10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017

☐   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER: 000-54437

HYPERSOLAR, INC.

(Name of registrant in its charter)

Nevada	26-4298300
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

510 Castillo St., Suite 320, Santa Barbara, CA 93101

(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: (805) 966-6566

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of registrant’s common stock outstanding, as of November 10, 2017 was 734,341,728.

HYPERSOLAR, INC.

INDEX

		Page
PART I: FINANCIAL INFORMATION
ITEM 1:	FINANCIAL STATEMENTS	1
	Condensed Balance Sheets at September 30, 2017 (unaudited) and June 30, 2017	1
	Condensed Statements of Operations for the Three Months Ended September 30, 2017 and 2016 (unaudited)	2
	Condensed Statement of Shareholders’ Deficit for the Three Months Ended September 30, 2017 (unaudited)	3
	Condensed Statements of Cash Flows Three Months Ended September 30, 2017 and 2016 (unaudited)	4
	Notes to the Condensed Financial Statements	5
ITEM 2:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	10
ITEM 3:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
ITEM 4:	CONTROLS AND PROCEDURES	12
PART II: OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	13
ITEM 1A:	RISK FACTORS	13
ITEM 2:	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3:	DEFAULTS UPON SENIOR SECURITIES	13
ITEM 4:	MINE SAFETY DISCLOSURES	13
ITEM 5:	OTHER INFORMATION	13
ITEM 6:	EXHIBITS	14
SIGNATURES		15

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HYPERSOLAR, INC.

CONDENSED BALANCE SHEETS

	September 30, 2017			June 30, 2017
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	46,425		$	80,133
Prepaid expense		1,667			4,167
TOTAL CURRENT ASSETS		48,092			84,300
PROPERTY & EQUIPMENT
Computers and peripherals		6,218			6,218
Less: accumulated depreciation		(6,218	)		(6,218	)
NET PROPERTY AND EQUIPMENT		-			-
OTHER ASSETS
Deposits		900			900
Domain, net of amortization of $3,248 and $3,160, respectively		2,067			2,155
Patents, net of amortization of $1,825 and $0, respectively		80,018			78,478
TOTAL OTHER ASSETS		82,985			81,533
TOTAL ASSETS	$	131,077		$	165,833
LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	135,070		$	103,112
Accrued expenses		441,832			401,626
Derivative liability		2,453,799			2,482,842
Convertible promissory notes, net of debt discount of $63,862 and $66,335, respectively		361,138			238,665
TOTAL CURRENT LIABILITIES		3,391,839			3,226,245
LONG TERM LIABILITIES
Convertible promissory notes, net of debt discount of $10,724 and $38,514, respectively		1,217,276			1,189,486
TOTAL LONG TERM LIABILITIES		1,217,276			1,189,486
TOTAL LIABILITIES		4,609,115			4,415,731
SHAREHOLDERS’ DEFICIT
Preferred Stock, $0.001 par value; 5,000,000 authorized preferred shares, no shares issued or outstanding		-			-
Common Stock, $0.001 par value; 1,000,000,000 authorized common shares  699,483,259 and 699,483,259 shares issued and outstanding, respectively		699,483			699,483
Additional Paid in Capital		6,850,736			6,850,736
Accumulated deficit		(12,028,257	)		(11,800,117	)
TOTAL SHAREHOLDERS’ DEFICIT		(4,478,038	)		(4,249,898	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	131,077		$	165,833

The accompanying notes are an integral part of these unaudited condensed financial statements

1

HYPERSOLAR, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	September 30, 2017			September 30, 2016
REVENUE	$	-		$	-
OPERATING EXPENSES
General and administrative expenses		118,247			140,801
Research and development cost		66,553			21,236
Depreciation and amortization		1,914			248
TOTAL OPERATING EXPENSES		186,714			162,285
LOSS FROM OPERATIONS BEFORE  OTHER INCOME (EXPENSES)		(186,714	)		(162,285	)
OTHER INCOME/(EXPENSES)
Gain (loss) on debt conversion and change in derivative liability		51,772			(300,207	)
Interest expense		(93,198	)		(97,923	)
TOTAL OTHER INCOME/(EXPENSES)		(41,426	)		(398,130	)
NET LOSS	$	(228,140	)	$	(560,415	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.000	)	$	(0.001	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED		699,483,259			589,552,961

The accompanying notes are an integral part of these unaudited condensed financial statements

2

HYPERSOLAR, INC.

CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017

									Additional
	Preferred stock				Common stock				Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance at June 30, 2017		-	$	-		699,483,259	$	699,483	$	6,850,736	$	(11,800,117	)	$	(4,249,898	)
Net loss for the three months ended September 30, 2017		-		-		-		-		-		(228,140	)		(228,140	)
Balance at September 30, 2017 (unaudited)		-	$	-		699,483,259	$	699,483	$	6,850,736	$	(12,028,257	)	$	(4,478,038	)

The accompanying notes are an integral part of these unaudited condensed financial statements

3

HYPERSOLAR, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	September 30, 2017			September 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(228,140	)	$	(560,415	)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation & amortization expense		1,914			248
(Gain)/Loss on debt conversion change in derivative liability		(51,772	)		300,207
Amortization of debt discount recorded as interest expense		52,992			61,159
(Increase) Decrease in change in assets:
Prepaid expense		2,500			-
Increase (Decrease) in change in liabilities :
Accounts payable		31,958			(2,994	)
Accrued expenses		40,206			36,764
NET CASH USED IN OPERATING ACTIVITIES		(150,342	)		(165,031	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets		(3,366	)		-
NET CASH FLOWS USED IN INVESTING ACTIVITIES:		(3,366	)		-
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		120,000			120,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		120,000			120,000
NET DECREASE IN CASH		(33,708	)		(45,031	)
CASH, BEGINNING OF PERIOD		80,133			119,887
CASH, END OF PERIOD	$	46,425		$	74,856
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	-		$	-
Taxes paid	$	-		$	-

The accompanying notes are an integral part of these unaudited condensed financial statements

4

HYPERSOLAR, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS - UNAUDITED

SEPTEMBER 30, 2017

1. BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of S-X Regulation Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the three months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending June 30, 2018.  For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended June 30, 2017.

Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has historically obtained funds through private placement offerings of equity and debt. Management believes that it will be able to continue to raise funds by sale of its securities to its existing shareholders and prospective new investors to provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business. There is no assurance that the Company will be able to continue raising the required capital.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of HyperSolar, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Cash and Cash Equivalent

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of intangible assets, and the deferred tax valuation allowance. Actual results could differ from those estimates.

Intangible Assets

Intangible assets consist of patents that are initially measured at the lower of cost or fair value. The patents are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified. Patents are amortized straight-line over 15 years.

Net Earnings (Loss) per Share Calculations

Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).  

For the three months ended September 30, 2017, the Company calculated the dilutive impact of the outstanding stock options of 250,000, and the convertible debt of $1,653,000, which is convertible into shares of common stock. The stock options and $1,653,000 of the convertible debt were not included in the calculation of net earnings per share, because their impact was antidilutive.

For the three months ended September 30, 2016, the dilutive impact of the outstanding stock options of 500,000, and the convertible debt of $1,505,500 converted into shares of common stock have been excluded in the calculation of net earnings per share, because their impact on the loss per share is antidilutive. 

5

HYPERSOLAR, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS - UNAUDITED

SEPTEMBER 30, 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock based Compensation

The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

Fair Value of Financial Instruments

Fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2017, the amounts reported for cash, accrued interest and other expenses, notes payables, and derivative liability approximate the fair value because of their short maturities.

We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined 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. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2017 (See Note 6):

	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities
Derivative liability		2,453,799		-		-		2,453,799
Total derivative liabilities measured at fair value	$	2,453,799	$	-	$	-	$	2,453,799

The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:

Balance as of July 1, 2017	$	2,482,842
Fair value of derivative liabilities issued		22,729
(Gain) on change in derivative liability		(51,772	)
Balance as of  December 31, 2016	$	2,453,799

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

6

HYPERSOLAR, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS - UNAUDITED

SEPTEMBER 30, 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements

In May 2017, FASB issued accounting standards update ASU-2017-09, “Compensation-Stock Compensation” (Topic 718) –Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period for public entities for reporting periods for which financial statements have not yet been issued, and all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of the adoption of ASU 2017-09 on the Company’s financial statements.

In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU-2017 on the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

3. CAPITAL STOCK

During the three months ended September 30, 2017, the Company issued no shares of common stock.

4. STOCK OPTIONS

Options

As of September 30, 2017, 250,000 non-qualified common stock options were outstanding. Each option expires on the date specified in the option agreement, which date is not later than the fifth (5^th) anniversary from the grant date of the options. As of September 30, 2017, 250,000 options are fully vested with a maturity date of March 31, 2020, and are exercisable at an exercise price of $0.02245 per share.

A summary of the Company’s stock option activity and related information follows:

	9/30/2017
			Weighted
	Number		average
	of		exercise
	Options		price
Outstanding, beginning of period		250,000	$	0.02
Granted		-		-
Exercised		-		-
Forfeited/Expired		-		-
Outstanding, end of period		250,000	$	0.02
Exercisable at the end of period		250,000	$	0.02

The stock based compensation expense recognized in the statement of operations during the three months ended September 30, 2017 and 2016, related to the granting of these options was $0, respectively.

5. CONVERTIBLE PROMISSORY NOTES

As of September 30, 2017, the outstanding convertible promissory notes are summarized as follows:

Convertible Promissory Notes	$	1,653,000
Less current portion		425,000
Total long term liabilities	$	1,228,000

7

HYPERSOLAR, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS - UNAUDITED

SEPTEMBER 30, 2017

5. CONVERTIBLE PROMISSORY NOTES (Continued)

Maturities of long-term debt for the next three years are as follows:

Year Ending September 30,	Amount
2019	$	113,000
2020		575,000
2021		540,000
	$	1,228,000

At September 30, 2017, the $1,653,000 in convertible promissory notes had a remaining debt discount of $74,586, leaving a net balance of $1,578,414.

The Company entered into a securities purchase agreement on May 23, 2014, for the sale of a 10% convertible promissory note (the “May Note”) in the aggregate principal amount of up to $500,000. The May Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.0048 per share or fifty percent (50%) of the lowest trading price after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $50,000.The Company received additional tranches in the amount of $415,000 for an aggregate sum of $465,000. The May Note matured on May 23, 2015 and was extended to February 23, 2016. A second extension was granted to November 23, 2016. On January 19, 2017, the investor extended the May Note for an additional sixty (60) months from the effective date of each tranche. The May Note matures on November 23, 2021. The Company issued 60,571,942 shares of common stock upon conversion of $235,863 in principal, plus accrued interest of $62,854, with an aggregate fair value loss of $367,808. Also, the principal was reduced by $1,137 for interest due from the investor. The remaining balance of the May Note as of September 30, 2017 was $228,000.

The Company entered into a securities purchase agreement on April 9, 2015, for the sale of a 10% convertible promissory note (the “April Note”) in the aggregate principal amount of up to $500,000. The April Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective advance or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $50,000. The Company received additional tranches in the amount of $450,000 for an aggregate sum of $500,000. The April Note matured nine (9) months from the effective dates of each respective tranche. A second extension was granted to October 9, 2016. On January 19, 2017, the investor extended the April Note for an additional (60) months from the effective date of each tranche. The April Note matures on October 31, 2021.

The Company entered into a securities purchase agreement January 28, 2016, for the sale of a 10% convertible promissory note (the “January Note”) in the aggregate principal amount of up to $500,000. The January Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $10,000. The Company received additional tranches in the amount of $490,000 for an aggregate sum of $500,000. The January Note matures twelve (12) months from the effective dates of each respective tranche. On January 19, 2017, the investor extended the January Note for an additional sixty (60) months from the effective date of each tranche. The January Note matures on January 27, 2022. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $27,790 during the three months ended September 30, 2017.

The Company entered into a securities purchase agreement February 3, 2017, for the sale of a 10% convertible promissory note (the “February Note”) in the aggregate principal amount of up to $500,000. The February Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $60,000. The Company received an additional tranches in the amount of $365,000 for an aggregate sum of $425,000. The February Note matures twelve (12) months from the effective dates of each respective tranche. The February Note matures on February 3, 2018, with an automatic extension of sixty (60) months from the effective date of each tranche. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $25,202 during the three months ended September 30, 2017.

ASC Topic 815 provides guidance applicable to convertible debt issued by the Company in instances where the number into which the debt can be converted is not fixed. For example, when a convertible debt converts at a discount to market based on the stock price on the date of conversion, ASC Topic 815 requires that the embedded conversion option of the convertible debt be bifurcated from the host contract and recorded at their fair value. In accounting for derivatives under accounting standards, the Company recorded a liability representing the estimated present value of the conversion feature considering the historic volatility of the Company’s stock, and a discount representing the imputed interest associated with the embedded derivative. The discount is amortized over the life of the convertible debt, and the derivative liability is adjusted periodically according to stock price fluctuations.

8

HYPERSOLAR, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS - UNAUDITED

SEPTEMBER 30, 2017

6. DERIVATIVE LIABILITIES

The convertible notes (the “Notes”) issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion features have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

During the three months ended September 30, 2017, as a result of the Notes issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $22,729, based upon the Binomial lattice formula. We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the Notes.

During the three months ended September 30, 2017, the Company recorded a net gain in change in derivative of $51,772 in the statement of operations due to the change in fair value of the remaining Notes, for the three months ended September 30, 2017. At September 30, 2017, the fair value of the derivative liability was $2,453,799.

For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice formula. The significant assumptions used in the Binomial lattice formula of the derivatives are as follows:

Risk free interest rate	1.20% - 1.92	%
Stock volatility factor	29.0% - 135.0	%
Weighted average expected option life	1 year - 5 year
Expected dividend yield	None

7. SUBSEQUENT EVENTS

Management evaluated subsequent events as of the date of the financial statements pursuant to ASC TOPIC 855, and reported the following events:

On October 2, 2017, the Company received an additional tranche in the amount of $60,000 under the February Note.

On October 2, 2017, the Company entered into a nonstatutory stock option agreement, granting a consultant the option to purchase 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share. The options shall terminate five (5) years from the date of grant or upon termination of services. Vesting of the options shall become exercisable as follows: one-third (1/3) shall vest immediately, one-third (1/3) shall vest on the second anniversary of this agreement and the remaining one-third (1/3) shall vest on the third anniversary of this agreement.

On November 1, 2017, the Company received an additional tranche in the amount of $15,000 under the February Note.

On November 9, 2017, the Company issued 34,858,469 shares of common stock upon conversion of $91,400 in principle, plus $27,119 in accrued interest under the May Note.

On November 10, 2017, the Company entered into a securities purchase agreement for the sale of a 10% convertible promissory note (the “November Note”) in the aggregate principal amount of up to $500,000. The November Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trade price recorded on any trade day after the effective date of each tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $45,000.

9

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

The information in this discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business strategy and expectations. Any statements that are not of historical fact may be deemed to be forward-looking statements. These forward-looking statements involve substantial risks and uncertainties. In some cases you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue”, the negative of the terms or other comparable terminology. Actual events or results may differ materially from the anticipated results or other expectations expressed in the forward-looking statements. In evaluating these statements, you should consider various factors, including the risks included from time to time in other reports or registration statements filed with the United States Securities and Exchange Commission. These factors may cause our actual results to differ materially from any forward-looking statements. We disclaim any obligation to publicly update these statements, or disclose any difference between actual results and those reflected in these statements.

Unless the context otherwise requires, references in this Form 10-Q to “we,” “us,” “our,” or the “Company” refer to Hypersolar, Inc.

Overview

At Hyper Solar, we are developing an innovative NanoParticle technology to produce low cost renewable hydrogen using solar. For over a century, splitting water molecules into hydrogen and oxygen using electrolysis has been well known. This technology can be used to produce an unlimited amount of clean and renewable hydrogen fuel to power a carbon-free world. However, in practice, current commercial electrolysis technologies require (a) expensive electricity and (b) highly purified water to prevent fouling of system components. These are the major barriers to affordable production of renewable hydrogen. We believe our process, using earth abundant elements, in a nanoscale structure can overcome these barriers.

On November 15, 2011, we filed a provisional patent application with the U.S. Patent and Trademark Office to protect the intellectual property rights for “Photoelectrochemically Active Heterostructures, Methods for Their Manufacture, And Methods And Systems For Producing Desired Products.” On March 14, 2017, this patent was granted as United States Patent No. 9,593,053. The patent protects the Company’s proprietary design of a self-contained solar-to-hydrogen device made up of millions of solar powered water-splitting nanoparticles, per square centimeter. We have multiple other patents pending for the methods of manufacturing these particles and a system to house them.

Our strategy has been to partner with major universities for the research and development or our technology. Currently we have agreements with the University of California, Santa Barbara and the University of Iowa.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

Use of Estimates

In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to recording net revenue, collectability of accounts receivable, useful lives and impairment of tangible and intangible assets, accruals, income taxes, inventory realization, stock-based compensation expense, Black Scholes valuation model inputs, derivative liabilities and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.

Fair Value of Financial Instruments

Fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2017, the amounts reported for cash, accrued interest and other expenses, notes payables, and derivative liability approximate the fair value because of their short maturities.

We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

10

Recently Issued Accounting Pronouncements

Management reviewed currently issued pronouncements during the three months ended September 30, 2017, and does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. Pronouncements disclosed in notes to the financials.

Results of Operations for the Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016.

Operating Expenses

Operating expenses for the three months ended September 30, 2017 were $186,714 and $162,285 for the prior period ended September 30, 2016. The net increase of $24,429 in operating expenses consisted primarily of an increase in research and development cost in the amount of $45,317, with an overall decrease in general and administrative expenses of $20,888.

Other Income/(Expenses)

Other income and (expenses) for the three months ended September 30, 2017 were $(41,426) and $(398,130) for the prior period ended September 30, 2016. The decrease in other expenses of $356,704 in other income and (expenses) was the result of a change in net gain on debt conversion and change in fair value of the derivative instruments of $351,979, with a decrease in interest expense of $4,725, which includes a net change of $8,167 of amortization of debt discount.

Net Income/(Loss)

For the three months ended September 30, 2017, our net loss was $(228,140) as compared to net loss of $(560,415) for the prior period September 30, 2016. The decrease in net loss of $332,275 was related primarily to the increase in other income and (expenses) associated with non-cash cost of the fair value of the convertible notes, with an overall increase in operating expenses. The Company has not generated any revenues.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

As of September 30, 2017, we had a working capital deficit of $3,343,747 as compared to $3,141,945 as of June 30, 2017. This increase in working capital deficit of $201,802 was due primarily to a decrease in cash, and prepaid expense, offset by an increase in other assets, accounts payable, accrued expenses, non-cash derivative liability, and current portion of convertible notes. 

Cash flow used in operating activities was $150,342 for the three months ended September 30, 2017 and $165,031 for the prior period ended September 30, 2016. The decrease in cash used in operating activities was due to an increase in research and development cost. The Company has had no revenues.

Cash provided by financing activities during the three months ended September 30, 2017 and 2016 was $120,000, respectively. There was no change in financing activities.

11

The condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying condensed financial statements do not reflect any adjustments that might result if we are unable to continue as a going concern. During the three months ended September 30, 2017, we did not generate any revenues, incurred net loss of $228,140, which was primarily associated with the net change in derivative instruments, and cash used in operations of $150,342. As of September 30, 2017, we had a working capital deficiency of $3,343,747 and a shareholders’ deficit of $4,478,038. These factors, among others raise substantial doubt about our ability to continue as a going concern. Our independent auditors, in their report on our audited financial statements for the year ended June 30, 2017, expressed substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern ultimately is dependent on our ability to generate revenue, which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, achieve profitable operations. We have historically obtained funds from our shareholders through the sale of our securities. Management believes that we will be able to continue to raise funds through the sale of our securities to existing and new investors. Management believes that funding from existing and prospective new investors and future revenue will provide the additional cash needed to meet our obligations as they become due, and will allow the development of our core business operations.

PLAN OF OPERATION AND FINANCING NEEDS

Our plan of operation within the next twelve months is to further research, develop, and protect our technology.

We believe that our current cash and investment balances will be sufficient to support development activity, intellectual property protection, and all general and administrative expenses for the next four months. Management estimate that we will require additional cash resources during 2018, based upon its current operating plan and condition. We are investigating additional financing alternatives, including continued equity and/or debt financing. There can be no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable. If we are unable to obtain sufficient funds, we may be forced to reduce the size of our operations, which could have a material adverse impact on, or cause us to curtail and/or cease the development of our products.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, result of operations, liquidity or capital expenditures.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for Smaller Reporting Companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There was no change to our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

12

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to, nor is any of our property currently the subject of, any pending legal proceeding that will have a material adverse effect on our business.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors previously disclosed in our annual report on Form 10-K filed with the SEC on September 21, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

No disclosure required.

ITEM 5. OTHER INFORMATION

Effective November 8, 2017, the Company issued a convertible promissory note (the “Note”) in the aggregate principal amount of $500,000to an accredited investor, of which $45,000 was advanced upon issuance of the Note. The principal and interest under the Note is due and payable twelve( 12) months from the funding of each tranche. The Note bears interest at a rate of 10% per annum and is convertible into shares of common stock of the Company at a price of the lesser of (a) $0.01 per share of the Company’s common stock, (b) Fifty Percent (50%) of the lowest trading price of the Company’s common stock recorded on any trading day after the date of funding, or (c) the lowest effective price per share granted to any person or entity, including the investor but excluding officers and directors of the Company, after the date of funding to acquire common stock of the Company, or adjust, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire common stock of the Company or outstanding common stock equivalents.

In connection with the sale of the Note, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.

13

ITEM 6. EXHIBITS

Exhibit No.	Description
10.1	Contract between Hypersolar, Inc. and The University of Iowa, Iowa City, Iowa effective as of June 1, 2017
31.1	Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to Sarbanes-Oxley Section 302.
32.2	Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
EX-101.INS	XBRL Instance Document
EX-101.SCH	XBRL Taxonomy Extension Schema Document
EX-101.CAL	XBRL Taxonomy Extension Calculation Linkbase
EX-101.DEF	XBRL Taxonomy Extension Definition Linkbase
EX-101.LAB	XBRL Taxonomy Extension Labels Linkbase
EX-101.PRE	XBRL Taxonomy Extension Presentation Linkbase

14

SIGNATURES

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

November 13, 2017	HYPERSOLAR, INC.
	By:	/s/ Timothy Young
		Timothy Young Chief Executive Officer and Acting Chief Financial Officer (Principal Executive Officer and Acting Principal Financial Officer and Accounting Officer)

15

EX-10.1

Exhibit 10.1

CONTRACT

THIS AGREEMENT effective this 1^st of June, 2017, by and between HyperSolar, Inc (hereafter referred to as “Sponsor”) and The University of Iowa, Iowa City, Iowa, a non-profit educational institution (hereinafter referred to as “University”).

WITNESSETH:

WHEREAS, the research program contemplated by this Agreement is of mutual interest and benefit to University and to Sponsor, will further the instructional and research objectives of University in a manner consistent with its status as a non- profit, tax-exempt, educational institution, and may derive benefits for both Sponsor and University through inventions, improvements, and/or discoveries;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree to the following:

ARTICLE 1 - Definitions

As used herein, the following terms shall have the following meanings:

1.1 “Project” shall mean the description of the project as described in Exhibit A hereof, under the direction of Syed Mubeen as Principal Investigator.

1.2 “Contract Period” is June 1, 2017, through May 31, 2018.

1.3 “University Intellectual Property” shall mean individually and collectively all inventions, improvements and/or discoveries which are conceived and/or made (i) by one or more employees of University, or (ii) jointly by one or more employees of University and by one or more employees/consultants of Sponsor, in performance of the Project.

ARTICLE 2 - Research Work

2.1 University shall commence performance of the Project promptly after the effective date of this Agreement, and shall use all reasonable efforts, care, and diligence to perform such Project in accordance with the terms and conditions of this Agreement. Anything in this Agreement to the contrary notwithstanding, Sponsor and University may at any time amend the Project by mutual written agreement.

2.2 In the event that the Principal Investigator becomes unable or unwilling to continue the Project, and a mutually acceptable substitute is not available, University and/or Sponsor shall have the option to terminate said Project pursuant to Article 10.1.

2.3 The University does not comply with Good Laboratory Practices (GLPs) as defined by the U.S. Food and Drug Administration in 21 C.F.R. 58.

ARTICLE 3 - Reports and Conferences

3.1 Written program reports shall be provided by University to Sponsor every six (6) months, and a final report shall be submitted by University within forty-five (45) days of the conclusion of the Contract Period, or the earlier termination of this Agreement.

3.2 During the term of this Agreement, representatives of University will meet with representatives of Sponsor at times and places mutually agreed upon to discuss the progress and results, as well as ongoing plans, or changes therein, of the Project to be performed hereunder.

ARTICLE 4 - Costs, Billings, and Other Support

4.1 It is agreed to and understood by the parties hereto that, subject to Article 2, total costs to Sponsor hereunder shall not exceed the sum of One Hundred and Forty Two Thousand and Two Hundred and Forty Three Dollars (142,243). Payment shall be made by Sponsor according to the following schedule:

Four (4) Quarterly Payments of $35,560.75

4.2 Invoices shall be submitted to the Sponsor representative listed in Article 17 for submission of invoices. Payments to University shall include Sponsor name, Principal Investigator name, project title and shall be submitted to the University representative listed in Article 17 for payment remittance.

4.3 [Sponsor shall loan/donate the following equipment to University under the following conditions:                 Not Applicable                                   .] University shall retain title to any equipment purchased with funds provided by Sponsor under this Agreement.

4.4 Anything herein to the contrary notwithstanding, in the event of early termination of this Agreement by Sponsor pursuant to Article 10.1 hereof, Sponsor shall pay all costs accrued by University as of the date of termination, including non-cancelable obligations, which shall include all non-cancelable contracts and fellowships or postdoctoral associate appointments called for in Appendix A, incurred prior to the effective date of termination. After termination, any obligation of Sponsor for fellowships or postdoctoral associates shall end no later than the end of University’s academic year following termination.

ARTICLE 5 - Publicity

5.1 Sponsor shall not use the name of University, nor of any member of University’s Project staff, in any publicity, advertising, or news release or in any way imply endorsement of the University without the prior written approval of an authorized representative of University. University shall not use the name of Sponsor, nor any employee of Sponsor, in any publicity without the prior written approval of Sponsor. University may disclose, without Sponsor’s approval, the terms of this Agreement that are a matter of public record under the Iowa Open Records Law, Iowa Code Chapter 22.

-2-

ARTICLE 6 - Publications

6.1 Sponsor recognizes that under University policy, the results of University research must be publishable and agrees that researchers engaged in the Project shall be permitted to present research results at symposia, national or regional professional meetings, and to publish in journals, theses or dissertations, or otherwise of their own choosing, methods and results of the Project, provided, however, that Sponsor shall have been furnished copies of any proposed publication or presentation at least one (1) month in advance of the submission of such proposed publication or presentation to a journal, editor, or other third party. Sponsor shall have thirty (30) days, after receipt of said copies, to object to such proposed presentation or proposed publication because there is patentable subject matter or proprietary information of Sponsor that needs protection. In the event that Sponsor makes such objection, said researcher(s) shall refrain from making such publication or presentation for a maximum of six (6) months from date of receipt of such objection in order for University to file patent application(s) with the United States Patent and Trademark Office and/or foreign patent office(s) directed to the patentable subject matter contained in the proposed publication or presentation. Sponsor does not possess a right to delay publication if the publication or presentation contains only findings and conclusions of basic science or results that would not affect the ability of Sponsor to obtain a patent.

ARTICLE 7 - Proprietary Information

7.1 It is the responsibility of Sponsor to mark or otherwise identify in writing prior to submission any information considered confidential that it deems necessary to share with University (“Confidential Information”). Oral disclosures of Confidential Information shall be identified as confidential at the time of disclosure and confirmed in writing within ten (10) business days of the disclosure. University shall have the right to accept or reject Sponsor’s Confidential Information. If such information is accepted it will be withheld by University from publication, and in all other respects shall be maintained by University as confidential and proprietary to Sponsor for a period of five (5) years after termination of this Agreement. University shall have no such obligation with respect to any portion of such Confidential Information which:

a) is or later becomes generally available to the public by use, publication or the like, through no fault of University;

b) is obtained on a non-confidential basis from a third party who disclosed the same to University;

c) University already possesses, as evidenced by its written records, predating receipt thereof from Sponsor; or

d) is required to be disclosed by law, regulation or court order.

7.2 All documentation concerning University Intellectual Property submitted to Sponsor in accordance with Article 8.4 shall be treated as confidential in order to preserve any patent rights.

-3-

ARTICLE 8 - Intellectual Property

8.1 All rights, title and interest to University Intellectual Property under the Project, except as provided in Article 8.3, shall belong to University and shall be subject to the terms and conditions of this Agreement.

8.2 Rights to inventions, improvements, and/or discoveries, whether patentable or copyrightable or not, relating to the Project made solely by employees/consultants of Sponsor shall belong to Sponsor. Such inventions, improvements, and/or discoveries shall not be subject to the terms and conditions of this Agreement.

8.3 Rights to inventions, improvements, and/or discoveries conceived and/or made during the Contract Period, whether patentable or copyrightable or not, relating to the Project, which are made jointly by employees of University and employees/consultants of Sponsor, shall be the joint property of University and Sponsor and shall be subject to the terms and conditions of this Agreement.

8.4 University will promptly notify Sponsor of any University Intellectual Property conceived and/or made during the Contract Period under the Project. If Sponsor directs that a patent application or application for other intellectual property protection be filed, University shall promptly prepare, file, and prosecute such U.S. and foreign application in University’s name, and Sponsor’s name if jointly invented. Sponsor shall bear all costs incurred in connection with such preparation, filing, prosecution, and maintenance of U.S. and foreign application(s) directed to said University Intellectual Property. Sponsor shall cooperate with University to assure that such application(s) will cover, to the best of Sponsor’s knowledge, all items of commercial interest and importance. While University shall be responsible for making decisions regarding scope and content of application(s) to be filed and prosecution thereof, Sponsor shall be given an opportunity to review and provide input thereto. University shall keep Sponsor advised as to all developments with respect to such application(s) and shall promptly supply to Sponsor copies of all papers received and filed in connection with the prosecution thereof in sufficient time for Sponsor to comment thereon.

8.5 If Sponsor elects not to exercise its option granted in Article 9.1 or decides to discontinue the financial support of the prosecution and maintenance of the patent protection, all right, title and interest in such patent, patent application, and University Intellectual Property shall automatically revert to University. University shall then be free to file or continue prosecution or maintain any such application(s), and to maintain any protection issuing thereon in the U.S. and in any foreign country at University’s sole expense.

ARTICLE 9 - Grant of Rights

9.1 Subject to Article 8.3, University grants Sponsor the first option to elect an exclusive license to University Intellectual Property developed under this Agreement, and a right to sub-license any and all University Intellectual Property developed under this Agreement on terms and conditions to be mutually agreed upon. If Sponsor elects to exercise this option, Sponsor shall notify University in writing of its decision within one (1) year from the date of termination of this Agreement.

-4-

9.2 No grant described in this Article shall be construed to limit University’s right to utilize University Intellectual Property for research, instruction or academic publication purposes.

ARTICLE 10 - Term and Termination

10.1 This Agreement shall become effective upon the date first hereinabove written and shall continue in effect for the full duration of the Contract Period unless sooner terminated in accordance with the provisions of this Article. The parties hereto may, however, extend the term of this Agreement for additional periods as desired under mutually agreeable terms and conditions which the parties reduce to writing and sign. Either party may terminate this Agreement upon sixty (60) days prior written notice to the other.

10.2 In the event that either party hereto shall commit any material breach or default in any of the terms or conditions of this Agreement, and also shall fail to remedy such default or breach within ninety (90) days after receipt of written notice thereof from the other party hereto, the party giving notice may, at its option and in addition to any other remedies which it may have at law or in equity, terminate this Agreement by sending notice of termination in writing to the other party to such effect, and such termination shall be effective as of the date of the receipt of such notice.

10.3 Termination of this Agreement by either party for any reason shall not affect the rights and obligations of the parties accrued prior to the effective date of termination of this Agreement. No termination of this Agreement, however effectuated, shall release the parties hereto from their rights and obligations under Articles 3.1, 4, 5, 6, 7, 8, 9 and 11.

ARTICLE 11 - Independent Contractor

11.1 In the performance of all services hereunder University shall be deemed to be and shall be an independent contractor and, as such, University shall not be entitled to any benefits applicable to employees of Sponsor.

11.2 Neither party is authorized or empowered to act as agent for the other for any purpose and shall not on behalf of the other enter into any contract, warranty, or representation as to any matter. Neither shall be bound to the acts or conduct of the other.

ARTICLE 12 – Insurance

12.1 Each party shall be liable for any and all claims for wrongful death, personal injury or property damage attributable to the negligent acts or omissions of that party and the officers, employees, and agents thereof.

-5-

12.2 University shall be responsible and agrees to pay for any and all claims for wrongful death, personal injury or property damage directly resulting from the negligence of University, its officers, employees and agents, and arising from activities under this Agreement to the full extent permitted by Chapter 669, Code of Iowa, which is the exclusive remedy for processing tort claims against the State of Iowa.

ARTICLE 13 - Governing Law

13.1 This Agreement shall be governed and construed in accordance with the substantive laws of the State of Iowa, excluding its conflict of laws provisions.

ARTICLE 14 - Assignment

14.1 This Agreement shall not be assigned by either party without the prior written consent of the parties hereto.

14.2 This Agreement is assignable to any division of Sponsor, any majority stockholder of Sponsor, and/or any subsidiary of Sponsor, provided that such assignee assumes all of the rights, obligations and liabilities of Sponsor hereunder.

ARTICLE 15 - Agreement Modification

15.1 Any agreement to change the terms of this Agreement in any way shall be valid only if the change is made in writing and approved by mutual agreement of authorized representatives of the parties hereto.

ARTICLE 16 - Warranties

16.1 NO WARRANTIES, EITHER EXPRESSED OR IMPLIED, ARE MADE PART OF THIS AGREEMENT.

ARTICLE 17 – Export Control

17.1 The disclosing party agrees to share any export control determinations when products, services, and/or technical data under this Agreement are subject to export controls under U.S. Government export laws and regulations; however, each party will be solely responsible for compliance with U.S. Government export laws and regulations.

-6-

ARTICLE 18 - Notices

18.1 Notices, invoices, and communications, hereunder shall be given by registered or certified mail, or express delivery service, postage or delivery charge prepaid, and addressed to the party to receive such notice, invoice, or communication at the address given below, or such other address as may hereafter be designated by notice in writing. Notice shall be deemed made on the date of receipt.

If to Sponsor:

Tim Young, CEO

HyperSolar, Inc

Phone: (310)486-0740

E-mail: tyoung@hypersolar.com

For Submission of Invoices:

HyperSolar, Inc.

32 E. Micheltorena, Suite A

Santa Barbara, CA 93101

Phone:  805-966-6566

Fax:       805-617-3601

E-mail: tyoung@hypersolar.com

If to University:   The University of Iowa

Division of Sponsored Programs

Attention:                                    

2 Gilmore Hall

Iowa City, Iowa 52242

Phone: 319-335-2123

Fax: 319-335-2130

E-mail:

For Payment Remittance:

The University of Iowa

Grant Accounting Office

B5 Jessup Hall

Iowa City, Iowa 52242-1316

Phone: 319-335-3801

Fax: 319-335-0674

IN WITNESS WHEREOF, the parties, duly authorized, have executed this Agreement in duplicate as of the day and year first written above.

HYPERSOLAR, INC. (SPONSOR)		THE UNIVERSITY OF IOWA
/s/ Timothy Young		/s/ Jennifer Lassner
By:	Timothy Young	By:	Jennifer Lassner
Title:	President and CEO	Title:	Executive Director of Sponsored Programs
Date: 05-12-2017		Date: 6-1-17

-7-

EX-31.1

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Timothy Young, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Hypersolar, Inc. for the fiscal quarter  ended September 30, 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 interim 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(s) 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)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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;
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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

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

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 controls over financial reporting.

Dated: November 13, 2017	/s/ Timothy Young
	By: Timothy Young
	Its: Chief Executive Officer & Acting Chief Financial Officer
	(Principal Executive Officer) (Principal Accounting and Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Hypersolar, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2017, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Timothy Young, Chief Executive Officer & Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2017	/s/ Timothy Young
	By: Timothy Young
	Its: Chief Executive Officer & Acting Chief Financial Officer
	(Principal Executive Officer) (Principal Accounting and Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2017	Nov. 10, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Hypersolar, Inc.
Entity Central Index Key	0001481028
Trading Symbol	HYSR
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		734,341,728

XML

Condensed Balance Sheets - USD ($)	Sep. 30, 2017	Jun. 30, 2017
CURRENT ASSETS
Cash	$ 46,425	$ 80,133
Prepaid expense	1,667	4,167
TOTAL CURRENT ASSETS	48,092	84,300
PROPERTY & EQUIPMENT
Computers and peripherals	6,218	6,218
Less: accumulated depreciation	(6,218)	(6,218)
NET PROPERTY AND EQUIPMENT
OTHER ASSETS
Deposits	900	900
Domain, net of amortization of $3,248 and $3,160, respectively	2,067	2,155
Patents, net of amortization of $1,825 and $0, respectively	80,018	78,478
TOTAL OTHER ASSETS	82,985	81,533
TOTAL ASSETS	131,077	165,833
CURRENT LIABILITIES
Accounts payable	135,070	103,112
Accrued expenses	441,832	401,626
Derivative liability	2,453,799	2,482,842
Convertible promissory notes, net of debt discount of $63,862 and $66,335, respectively	361,138	238,665
TOTAL CURRENT LIABILITIES	3,391,839	3,226,245
LONG TERM LIABILITIES
Convertible promissory notes, net of debt discount of $10,724 and $38,514, respectively	1,217,276	1,189,486
TOTAL LONG TERM LIABILITIES	1,217,276	1,189,486
TOTAL LIABILITIES	4,609,115	4,415,731
SHAREHOLDERS' DEFICIT
Preferred Stock, $0.001 par value; 5,000,000 authorized preferred shares, no shares issued or outstanding
Common Stock, $0.001 par value; 1,000,000,000 authorized common shares 699,483,259 and 699,483,259 shares issued and outstanding, respectively	699,483	699,483
Additional Paid in Capital	6,850,736	6,850,736
Accumulated deficit	(12,028,257)	(11,800,117)
TOTAL SHAREHOLDERS' DEFICIT	(4,478,038)	(4,249,898)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$ 131,077	$ 165,833

XML

Condensed Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2017	Jun. 30, 2017
Statement of Financial Position [Abstract]
Amortization of domain	$ 3,248	$ 3,160
Amortization of patents	1,825	0
Convertible promissory notes, net of debt discount for current liabilities	63,862	66,335
Convertible promissory notes, net of debt discount for long term liabilities	$ 10,724	$ 38,514
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued
Preferred Stock, shares outstanding
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	1,000,000,000	1,000,000,000
Common Stock, shares issued	699,483,259	699,483,259
Common Stock, shares outstanding	699,483,259	699,483,259

XML

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
REVENUE
OPERATING EXPENSES
General and administrative expenses	118,247	140,801
Research and development cost	66,553	21,236
Depreciation and amortization	1,914	248
TOTAL OPERATING EXPENSES	186,714	162,285
LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES)	(186,714)	(162,285)
OTHER INCOME/(EXPENSES)
Gain (loss) on debt conversion and change in derivative liability	51,772	(300,207)
Interest expense	(93,198)	(97,923)
TOTAL OTHER INCOME/(EXPENSES)	(41,426)	(398,130)
NET LOSS	$ (228,140)	$ (560,415)
BASIC AND DILUTED LOSS PER SHARE	$ (0.000)	$ (0.001)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED	699,483,259	589,552,961

XML

Condensed Statements of Shareholders' Deficit - 3 months ended Sep. 30, 2017 - USD ($)	Total	Preferred stock	Common stock	Additional Paid-in Capital	Accumulated Deficit
Beginning balance at Jun. 30, 2017	$ (4,249,898)		$ 699,483	$ 6,850,736	$ (11,800,117)
Beginning balance, shares at Jun. 30, 2017			699,483,259
Net loss	(228,140)				(228,140)
Ending balance at Sep. 30, 2017	$ (4,478,038)		$ 699,483	$ 6,850,736	$ (12,028,257)
Ending balance, shares at Sep. 30, 2017			699,483,259

XML

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (228,140)	$ (560,415)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation & amortization expense	1,914	248
(Gain)/Loss on debt conversion change in derivative liability	(51,772)	300,207
Amortization of debt discount recorded as interest expense	52,992	61,159
(Increase) Decrease in change in assets:
Prepaid expense	2,500
Increase (Decrease) in change in liabilities :
Accounts payable	31,958	(2,994)
Accrued expenses	40,206	36,764
NET CASH USED IN OPERATING ACTIVITIES	(150,342)	(165,031)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets	(3,366)
NET CASH FLOWS USED IN INVESTING ACTIVITIES:	(3,366)
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable	120,000	120,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	120,000	120,000
NET DECREASE IN CASH	(33,708)	(45,031)
CASH, BEGINNING OF PERIOD	80,133	119,887
CASH, END OF PERIOD	46,425	74,856
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid
Taxes paid

XML

Basis of Presentation

3 Months Ended

Sep. 30, 2017

Basis of Presentation [Abstract]

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of S-X Regulation Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the three months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending June 30, 2018.  For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended June 30, 2017.

Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has historically obtained funds through private placement offerings of equity and debt. Management believes that it will be able to continue to raise funds by sale of its securities to its existing shareholders and prospective new investors to provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business. There is no assurance that the Company will be able to continue raising the required capital.

XML

Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2017

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of HyperSolar, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Cash and Cash Equivalent

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of intangible assets, and the deferred tax valuation allowance. Actual results could differ from those estimates.

Intangible Assets

Intangible assets consist of patents that are initially measured at the lower of cost or fair value. The patents are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified. Patents are amortized straight-line over 15 years.

Net Earnings (Loss) per Share Calculations

Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).  

For the three months ended September 30, 2017, the Company calculated the dilutive impact of the outstanding stock options of 250,000, and the convertible debt of $1,653,000, which is convertible into shares of common stock. The stock options and $1,653,000 of the convertible debt were not included in the calculation of net earnings per share, because their impact was antidilutive.

For the three months ended September 30, 2016, the dilutive impact of the outstanding stock options of 500,000, and the convertible debt of $1,505,500 converted into shares of common stock have been excluded in the calculation of net earnings per share, because their impact on the loss per share is antidilutive. 

Stock based Compensation

The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

Fair Value of Financial Instruments

Fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2017, the amounts reported for cash, accrued interest and other expenses, notes payables, and derivative liability approximate the fair value because of their short maturities.

We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined 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. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2017 (See Note 6):

	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities
Derivative liability		2,453,799		-		-		2,453,799
Total derivative liabilities measured at fair value	$	2,453,799	$	-	$	-	$	2,453,799

The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:

Balance as of July 1, 2017	$	2,482,842
Fair value of derivative liabilities issued		22,729
(Gain) on change in derivative liability		(51,772	)
Balance as of  December 31, 2016	$	2,453,799

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Recently Issued Accounting Pronouncements

In May 2017, FASB issued accounting standards update ASU-2017-09, “Compensation-Stock Compensation” (Topic 718) –Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period for public entities for reporting periods for which financial statements have not yet been issued, and all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of the adoption of ASU 2017-09 on the Company’s financial statements.

In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU-2017 on the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

XML

Capital Stock

3 Months Ended

Sep. 30, 2017

Capital Stock [Abstract]

CAPITAL STOCK

3. CAPITAL STOCK

During the three months ended September 30, 2017, the Company issued no shares of common stock.

XML

Stock Options

3 Months Ended

Sep. 30, 2017

Stock Options [Abstract]

STOCK OPTIONS

4. STOCK OPTIONS

Options

As of September 30, 2017, 250,000 non-qualified common stock options were outstanding. Each option expires on the date specified in the option agreement, which date is not later than the fifth (5^th) anniversary from the grant date of the options. As of September 30, 2017, 250,000 options are fully vested with a maturity date of March 31, 2020, and are exercisable at an exercise price of $0.02245 per share.

A summary of the Company’s stock option activity and related information follows:

	9/30/2017
			Weighted
	Number		average
	of		exercise
	Options		price
Outstanding, beginning of period		250,000	$	0.02
Granted		-		-
Exercised		-		-
Forfeited/Expired		-		-
Outstanding, end of period		250,000	$	0.02
Exercisable at the end of period		250,000	$	0.02

The stock based compensation expense recognized in the statement of operations during the three months ended September 30, 2017 and 2016, related to the granting of these options was $0, respectively.

XML

Convertible Promissory Notes

3 Months Ended

Sep. 30, 2017

Convertible Promissory Notes [Abstract]

CONVERTIBLE PROMISSORY NOTES

5. CONVERTIBLE PROMISSORY NOTES

As of September 30, 2017, the outstanding convertible promissory notes are summarized as follows:

Convertible Promissory Notes	$	1,653,000
Less current portion		425,000
Total long term liabilities	$	1,228,000

Maturities of long-term debt for the next three years are as follows:

Year Ending September 30,	Amount
2019	$	113,000
2020		575,000
2021		540,000
	$	1,228,000

At September 30, 2017, the $1,653,000 in convertible promissory notes had a remaining debt discount of $74,586, leaving a net balance of $1,578,414.

The Company entered into a securities purchase agreement on May 23, 2014, for the sale of a 10% convertible promissory note (the “May Note”) in the aggregate principal amount of up to $500,000. The May Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.0048 per share or fifty percent (50%) of the lowest trading price after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $50,000.The Company received additional tranches in the amount of $415,000 for an aggregate sum of $465,000. The May Note matured on May 23, 2015 and was extended to February 23, 2016. A second extension was granted to November 23, 2016. On January 19, 2017, the investor extended the May Note for an additional sixty (60) months from the effective date of each tranche. The May Note matures on November 23, 2021. The Company issued 60,571,942 shares of common stock upon conversion of $235,863 in principal, plus accrued interest of $62,854, with an aggregate fair value loss of $367,808. Also, the principal was reduced by $1,137 for interest due from the investor. The remaining balance of the May Note as of September 30, 2017 was $228,000.

The Company entered into a securities purchase agreement on April 9, 2015, for the sale of a 10% convertible promissory note (the “April Note”) in the aggregate principal amount of up to $500,000. The April Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective advance or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $50,000. The Company received additional tranches in the amount of $450,000 for an aggregate sum of $500,000. The April Note matured nine (9) months from the effective dates of each respective tranche. A second extension was granted to October 9, 2016. On January 19, 2017, the investor extended the April Note for an additional (60) months from the effective date of each tranche. The April Note matures on October 31, 2021.

The Company entered into a securities purchase agreement January 28, 2016, for the sale of a 10% convertible promissory note (the “January Note”) in the aggregate principal amount of up to $500,000. The January Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $10,000. The Company received additional tranches in the amount of $490,000 for an aggregate sum of $500,000. The January Note matures twelve (12) months from the effective dates of each respective tranche. On January 19, 2017, the investor extended the January Note for an additional sixty (60) months from the effective date of each tranche. The January Note matures on January 27, 2022. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $27,790 during the three months ended September 30, 2017.

The Company entered into a securities purchase agreement February 3, 2017, for the sale of a 10% convertible promissory note (the “February Note”) in the aggregate principal amount of up to $500,000. The February Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $60,000. The Company received an additional tranches in the amount of $365,000 for an aggregate sum of $425,000. The February Note matures twelve (12) months from the effective dates of each respective tranche. The February Note matures on February 3, 2018, with an automatic extension of sixty (60) months from the effective date of each tranche. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $25,202 during the three months ended September 30, 2017.

ASC Topic 815 provides guidance applicable to convertible debt issued by the Company in instances where the number into which the debt can be converted is not fixed. For example, when a convertible debt converts at a discount to market based on the stock price on the date of conversion, ASC Topic 815 requires that the embedded conversion option of the convertible debt be bifurcated from the host contract and recorded at their fair value. In accounting for derivatives under accounting standards, the Company recorded a liability representing the estimated present value of the conversion feature considering the historic volatility of the Company’s stock, and a discount representing the imputed interest associated with the embedded derivative. The discount is amortized over the life of the convertible debt, and the derivative liability is adjusted periodically according to stock price fluctuations.

XML

Derivative Liabilities

3 Months Ended

Sep. 30, 2017

Derivative Liabilities [Abstract]

DERIVATIVE LIABILITIES

6. DERIVATIVE LIABILITIES

The convertible notes (the “Notes”) issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion features have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

During the three months ended September 30, 2017, as a result of the Notes issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $22,729, based upon the Binomial lattice formula. We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the Notes.

During the three months ended September 30, 2017, the Company recorded a net gain in change in derivative of $51,772 in the statement of operations due to the change in fair value of the remaining Notes, for the three months ended September 30, 2017. At September 30, 2017, the fair value of the derivative liability was $2,453,799.

For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice formula. The significant assumptions used in the Binomial lattice formula of the derivatives are as follows:

Risk free interest rate	1.20% - 1.92	%
Stock volatility factor	29.0% - 135.0	%
Weighted average expected option life	1 year - 5 year
Expected dividend yield	None

XML

Subsequent Events

3 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

7. SUBSEQUENT EVENTS

Management evaluated subsequent events as of the date of the financial statements pursuant to ASC TOPIC 855, and reported the following events:

On October 2, 2017, the Company received an additional tranche in the amount of $60,000 under the February Note.

On October 2, 2017, the Company entered into a nonstatutory stock option agreement, granting a consultant the option to purchase 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share. The options shall terminate five (5) years from the date of grant or upon termination of services. Vesting of the options shall become exercisable as follows: one-third (1/3) shall vest immediately, one-third (1/3) shall vest on the second anniversary of this agreement and the remaining one-third (1/3) shall vest on the third anniversary of this agreement.

On November 1, 2017, the Company received an additional tranche in the amount of $15,000 under the February Note.

On November 9, 2017, the Company issued 34,858,469 shares of common stock upon conversion of $91,400 in principle, plus $27,119 in accrued interest under the May Note.

On November 10, 2017, the Company entered into a securities purchase agreement for the sale of a 10% convertible promissory note (the “November Note”) in the aggregate principal amount of up to $500,000. The November Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trade price recorded on any trade day after the effective date of each tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. Upon execution of the securities purchase agreement, the Company received a tranche of $45,000.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2017

Summary of Significant Accounting Policies [Abstract]

Cash and Cash Equivalent

Cash and Cash Equivalent

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of intangible assets, and the deferred tax valuation allowance. Actual results could differ from those estimates.

Intangible Assets

Intangible Assets

Intangible assets consist of patents that are initially measured at the lower of cost or fair value. The patents are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified. Patents are amortized straight-line over 15 years.

Net Earnings (Loss) per Share Calculations

Net Earnings (Loss) per Share Calculations

Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).  

For the three months ended September 30, 2017, the Company calculated the dilutive impact of the outstanding stock options of 250,000, and the convertible debt of $1,653,000, which is convertible into shares of common stock. The stock options and $1,653,000 of the convertible debt were not included in the calculation of net earnings per share, because their impact was antidilutive.

For the three months ended September 30, 2016, the dilutive impact of the outstanding stock options of 500,000, and the convertible debt of $1,505,500 converted into shares of common stock have been excluded in the calculation of net earnings per share, because their impact on the loss per share is antidilutive.

Stock based Compensation

Stock based Compensation

The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2017, the amounts reported for cash, accrued interest and other expenses, notes payables, and derivative liability approximate the fair value because of their short maturities.

We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined 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. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2017 (See Note 6):

	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities
Derivative liability		2,453,799		-		-		2,453,799
Total derivative liabilities measured at fair value	$	2,453,799	$	-	$	-	$	2,453,799

The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:

Balance as of July 1, 2017	$	2,482,842
Fair value of derivative liabilities issued		22,729
(Gain) on change in derivative liability		(51,772	)
Balance as of  December 31, 2016	$	2,453,799

Accounting for Derivatives

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2017, FASB issued accounting standards update ASU-2017-09, “Compensation-Stock Compensation” (Topic 718) –Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period for public entities for reporting periods for which financial statements have not yet been issued, and all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of the adoption of ASU 2017-09 on the Company’s financial statements.

In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU-2017 on the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Sep. 30, 2017

Summary of Significant Accounting Policies [Abstract]

Schedule of measurement of assets and liabilities at fair value on recurring basis

	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities
Derivative liability		2,453,799		-		-		2,453,799
Total derivative liabilities measured at fair value	$	2,453,799	$	-	$	-	$	2,453,799

Summary of reconciliation of the derivative liability

Balance as of July 1, 2017	$	2,482,842
Fair value of derivative liabilities issued		22,729
(Gain) on change in derivative liability		(51,772	)
Balance as of  December 31, 2016	$	2,453,799

XML

Stock Options (Tables)

3 Months Ended

Sep. 30, 2017

Stock Options [Abstract]

Schedule of the Company's stock option activity and related information

	9/30/2017
			Weighted
	Number		average
	of		exercise
	Options		price
Outstanding, beginning of period		250,000	$	0.02
Granted		-		-
Exercised		-		-
Forfeited/Expired		-		-
Outstanding, end of period		250,000	$	0.02
Exercisable at the end of period		250,000	$	0.02

XML

Convertible Promissory Notes (Tables)

3 Months Ended

Sep. 30, 2017

Convertible Promissory Notes [Abstract]

Schedule of convertible promissory notes

Convertible Promissory Notes	$	1,653,000
Less current portion		425,000
Total long term liabilities	$	1,228,000

Schedule of maturities of long-term debt

Year Ending September 30,	Amount
2019	$	113,000
2020		575,000
2021		540,000
	$	1,228,000

XML

Derivative Liabilities (Tables)

3 Months Ended

Sep. 30, 2017

Derivative Liabilities [Abstract]

Schedule of fair market value of the derivative liability

Risk free interest rate	1.20% - 1.92	%
Stock volatility factor	29.0% - 135.0	%
Weighted average expected option life	1 year - 5 year
Expected dividend yield	None

XML

Summary of Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017	Jun. 30, 2016
Liabilities
Derivative liability measured at fair value	$ 2,453,799	$ 2,482,842
Total derivative liabilities measured at fair value	2,453,799
Fair value measurements on recurring basis [Member] | (Level 1) [Member]
Liabilities
Derivative liability measured at fair value
Total derivative liabilities measured at fair value
Fair value measurements on recurring basis [Member] | (Level 2) [Member]
Liabilities
Derivative liability measured at fair value
Total derivative liabilities measured at fair value
Fair value measurements on recurring basis [Member] | (Level 3) [Member]
Liabilities
Derivative liability measured at fair value	2,453,799	$ 2,482,842
Total derivative liabilities measured at fair value	$ 2,453,799

XML

Summary of Significant Accounting Policies (Details 1) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Beginning balance	$ 2,482,842
(Gain) on change in derivative liability	(51,772)	$ 300,207
Ending balance	2,453,799
(Level 3) [Member] | Fair Value Measurements [Member]
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Beginning balance	2,482,842
Fair value of derivative liabilities issued	22,729
(Gain) on change in derivative liability	(51,772)
Ending balance	$ 2,453,799

XML

Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2016
Summary of Significant Accounting Policies (Textual)
Convertible debt	$ 1,653,000		$ 1,505,500
Outstanding stock options	250,000		500,000
Patents are amortized straight-line term	15 years
Stock options [Member]
Summary of Significant Accounting Policies (Textual)
Convertible debt	$ 1,653,000
Outstanding stock options	250,000	250,000	500,000

XML

Capital Stock (Details)	3 Months Ended
	Sep. 30, 2017 shares
Common Stock [Member]
Capital Stock (Textual)
Issuance of common stock (in shares)	0

XML

Stock Options (Details)	3 Months Ended
	Sep. 30, 2017 $ / shares shares
Number of Options
Outstanding, end of period	250,000
Stock options [Member]
Number of Options
Outstanding, beginning of period	250,000
Granted
Exercised
Forfeited/Expired
Outstanding, end of period	250,000
Exercisable at the end of period	250,000
Weighted average exercise price
Outstanding, beginning of period | $ / shares	$ 0.02
Granted | $ / shares
Exercised | $ / shares
Forfeited/Expired | $ / shares
Outstanding, end of year | $ / shares	0.02
Exercisable at the end of period | $ / shares	$ 0.02

XML

Stock Options (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Stock Options (Textual)
Non-qualified common stock outstanding	250,000	500,000
Stock compensation expense	$ 0	$ 0
Non-qualified common stock options [Member]
Stock Options (Textual)
Exercisable price	$ 0.02245
Description of maturity dates	Maturity date of March 31, 2020.
Stock option vested exercisable	250,000
Non-qualified common stock [Member]
Stock Options (Textual)
Non-qualified common stock outstanding	250,000

XML

Convertible Promissory Notes (Details)	Sep. 30, 2017 USD ($)
Convertible Promissory Notes [Abstract]
Convertible Promissory Notes	$ 1,653,000
Less current portion	425,000
Total long term liabilities	$ 1,228,000

XML

Convertible Promissory Notes (Details 1)	Sep. 30, 2017 USD ($)
Year Ending September 30,
2019	$ 113,000
2020	575,000
2021	540,000
Maturities of long-term debt, Total	$ 1,228,000

XML

Convertible Promissory Notes (Details Textual) - USD ($)					3 Months Ended
	Feb. 03, 2017	Jan. 28, 2016	Apr. 09, 2015	May 23, 2014	Sep. 30, 2017	Sep. 30, 2016
Convertible Promissory Notes (Textual)
Convertible promissory note principal amount					$ 1,228,000
Convertible notes payable					22,729
Convertible debt					1,653,000	$ 1,505,500
Debt discount					74,586
Net balance of convertible debt					$ 1,578,414
May Note [Member] | Securities Purchase Agreements [Member] | 10% Convertible Promissory Notes [Member]
Convertible Promissory Notes (Textual)
Amount received in consideration of sale of debt				$ 50,000
Convertible promissory notes, interest rate				10.00%
Accrued interest				$ 62,854
Amount of additional tranches received				415,000
Convertible promissory note principal amount				465,000
Aggregate principal amount				$ 500,000
Conversion price				$ 0.0048
Percentage of trading price				50.00%
Debt instrument, term				60 months
Debt instrument, maturity date description				Note matured on May 23, 2015 and was extended to February 23, 2016.
Maturity date				Nov. 23, 2021
Debt instrument, convertible, terms of conversion feature				Price equal to a variable conversion price of the lesser of $0.0048 per share or fifty percent (50%) of the lowest trading price after the effective date to acquire common stock.
Issuance of common stock (in shares)					60,571,942
Convertible notes payable					$ 235,863
Interest due from the investor					1,137
Aggregate fair value loss				$ 367,808
April Note [Member] | Securities Purchase Agreements [Member] | 10% Convertible Promissory Notes [Member]
Convertible Promissory Notes (Textual)
Amount received in consideration of sale of debt			$ 50,000
Convertible promissory notes, interest rate			10.00%
Amount of additional tranches received			$ 450,000
Convertible promissory note principal amount			500,000
Aggregate principal amount			$ 500,000
Conversion price			$ 0.01
Percentage of trading price			50.00%
Debt instrument, term			9 months
Debt instrument, maturity date description			Note matured nine (9) months from the effective dates of each respective tranche.
Maturity date			Oct. 31, 2021
Debt instrument, convertible, terms of conversion feature			Price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective advance or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock.
January Note [Member] | Securities Purchase Agreements [Member] | 10% Convertible Promissory Notes [Member]
Convertible Promissory Notes (Textual)
Amount received in consideration of sale of debt		$ 10,000
Convertible promissory notes, interest rate		10.00%
Accrued interest					27,790
Amount of additional tranches received		$ 490,000
Convertible promissory note principal amount		500,000
Aggregate principal amount		$ 500,000
Conversion price		$ 0.01
Percentage of trading price		50.00%
Debt instrument, term		12 months
Debt instrument, maturity date description		Note matures twelve (12) months from the effective dates of each respective tranche.
Maturity date		Jan. 27, 2022
Debt instrument, convertible, terms of conversion feature		Price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock.
February Note [Member] | Securities Purchase Agreements [Member] | 10% Convertible Promissory Notes [Member]
Convertible Promissory Notes (Textual)
Amount received in consideration of sale of debt	$ 60,000
Convertible promissory notes, interest rate	10.00%
Accrued interest					$ 25,202
Amount of additional tranches received	$ 365,000
Convertible promissory note principal amount	425,000
Aggregate principal amount	$ 500,000
Conversion price	$ 0.01
Percentage of trading price	50.00%
Debt instrument, term	12 months
Debt instrument, maturity date description	Note matures twelve (12) months from the effective dates of each respective tranche.
Maturity date	Feb. 03, 2018
Debt instrument, convertible, terms of conversion feature	Price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trading price since the original effective date of each respective tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock.

XML

Derivative Liabilities (Details)	3 Months Ended
	Sep. 30, 2017
Derivative [Line Items]
Risk free interest rate, minimum	1.20%
Risk free interest rate, maximum	1.92%
Stock volatility factor, minimum	29.00%
Stock volatility factor, maximum	135.00%
Expected dividend yield
Maximum [Member]
Derivative [Line Items]
Weighted average expected option life	5 years
Minimum [Member]
Derivative [Line Items]
Weighted average expected option life	1 year

XML

Derivative Liabilities (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2017
Derivative Liabilities (Textual)
Convertible notes payable	$ 22,729
Derivative liability	2,453,799		$ 2,482,842
Net gain on derivative liability	$ 51,772	$ (300,207)

XML

Subsequent Events (Details) - Subsequent Events [Member] - USD ($)	Nov. 10, 2017	Nov. 09, 2017	Nov. 01, 2017	Oct. 02, 2017
Subsequent Events (Textual)
Amount of additional tranches received				$ 60,000
Convertible note promissory note, interest rate	10.00%
Conversion of common stock, description	The November Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of the lesser of $0.01 per share or fifty percent (50%) of the lowest trade price recorded on any trade day after the effective date of each tranche or the lowest effective price per share granted to any person or entity after the effective date to acquire common stock.
Aggregate principal amount	$ 500,000
Purchase of common stock shares				$ 10,000,000
Exercise price				$ 0.01
Options term				5 years
Tranche received	$ 45,000
February Note [Member]
Subsequent Events (Textual)
Amount of additional tranches received			$ 15,000
May Note [Member]
Subsequent Events (Textual)
Issuance of common stock for conversion of debt, shares		34,858,469
Issuance of common stock for conversion of debt, value		$ 91,400
Accrued interest		$ 27,119