Convertible Preferred Stock

6 Months Ended

Dec. 31, 2019

Equity [Abstract]

CONVERTIBLE PREFERRED STOCK

(13) CONVERTIBLE PREFERRED STOCK

The following schedule reflects the number of shares of preferred stock that have been issued, converted and are outstanding as of December 31, 2019:

Security	Date Issued	No. of Shares		Amount		Date of Conversion	No. of Shares Converted		Amount Converted		Balance 12/31/2019
Series M Cv Pfd	8/1/2014		250	$	2,500,000	4/18/2017		6	$	60,000
						11/21/2017		3		30,000
						8/7/2018		241		2,410,000
Series M Cv Pfd	8/31/2015		200		2,000,000	8/7/2018		200		2,000,000
Series M Cv Pfd	4/22/2016		150		1,500,000	8/7/2018		150		1,500,000
Total Series M Cv Pfd			600	$	6,000,000			600	$	6,000,000	$	-0-
Dividends												-0-
						Total redemption value					$	0-
Series L Cv Pfd	2/10/2010		35	$	350,000	1/6/2011		15	$	150,000	$	200,000
Dividends												184,451
						Total redemption value					$	388,988

Series L Convertible Preferred Stock

On March 31, 2010, a private investor converted a $350,000 short-term promissory note into 35 shares of Series L Convertible Preferred Stock. The original purchase price/stated value is $10,000 per share and dividends accrue at an annual rate of 9%. The preferred stock is convertible into 474 shares of common stock for each share of preferred stock. On January 6, 2011, the private investor converted 15 shares of Series L Convertible Preferred Stock representing a principal value of $150,000. After the conversion, the private investor held 20 shares representing a principal value of $200,000. The remaining principal value of $200,000 is presented on the balance sheet as temporary equity, as the holder has the option to redeem for cash at any time. At December 31, 2019 and June 30, 2019, the balance of cumulative dividends owed to the investor which is included in redemption value was $188,988 and $179,914, respectively. The total presented on the balance sheet as temporary equity is $388,988 as of December 31, 2019 and $379,914 as of June 30, 2019.

Series M Convertible Preferred Stock

The Company, during the fiscal year ending June 30, 2015, sold Series M Convertible Preferred Stock to Viable International Investments, LLC, a Florida limited liability company, ("Viable"). Each share of the Series M Preferred Stock was convertible into 147,283 shares of Common Stock. In the event of a liquidation, the holders of the Series M Preferred Stock would have been entitled to receive, prior to any distribution of assets to holders of Common Stock or other class of capital stock or other equity securities of the Corporation, $10,000 per share of Series M Preferred Stock held plus accrued but unpaid dividends. The holders of the Series M Preferred Stock would have had identical voting rights as any holder of Common Stock and would have voted together, not as separate classes. The original purchase price/stated value of each share of Series M Preferred Stock was $10,000 and Viable was be entitled to receive cumulative dividends at the fixed rate of 9% of the stated value per share per annum. The first tranche of the private placement sale of 250 shares of convertible preferred stock was made pursuant to a Securities Purchase Agreement (the "Agreement") dated June 27, 2014 between the Company and Viable. The Agreement stipulated the payment of a $100,000 non-refundable deposit which was paid on June 27, 2014 and applied to the purchase price on the first closing date, August 4, 2014. At the first closing, $2,400,000 was paid by Viable to purchase 250 shares of convertible preferred stock which provided a 78.9% voting and economic interest in the Company's capital stock representing a change in control of the Company. Because of delays in restructuring the Company and executing its business plan, Viable was unable to convert its Series M Convertible Preferred Stock into Common Stock according to its timeline. On June 1, 2016, Viable presented the Company with a waiver that permanently waived its rights under Section 3 – Redemption at Holder's Option of the Certificate of Designations of the Series M Preferred Stock. Therefore, the Company reclassified the Series M Preferred Shares to permanent equity from temporary equity on June 1, 2016.

Viable, at its option, deviated from the stipulated payment schedules and purchased 200 Series M shares for $2,000,000 on August 31, 2015, and 150 Series M shares for $1,500,000 on April 22, 2016, which completed all of the payments required pursuant to the Agreement. The Series M dividends were payable at the Company's option in cash or common stock. Accordingly, after the reclassification of Series M from temporary equity to permeant equity the Company has continued to accrue the dividend as a charge to retained earnings and a credit to preferred stock Series M in permanent equity. Upon conversion of the remaining 591 Series M shares to common stock on August 7, 2018, the accrued dividends were forfeited and reversed to retained earnings as the Company does not have any further obligations for payment of such accrued dividends.

On November 21, 2017, Viable exercised its right to convert three shares of its Series M Convertible Preferred Stock valued at $30,000 into 441,848 shares of restricted common stock. Subsequent to the conversion, Viable sold a total of 392,157 restricted common shares to three accredited investors in China and retained 49,691 restricted common shares for its portfolio. The underlying Series M Convertible Preferred Stock held by Viable was issued with a restrictive legend pursuant to Rule 144 because the shares were not registered. Any conversions to common stock would also be issued with a restrictive legend pursuant to Rule 144.

On April 18, 2017, Viable exercised its right to convert six shares of its Series M Convertible Preferred Stock valued at $60,000 into 883,696 shares of restricted common stock. Subsequent to the conversion, Viable sold a total of 872,787 restricted common shares to three accredited investors in China and retained 10,909 restricted common shares for its portfolio. The underlying Series M Convertible Preferred Stock held by Viable was issued with a restricted legend pursuant to Rule 144 because the shares were not registered. Any conversions to common stock would also be issued with a restricted legend pursuant to Rule 144.

On August 7, 2018, Viable converted its remaining 591 shares Series M Convertible Preferred Stock into 87,044,089 shares of restricted common stock.