is proportionately adjustable for events including subdivisions, combinations or consolidations, reclassifications, exchanges, mergers, and reorganizations.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $73,250, recorded as debt discount and is amortized using the effective interest rate method over the life of the loans, two years. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $6,985 and $0, respectively.

The Company recognized a beneficial conversion expense for the three and nine months ended March 31, 2017 and 2016 of $62,400 and $0, respectively.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $3,343 and $0, respectively.

As of March 31, 2017, $260,000 of principal was outstanding.

February 2017 Convertible Promissory Note

In March 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for 200,000 unregistered and restricted shares of common stock of the Company and a convertible promissory note in the principal amount of $100,000. The Note Holder received 250,000 common stock warrants exercisable at $0.12 per share through February 1, 2020. The promissory note has a term of eight months maturing on October 1, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the Company allocated the fair value of the common stock and warrants to the proceeds received in the amount of $24,733, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $6,060 and $0, respectively.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $8,000 and $0, respectively.

As of March 31, 2017, $100,000 of principal was outstanding.

March 2017 Convertible Debenture

In March 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $150,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $150,000. The Note Holder received 375,000 common stock warrants exercisable at $0.12 per share through March 28, 2020. The promissory note has a term of eight months maturing on November 28, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $27,897, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $3,407 and $0, respectively.

The Company recognized a beneficial conversion expense for the three and nine months ended March 31, 2017 and 2016 of $40,397 and $0, respectively.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $12,000 and $0, respectively.

As of March 31, 2017, $150,000 of principal was outstanding.

March 2017 Convertible Promissory Notes

In March 2017, the Company entered into Convertible Promissory Notes with SBI Investment LLC, 2014-1 (“SBI”) and L2 Capital, LLC (“L2 Capital”) to obtain $285,000 in gross proceeds. In connection with the first funding tranche, SBI and L2 received 253,525 and 760,576 common stock warrants, respectively, exercisable at $0.13 per share through March 28, 2022. At each subsequent funding to the first tranche, the Company will issue to each of SBI and L2 Capital warrants to purchase 50% of the total amount of each tranche funded plus the applicable original issue discount, divided by the lesser of (i) the closing bid of the common stock on March 29, 2017 and (ii) the closing bid price of the common stock on the funding date of each respective tranche. The promissory notes have a term of six months from the issuance date and bear interest at the rate of 6% per annum. The promissory notes are not pre-payable by the Company without penalty. The promissory notes are convertible into unregistered and restricted shares of Common Stock only if there is an Event of Default as defined in the notes.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $86,673, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company also recorded original issue discount (“OID”) of $31,850 as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized accretion of debt discount expense for the three and nine months ended March 31, 2017 and 2016 of $0 and $0, respectively.

In March 2017, the Company entered into an equity purchase agreement (“Eloc”) with SBI and L2 Capital, allowing them to purchase up to $5,000,000 of the Company’s common stock. As consideration for SBI and L2 Capital, the Company agreed to pay SBI and L2 Capital commitment fees of $63,000 and $147,000, respectively. These commitment fees were issued in the form of promissory notes, which bear interest at 8% per annum and have mature nine months from the date of issuance. The promissory notes are convertible into unregistered and restricted shares of Common Stock only if there is an Event of Default as defined in the notes.

Interest expense for the three and nine months ended March 31, 2017 and 2016 of $138 and $0, respectively.

As of March 31, 2017, $541,850 of principal was outstanding.

Debt Issuance Costs

The costs related to the issuance of debt are presented on the balance sheet as a direct deduction from the related debt and amortized to interest expense using the effective interest method over the maturity period of the related debt. Amortization expense for the three months ended March 31, 2017 and 2016 was $16,139 and $0, respectively, and $47,469 and $0 for the nine months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, the balance of debt issuance costs was $82,873.

XML

Notes Payable

9 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Notes Payable

NOTE 6 – NOTES PAYABLE

Promissory Notes

In September 2016, the Company issued an unsecured promissory note for proceeds of $100,000. The note bears 0% interest and the Company issued 416,667 common stock warrants exercisable at $0.15 per share through September 29, 2021. The note was due October 13, 2016 and was repaid on October 11, 2016.

In accounting for the promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $26,454, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, fourteen days. The Company recognized accretion of debt discount expense for the three months ended March 31, 2017 and 2016 of $0 and $0, respectively, and $26,454 and $0 for the nine months ended March 31, 2017 and 2016, respectively.

As of March 31, 2017, $0 of principal was outstanding. See Note 13 for additional information.

Note Payable – Insurance

In August 2016, to finance an insurance premium, the Company issued a negotiable promissory note for $13,959 at an interest rate of 4.87% per annum. The note is due in May 5, 2017. The balance outstanding at March 31, 2017 was $0.

In March, 2017, to finance an insurance premium, the Company issued a negotiable promissory note for $17,434 at an interest rate of 6.89% per annum. The note is due November 11, 2017. The balance outstanding at March 31, 2017 was $17,434.

XML

Equity Transactions

9 Months Ended

Mar. 31, 2017

Equity [Abstract]

Equity Transactions

NOTE 7 – EQUITY TRANSACTIONS

Common Stock

During the nine months ended March 31, 2017, the Company issued 833,333 shares of common stock for cash proceeds of $100,000. Additionally, investors exercised options and warrants to purchase 10,000,000 shares of common stock for cash proceeds of $425,000. Included were cashless exercises of 5,000,000 warrants that resulted in the issuance of 2,500,000 shares of common stock.

During the nine months ended March 31, 2017, the Company granted 3,250,000 shares of common stock to consultants at the fair market value of $262,500. This was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

During the nine months ended March 31, 2017, the Company issued 3,216,666 shares to lenders as commitment fees at the fair market value of $316,000, of which $175,000 was recognized as general and administrative expense and $141,000 was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

During the nine months ended March 31, 2017, holders of convertible notes elected to convert debt of $250,000 into 2,083,334 shares of common stock.

During the nine months ended March 31, 2017, the Company issued 102,374 shares of common stock to a lender, in exchange for interest due, in the amount of $12,285.

During the nine months ended March 31, 2017, the Company issued 400,000 shares in connection with the issuance of the September 2016 promissory note and the February 2017 convertible debenture.

During the nine months ended March 31, 2017, the Company cancelled 194,059 common shares.

Stock Warrants

A summary of activity of the Company’s stock warrants for the nine months ended March 31, 2017 is presented below:

						Weighted
	Weighted					Average		Weighted
	Average					Remaining		Average
	Exercise		Number of			Contractual		Grant Date
	Price		Warrants			Term in Years		Fair Value
Balance as of June 30, 2016	$	0.11		39,262,305				$	0.15
Expired		0.18		(555,555	)				0.14
Granted		0.16		8,013,628					0.11
Exercised		0.06		(12,500,000	)				0.15
Cancelled		0.13		(2,104,637	)				0.15
Balance as of March 31, 2017	$	0.13		32,115,741			3.12	$	0.14
Vested and exercisable as of March 31, 2017	$	0.13		32,115,741			3.12	$	0.14

Outstanding warrants at March 31, 2017 expire during the period April 2017 to March 2022 and have exercise prices ranging from $0.06 to $0.30.

XML

Stock-Based Compensation

9 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

NOTE 8 – STOCK-BASED COMPENSATION

The Company follows FASB Accounting Standards Codification (“ASC”) 718 “Compensation — Stock Compensation” for share-based payments which requires all stock-based payments, including stock options, to be recognized as an operating expense over the vesting period, based on their grant date fair values.

In October 2009, the Board of Directors authorized the approval of a stock option plan covering 7,500,000 shares of common stock, which was increased to 10,000,000 shares in December 2009 and approved by stockholders in January 2010. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2017, 9,200,000 options have been granted, with terms ranging from five to ten years, and 800,000 have been cancelled. The balance outstanding at March 31, 2017 was 8,400,000.

In March 2012, 3,500,000 stock options, with a term of five years, were granted outside of a stock option plan. In March, 2017, the term of these options was extended for an additional five years.

In January 2013, the Board of Directors authorized the approval of a stock option plan covering 20,000,000 shares of common stock, which was increased to 60,000,000 shares in March 2013 and approved by stockholders in March 2013. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2017, 72,653,473 options have been granted, with terms ranging from five to ten years, 3,325,000 have been exercised and 15,886,559 have been cancelled. The balance outstanding at March 31, 2017 was 53,441,914.

On February 17, 2016, the Shareholders approved the 2015 Employee Benefit and Consulting Services Compensation Plan covering 15,000,000 shares. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2017, 2,800,000 options have been granted with a term of five years, and 1,625,000 have been cancelled. The balance outstanding at March 31, 2017 was 1,175,000.

In June 2016, 6,000,000 stock options, with a term of ten years, were granted outside of a stock option plan. During the nine months ended March 31, 2017, 3,000,000 options were cancelled.

Incentive Stock Options: The Company estimates the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model. The volatility is based on expected volatility over the expected life of thirty-six to sixty months. Compensation cost is recognized based on awards that are ultimately expected to vest, therefore, the Company has reduced the cost for estimated forfeitures based on historical forfeiture rates, which were between 14% and 17% during the nine months ended March 31, 2017. As the Company has not historically declared dividends, the dividend yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions. There is no assurance the value realized by an optionee will be at or near the value estimated by the Black-Scholes-Merton model.

The following assumptions were used for the periods indicated:

	Nine Months Ended
	March 31,
	2017			2016
Expected volatility		140.73	%		142.05	%
Expected dividend yield		-			-
Risk-free interest rates		1.25	%		1.19	%
Expected term (in years)		3.0 to 5.0			3.0 to 5.0

The computation of expected volatility during the nine months ended March 31, 2017 and 2016 was based on the historical volatility. Historical volatility was calculated from historical data for the time approximately equal to the expected term of the option award starting from the grant date. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for the period corresponding with the expected life of the option.

A summary of the activity of the Company’s stock options for the nine months ended March 31, 2017 is presented below:

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value
Balance as of June 30, 2016	$	0.08		75,375,248				$	0.11	$	3,771,601
Expired		-		-					-
Granted		0.12		2,500,000					0.10
Exercised		-		-					-
Cancelled		0.12		(8,358,334	)				0.12
Balance as of March 31, 2017	$	0.08		69,516,914			5.15	$	0.11	$	4,340,520
Vested and exercisable as of March 31, 2017	$	0.07		64,608,580			4.64	$	0.11	$	4,309,020

Outstanding options at March 31, 2017, expire during the period January 2018 to June 2026 and have exercise prices ranging from $0.05 to $0.17.

Compensation expense associated with stock options for the three months ended March 31, 2017 and 2016 was $(76,259) and $98,316, respectively, and $664,530 and $1,439,221 for the nine months ended March 31, 2017 and 2016, respectively, and was included in general and administrative expenses in the consolidated statements of operations.

At March 31, 2017, the Company had 4,908,334 shares of nonvested stock option awards. The total cost of nonvested stock option awards which the Company had not yet recognized was $403,944 at March 31, 2017. Such amounts are expected to be recognized over a period of 2.5 years.

Restricted Stock: To encourage retention and performance, the Company granted certain employees restricted shares of common stock with a fair value per share determined in accordance with conventional valuation techniques, including but not limited to, arm’s length transactions, net book value or multiples of comparable company earnings before interest, taxes, depreciation and amortization, as applicable. Generally, the stock vests over a 3 year period. A summary of the activity of the Company’s restricted stock awards for the nine months ended March 31, 2017 is presented below:

	Number of
	Nonvested,			Weighted
	Nonissued			Average
	Restricted			Grant Date
	Share Awards			Fair Value
Nonvested, nonissued restricted shares outstanding at June 30, 2016		1,000,000		$	0.42
Granted		-			-
Vested		(500,000	)		0.42
Forfeited		-			-
Nonvested, nonissued restricted shares outstanding at March 31, 2017		500,000		$	0.42

Compensation expense associated with restricted stock for the three months ended March 31, 2017, and 2016, was $51,781 and $52,356, respectively, and $157,644 and $193,219 for the nine months ended March 31, 2017, and 2016, respectively, and was included in general and administrative expenses in the consolidated statements of operations. The total cost of nonvested stock awards which the Company had not yet recognized was $60,411 at March 31, 2017. This amount is expected to be recognized over a period of 0.5 years.

Agreements with Officers and Employees: In June 2016, the Company’s officers and certain employees owning options to purchase 56,087,599 shares of the Company’s common stock entered into an agreement with the Company that such persons cannot exercise their options and the Company does not have to reserve for the issuance of shares of common stock underlying their options until the earlier of June 30, 2017 or the Company having unreserved shares sufficient for all outstanding options to be exercised. On May 1, 2017, the Company’s shareholders approved an increase in the number of authorized common shares to 750,000,000. As a result of this increase all 56,087,599 options will be exercisable as of May 1, 2017.

XML

Loss Per Share

9 Months Ended

Mar. 31, 2017

LOSS PER COMMON SHARE

Loss Per Share

NOTE 9 – LOSS PER SHARE

The Company follows ASC 260, “Earnings Per Share”, for share-based payments that are considered to be participating securities within the definition provided by the standard. All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
	(unaudited)						(unaudited)
Net loss	$	(1,164,684	)	$	(752,360	)	$	(4,948,833	)	$	(4,138,967	)
Weighted average common shares outstanding:
Basic and diluted		339,943,771			322,675,999			333,385,603			316,418,240
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

For the three and nine months ended March 31, 2017 and 2016, 32,115,741 and 35,466,779 stock warrants, respectively, were excluded from diluted earnings per share because they are considered anti-dilutive.

For the three and nine months ended March 31, 2017 and 2016, 69,516,914 and 64,625,248 stock options, respectively, were excluded from diluted earnings per share because they are considered anti-dilutive.

XML

Revenue

9 Months Ended

Mar. 31, 2017

Revenue

Revenue

NOTE 10- REVENUE

During the three months ended March 31, 2017, the Company recognized revenues of $2,500 compared with revenues of $225,000 recognized during the three months ended March 31, 2016. For the nine months ended March 31, 2017, the Company recognized revenues of $27,000 from merchandise samples compared with revenues of $225,000 from a development assistance contract recognized in the comparable period of 2016.

XML

Commitments and Contingencies

9 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Agreement with Rice University

On August 20, 2008, Solterra entered into a License Agreement with Rice University, which was amended and restated on September 26, 2011; also on September 26, 2011, QMC entered into a new License Agreement with Rice (collectively the “Rice License Agreements”). On August 21, 2013, QMC and Solterra each entered into a second amended license agreements with Rice University. QMC and Solterra entered into third amended license agreements with Rice University on March 15 and 24, 2016, respectively.

The Rice License Agreements, as amended, require the payment of certain patent fees to Rice and for QMC and Solterra to meet certain milestones by specific dates. Pursuant to the Solterra Rice License Agreement, as amended, Rice is entitled to receive, during the term, certain royalties of adjusted gross sales (as defined therein) ranging from 2% to 4% for photovoltaic cells and 7.5% of adjusted gross sales for QDs sold in electronic and medical applications.

The Company had verbal agreements with Rice University to modify the minimum royalty due dates that results in the Company being in full compliance with the agreements at March 31, 2017. On June 11, 2017 , the Company executed the revised agreements. Per the revised agreements, both Quantum Materials and Solterra shall pay to Rice a non-refundable, non-creditable annual maintenance fee of $10,000 (“Maintenance Fee”) each January 1, beginning on January 1, 2018 and each year thereafter until the first Sale of a Rice Licensed Product. Licensee’s obligation to pay the Maintenance Fee shall terminate upon first Sale of a Rice Licensed Product unless otherwise specified. In addition, Quantum Materials and Solterra shall pay to Rice an annual minimum royalty payment of $50,000 (“Annual Minimum Royalty”) on January 1 immediately following the first Sale of a Rice Licensed Product and each January 1 of every year thereafter for the term of the revised agreements, regardless of whether sales occur on an ongoing basis. The Annual Minimum Royalty shall be creditable towards royalties due in each respective royalty year, January 1 to December 31, following the due date.

Agreement with University of Arizona

Solterra entered into an exclusive Patent License Agreement with the University of Arizona (“UA”) in July 2009. On March 3, 2017, Solterra entered into an amended license agreement with UA. Pursuant to UA License Agreement, as amended, Solterra is obligated to pay minimum annual royalties of $50,000 by June 30, 2017, $125,000 by September 15, 2017 and $200,000 on each June 30th thereafter, subject to adjustments for increases in the consumer price index. Such minimum royalty payments shall be credited against royalties due in each respective royalty year, July 1 to June 30, following the due date. Royalties based on net sales are 2% of net sales of licensed products for non-display electronic component applications and 2.5% of net sales of licensed products for printed electronic displays. The UA License Agreements and subsequent amendments have been filed on Form 8-K and are incorporated by reference herein. The Company is in the process of renegotiating the minimum royalty commitments and while oral modifications have been agreed to a final amendment has not been finalized. As of March 31, 2017, no royalties have been accrued for this obligation.

Agreement with Texas State University

The Company entered into a Service Agreement with Texas State University (“TSU”) by which the Company occupies certain office and lab space at TSU’s STAR Park (Science Technology and Advanced Research) Facility. The agreement is month-to-month and can be terminated with 60-days written notice of either party.

XML

Income Tax

9 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Tax

NOTE 12 – INCOME TAX

The Company follows ASC 740 “Income Taxes” regarding the accounting for deferred tax assets and liabilities. Under the asset and liability method required by this guidance, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A deferred tax asset will be reduced by a valuation allowance when, based on the Company’s estimates, it is more likely than not that a portion of those assets will not be realized in a future period.

The Company assesses the likelihood that deferred tax assets will be recovered from the existing deferred tax liabilities or future taxable income. To the extent the Company believes that recovery will not meet the more likely than not threshold, it establishes a valuation allowance. The Company has recorded valuation allowances in the U.S. for its net deferred tax assets since management believes it is more likely than not that these assets will not be realized because future taxable income necessary to utilize these losses cannot be established or projected.

The Company had approximately $25,560,000 in U.S. net operating loss (“NOL”) carryforwards that expire beginning in 2029 as of its fiscal year ending June 30, 2016, and $29,079,000 in NOL’s available as of March 31, 2017 prior to any reductions under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”). Section 382 provides that a corporation that undergoes an “ownership change”, as defined therein, is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income.

The Company completed an evaluation study whether an “ownership change” had occurred and determined that the limitation would be approximately $750,000, thereby reducing the net operating loss at March 31, 2017 to approximately $28,329,000. The Company has recorded a valuation allowance on the entire NOL as it believes that it is more likely than not that all of the deferred tax asset associated with the NOLs will not be realized regardless of whether an “ownership change” has occurred.

When a company operates in a jurisdiction that generates ordinary losses but does not expect to realize them, ASC 740-270-30-36(a) requires the exclusion of the respective jurisdiction from the overall annual effective tax rate (“AETR”) calculation and instead, a separate AETR should be computed. The Company operates in one jurisdiction and has determined that its deferred tax assets are not realizable on a more likely than not basis and has recorded a full valuation allowance. The effective income tax rate for the three months and nine months ended March 31, 2017 and 2016 was 0%.

XML

Supplemental Cash Flow Information

9 Months Ended

Mar. 31, 2017

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Nine Months Ended
	March 31,
	2017		2016
	(unaudited)
Cash paid for interest	$	20,584	$	20,055
Cash paid for income taxes	$	-	$	-

The following is supplemental disclosure of non-cash investing and financing activities:

	Nine Months Ended March 31,
	2017		2016
	(unaudited)
Conversion of debentures into shares of common stock	$	250,000	$	-
Allocated value of common stock and warrants issued with convertible debentures	$	391,237	$	-
Stock warrants issued for conversion of accrued salaries	$	-	$	409,667
Prepaid expense paid in shares of common stock	$	292,387	$	131,655
Prepaid expense financed with debt	$	210,000	$	-
Cancellation of shares	$	194	$	-
Financing of prepaid insurance	$	7,281	$	20,024

XML

Transactions with Affiliated Parties

9 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Transactions with Affiliated Parties

NOTE 14 – TRANSACTIONS WITH AFFILIATED PARTIES

During the nine months ended March 31, 2017, the Company issued a convertible debenture to a family member of a key executive for proceeds of $200,000. This transaction is described in more detail in Note 5 under the heading April – June, August, October and November 2016 Convertible Debentures.

In September 2016, the Company’s former Chief Financial Officer loaned the Company $100,000 to provide short-term bridge financing. This transaction is described in more detail in Note 6 under the heading “Promissory Note”. The Company repaid the loan on October 11, 2016.

XML

Recently Issued Accounting Standards

9 Months Ended

Mar. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Standards

NOTE 15 – RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting. The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which updates guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods after December 15, 2018 with early adoption permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes. This ASU requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. It thus simplifies the current guidance, which requires entities to separately present deferred tax assets and deferred tax liabilities as current and noncurrent. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company adopted this guidance effective for the year ended June 30, 2016.

In August 2014, the FASB issued ASU No. 2014-15 Preparation of Financial Statements — Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The Company will continue to evaluate the going concern considerations in this ASU, however, at this time, the Company has not adopted this standard. The Company does not anticipate or expect adoption of this ASU will have a material effect to the consolidated financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction and industry-specific revenue recognition guidance under current generally accepted accounting principles (GAAP) and replaces it with a principle-based approach for determining revenue recognition. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing. Early adoption of this updated guidance is permitted as of the original effective date of December 31, 2016. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

XML

Equity Purchase Agreement and Registration Rights

9 Months Ended

Mar. 31, 2017

Equity [Abstract]

Equity Purchase Agreement and Registration Rights

NOTE 16 – EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS

Equity Purchase Agreement

On March 29, 2017, the Company entered into an equity purchase agreement (“Eloc”) with SBI and L2 Capital to purchase from them up to $5,000,000 of the Company’s common stock. Pursuant to the terms of the equity agreement, for a period of up to four years, SBI and L2 Capital are committed to purchase at the election of the Company, assuming an effective registration statement, and upon delivery by the Company of a put notice to Put Shares (as defined in the Eloc) (i) in a minimum amount of not less than $25,000 and (ii) in a maximum amount up to the lesser of (a) $250,000 or (b) 150% of the average daily trading value; provided such minimum amount of Put Shares may be decreased and such maximum amount of Put Shares may be increased, subject to the Company’s approval. Unless otherwise agreed to in writing by SBI and L2 Capital, the amount in the Put Notice shall be allocated pro rata among the participating investors based upon the Maximum Commitment Amount as defined in the Eloc. The purchase price of the Put Shares shall mean 80% of the market price (i.e. the lowest closing bid price for any trading day during the Valuation Period as defined in the Eloc). If 80% of the lowest closing bid price on the OTCQB for any trading day during the respective Valuation Period (as defined in Eloc) is less than the Company minimum price of $.12 per share, then SBI and/or L2 Capital may elect to purchase all or none of the Put Shares at the Company minimum price.

As further consideration for SBI and L2 Capital entering into the Eloc, the Company agreed to pay SBI and L2 Capital $63,000 and $147,000, respectively, in promissory notes. These promissory notes bear interest at 8% per annum and have a maturity date of nine months from the date of issuance. These notes are not convertible unless there is an Event of Default as defined in the notes.

Registration Rights Agreement

On March 29, 2016, the Company entered into a registration rights agreement with SBI and L2 Capital. Pursuant to said agreement, the Company is required to file a registration statement with the Securities and Exchange Commission to register the shares of common stock under the Eloc and all shares of common stock underlying the notes and warrants issued to SBI and L2 Capital in connection with the Eloc and loan transactions described above.

XML

Subsequent Events

9 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

NOTE 17 - SUBSEQUENT EVENTS

In April 2017, the Company issued 2,500,000 common shares for consulting services. The cost of this issuance was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

In April 2017, the Company issued 595,238 common shares for consulting services. The cost of this issuance was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

On or about April 27, 2017 the Company executed a funded collaboration agreement by which Quantum will work with Freschfield to integrate Quantum Materials Corp advanced Nanomaterials including quantum dot-based solar photovoltaics into Freschfield’s SmartSkinz. Freschfield has synthesized solar and hydrogen fuel cell technologies into an outer layer building skin – SmartSkinz – which creates a perpetual carbon-free energy source, under any weather condition, time of day and location. Quantum Materials’ development will focus on developing and deploying advanced nanomaterials to optimize system performance on several levels including the building-integrated photovoltaics (BIPV) component of SmartSkinz. Under terms of the agreement, Freschfield will fund development by providing $1 million over four quarters to Quantum Materials beginning June 2017.

On May 1, 2017, a Special Meeting of Stockholders was held by Quantum Materials Corp. At the Stockholder Meeting a quorum of 215,995,100 shares of common stock were present in person or by proxy. At the Special Meeting, the stockholders approved the filing of an amendment to the Corporation’s Articles of Incorporation to increase the number of authorized shares of $.001 par value common stock from 400,000,000 shares to 750,000,000 shares. Of the 215,995,100 shares of common stock that were present at the meeting in person or by proxy, 199,175,046 shares of common stock were voting in favor of the proposal, 15,870,085 shares against and 949,969 shares abstained from voting.

On May 4, 2017, the Company received $200,000 from L2 Capital and SBI in conjunction with their equity purchase agreement.

On May 5, 2017, the Company issued a total of 6,125,000 common shares for consulting services. The cost of these issuances were recognized as a prepaid asset and will be amortized to expense over the life of the agreements.

On May 19, 2017, the Company entered into two waiver and consent agreements with Lincoln Park Capital Fund, LLC (“Lincoln Park”) whereby the parties agreed that the prior equity line of credit agreement entered into on November 8, 2016 is canceled and various covenants made with respect to a $200,000 loan were waived in connection with certain loan transactions and in consideration thereof, the Company agreed to issue 1,000,000 shares of common stock to Lincoln Park in settlement of all claims.

In June 2017, the Company issued 771,211 shares for the conversion of $85,000 of convertible debentures plus accrued interest.

In June 2017, the Company issued 3,500,000 shares for consulting services. The cost of this issuance will be expensed during the three months ended June 30, 2017.

In June 2017, the Company issued a total of 5,333,333 shares for consulting services. The cost of these issuances was recognized as a prepaid asset and will be amortized to expense over the life of the agreement.

In June 2017, the Company issued a total of 717,945 common shares to various noteholders in payment of interest on convertible debentures.

XML

Basis of Presentation (Policies)

9 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

The accompanying consolidated financial statements include the accounts of Quantum Materials Corp. and its wholly owned subsidiary, Solterra Renewable Technologies, Inc. (collectively referred to as the “Company”).

The consolidated financial statements of the Company as of and for the nine months ended March 31, 2017 are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended June 30, 2016. The year-end balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the accompanying unaudited financial information includes all adjustments necessary for a fair presentation of the interim financial information. Operating results for the interim periods are not necessarily indicative of the results of any subsequent periods. Certain information in the footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) has been condensed or omitted for the interim periods presented under the United States Securities and Exchange Commission (“SEC”) rules and regulations. As such, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016.

Nature of Operations

Nature of Operations

The Company is a nanotechnology company specializing in the design, development, production and supply of quantum dots, including tetrapod quantum dots, a high-performance variant of quantum dots, and highly uniform nanoparticles, using its patented automated continuous flow production process. Quantum dots and other nanoparticles are expected to be increasingly utilized in a range of applications in the life sciences, television and display, solid state lighting, solar energy, battery, security ink, and sensor sectors of the market. Key uncertainties and risks to the Company include, but are not limited to, if and how quickly various industries adopt and fully embrace quantum dot technology and technological changes, including those developed by the Company’s competitors, rendering the Company’s technology uncompetitive or obsolete.

Going Concern

Going Concern

The Company recorded losses from continuing operations in the current period presented and has a history of losses. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, obtain revenues from operations, raise additional capital, and/or obtain debt financing.

In conjunction with anticipated revenue streams, management is currently negotiating equity and debt financing, the proceeds from which would be used to settle outstanding debts, to finance operations, and for general corporate purposes. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern.

The accompanying unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

XML

Property and Equipment (Tables)

9 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	March 31, 2017		June 30, 2016
	(unaudited)
Furniture and fixtures	$	1,625	$	1,625
Computers and software		11,447		11,447
Machinery and equipment		944,615		911,744
		957,687		924,816
Less: accumulated depreciation		222,351		150,142
Total property and equipment, net	$	735,336	$	774,674

XML

Licenses and Patents (Tables)

9 Months Ended

Mar. 31, 2017

Finite-Lived Intangible Assets, Net [Abstract]

Schedule of Licenses and Patents

Licenses and patents consisted of the following:

	March 31, 2017		June 30, 2016
	(unaudited)
William Marsh Rice University	$	40,000	$	40,000
University of Arizona		15,000		15,000
Bayer acquired patents		137,743		137,743
		192,743		192,743
Less: accumulated amortization		104,167		75,256
Total licenses and patents, net	$	88,576	$	117,487

XML

Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value of Convertible Debentures

The following table sets forth the fair value of the Company’s convertible debentures as of March 31, 2017, and June 30, 2016:

	March 31, 2017				June 30, 2016
	(unaudited)
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Convertible debentures issued in September 2014	$	25,050	$	44,093	$	25,050	$	21,710
Convertible debentures issued in January 2015	$	500,000	$	1,166,667	$	500,000	$	1,083,333
Convertible debentures issued in April - June 2016	$	1,465,000	$	1,958,670	$	1,565,000	$	1,695,417
Convertible debenture issued in August 2016	$	200,000	$	253,711	$	-	$	-
Convertible debenture issued in November 2016	$	200,000	$	245,990	$	-	$	-
Convertible debentures issued in January - March 2017	$	260,000	$	303,334	$	-	$	-
Convertible debenture issued in February 2017	$	100,000	$	116,667	$	-	$	-
Convertible debenture issued in March 2017	$	150,000	$	175,000	$	-	$	-
Convetible promissory notes issued in March 2017	$	541,850	$	632,158	$	-	$	-

XML

Convertible Debentures (Tables)

9 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Convertible Debentures

The following table sets forth activity associated with the convertible debentures:

	March 31, 2017		June 30, 2016
	(unaudited)
Convertible debentures issued in September 2014	$	25,050	$	25,050
Convertible debentures issued in January 2015		500,000		500,000
Convertible debentures issued in April - June 2016		1,565,000		1,565,000
Convertible debenture issued in August 2016		200,000		-
Convertible promissory note issued in September 2016		100,000		-
Convertible debenture issued in October 2016		50,000		-
Convertible debenture issued in November 2016		200,000		-
Convertible debentures issued in January - March 2017		260,000		-
Convertible debenture issued in February 2017		100,000		-
Convertible debenture issued in March 2017		150,000		-
Convertible promissory notes issued in March 2017		541,850		-
		3,691,900		2,090,050
Less: amount converted to shares		250,000		-
Total convertible debentures outstanding		3,441,900		2,090,050
Less: unamortized discount		550,415		527,350
Less: debt issuance costs		82,873		115,342
		2,808,612		1,447,358
Less: current portion		1,115,164		407,702
Total convertible debentures, net of current portion	$	1,693,448	$	1,039,656

XML

Equity Transactions (Tables)

9 Months Ended

Mar. 31, 2017

Equity [Abstract]

Summary of Activity of Company's Stock Warrants

A summary of activity of the Company’s stock warrants for the nine months ended March 31, 2017 is presented below:

						Weighted
	Weighted					Average		Weighted
	Average					Remaining		Average
	Exercise		Number of			Contractual		Grant Date
	Price		Warrants			Term in Years		Fair Value
Balance as of June 30, 2016	$	0.11		39,262,305				$	0.15
Expired		0.18		(555,555	)				0.14
Granted		0.16		8,013,628					0.11
Exercised		0.06		(12,500,000	)				0.15
Cancelled		0.13		(2,104,637	)				0.15
Balance as of March 31, 2017	$	0.13		32,115,741			3.12	$	0.14
Vested and exercisable as of March 31, 2017	$	0.13		32,115,741			3.12	$	0.14

XML

Stock-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Valuation Assumptions Used to Estimate Fair Value of Stock Options

The following assumptions were used for the periods indicated:

	Nine Months Ended
	March 31,
	2017			2016
Expected volatility		140.73	%		142.05	%
Expected dividend yield		-			-
Risk-free interest rates		1.25	%		1.19	%
Expected term (in years)		3.0 to 5.0			3.0 to 5.0

Summary of Award Activity Under Stock Option Plans

A summary of the activity of the Company’s stock options for the nine months ended March 31, 2017 is presented below:

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value
Balance as of June 30, 2016	$	0.08		75,375,248				$	0.11	$	3,771,601
Expired		-		-					-
Granted		0.12		2,500,000					0.10
Exercised		-		-					-
Cancelled		0.12		(8,358,334	)				0.12
Balance as of March 31, 2017	$	0.08		69,516,914			5.15	$	0.11	$	4,340,520
Vested and exercisable as of March 31, 2017	$	0.07		64,608,580			4.64	$	0.11	$	4,309,020

Summary of Award Activity Under Restricted Stock Plans

A summary of the activity of the Company’s restricted stock awards for the nine months ended March 31, 2017 is presented below:

	Number of
	Nonvested,			Weighted
	Nonissued			Average
	Restricted			Grant Date
	Share Awards			Fair Value
Nonvested, nonissued restricted shares outstanding at June 30, 2016		1,000,000		$	0.42
Granted		-			-
Vested		(500,000	)		0.42
Forfeited		-			-
Nonvested, nonissued restricted shares outstanding at March 31, 2017		500,000		$	0.42

XML

Loss Per Share (Tables)

9 Months Ended

Mar. 31, 2017

LOSS PER COMMON SHARE

Schedule of Computation of Basic and Diluted Loss Per Share

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
	(unaudited)						(unaudited)
Net loss	$	(1,164,684	)	$	(752,360	)	$	(4,948,833	)	$	(4,138,967	)
Weighted average common shares outstanding:
Basic and diluted		339,943,771			322,675,999			333,385,603			316,418,240
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

XML

Supplemental Cash Flow Information (Tables)

9 Months Ended

Mar. 31, 2017

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

The following is supplemental cash flow information:

	Nine Months Ended
	March 31,
	2017		2016
	(unaudited)
Cash paid for interest	$	20,584	$	20,055
Cash paid for income taxes	$	-	$	-

The following is supplemental disclosure of non-cash investing and financing activities:

	Nine Months Ended March 31,
	2017		2016
	(unaudited)
Conversion of debentures into shares of common stock	$	250,000	$	-
Allocated value of common stock and warrants issued with convertible debentures	$	391,237	$	-
Stock warrants issued for conversion of accrued salaries	$	-	$	409,667
Prepaid expense paid in shares of common stock	$	292,387	$	131,655
Prepaid expense financed with debt	$	210,000	$	-
Cancellation of shares	$	194	$	-
Financing of prepaid insurance	$	7,281	$	20,024

XML

Basis of Presentation - (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital deficit	$ 2,345,450
Net cash in operating activities	$ (1,782,458)	$ (1,293,250)

XML

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 25,257	$ 21,853	$ 72,209	$ 63,853

XML

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Property and equipment, gross	$ 957,687	$ 924,816
Less: accumulated depreciation	222,351	150,142
Total property and equipment, net	735,336	774,674
Furniture and Fixtures [Member]
Property and equipment, gross	1,625	1,625
Computers and Software [Member]
Property and equipment, gross	11,447	11,447
Machinery and Equipment [Member]
Property and equipment, gross	$ 944,615	$ 911,744

XML

Licenses and Patents (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Finite-Lived Intangible Assets, Net [Abstract]
Amortization expense	$ 9,637	$ 9,637	$ 28,911	$ 28,911

XML

Licenses and Patents - Schedule of Licenses and Patents (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Licenses and patents, gross	$ 192,743	$ 192,743
Less: accumulated amortization	104,167	75,256
Total licenses and patents, net	88,576	117,487
William Marsh Rice University [Member]
Licenses and patents, gross	40,000	40,000
University of Arizona [Member]
Licenses and patents, gross	15,000	15,000
Bayer Acquired Patents [Member]
Licenses and patents, gross	$ 137,743	$ 137,743

XML

Fair Value of Financial Instruments - Schedule of Fair Value of Convertible Debentures (Details) - Level 2 [Member] - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Convertible Debentures Issued in September 2014 [Member] | Carrying Value [Member]
Convertible debentures	$ 25,050	$ 25,050
Convertible Debentures Issued in September 2014 [Member] | Fair Value [Member]
Convertible debentures	44,093	21,710
Convertible Debentures Issued in January 2015 [Member] | Carrying Value [Member]
Convertible debentures	500,000	500,000
Convertible Debentures Issued in January 2015 [Member] | Fair Value [Member]
Convertible debentures	1,166,667	1,083,333
Convertible Debentures Issued in April - June 2016 [Member] | Carrying Value [Member]
Convertible debentures	1,465,000	1,565,000
Convertible Debentures Issued in April - June 2016 [Member] | Fair Value [Member]
Convertible debentures	1,958,670	1,695,417
Convertible Debenture Issued in August 2016 [Member] | Carrying Value [Member]
Convertible debentures	200,000
Convertible Debenture Issued in August 2016 [Member] | Fair Value [Member]
Convertible debentures	253,711
Convertible Debentures Issued in November 2016 [Member] | Carrying Value [Member]
Convertible debentures	200,000
Convertible Debentures Issued in November 2016 [Member] | Fair Value [Member]
Convertible debentures	245,990
Convertible debentures issued in January-March 2017 [Member] | Carrying Value [Member]
Convertible debentures	260,000
Convertible debentures issued in January-March 2017 [Member] | Fair Value [Member]
Convertible debentures	303,334
Convertible Debenture Issued in February 2017 [Member] | Carrying Value [Member]
Convertible debentures	100,000
Convertible Debenture Issued in February 2017 [Member] | Fair Value [Member]
Convertible debentures	116,667
Convertible Debenture Issued in March 2017 [Member] | Carrying Value [Member]
Convertible debentures	150,000
Convertible Debenture Issued in March 2017 [Member] | Fair Value [Member]
Convertible debentures	175,000
Convertible Promissory Notes Issued in March 2017 [Member] | Carrying Value [Member]
Convertible debentures	541,850
Convertible Promissory Notes Issued in March 2017 [Member] | Fair Value [Member]
Convertible debentures	$ 632,158
Convertible debenture issued in November 2016 [Member] | Carrying Value [Member]
Convertible debentures
Convertible debenture issued in November 2016 [Member] | Fair Value [Member]
Convertible debentures

XML

Convertible Debentures (Details Narrative) - USD ($)						1 Months Ended			3 Months Ended			9 Months Ended
	Nov. 30, 2016	Oct. 31, 2016	Oct. 10, 2016	Jan. 15, 2015	Sep. 16, 2014	Mar. 31, 2017	Sep. 30, 2016	Aug. 31, 2016	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Debt Instrument [Line Items]
Debt instrument principal amount						$ 3,691,900			$ 3,691,900	$ 2,090,050		$ 3,691,900
Debt interest rate						8.00%			8.00%			8.00%
Convertible promissory note						$ 2,808,612			$ 2,808,612	$ 1,447,358		$ 2,808,612
Proceeds from issuance of convertible debenture												1,360,000
Accretion of debt discount									$ (100,566)		$ (43,903)	$ (400,423)	(129,127)
Common stock, par value						$ 0.001			$ 0.001	$ 0.001		$ 0.001
Beneficial conversion expense									$ 102,797			$ 197,095
Debt conversion of converted amount												$ 541,850
Unregistered and restricted shares issued for conversion of debentures									1,250,000			2,083,334
Common stock issued for warrant exercises, shares												2,500,000
Debt original issue discount						$ 82,873			$ 82,873			$ 82,873
Amortization expense									16,139		0	47,469	0
September 2014 Convertible Debenture [Member]
Debt Instrument [Line Items]
Debt instrument principal amount					$ 500,050
Debt interest rate					6.00%
Debenture, conversion price					$ 0.15
Percentage of strike price per share					$ 0.30
Warrant term					5 years
Maturity date description					September 16, 2019 and October 30, 2019
Interest expense									376		380	1,144	1,148
Convertible promissory note						25,050			25,050			25,050
January 2015 Convertible Debenture [Member]
Debt Instrument [Line Items]
Debt interest rate				8.00%
Debenture, conversion price				$ 0.06
Interest expense									9,863		9,973	30,027	30,137
Convertible promissory note						500,000			500,000			500,000
Proceeds from issuance of convertible debenture				$ 500,000
Warrants exercise price per share				$ 0.06
Debt instruments maturity date			Jan. 15, 2018	Jan. 15, 2017
Warrants converted into common stock			6,250,000
Proceeds from issuance of warrants			$ 375,000
Allocated value of warrants related to debenture				$ 348,105
Accretion of debt discount									0		43,903	92,298	129,127
April - June, August, October and November 2016 Convertible Debentures [Member]
Debt Instrument [Line Items]
Debt interest rate										8.00%
Interest expense									37,300		0	108,276	0
Convertible promissory note						1,865,000			1,865,000			1,865,000
Warrants exercise price per share										$ 0.15
Warrants converted into common stock										4,166
Accretion of debt discount									69,156		0	235,697	0
Sale of stock transaction during period, shares	200	50						200		1,565
Sale of stock transaction during period	$ 200,000	$ 50,000						$ 200,000		$ 1,565,000
Common stock, par value										$ 0.001
Fair value of warrants												609,595
Beneficial conversion expense									0		0	64,775	0
Debt conversion of converted amount												$ 150,000
Debt conversion of converted shares												1,250,000
April - June, August, October and November 2016 Convertible Debentures [Member] | Unsecured Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount										$ 1,000
Warrants exercise price per share										$ 0.12
September 2016 Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount							$ 100,000
Debt interest rate							8.00%
Debenture, conversion price							$ 0.12
Interest expense									2,622		0	$ 8,000	0
Convertible promissory note						$ 0			0			0
Proceeds from issuance of convertible debenture							$ 100,000
Warrants exercise price per share							$ 0.12
Debt instruments maturity date							May 15, 2017
Warrants converted into common stock							250,000
Proceeds from issuance of warrants							$ 29,522
Accretion of debt discount									14,957		0	29,522	0
Beneficial conversion expense									$ 0		0	$ 29,523	0
Unregistered and restricted shares issued for conversion of debentures							200,000
September 2016 Convertible Promissory Note [Member] | Note [Member]
Debt Instrument [Line Items]
Debt conversion of converted shares												833,333
September 2016 Convertible Promissory Note [Member] | Accrued Interest [Member]
Debt Instrument [Line Items]
Debt conversion of converted shares												66,667
January-March, 2017 Convertible Debentures [Member]
Debt Instrument [Line Items]
Debt interest rate						8.00%			8.00%			8.00%
Debenture, conversion price						$ 0.12			$ 0.12			$ 0.12
Interest expense									$ 3,343		0	$ 3,343	0
Convertible promissory note						$ 260,000			$ 260,000			$ 260,000
Warrants exercise price per share						$ 0.15			$ 0.15			$ 0.15
Warrants converted into common stock						4,166			4,166			4,166
Accretion of debt discount												$ 6,985	0
Sale of stock transaction during period, shares									2,600
Sale of stock transaction during period									$ 260,000
Common stock, par value						$ 0.001			$ 0.001			$ 0.001
Fair value of warrants												$ 73,250
Beneficial conversion expense												62,400	0
January-March, 2017 Convertible Debentures [Member] | Unsecured Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount						$ 1,000			$ 1,000			1,000
February 2017 Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount						$ 100,000			$ 100,000			$ 100,000
Debenture, conversion price						$ 0.12			$ 0.12			$ 0.12
Maturity date description						The promissory note has a term of eight months maturing on October 1, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal.
Interest expense									$ 8,000		0	$ 8,000	0
Convertible promissory note						$ 100,000			$ 100,000			$ 100,000
Proceeds from issuance of convertible debenture						$ 100,000
Warrants exercise price per share						$ 0.12			$ 0.12			$ 0.12
Debt instruments maturity date						Oct. 01, 2017
Warrants converted into common stock						250,000			250,000			250,000
Proceeds from issuance of warrants						$ 24,733
Accretion of debt discount									$ 6,060		0	$ 6,060	0
Unregistered and restricted shares issued for conversion of debentures						200,000
March 2017 Convertible Debenture [Member]
Debt Instrument [Line Items]
Debt instrument principal amount						$ 150,000			$ 150,000			$ 150,000
Debenture, conversion price						$ 0.12			$ 0.12			$ 0.12
Maturity date description						The promissory note has a term of eight months maturing on November 28, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal.
Interest expense									$ 12,000		0	$ 12,000	0
Convertible promissory note						$ 150,000			$ 150,000			$ 150,000
Proceeds from issuance of convertible debenture						$ 150,000
Warrants exercise price per share						$ 0.12			$ 0.12			$ 0.12
Debt instruments maturity date						Nov. 28, 2017
Warrants converted into common stock						375,000			375,000			375,000
Accretion of debt discount									$ 3,407		0	$ 3,407	0
Fair value of warrants						$ 27,897
Beneficial conversion expense									$ 40,397		0	$ 40,397	0
March 2017 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Debt interest rate						6.00%			6.00%			6.00%
Interest expense									$ 138		0	$ 138	0
Proceeds from issuance of convertible debenture						$ 285,000
Warrants exercise price per share						$ 0.13			$ 0.13			$ 0.13
Accretion of debt discount									$ 0		$ 0	$ 0	$ 0
Fair value of warrants						$ 86,673
Debt original issue discount						$ 31,850			$ 31,850			$ 31,850
March 2017 Convertible Promissory Notes [Member] | SBI Investment LLC [Member]
Debt Instrument [Line Items]
Debt interest rate						50.00%			50.00%			50.00%
Warrants converted into common stock						253,525			253,525			253,525
Sale of stock transaction during period, shares						5,000,000
Commitment fees						$ 63,000
March 2017 Convertible Promissory Notes [Member] | L2 Capital, LLC [Member]
Debt Instrument [Line Items]
Debt interest rate						50.00%			50.00%			50.00%
Warrants converted into common stock						760,576			760,576			760,576
Sale of stock transaction during period, shares						5,000,000
Commitment fees						$ 147,000
March 2017 Convertible Promissory Notes [Member] | Equity Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt interest rate						8.00%			8.00%			8.00%

XML

Convertible Debentures - Schedule of Convertible Debentures (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Debt Instrument [Line Items]
Convertible debenture	$ 3,691,900	$ 2,090,050
Less: amount converted to shares	250,000
Total convertible debentures outstanding	3,441,900	2,090,050
Less: unamortized discount	550,415	527,350
Less: debt issuance costs	82,873	115,342
Total convertible debentures	2,808,612	1,447,358
Less: current portion	1,115,164	407,702
Total convertible debentures, net of current portion	1,693,448	1,039,656
Convertible Debentures Issued in September 2014 [Member]
Debt Instrument [Line Items]
Convertible debenture	25,050	25,050
Convertible Debentures Issued in January 2015 [Member]
Debt Instrument [Line Items]
Convertible debenture	500,000	500,000
Convertible Debentures Issued in April - June 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	1,565,000	1,565,000
Convertible Debenture Issued in August 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	200,000
Convertible Debenture Issued in September, 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	100,000
Convertible Debenture Issued in October 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	50,000
Convertible Debentures Issued in November 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	200,000
Convertible debentures issued in January-March, 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	260,000
Convertible debentures issued in February 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	100,000
Convertible debentures issued in March, 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	150,000
Convertible Promissory Notes Issued in March 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	$ 541,850

XML

Notes Payable (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended		9 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Aug. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Debt interest rate	8.00%			8.00%		8.00%
Accretion of debt discount				$ 100,566	$ 43,903	$ 400,423	$ 129,127
Proceeds from notes payable						100,000	150,000
Promissory Note [Member]
Unsecured promissory		$ 100,000
Debt interest rate		0.00%
Issuance of warrants to common stock		416,667
Warrants exercisable price per share		$ 0.15
Debt instruments maturity date description		The note was due October 13, 2016 and was repaid on October 11, 2016.
Proceeds from issuance of warrants		$ 26,454
Accretion of debt discount				0	$ 0	26,454	$ 0
Notes payable	$ 0			0		0
Note Payable Insurance [Member]
Debt interest rate			4.87%
Notes payable	$ 0			$ 0		$ 0
Proceeds from notes payable			$ 13,959
Debt instruments maturity date			May 05, 2017
Note Payable Insurance [Member] | Finance Directors and Officer's [Member]
Debt interest rate	6.89%			6.89%		6.89%
Notes payable	$ 17,434			$ 17,434		$ 17,434
Proceeds from notes payable	$ 17,434
Debt instruments maturity date	Nov. 11, 2017

XML

Equity Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Number of common stock shares issued			833,333
Number of common stock value issued			$ 100,000
Number of common stock shares issued for services, shares			1,750,000
Number of common stock shares issued for services			$ 578,500
General and administrative expense	$ 737,022	$ 903,795	3,750,806	$ 4,212,120
Debt conversion of converted instrument amount			$ 250,000
Debt conversion of converted shares	1,250,000		2,083,334
Allocated value of common stock issued for debenture conversion, shares			200,000
April 2017 to March 2022 [Member] | Minimum [Member]
Warrants exercise price per share	$ 0.06		$ 0.06
April 2017 to March 2022 [Member] | Maximum [Member]
Warrants exercise price per share	$ 0.30		$ 0.30
September 2016 Promissory Note [Member] | February 2017 Convertible Debenture [Member]
Allocated value of common stock issued for debenture conversion, shares			400,000
Consultants [Member]
Number of common stock shares issued for services, shares			3,250,000
Number of common stock shares issued for services			$ 262,500
Common Stock [Member]
Number of common stock shares issued			2,500,000
Number of shares issued with cashless exercise price			5,000,000
Share cancellations, shares			194,059
Investors [Member]
Warrant to purchase shares of common stock	10,000,000		10,000,000
Proceeds from warrant exercised			$ 425,000
Lender [Member]
Number of common stock shares issued for services, shares			3,216,666
Fair value of commitment fees			$ 316,000
General and administrative expense			175,000
Prepaid assets	$ 141,000		$ 141,000
Common stock issued for interest, shares			102,374
Common stock issued for interest			$ 12,285

XML

Equity Transactions - Summary of Activity of Company's Stock Warrants (Details) - Warrant [Member]	9 Months Ended
	Mar. 31, 2017 $ / shares shares
Weighted Average Exercise Price Beginning Balance	$ 0.11
Weighted Average Exercise Price Expired	0.18
Weighted Average Exercise Price Granted	0.16
Weighted Average Exercise Price Exercised	0.06
Weighted Average Exercise Price Cancelled	0.13
Weighted Average Exercise Price Ending Balance	0.13
Weighted Average Exercise Price Vested and exercisable	$ 0.13
Number of Warrants Beginning Balance | shares	39,262,305
Number of Warrants Expired | shares	(555,555)
Number of Warrants Granted | shares	8,013,628
Number of Warrants Exercised | shares	(12,500,000)
Number of Warrants Cancelled | shares	(2,104,637)
Number of Warrants Ending Balance | shares	32,115,741
Number of Warrants Vested and exercisable | shares	32,115,741
Weighted Average Remaining Contractual Term in Years	3 years 1 month 13 days
Weighted Average Remaining Contractual Term in Years Vested and exercisable	3 years 1 month 13 days
Weighted Average Grant Date Fair Value Beginning Balance	$ 0.15
Weighted Average Grant Date Fair Value Expired	0.14
Weighted Average Grant Date Fair Value Granted	0.11
Weighted Average Grant Date Fair Value Exercised	0.15
Weighted Average Grant Date Fair Value Cancelled	0.15
Weighted Average Grant Date Fair Value Ending Balance	0.14
Weighted Average Grant Date Fair Value Vested and exercisable	$ 0.14

XML

Stock-Based Compensation (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2012	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016	May 01, 2017	Feb. 17, 2016	Mar. 31, 2013	Jan. 31, 2013	Jan. 31, 2010	Oct. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of exercisable shares of stock options	64,608,580		64,608,580		64,608,580
Officers and Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in authorized number of shares of common stock								750,000,000
Number of exercisable shares of stock options								56,087,599
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, shares		3,500,000					6,000,000
Options cancelled, shares	3,000,000		3,000,000		3,000,000
Options term	5 years	5 years					10 years
Compensation expense			$ (76,259)	$ 98,316	$ 664,530	$ 1,439,221
Nonvested stock option awards, shares	4,908,334		4,908,334		4,908,334
Cost of nonvested stock option awards not yet recognized	$ 403,944		$ 403,944		$ 403,944
Period of nonvested stock option awards not yet recognized for recognition					2 years 6 months
Stock Options [Member] | Officers and Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vesting period					6 months
Number of shares restricted for exercise under stock option plan and no common stock reserved							56,087,599
Stock Options [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Historical forfeiture rates					14.00%
Option expiration year					2018-01
Stock option exercise price per share	$ 0.05		$ 0.05		$ 0.05
Stock Options [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Historical forfeiture rates					17.00%
Option expiration year					2026-06
Stock option exercise price per share	$ 0.17		$ 0.17		$ 0.17
Stock Options [Member] | Stock Option Plan Authorized 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized, shares												10,000,000	7,500,000
Options granted, shares	9,200,000		9,200,000		9,200,000
Options cancelled, shares	800,000		800,000		800,000
Number of outstanding shares	8,400,000		8,400,000		8,400,000
Stock Options [Member] | Stock Option Plan Authorized 2009 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term					5 years
Stock Options [Member] | Stock Option Plan Authorized 2009 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term					10 years
Stock Options [Member] | Stock Option Plan Authorized 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized, shares										60,000,000	20,000,000
Options granted, shares	72,653,473		72,653,473		72,653,473
Options cancelled, shares	15,886,559		15,886,559		15,886,559
Number of outstanding shares	53,441,914		53,441,914		53,441,914
Options exercised, shares	3,325,000		3,325,000		3,325,000
Stock Options [Member] | Stock Option Plan Authorized 2013 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term					5 years
Stock Options [Member] | Stock Option Plan Authorized 2013 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term					10 years
Stock Options [Member] | Employee Benefit And Consulting Services Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized, shares									15,000,000
Options granted, shares	2,800,000		2,800,000		2,800,000
Options cancelled, shares	1,625,000		1,625,000		1,625,000
Options term					5 years
Number of outstanding shares	1,175,000		1,175,000		1,175,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense			$ 51,781	$ 52,356	$ 157,644	$ 193,219
Cost of nonvested stock option awards not yet recognized	$ 60,411		$ 60,411		$ 60,411
Option vesting period					3 years

XML

Stock-Based Compensation - Schedule of Valuation Assumptions Used to Estimate Fair Value of Stock Options (Details)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Expected volatility	140.73%	142.05%
Expected dividend yield	0.00%	0.00%
Risk-free interest rates	1.25%	1.19%
Minimum [Member]
Expected term (in years)	3 years	3 years
Maximum [Member]
Expected term (in years)	5 years	5 years

XML

Stock-Based Compensation - Summary of Award Activity Under Stock Option Plans (Details)	9 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Weighted Average Exercise Price Balance	$ 0.08
Weighted Average Exercise Price Expired
Weighted Average Exercise Price Granted	0.12
Weighted Average Exercise Price Exercised
Weighted Average Exercise Price Cancelled	0.12
Weighted Average Exercise Price Balance	0.08
Weighted Average Exercise Price Vested and exercisable	$ 0.07
Number of Optioned Shares Balance | shares	75,375,248
Number of Optioned Shares Expired | shares
Number of Optioned Shares Granted | shares	2,500,000
Number of Optioned Shares Exercised | shares
Number of Optioned Shares Cancelled | shares	(8,358,334)
Number of Optioned Shares Balance | shares	69,516,914
Number of Optioned Shares Vested and exercisable | shares	64,608,580
Weighted Average Remaining Contractual Term in Years Balance	5 years 1 month 24 days
Weighted Average Remaining Contractual Term in Years Vested and exercisable	4 years 7 months 21 days
Weighted Average Optioned Grant Date Fair Value Balance	$ 0.11
Weighted Average Optioned Grant Date Fair Value Expired
Weighted Average Optioned Grant Date Fair Value Granted	0.10
Weighted Average Optioned Grant Date Fair Value Exercised
Weighted Average Optioned Grant Date Fair Value Cancelled	0.12
Weighted Average Optioned Grant Date Fair Value Balance	0.11
Weighted Average Optioned Grant Date Fair Value Vested and exercisable	$ 0.11
Aggregate Intrinsic Value Balance | $	$ 3,771,601
Aggregate Intrinsic Value Balance | $	4,340,520
Aggregate Intrinsic Value Vested and exercisable | $	$ 4,340,520

XML

Stock-Based Compensation - Summary of Award Activity Under Restricted Stock Plans (Details) - Restricted Stock [Member]	9 Months Ended
	Mar. 31, 2017 $ / shares shares
Number of Nonvested Non-issued Restricted Shares Awards, Beginning Balance | shares	1,000,000
Number of Nonvested Non-issued Restricted Shares Awards, Granted | shares
Number of Nonvested Non-issued Restricted Shares Awards, Vested | shares	(500,000)
Number of Nonvested Non-issued Restricted Shares Awards, Forfeited | shares
Number of Nonvested Non-issued Restricted Shares Awards, Ending Balance | shares	500,000
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 0.42
Weighted Average Grant Date Fair Value, Granted | $ / shares
Weighted Average Grant Date Fair Value, Vested | $ / shares	0.42
Weighted Average Grant Date Fair Value, Forfeited | $ / shares
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 0.42

XML

Loss Per Share (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Stock Warrants [Member]
Anti-dilutive shares excluded from diluted earnings per share	32,115,741	35,466,779	32,115,741	35,466,779
Stock Options [Member]
Anti-dilutive shares excluded from diluted earnings per share	69,516,914	64,625,248	69,516,914	64,625,248

XML

Loss Per Share - Schedule of Computation of Basic and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
LOSS PER COMMON SHARE
Net loss	$ (1,164,684)	$ (752,360)	$ (4,948,833)	$ (4,138,967)
Weighted average common shares outstanding: Basic and diluted	339,943,771	322,675,999	333,385,603	316,418,240
Basic and diluted loss per share	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)

XML

Revenue (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Revenue
Revenue	$ 2,500	$ 225,000	$ 27,000	$ 225,000

XML

Commitments and Contingencies (Details Narrative)	9 Months Ended
	Mar. 31, 2017 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Annual minimum royalty payment	$ 50,000
Accrued obligation
January 2018 [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Yearly maintenance fee	$ 10,000
William Marsh Rice University [Member] | Quantum Dots [Member] | License Agreements [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of adjusted gross sales	7.50%
Texas State University [Member] | Service Agreement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Period of termination notice for the memorandum of understanding	60 days
Solterra Renewable Technologies Inc [Member] | William Marsh Rice University [Member] | Photovoltaic Cells [Member] | Minimum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of adjusted gross sales	2.00%
Solterra Renewable Technologies Inc [Member] | William Marsh Rice University [Member] | Photovoltaic Cells [Member] | Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of adjusted gross sales	4.00%
Solterra Renewable Technologies Inc [Member] | University of Arizona [Member] | License Agreements [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalties payable due in first installment period	$ 50,000
Royalties payable due in second installment period	125,000
Royalties, future minimum payments due on each june 30th thereafter	$ 200,000
Solterra Renewable Technologies Inc [Member] | University of Arizona [Member] | Non Display Electronic Component Applications [Member] | License Agreements [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of adjusted gross sales	2.00%
Solterra Renewable Technologies Inc [Member] | University of Arizona [Member] | Printed Electronic Displays [Member] | License Agreements [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of adjusted gross sales	2.50%

XML

Income Tax (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Net operating loss carryforwards	$ 29,079,000		$ 29,079,000
Net operating loss carryforwards expiration year			2029
Ownership change limitation amount			$ 750,000
Income tax rate	0.00%	0.00%	0.00%	0.00%
Minimum [Member]
Net operating loss carryforwards	$ 28,329,000		$ 28,329,000
U.S [Member]
Net operating loss carryforwards	$ 25,560,000		$ 25,560,000

XML

Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 20,584	$ 20,055
Cash paid for income taxes
Conversion of debentures into shares of common stock	250,000
Allocated value of common stock and warrants issued with convertible debentures	391,237
Stock warrants issued for conversion of accrued salaries		409,667
Prepaid expense paid in shares of common stock	292,387	131,655
Prepaid expense financed with debt	210,000
Cancellation of shares	194
Financing of prepaid insurance	$ 7,281	$ 20,024

XML

Transactions with Affiliated Parties (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Related Party Transaction [Line Items]
Proceeds from convertible debt	$ 1,360,000
Family Members of Key Executive [Member]
Related Party Transaction [Line Items]
Proceeds from convertible debt	$ 200,000
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Due to related party			$ 100,000

XML

Equity Purchase Agreement and Registration Rights (Details Narrative) - USD ($)		9 Months Ended
	Mar. 29, 2017	Mar. 31, 2017
Promissory note bear interest rate		8.00%
Maturity term		9 months
Equity Purchase Agreement [Member]
Purchase agreement description		(i) in a minimum amount of not less than $25,000 and (ii) in a maximum amount up to the lesser of (a) $250,000 or (b) 150% of the average daily trading value; provided such minimum amount of Put Shares may be decreased and such maximum amount of Put Shares may be increased, subject to the Company’s approval. Unless otherwise agreed to in writing by SBI and L2 Capital, the amount in the Put Notice shall be allocated pro rata among the participating investors based upon the Maximum Commitment Amount as defined in the Eloc. The purchase price of the Put Shares shall mean 80% of the market price (i.e. the lowest closing bid price for any trading day during the Valuation Period as defined in the Eloc). If 80% of the lowest closing bid price on the OTCQB for any trading day during the respective Valuation Period (as defined in Eloc) is less than the Company minimum price of $.12 per share, then SBI and/or L2 Capital may elect to purchase all or none of the Put Shares at the Company minimum price.
Equity Purchase Agreement [Member] | SBI Investment LLC [Member]
Purchase shares of common stock shares value	$ 5,000,000
Maximum equity agreement period	4 years
Consideration to be paid	$ 63,000
Equity Purchase Agreement [Member] | L2 Capital, LLC [Member]
Purchase shares of common stock shares value	$ 5,000,000
Maximum equity agreement period	4 years
Consideration to be paid	$ 147,000

XML

Subsequent Events (Details Narrative) - USD ($)					1 Months Ended	3 Months Ended		9 Months Ended
	May 19, 2017	May 05, 2017	May 04, 2017	May 01, 2017	Apr. 30, 2017	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Common stock issued for services, shares								1,750,000
Research and development expenses						$ 136,786	$ 19,210	$ 408,588	$ 165,265
Common stock, par value						$ 0.001		$ 0.001		$ 0.001
Common stock, shares authorized						400,000,000		400,000,000		400,000,000
Number of common stock shares issued								833,333
Subsequent Event [Member] | June 2017 [Member]
Common stock issued for services, shares								3,500,000
Conversion of convertible shares issued								771,211
Conversion of convertible shares issued value								$ 85,000
Subsequent Event [Member] | June 2017 [Member] | Noteholders [Member]
Number of common stock shares issued								717,945
Subsequent Event [Member] | Quantum Materials Corp [Member]
Common stock issued for services, shares				215,995,100
Research and development expenses				$ 1,000,000
Common stock, par value				$ 0.001
Description of common stock presented				Of the 215,995,100 shares of common stock that were present at the meeting in person or by proxy, 199,175,046 shares of common stock were voting in favor of the proposal, 15,870,085 shares against and 949,969 shares abstained from voting.
Subsequent Event [Member] | Quantum Materials Corp [Member] | Minimum [Member]
Common stock, shares authorized				400,000,000
Subsequent Event [Member] | Quantum Materials Corp [Member] | Maximum [Member]
Common stock, shares authorized				750,000,000
Subsequent Event [Member] | L2 Capital, LLC [Member]
Proceeds from loan			$ 200,000
Subsequent Event [Member] | SBI Investment LLC [Member]
Proceeds from loan			$ 200,000
Subsequent Event [Member] | Lincoln Park Capital Fund, LLC [Member]
Common stock issued for services, shares	1,000,000
Proceeds from loan	$ 200,000
Subsequent Event [Member] | Consulting Services [Member]
Common stock issued for services, shares		6,125,000			2,500,000
Subsequent Event [Member] | Consulting Services [Member] | June 2017 [Member]
Common stock issued for services, shares								5,333,333
Subsequent Event [Member] | Consulting Services One [Member]
Common stock issued for services, shares					595,238