10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[Mark One]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

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

For the transition period from _____to______

Commission file number: 000-26028

IMAGING DIAGNOSTIC SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Florida	22-2671269
(State of Incorporation)	(IRS Employer Ident. No.)
618 E South St, Suite 500, Orlando, FL	32801
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number: (954) 581-9800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed 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 every Interactive Data File required to be submitted 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 such files). 

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer, a smaller reporting company, or an emerging growth company. See definition 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        ☐	Smaller reporting company        ☒
Non-accelerated filer          ☐		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 outstanding of the issuer’s common stock as of November 9, 2021: 123,156,941 shares of common stock, no par value.

IMAGING DIAGNOSTIC SYSTEMS, INC.  

		Page
	Part I - Financial Information
Item 1.	Financial Statements
	Balance Sheets – September 30, 2021 (Unaudited) and June 30, 2021	1
	Statements of Operations – (Unaudited) Three months ended September 30, 2021 and 2020	2
	Statements of Changes in Stockholders’ Deficit – (Unaudited) Three months ended September 30, 2021 and 2020	3
	Statements of Cash Flows - (Unaudited) Three months ended September 30, 2021 and 2020	4
	Notes to (Unaudited) Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Financial Condition and Results
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
	Part II - Other Information	28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
Signatures		29

i

Item 1. Financial Statements

IMAGING DIAGNOSTIC SYSTEMS, INC.

Balance Sheets

	(unaudited)
	September 30, 2021			June 30, 2021
Assets
Current assets:
Cash	$	30,436		$	2,473
Consultant advances		5,000			5,000
Prepaid expenses and deposits		14,076			12,951
Total current assets		49,512			20,424
Property and equipment, net		-			-
Total assets	$	49,512		$	20,424
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	568,643		$	472,571
Accrued payroll taxes and penalties		314,019			314,019
Promissory notes, related party		626,276			581,276
Current portion of PPP loan payable		14,510			10,595
Total current liabilities		1,523,448			1,378,461
Long-term liabilities
PPP Loan Payable, less current portion		65,090			69,005
Total long-term liabilities		65,090			69,005
Total liabilities		1,588,538			1,447,466
Commitment and Contingencies (Note 18)
Temporary equity
Convertible Preferred Series L		420,476			415,939
Total temporary equity		420,476			415,939
Stockholders’ Deficit:
Preferred stock, no par, 2,000,000 authorized Convertible preferred stock, Series M, 600 designated 0 shares issued and outstanding at September 30, 2021 and June 30, 2021		-			-
Common stock, no par value, 500,000,000 authorized, 123,156,941 and 123,156,941 shares issued and outstanding September 30, 2021 and June 30, 2021, respectively		132,974,686			132,974,686
Accumulated Deficit		(134,934,188	)		(134,817,667	)
Total stockholders’ deficit		(1,959,502	)		(1,842,981	)
Total liabilities and stockholders’ deficit	$	49,512		$	20,424

See accompanying notes to the unaudited financial statements

1

IMAGING DIAGNOSTIC SYSTEMS, INC.

Statements of Operations

(unaudited)

	Three Months Ended			Three Months Ended
	September 30, 2021			September 30, 2020
Total Revenue	$	-		$	-
Cost of Sales		-			-
Gross Profit		-			-
Operating Expenses:
General and administrative		40,289			78,899
Salaries and wages		-			-
Research and development		-			8,308
Sales and marketing		111			338
Depreciation and amortization		-			622
Consulting expenses (including share-based compensation)		51,000			51,000
Total Operating Expenses		91,400			139,167
Operating Loss		(91,400	)		(139,167	)
Other Income (expense)
Interest income		-			1
Other Income		-			1,000
Interest expense		(20,584	)		(19,861	)
Total Other Expense		(20,584	)		(18,860	)
Net Loss		(111,984	)		(158,027	)
Preferred Stock Dividends		(4,537	)		(4,525	)
Net Loss Available to Common Stockholders	$	(116,521	)	$	(162,552	)
Net Loss per common share:
Basic and diluted	$	-		$	-
Weighted average number of common shares outstanding:
Basic and diluted		123,156,941			122,876,549

See accompanying notes to the unaudited financial statements

2

IMAGING DIAGNOSTIC SYSTEMS, INC.

Statements of Changes in Stockholders’ Deficit

For the three months ended September 30, 2021 and 2020

(unaudited)

	Common Stock							Total
	Number of				Accumulated			Stockholders’
	Shares		Amount		Deficit			Deficit
Balance at June 30, 2021		123,156,941	$	132,974,686	$	(134,817,667	)	$	(1,842,981	)
Cummulative Dividend on Series L CV Preferred		-		-		(4,537	)		(4,537	)
Net loss		-		-		(111,984	)		(111,984	)
Balance at September 30, 2021		123,156,941	$	132,974,686	$	(134,934,188	)	$	(1,959,502	)
Balance at June 30, 2020		122,876,549	$	132,570,255	$	(134,109,749	)	$	(1,539,494	)
Cummulative Dividend on Series L CV Preferred		-		-		(4,525	)		(4,525	)
Net loss		-		-		(158,027	)		(158,027	)
Balance at September 30, 2020		122,876,549	$	132,570,255	$	(134,272,301	)	$	(1,702,046	)

See accommpanying notes to the unaudited financial statements

3

IMAGING DIAGNOSTIC SYSTEMS, INC.

Statements of Cash Flows

(unaudited)

	Three months ended			Three months ended
	September 30, 2021			September 30, 2020
Net loss	$	(111,984	)	$	(158,027	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		-			622
Changes in assets and liabilities:
(Increase) decrease in royalty receivable		-			10,875
(Increase) decrease in prepaid expenses		(1,125	)		(9,631	)
Increase (decrease) in accounts payable and accrued expenses		96,072			110,309
Change in right of use asset/lease obligation, net		-			(108	)
Total adjustments		94,947			112,067
Net cash used in operating activities		(17,037	)		(45,960	)
Cash flows from financing activities:
Proceeds from promissory notes, related party		45,000			-
Net cash provided by financing activities		45,000			-
Net increase (decrease) in cash and cash equivalents		27,963			(45,960	)
Cash at the beginning of year		2,473			45,960
Cash at end of the period	$	30,436		$	-
Supplemental Disclosure of cash flow information:
Cash paid for interest	$	1,145		$	-
Cash paid for taxes	$	-		$	-

See accompanying notes to the unaudited financial statements

4

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(1) ORGANIZATION AND NATURE OF BUSINESS

Imaging Diagnostic Systems, Inc. (the “Company” or “IDSI”) is a medical technology company that has developed a new, non-invasive CT scanner called CTLM® that uses a laser beam in place of ionizing X-ray for breast imaging. This technology is called Diffuse Optical Tomography. The CTLM® will provide an adjunctive imaging modality to other methods of imaging the breast such as X-ray mammography, MRI and ultrasound.

Since inception in December 1993 as a Florida corporation and subsequently its reverse merger with Alkan Corp., a New Jersey Corporation on April 14, 1994, we continued operations and changed our state of incorporation from New Jersey to Florida, effective July 1, 1995.

(2) GOING CONCERN AND MANAGEMENT’S PLANS

The accompanying financial statements are prepared assuming the Company will continue as a going concern. As of September 30, 2021, the Company had an accumulated deficit of $134,934,188, a stockholders’ deficit of $1,959,502 and a working capital deficiency of $1,473,936. For the three months ended September 30, 2021, net loss totaled $111,984. The net cash used in operating activities for the three months ended September 30, 2021 totaled $17,037. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these financial statements are issued. The ability of the Company to continue as a going concern is dependent upon generating sales and obtaining additional capital and financing. While the Company believes in the viability of its strategy to generate material sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The Company received from the Chinese FDA (“CFDA”) marketing clearance for the CTLM® effective November 16, 2018 to November 15, 2023. However, there can be no assurance that we will obtain U.S. Food and Drug Administration (“FDA”) marketing or other new international marketing clearances, that the CTLM® will achieve market acceptance or that sufficient revenues will be generated from sales of the CTLM® in China or elsewhere to allow us to operate profitably. If our majority shareholder Viable International Investments, LLC (“Viable”) fails to continue funding, the Company would be materially adversely affected and may have to cease operations due to a lack of funding. These matters affect the Company’s liquidity profile, and management’s plans in those regards are discussed in the paragraphs that follow.

During fiscal year 2022, we anticipate that losses from operations will continue until we begin to generate revenues through the sales of CTLM® systems in China. These losses will be primarily due to an anticipated increase in marketing, manufacturing and operational expenses associated with the international commercialization of the CTLM®, expenses associated with FDA approval processes, and the costs associated with advanced product development activities.

The Company’s next focus, after having obtained CFDA approval in China, is on obtaining marketing clearance of its CTLM® Breast Imaging System through the FDA. The premarket approval (“PMA”) process for U.S. marketing clearance is expected to take longer than the Chinese process, and we intend to resume this effort after achieving successful marketing and sales of CTLM® systems in China. Our sales and marketing efforts in China have been significantly hindered by the ongoing COVID-19 pandemic, and therefore we do not expect revenue from China until the third or fourth quarter of fiscal 2022. No sales in other countries are expected in the foreseeable future, as we do not intend to pursue sales in other countries until after obtaining FDA marketing clearance, as to which there can be no assurance.

In analyzing the regulatory path forward, timeline, and costs associated with the level of effort required to upgrade the Company’s Quality Management System (QMS), we have decided not to renew our CE mark (required for sales in the European Union) for this year and to consider reapplying in 2 to 3 years to avoid these regulatory fees. Similarly, we will maintain our Quality Management System to be compliant to ISO 13485:2016 but not certify to ISO 13485:2016 by Underwriters Laboratories (UL) which will allow us to avoid fees associated with certification, travel, and hosting audits. Maintaining our QMS to be ISO 13485:2016 compliant will allow us to quickly schedule an audit with UL and become ISO 13485 certified when necessary.

5

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(2) GOING CONCERN AND MANAGEMENT’S PLANS (Continued)

On October 23, 2019, the Company entered into a consulting agreement (“the Agreement”) effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI’s Chief Scientific Consultant. Pursuant to the Agreement, Dr. Jiang is focused on improving the technical performance and image quality of IDSI’s Computed Tomography Laser Mammography (CTLM^®) breast imaging device. Dr. Jiang has completed the first phase of image quality improvement and is currently collecting image data for evaluation and further technical improvement.

Xi’an IDI has been working with Yiling Hospital Management Group based in Beijing, China (“Yiling”) to evaluate CTLM®’s potential use and application. As of the date of this report, Xi’an IDI has loaned three CTLM® systems to Yiling and Yiling is at the stage of testing and data validation.

It is important that the effectiveness of the image quality improvements be established before Xi’an IDI can resume their sales and marketing efforts in China. Once the Company has substantial revenues and cash flow, it believes it will be able to raise the necessary funding to allow the Company to move forward with its various R&D and regulatory initiatives that have been put on hold due to the COVID-19 pandemic.

The Company’s ability to continue as a going concern and its future success are dependent upon its ability to raise additional capital in the near term to: (1) satisfy its current obligations, (2) continue its research and development efforts, and (3) successfully develop, market, and sell its products. Due to the difficulty of raising additional capital during the current COVID-19 crisis, the Company has been taking aggressive measures to reduce its operating costs in order to preserve cash. The Company’s ability to meet its cash flow requirements through fiscal 2022 and continue its development and commercialization efforts will be dependent on the length and severity of the COVID-19 crisis and the Company’s ability to secure additional funding. There can be no assurance that IDSI will generate sufficient revenue to provide positive cash flows from operations or that sufficient capital will be available, when required, to permit the Company to execute its plan of operations. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and use of estimates

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures. Actual results could differ materially from these estimates.

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended June 30, 2021, contained in our General Form for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on October 12, 2021. The results of operations for the three months ended September 30, 2021, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2022.

6

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Revenue recognition

As of July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The Company sells medical imaging products, parts, and services where permitted to independent distributors and in certain unrepresented territories directly to end-users. The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Any discounts, sales incentives or similar arrangements with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue.

The Company also receives royalties pursuant to a licensing relationship with Trifoil Imaging. Revenue is recognized in the reporting periods in which royalties are due to the Company.

(c) Allowance for doubtful accounts

In the event that management determines that a receivable becomes uncollectible, or events or circumstances change, which result in a temporary cessation of payments from the distributor, we will make our best estimate of probable or potential losses in our accounts receivable balance using the allowance method for each quarterly period. Management will review the receivables at the end of each fiscal year and the appropriate allowance will be made based on current available evidence and historical experience.

Our allowance for doubtful accounts was $850 as of September 30, 2021 and June 30, 2021. These amounts consist of other receivables that have been fully reserved.

(d) Cash and cash equivalents

Holdings of highly liquid investments with original maturities of three months or less and investment in money market funds are considered to be cash equivalents by the Company. There were no cash equivalents at September 30, 2021 and June 30, 2021.

(e) Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit of $250,000. At September 30, 2021 and June 30, 2021, the Company had $0 in excess of the federally insured limit.

The Company did not have any revenue for the three months ended September 30, 2021 and 2020.

(f) Inventory

Inventories, consisting principally of raw materials, work-in-process (including completed units under testing), finished goods and units placed on consignment, are carried at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials consist of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and testing. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment of slow moving or obsolete inventory. The Company maintains a reserve for obsolete inventory and generally makes inventory value adjustments against the reserve.

7

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(g) Property and equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the estimated useful lives of the related assets. Expenditures for renewals and betterments which increase the estimated useful life or capacity of the asset are capitalized; expenditures for repairs and maintenance are expensed when incurred.

(h) Research and development

Research and development expenses consist principally of expenditures for equipment and outside third-party consultants, raw materials which are used in testing and the development of the Company’s CTLM® device or other products and product software. The non-payroll related expenses include testing at outside laboratories, parts associated with the design of initial components and tooling costs, and other costs which do not remain with the developed CTLM® device.

(i) Net loss per share

The Company relies on the guidance provided by ASC 260, (“Earnings per Share”), which requires the reporting of both basic and diluted earnings per share. Basic net loss per share is determined by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive.

The Company had 13,922,657 and 13,922,657 options vested as of September 30, 2021 and June 30, 2021, respectively and 2,830,290 and 2,830,290 options not yet vested as of September 30, 2021 and June 30, 2021, respectively.

(j) Stock-based compensation

In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, an accounting standard update to improve non-employee share-based payment accounting. The accounting standard update more closely aligns the accounting for employee and non-employee share-based payments. The accounting standards update is effective as of the beginning of 2019 with early adoption permitted. We have elected to adopt this standard.

The Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options and similar awards, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of outstanding and vested stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. No stock options were granted during the three months ended September 30, 2021. During the three months ended September 30, 2020, the Board granted options to purchase 157,102 shares with an exercise price of $.51 per share to an employee. Stock options are being expensed pursuant to ASC 718.

8

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The fair value concepts were not changed significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation over the requisite vesting period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model. See Note (17) Stock Options.

(k) Long-lived assets

The Company relies on the guidance provided by ASC 360 (“Property, Plant & Equipment”). ASC 360 requires companies to write down to estimated fair value long-lived assets that are impaired. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In performing the review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the assets, an impairment loss is recognized.

The Company has determined that no impairment losses need to be recognized through the three months ended September 30, 2021 and 2020.

(l) Income taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax positions. 

9

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of the date these financials were available to be issued, tax years ended June 30, 2018 to 2021 are still potentially subject to audit by the taxing authorities.

(m) Warranty reserve

The Company warrants all products and parts supplied for a period of 12 months from the date of installation or 15 months from the date the products was/were shipped from IDSI, whichever occurs first. Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Based on the Company’s experience, the warranty reserve was estimated based on the replacement cost of the laser and certain electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The Company had no warranty reserve balance as of September 30, 2021 or June 30, 2021.

(n) Impact of recently issued accounting pronouncements

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

(o) Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, receivables, accounts payable, short-term debt and accrued liabilities approximated their fair values due to the short maturity of these instruments. After a review of our accounts receivable, the Company has not recorded an allowance for doubtful accounts. The fair value of the Company’s debt obligations is estimated based on the quoted market prices for the same or similar issues or on current rates offered to the Company for debt of the same remaining maturities. At September 30, 2021 and June 30, 2021, the aggregate fair value of the Company’s debt obligations approximated its carrying value. The Company relies upon the guidance of ASC 820 (“Fair Value Measurements and Disclosures”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly, transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities

10

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

(4) REVENUE

The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Sales taxes and other similar taxes are excluded from revenue. 

As of July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The Company had no revenues during the three months ended September 30, 2021 and 2020.

11

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(5) RELATED PARTY TRANSACTIONS

Related party revenues

On March 22, 2018, the Board of Directors approved the execution of two agreements with Xi’an of China, an affiliated Company of IDSI. The agreements are a Know How Transfer Contract and a CTLM® Know How Confidentiality Agreement. The contract, having a term of 20 years, stipulates that Xi’an will pay IDSI a know how transfer fee of 25% of revenue for CTLM® product sales in their territory. There were no such sales during the three months ended September 30, 2021 and 2020.

Related party fees

Erhfort, LLC earned a consulting fee of $25,500 for each of the three-month periods ended September 30, 2021 and 2020. Erhfort, LLC regularly reviews the Company’s operations and reports to IDSI’s CEO, Chunming Zhang, who lives in China. Erhfort, LLC is a related party because it owns Company common stock directly and indirectly.

David Fong, serving as the Company’s CFO, earned consulting fees of $25,500 for each of the three-month periods ended September 30, 2021 and 2020. These fees were assigned to his affiliated business, Fong & Associates, LLC.

Related party payables and accrued expenses

As of September 30, 2021 and June 30, 2021, the amount of interest on related party notes due to Erhfort, LLC, which is included in accounts payable, is $102,921 and $83,260, respectively.

As of September 30, 2021 and June 30, 2021, the amount of consulting fees due to Ehrfort, LLC, which is included in accounts payable, is $76,500 and $51,000, respectively.

As of September 30, 2021 and June 30, 2021, the amount of consulting fees due to Fong & Associates, LLC, which is included in accounts payable, is $209,500 and $184,000, respectively.

As of September 30, 2021 and June 30, 2021, the amount of interest on related party notes due to JM One Holdings, LLC, which is included in accrued expenses, is $6,616 and $5,860, respectively. JM One Holdings, LLC is an entity affiliated with the Company’s CFO.

Related party debt

As of September 30, 2021 and June 30, 2021, the amount in promissory notes due to related parties are $626,276 and $581,276, respectively (See Note 12).

(6) ROYALTY RECEIVABLE

On June 16, 2006, the Company entered into a Royalty Agreement with Bioscan Inc. whereby the Company established a licensing relationship with Bioscan which granted Bioscan an exclusive sublicensable, royalty-bearing license to make, use, offer for sale, import and otherwise develop and commercialize products in its territory. Bioscan Inc. was subsequently purchased by TriFoil Imaging. During the three months ended September 30, 2021 and 2020, there was no royalty income. As of September 30, 2021 and June 30, 2021, the Company had royalty receivable balances of $0.

(7) INVENTORIES

Inventories consisted of the following:

	September 30, 2021			June 30, 2021
Raw materials consisting of purchased parts, components and supplies	$	92,587		$	92,587
Finished goods		7,500			7,500
Total Inventory	$	100,087		$	100,087
Allowance for Obsolete Inventory		(100,087	)		(100,087	)
Net Inventory	$	-		$	-

Due to the age of the inventory, lack of demand for parts and lack of sales the Company wrote off all inventory during the year ended June 30, 2017 and has booked an allowance for the entire value of its inventory as of September 30, 2021 and June 30, 2021.

12

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(8) PREPAID EXPENSES AND DEPOSITS

The following is a summary of prepaid expenses:

	September 30, 2021		June 30, 2021
Prepaid Software	$	1,331	$	206
Prepaid Rent		962		962
Rent Deposits		1,783		1,783
Consulting Retainers		10,000		10,000
Total Prepaid expenses	$	14,076	$	12,951

(9) PROPERTY AND EQUIPMENT

The following is a summary of property and equipment, less accumulated depreciation:

	September 30, 2021			June 30, 2021			Useful life
Computers and Equipment	$	12,612		$	12,612		5 years
Third Party Software		10,291			10,291		5 years
Clinical Equipment		15,000			15,000		5 years
Total Property & Equipment	$	37,903		$	37,903
Less: accumulated depreciation		(37,903	)		(37,903	)
Total Property & Equipment - Net	$	-		$	-

Depreciation expense for the three months ended September 30, 2021 and 2020 was $0 and $622 respectively.

(10) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of September 30, 2021 and June 30, 2021, accounts payable and accrued expenses totaled $568,643 and $472,571, respectively, which consists of accounts payable of $560,948 and $465,799 and other accrued expenses of $7,695 and $6,772, respectively.

(11) ACCRUED PAYROLL TAXES AND PENALTIES

As of September 30, 2021 and June 30, 2021, the Company owed the IRS $314,019 and $314,019, respectively. Accrued payroll taxes represent outstanding interest and penalties based on prior management’s failure to pay payroll taxes commencing with the quarter ending September 30, 2010. As part of new management’s restructuring plan, the Company received funds from an accredited investor to be able to make a payment to pay off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable International Investments LLC provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting penalty and interest abatement. The amount due at September 30, 2021 of $314,019 represents the interest and penalties. The Company has formally asked the IRS to abate all remaining interest and penalties of $314,019. The Company had a telephone conference on April 18, 2019 with the office of appeals and is waiting for further communications from the appeals officer. As of September 30, 2021, the Company’s tax counsel is in the process of reviewing recent IRS correspondence to determine appeals status and will work towards final resolutions with the IRS on all outstanding liabilities. The Company has decided to wait until all resolutions are final before making any adjustments to the balance of $314,019 owed to the IRS.

13

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(12) PROMISSORY NOTES – RELATED PARTY

The following table is a summary of the outstanding note balances as of September 30, 2021 and June 30, 2021.

Noteholder	Interest Rate			Maturity Date	September 30, 2021		June 30, 2021
Related Party Notes:
Erhfort, LLC		15	%	12/31/21	$	100,000	$	100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
JM One Holdings, LLC		15	%	12/31/21		20,000		20,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		10,000		10,000
Erhfort, LLC		15	%	12/31/21		10,000		10,000
Viable International Investments, LLC		0	%	On Demand		7,865		7,865
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		3,000		3,000
Viable International Investments, LLC		0	%	On Demand		15,000		-
Viable International Investments, LLC		0	%	On Demand		30,000		-
Xi’an IDI		0	%	On Demand		10,411		10,411
Total Related Party Notes					$	626,276	$	581,276

Erhfort, LLC and Viable International Investments, LLC own Company common stock directly and indirectly. JM One Holdings, LLC is an entity affiliated with the Company’s CFO. Hence, these debts are considered related party debt. Xi’an IDI is affiliated with IDSI due to a licensing agreement.

During the three months ended September 30, 2021, the Company received loan proceeds of $45,000 from Viable International Investments, LLC with annual interest rates of 0%.

14

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(13) LONG-TERM DEBT

The following table is a summary of the outstanding loan balances as of September 30, 2021 and June 30, 2021.

Noteholder	Interest Rate			Maturity Date	September 30, 2021			June 30, 2021
Truist Bank		1	%	5/1/25	$	79,600		$	79,600
Total Debt						79,600			79,600
Current Portion of Debt						(14,510	)		(10,595	)
Total Long-term Debt					$	65,090		$	69,005

Future maturities of long-term debt are as follows as of September 30, 2021:

For the year ended June 30,
2022	$	10,599
2023		15,707
2024		15,866
2025		37,428
	$	79,600

On May 9, 2020, the Company entered into a loan with Truist Bank, a lender pursuant to the Paycheck Protection Program of the CARES Act as administered by the SBA in the amount of $79,600. The loan, in the form of a promissory note, matures on May 11, 2022. No additional collateral or guarantees were provided by the Company for the loan. The PPP loan provides for customary events of default. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, rent payments, mortgage interest and covered utilities during the 24-week period beginning on the date of loan disbursement.  The Company may be required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, and it cannot provide any assurance that it will be eligible for loan forgiveness, or that any amount of the PPP Loan will ultimately be forgiven by the SBA. All aspects of the PPP loan are subject to review by the SBA, including without limitation, the Company’s eligibility for and the size of the loan.  The review procedures have not been made public.  The Company cannot predict the outcome of that review nor be assured that all or any part of the loan will be forgiven.  To the extent that all or part of the PPP loan is not forgiven, the Company will be required to make payments, beginning October 2021, including interest accruing at an annual interest rate of 1.0% beginning on the date of disbursement. As of September 30, 2021 and June 30, 2021, the Company reported an accrued interest balance related to the PPP Loan of $1,079 and $912, respectively. The accrued interest is included in accounts payable and accrued expenses on our balance sheets.

(14) LEASES

In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement, and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on July 1, 2019, meaning we did not restate prior periods. Financial information for periods ended after July 1, 2019 are presented under the guidance in topic 842, while prior periods are presented under Topic 840.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

We may have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

As of September 30, 2021 and June 30, 2021, the Company does not have any leases with terms of more than twelve months.

15

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(15) CONVERTIBLE PREFERRED STOCK

The following schedule reflects the number of shares of preferred stock that have been issued, converted and are outstanding as of September 30, 2021:

Security	Date Issued	No. of Shares		Amount		Date of Conversion	No. of Shares Converted		Amount Converted		Balance 9/30/2021
Total Series M Cv Pfd	Various		600	$	6,000,000	Various		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												220,476
						Total redemption value					$	420,476

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 September 30, 2021 and June 30, 2021, the balance of cumulative dividends owed to the investor which is included in redemption value was $220,476 and $215,939, respectively. The total presented on the balance sheet as temporary equity is $420,476 as of September 30, 2021 and $415,939 as of June 30, 2021.

Series M Convertible Preferred Stock

The Company had previously sold 600 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. As of September 30, 2021 and June 30, 2021, the balance of Series M Preferred stock was $0.

16

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(16) COMMON STOCK

The Company has 500,000,000 of common shares no par value authorized and 2,000,000 of no par preferred shares authorized.

The Company did not issue any shares of common or preferred stock during the three months ended September 30, 2021 and 2020.

(17) STOCK OPTIONS

On December 4, 2016, the Board of Directors adopted the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) which was subsequently approved and adopted by majority written consent in lieu of an annual meeting. The purpose of the 2016 Plan is to encourage and enable the officers, employees, directors and other key persons (including consultants) of the Company, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

On August 1, 2020, the Board granted an option to purchase 157,102 shares with an exercise price of $.51 and a fair value of $.51 to an employee. These options will vest when CTLM® 3.0 is ready for Alpha testing and will be expensed at that time. On May 1, 2021, the Board granted an option to purchase 1,500,000 shares with an exercise price of $.51 and fair value of $.13 per share to a consultant. These options will vest over a three-year period. These options will be expensed as they vest.

In computing the impact of stock option grants, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility of a comparable company; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future.

In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company cannot assess its forfeiture rate at this time due to the lack of historical data.

	As of September 30, 2021			As of June 30, 2021
Expected volatility		23% to 44	%		23% to 44 %
Expected term		0.25 to 4.59 Years			0.5 to 4.83 Years
Risk-Free interest rate		0.05% to 3.09	%		0.05% to 3.09	%
Forfeiture rate		0.00	%		0.00	%
Expected dividend rate		0.00	%		0.00	%

At September 30, 2021, the Company has unvested and vested options under the 2016 Plan with exercise prices that range from a low of $.20 per share to a high of $.51 per share. The following table summarizes information about all of the stock options granted, exercised and cancelled under the 2016 Plan at September 30, 2021 and June 30, 2021:

17

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(17) STOCK OPTIONS (Continued)

Employees/Consultants	Options		Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2020		15,095,833	$	0.24	2.43 Years	$	-
Granted		1,657,102	$	0.51
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at June 30, 2021		16,752,935	$	0.25	1.76 Years	$	-
Granted		-	$	-
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at September 30, 2021		16,752,935	$	0.27	1.51 Years	$	-

The following table summarizes information about vested and unvested options under the 2016 Plan at September 30, 2021 and June 30, 2021. The Company did not recognize any options expense during the three months ended September 30, 2021 as no options vested during the three-month period.

Employees/Consultants	Unvested			Vested and Exercisable			Total
Outstanding at June 30, 2020		4,123,184			10,972,649			15,095,833
Granted		1,657,102			-			1,657,102
Vested and Exercisable		(2,950,000	)		2,950,000			-
Cancelled		-			-			-
Rounding Adjustment		4			(4	)		-
Outstanding at June 30, 2021		2,830,290			13,922,645			16,752,935
Granted		-			-			-
Vested and Exercisable		-			-			-
Cancelled		-			-			-
Adjustment		-			-			-
Outstanding at September 30, 2021		2,830,290			13,922,645			16,752,935

Unvested options will be expensed under the Black-Scholes options-pricing model when they vest. As of September 30, 2021, remaining options to be expensed when vested are estimated to be $440,459.

At September 30, 2021, the Company has issued options pursuant to six different stock option plans, the most recent being the 2016 Plan. The previous five plans through and including the 2012 Non-Statutory Plan have a remaining total of options vested and exercisable to purchase 12 shares at exercise price of $350 per share.

18

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(17) STOCK OPTIONS (Continued)

The tables below summarize information about these five plans:

Employees/Consultants	Options			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2020		13		$	976	2.01 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		(1	)	$	13,500
Outstanding at June 30, 2021		12		$	350	1.11 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		-		$	-
Outstanding at September 30, 2021		12		$	350	.86 Years	$	-

Vested & Exercisable Stock Options	September 30, 2021		June 30, 2021
Employee 2016 Equity Plan		-		-
Director 2016 Equity Plan		-		-
Employee Other Plans		12		12
Directors and Consultants Other Plans		-		-
Total		12		12

The table below summarizes information about all stock options outstanding as of September 30, 2021:

	Outstanding Options						Vested Options
Range of Exercise price	Number Outstanding at September 30, 2021		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life		Number Exercisable at September 30, 2021		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life
$0.20 - $0.51		16,752,935	$	0.27		1.51		13,922,645	$	0.23		1.14
$350		12	$	350		.86		12	$	350		.86
Outstanding options		16,752,947	$	0.27		1.76		13,922,657	$	0.23		1.39

The Company’s common stock, symbol IMDS, was quoted on OTCmarkets.com Pink until September 25, 2014 at which time IDSI’s registration was revoked by the Securities and Exchange Commission (SEC) for failure to timely file its Quarterly and Annual Reports. The last quoted price was $0.1. Because the Company was de-registered and

19

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

September 30, 2021

(17) STOCK OPTIONS (Continued)

OTC markets did not provide a quote for IMDS, there is no public market for the Company’s shares. Given the exercise prices adjusted for the reverse split, it is highly unlikely that any employee holding pre-2016 Plan options will exercise them. The Company has sufficient authorized shares available for all outstanding option; however, if exercised, the shares will be issued with a restrictive legend because the Company was not an SEC reporting company until October 2018. Further, given its recent return to SEC reporting status, the Company is unable to file an S-8 Registration Statement to register shares issued because of option exercise pursuant to various stock option agreements.

(18) COMMITMENTS AND CONTINGENCIES

The Company previously carried $3,000,000 in product liability insurance to cover both clinical sites and sales. As part of its cost savings initiatives, the Company cancelled the policy as it had not had any adverse experiences after conducting more than 25,000 patient scans worldwide. The Company is now self-insuring the risk of product liability.

From May 2010 to June 2012, claims were made by the IRS for payment of the Company’s accrued payroll taxes, interest and penalties, which as of June 30, 2012 was $1,489,640. The Company engaged tax counsel to handle this matter and intends to fully satisfy its payroll tax obligations. On August 4, 2014, Viable purchased 250 shares of convertible preferred stock for $2,500,000, which gave them a 78.9% voting and economic interest in the Company’s capital stock representing a change in control of the Company. New management’s tax counsel negotiated a new Installment Agreement which stipulated a lump sum payment of $250,000, which was paid on September 4, 2014 and monthly installment payments of $20,000 beginning in September 2014 due on the 18^th of each month until the balance of payroll taxes, interest and penalties are paid in full (Note 11).

During fiscal 2018, as part of new management’s restructuring plan, the Company received funds from an accredited investor to pay off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable International Investments LLC provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting abatement of penalties and interest totaling $314,019. As of September 30, 2021, the Company’s tax counsel is in the process of reviewing recent IRS correspondence to determine appeals status and will work towards final resolutions with the IRS on all outstanding liabilities. The Company has decided to wait until all resolutions are final before making any adjustments to the balance of $314,019 owed to the IRS.

On October 23, 2019, the Company entered into a consulting agreement (“the Agreement”) effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI’s Chief Scientific Consultant. Pursuant to the Agreement, Dr. Jiang is focused on improving the technical performance and image quality of IDSI’s CTLM® breast imaging device. Per the Agreement, the goal of the initial project was to complete image quality improvement by November 1, 2020. A payment of $500,000 will be due upon satisfactory completion of the project. As of September 30, 2021, Dr. Jiang has completed the first phase of image quality improvement and is currently collecting image data for evaluation and further technical improvement. We have yet to establish the effectiveness of the improvements, as completion of the project has been delayed due to the COVID-19 crisis.

20

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

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q for the period ended September 30, 2021, contains “forward-looking statements” within the meaning of the federal securities laws and use terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “projects”, “potential,” or “continue,” or the negative or other comparable terminology regarding beliefs, plans, expectations, or intentions regarding the future. These forward-looking statements involve substantial risks and uncertainties, and actual results could differ materially from those discussed and anticipated in such statements. These forward-looking statements include, among others, statements relating to our business strategy, which is based upon our interpretation and analysis of trends in the healthcare treatment industry, especially those related to the diagnosis and treatment of breast cancer, and upon management’s ability to successfully develop and commercialize its principal product, the CTLM®. This strategy assumes that the CTLM® will provide benefits, from both a medical and an economic perspective, to current alternative techniques for diagnosing and managing breast cancer. Factors that could cause actual results to materially differ include, without limitation, the ongoing global COVID-19 pandemic/economic crisis, the timely and successful completion of our clinical trials required by the U.S. Food and Drug Administration (“FDA”) and compliance with the regulations of the FDA and the China Food and Drug Administration (“CFDA”); the timely and successful submission of our FDA application for pre-market approval and our ability to obtain U.S. marketing clearance; manufacturing risks relating to the CTLM®, including our reliance on a single or limited source or sources of supply for some key components of our products as well as the need to comply with especially high standards for those components and in the manufacture of optical imaging products in general; uncertainties inherent in the development of new products and the enhancement of our existing CTLM® product, including technical and regulatory risks, cost overruns and delays; our ability to accurately predict the demand for our CTLM® product as well as future products and to develop strategies to address our markets successfully; the early stage of market development for medical optical imaging products and our ability to gain market acceptance of our CTLM® product by the medical community; our ability to expand our international distributor network for both the near and longer-term to effectively implement our globalization strategy; our dependence on senior management and key personnel and our ability to attract and retain additional qualified personnel; risks relating to financing through private placements or other working capital financing arrangements; technical innovations that could render the CTLM® or other products marketed or under development by us obsolete; competition; risks and uncertainties relating to intellectual property, including claims of infringement and patent litigation; risks relating to future acquisitions and strategic investments and alliances; and reimbursement policies for the use of our CTLM® product and any products we may introduce in the future. There are also many known and unknown risks, uncertainties and other factors, including, but not limited to, technological changes and competition from new diagnostic equipment and techniques, changes in general economic conditions, healthcare reform initiatives, legal claims, regulatory changes and risk factors detailed from time to time in our Securities and Exchange Commission filings that may cause these assumptions to prove incorrect and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described above and in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, filed on October 12, 2021. All forward-looking statements and risk factors included in this Form 10-Q report and in the Form 10-K report are made as of the date of the relevant disclosure document based on information available to us as of the date thereof, and we assume no obligation to update any forward-looking statements or risk factors. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial position. Since our common stock is considered a “penny stock,” we are ineligible to rely on the safe harbor for forward-looking statements provided in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). You are cautioned not to place undue reliance on these forward-looking statements.

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OVERVIEW

Our business address is 618 E South St, Suite 500, Orlando, FL 32801. Our Internet website address is www.imds.com. The information contained in, or that can be accessed through, our website is not part of this Form 10-Q quarterly report.

Imaging Diagnostic Systems, Inc. (“IDSI” or the “Company”) is a late development stage medical technology company that has developed a new, non-invasive CT scanner (“CTLM®”) that uses a laser beam in place of ionizing X-ray for breast imaging. This technology is called Diffuse Optical Tomography. The CTLM® will provide an adjunctive imaging modality to other methods of imaging the breast such as X-ray mammography, MRI and ultrasound.

Since inception in December 1993 as a Florida corporation and subsequently its reverse merger with Alkan Corp., a New Jersey Corporation on April 14, 1994, we continued operations and changed our state of incorporation from New Jersey to Florida, effective July 1, 1995. On July 14, 1995, we filed with the United States Securities and Exchange Commission (“SEC”) a Form 10 SB for registration of our securities as a small business issuer. The Form 10 SB was declared effective in September 1995 and our stock began trading on the OTC Bulletin Board (OTC:BB) on September 20, 1995 under the symbol IMDS. We became a fully reporting company under Commission File Number 0-26028 and traded on the OTC:BB and then on the OTC:QB and ultimately on the OTC PINK until September 25, 2014, at which time our registration was revoked by the SEC for failure to timely file our required periodic reports. Our latest quarterly report on Form 10-Q that was filed prior to our filing of our Form 10 registration statement on August 28, 2018, was filed on May 15, 2013, for the quarter ended March 31, 2013. Our latest annual report on Form 10-K that was filed prior to the filing of our Form 10 registration statement on August 28, 2018, was filed on October 15, 2012, for the year ended June 30, 2012. Copies of our SEC reports through the date of revocation (the “Prior Reports”) are available at www.sec.gov.

On August 28, 2018, we filed a Form 10 registration statement to register issued and outstanding shares held by our shareholders and to become a fully reporting company under the Securities Exchange Act of 1934 (the “Exchange Act”). The Form 10 was amended in response to SEC comments on October 5, 2018 and November 14, 2018. On February 7, 2019, the SEC confirmed that it had no further comments on the Form 10. Under the Exchange Act, our registration became effective on October 29, 2018, i.e. 60 days after filing the Form 10. The Form 10 was further amended on September 26, 2019 to correct the classification of the Series L Convertible Preferred Stock from a current liability to temporary equity.

As of the date of this quarterly report on Form 10-Q for the three months ended September 30, 2021, we have had no substantial revenues from our operations and have incurred net losses applicable to common shareholders since inception through September 30, 2021 of $134,934,188 after discounts and dividends on preferred stock. We incurred net losses applicable to common shareholders of $116,521 for the three months ended September 30, 2021 and $162,552 for the three months ended September 30, 2020.

The Company received marking clearance for the CTLM® from the Chinese FDA (“CFDA”) effective November 16, 2018 to November 15, 2023 as disclosed in the Company’s 8-K report filed December 11, 2018; however, we anticipate that substantial losses from operations will continue until we begin to generate revenues through the sales of CTLM® systems in China. We believe that we face substantial delays before receiving marketing clearance through the U.S. Food and Drug Administration (“FDA”). These losses will be primarily due to an anticipated increase in marketing, manufacturing and operational expenses associated with the international commercialization of the CTLM®, expenses associated with international commercialization of the CTLM®, expenses associated with FDA approval processes, and the costs associated with advanced product development activities. We have implemented a new business strategy which includes a licensing agreement on June 20, 2017 with Xi’an IDI Laser Imaging Co. Ltd (Xi’an IDI), a related party, to shift manufacturing of the CTLM® for the China and Asian markets to China.

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The Company’s next regulatory focus, after having obtained CFDA approval in China, is on obtaining marketing clearance of its CTLM® Breast Imaging System through the FDA. The premarket approval (“PMA”) process for U.S. marketing clearance is expected to take longer than the Chinese process, and we intend to resume this effort after successful marketing and sales of CTLM® systems in China. Our sales and marketing efforts in China have been significantly hindered by the ongoing COVID-19 pandemic, and therefore we do not expect revenue from China until the third or fourth quarter of fiscal 2022. No sales in other countries are expected in the near future, as we do not intend to pursue sales in other countries until after obtaining FDA marketing clearance.

In analyzing the regulatory path forward, timeline, and costs associated with the level of effort required to upgrade the Company’s Quality Management System (QMS), we have decided not to renew our CE mark (required for sales in the European Union) for this year and to consider reapplying in 2 to 3 years to avoid these regulatory fees. Similarly, we will maintain our Quality Management System to be compliant to ISO 13485:2016 but not certify to ISO 13485:2016 by Underwriters Laboratories (UL) which will allow us to avoid fees associated with certification, travel, and hosting audits. Maintaining our QMS to be ISO 13485:2016 compliant will allow us to quickly schedule an audit with UL and become ISO 13485 certified when necessary.

On October 23, 2019, we entered into a consulting agreement effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI’s Chief Scientific Consultant (the “Consulting Agreement”). Pursuant to the Consulting Agreement, Dr. Jiang is focused on improving the technical performance and image quality of IDSI’s Computed Tomography Laser Mammography (CTLM^®) breast imaging device. The details of this Agreement were disclosed on our Form 8-K report filed with the SEC on October 29, 2019. As of the date of this report, Dr. Jiang has completed the first phase of image quality improvement and is currently collecting image data for evaluation and further technical improvement.

Xi’an IDI has been working with Yiling Hospital Management Group based in Beijing, China (“Yiling”) to evaluate CTLM’s potential use and application. As of the date of this report, Xi’an IDI has loaned three CTLM® systems to Yiling and Yiling is at the stage of testing and data validation.

It is important that the effectiveness of the image quality improvements be established before Xi’an IDI can resume their sales and marketing efforts in China. Once IDSI has substantial revenues and cash flow, we believe we will be able to raise from operations and/or private investors the necessary funding to allow us to move forward with our CTLM® 3.0 project, as discussed in detail in the “CTLM®” section below. The CTLM® 3.0 project and some regulatory initiatives have been put on hold due to the COVID-19 pandemic and its consequences.

CRITICAL ACCOUNTING POLICIES

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures. Actual results could differ materially from these estimates.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Inventory 

Inventories, consisting principally of raw materials, work-in-process (including completed units under testing), finished goods and units placed on consignment, are carried at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials consist of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and testing. We periodically review the value of items in inventory and record write-downs or write-offs based on its assessment of slow moving or obsolete inventory. We maintain an allowance for obsolete inventory and generally makes inventory value adjustments against the allowance

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Stock-Based Compensation

We rely on the guidance provided by ASC 718, (“Share Based Payments”). ASC 718 requires companies to expense the value of employee stock options and similar awards and applies to all outstanding and vested stock-based awards.

In computing the impact, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, we analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If our actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. During the three months ended September 30, 2021, no stock options were granted to employees or consultants . During the three months ended September 30, 2020, the Board granted options to purchase 157,102 shares with an exercise price of $.51 per share to an employee. Those options are being expensed pursuant to ASC 718.

The fair value concepts were not changed significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation over the requisite service period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model.

RESULTS OF OPERATIONS

Sales and Cost of Sales

Revenues during the three months ended September 30, 2021 and 2020 were $0.

The Cost of Sales during the three months ended September 30, 2021 and 2020 were $0.

GENERAL AND ADMINISTRATIVE

Our general and administrative expenses include travel/subsistence related to general and administrative activities, property and casualty insurance, professional fees associated with our corporate and securities attorneys and independent auditors, corporate governance expenses, stockholder expenses, utilities, maintenance, telephones, office supplies and sales and property taxes.

General and administrative expenses during the three months ended September 30, 2021, were $40,289 representing a decrease of $38,610 or 49% from $78,899 during the three months ended September 30, 2020.

The general and administrative decrease of $38,610 is due primarily to a decrease in rent and auto payments as lease agreements were terminated in the second and third quarters of fiscal 2021. There were also reductions in other expenses due to the reduction in business activity during the three months ended September 30, 2021 because of the ongoing COVID-19 crisis.

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SALARIES AND WAGES

Our salaries and wages expenses include compensation, related benefits, payroll taxes and other payroll fees for all employees.

Salaries and wages expense during the three months ended September 30, 2021 and 2020 were $0.

The lack of salaries and wages is due to the Company’s decision to furlough all employees on May 1, 2020 in response to the COVID-19 crisis. Some of these individuals have been working as independent contractors on an as-needed basis.

RESEARCH AND DEVELOPMENT

We incur research and development expenses to develop significant enhancements to our sole product, the CTLM®. These expenses consist primarily of clinical costs, costs of materials and components to make product enhancements, new product research costs, and costs associated with servicing clinical collaboration sites.

Research and development expenses during the three months ended September 30, 2021 were $0 representing a decrease of $8,308 or 100% from $8,308 during the three months ended September 30, 2020.

The research and development decrease of $8,308 is due entirely to the lack of regulatory expenses during the period ended September 30, 2021 and 2020.

SALES AND MARKETING

Our sales and marketing expenses consist primarily of expenses associated with advertising and promotion, representative office expense, trade shows, conferences, promotional and training costs related to marketing the CTLM®, commissions, travel/subsistence, patent maintenance fees, consulting, certification expenses, and product liability insurance.

Sales and marketing expenses during the three months ended September 30, 2021, were $111 representing a decrease of $227 or 67% from $338 during the three months ended September 30, 2020.

All sales and marketing expenses during both the three months ended September 30, 2021 and 2020 were related to fees for maintaining our website. The difference relates to variations in website related fees between the two periods.

CONSULTING EXPENSES

Our consulting expenses consists of all consulting fees paid as well as share-based compensation issued to our consultants. Our share-based compensation expense consists of vested stock options expensed under the Black-Scholes options pricing model.

Consulting expenses for each of the three months ended September 30, 2021 and 2020 were $51,000.

Consulting expenses consists only of fees to related parties for the three months ended September 30, 2021 and 2020.

AGGREGATE OPERATING EXPENSES

Total operating expenses (general and administrative, salaries and wages, research and development, sales and marketing, depreciation and amortization, and stock options) and cost of sales during the three months ended September 30, 2021, were $91,400, representing a decrease of $47,767 or 34% from $139,167 when compared to the operating expenses and cost of sales during the three months ended September 30, 2020.  The overall decrease in expenses is due primarily to the ongoing COVID-19 pandemic which required us to further streamline operations and reduce costs.

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Depreciation and amortization during the three months ended September 30, 2021, was $0 representing a decrease of $622 or 100% from $622 during the three months ended September 30, 2020.

Interest expense during the three months ended September 30, 2021, was $20,584 representing an increase of $723 or 4% from $19,861 during the three months ended September 30, 2020. The increase is due to a higher balance of outstanding debt during the three months ended September 30, 2021.

BALANCE SHEET DATA 

Our combined cash and cash equivalents totaled $30,436 at September 30, 2021 and $2,473 at June 30, 2021.  We do not expect to generate a positive internal cash flow for at least the next 12 months due to our efforts to generate sales in China and obtain FDA marketing clearance, the expected costs of commercializing our initial product, the CTLM®, and the time required for homologations from certain countries.

Our inventory, which consists of raw materials, work in process (including completed units under testing), and finished goods totaled $100,087 at September 30, 2021 and $100,087 at June 30, 2021.  Raw materials used for research and development or other purposes are expensed and not included in inventory. The net inventory is $0 at September 30, 2021 and June 30, 2021 because the Company has recorded an allowance for slow moving and obsolete inventory for the entire value of the inventory due to lack of demand for parts and lack of sales.

Our property and equipment, net, totaled $0 at September 30, 2021 and $0 at June 30, 2021.

Our current liabilities, which consist of accounts payable, accrued payroll taxes and penalties, short term debt, and current portion of long-term debt, totaled $1,523,448 at September 30, 2021 and $1,378,461 at June 30, 2021. Accounts payable and accrued expenses totaled $568,643 at September 30, 2021 and $472,571 at June 30, 2021. Accrued payroll taxes and penalties totaled $314,019 at September 30, 2021 and $314,019 at June 30, 2021. Promissory notes totaled $626,276 at September 30, 2021 and $581,276 at June 30, 2021. The current portion of long-term debt was $14,510 at September 30, 2021 and $10,595 at June 30, 2021. Current liabilities increased primarily due to accounts payable and accrued expenses increasing by $96,072 and related party promissory notes increasing by $45,000.

Our long-term liabilities, which consists of the noncurrent operating lease liabilities as well as long-term loans payable totaled $65,090 at September 30, 2021 and $69,005 at June 30, 2021. The decrease in long-term liabilities was due to a portion of the loan payable becoming a current liability during the three months ended September 30, 2021.

Our temporary equity, which consists of Convertible Preferred Series L (including accrued dividends), totaled $420,476 at September 30, 2021 and $415,939 at June 30, 2021. The increase of $4,537 is due to dividends for the three months ended September 30, 2021 that are being included in the total redemption value.

LIQUIDITY AND CAPITAL RESOURCES 

We are currently a development stage company and our continued existence is dependent upon our ability to resolve our liquidity problems, principally by obtaining additional debt and/or equity financing.  We have yet to generate a positive internal cash flow, and until significant sales of our product occur, we are mostly dependent upon debt and equity funding from Viable and its affiliates and/or outside investors. While Viable has stated its intention to provide, directly or through private investors it procures, the working capital that we need for the next 12 months, there can be no assurance that this funding will be provided. In the event that we are unable to obtain adequate debt or equity financing or are unable to obtain such financing on terms and conditions acceptable to us, we may have to cease or severely curtail our operations.  This would materially impact our ability to continue as a going concern.

26

We have financed our operating and research and development activities through multiple private placements of common stock as well as short term loans from related parties.  During the three months ended September 30, 2021, we received $45,000 through short-term related party loans. During the three months ended September 30, 2020, we did not raise any capital through private placements of common stock or received proceeds from short term loans.

Net cash used for operating and product development expenses, which may include our purchase of additional materials to continue the manufacture of CTLM® Systems in anticipation of receiving orders from our distributors in certain countries where permitted by law was $17,037 for the three months ended September 30, 2021, compared to net cash used by operating activities and product development of the CTLM® and related software development of $45,960 during the three months ended September 30, 2020.  At September 30, 2021, we had negative working capital of $1,473,936 compared to negative working capital of $1,358,037 at June 30, 2021. We do not expect to generate a positive internal cash flow for at least the next 12 months due to the time needed to ramp up our sales and marketing plan in China. Implementation of our plan has been severely impeded by the ongoing COVID-19 crisis, and abatement of the crisis is needed in order for our plan to succeed.

If and when we receive marketing clearance from the FDA, which cannot be assured, we believe that we will need funding in excess of $5 million above and beyond normal operating expenses over the following year to fully complete all necessary stages in order for us to market the CTLM® in the United States and foreign countries other than China. In China Xi’an IDI will be responsible for all expenses relating to the manufacture, marketing and sale of the CTLM®.  The $5 million will be used to purchase inventory, sub-contracted components, tooling and manufacturing templates and pay non-recurring engineering costs associated with preparation for full capacity manufacturing and assembly and marketing, advertising and promotion, training, ongoing regulatory expenses, and other costs associated with product launch.  We expect to use the proceeds of the sale of restricted common stock through private placements as our preferred choice to raise the additional funds required to continue operations. In the event that we are unable to raise funds through private placements, of common or preferred stock, or debt securities, or combinations thereof; we will be materially adversely affected and may have to cease operations. If additional funds are raised by issuing equity securities, dilution to existing stockholders will result, and future investors may be granted rights superior to those of existing stockholders.

Through the date of this report, IDSI has been taking drastic measures as a response to the global COVID-19 crisis to preserve working capital. These measures include the conversion of our full-time employees to contractors working on an as-needed basis, deferral of payments to vendors, and transition of our facilities to a smaller, more cost-efficient space.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.  

Under the supervision and participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2021. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer, or the persons performing similar functions, concluded that our disclosure controls and procedures were effective as of September 30, 2021.

There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal year that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

At this time, there are no material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

Item 1A. Risk Factors.

Our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, filed on October 12, 2021, includes a detailed discussion of our risk factors. The risks described in our Form 10-K Report are not the only risks facing IDSI. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. For the three months ended September 30, 2021, there were no material changes in risk factors as previously disclosed in our Form 10-K.

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

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. (Mine Safety Disclosures)

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

31.1	Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

28

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 9, 2021		Imaging Diagnostic Systems, Inc.
	By:	/s/ David Fong
		David Fong
		Chief Financial Officer
		(PRINCIPAL ACCOUNTING OFFICER)

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EX-31.1

Exhibit 31.1

CERTIFCATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT SECTIONS 13(a) & 15(d)

AS REQUIRED BY

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chunming Zhang, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Imaging Diagnostic Systems, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material factor 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 quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(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 period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (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; and

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

Date: November 9, 2021	/s/ Chunming Zhang
	Chunming Zhang
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFCATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT SECTIONS 13(a) & 15(d)

AS REQUIRED BY

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Fong, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Imaging Diagnostic Systems, Inc.;
2.	Based on my knowledge, this quarterly 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 quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(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 period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (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; and

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

Date: November 9, 2021	/s/ David Fong
	David Fong
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Imaging Diagnostic Systems, Inc. (the “Company”) on Form 10-Q for the quarter ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chunming Zhang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

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

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

Date: November 9, 2021	/s/ Chunming Zhang
	Chunming Zhang
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Imaging Diagnostic Systems, Inc. (the “Company”) on Form 10-Q for the quarter ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Fong, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

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

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

Date: November 9, 2021	/s/ David Fong
	David Fong
	Chief Financial Officer

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Document And Entity Information - shares	3 Months Ended
	Sep. 30, 2021	Nov. 09, 2021
Document Information Line Items
Entity Registrant Name	IMAGING DIAGNOSTIC SYSTEMS INC /FL/
Document Type	10-Q
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		123,156,941
Amendment Flag	false
Entity Central Index Key	0000790652
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2021
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-26028
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	22-2671269
Entity Address, Address Line One	618 E South St
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Orlando
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32801
City Area Code	(954)
Local Phone Number	581-9800
Entity Interactive Data Current	Yes

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Balance Sheets - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Current assets:
Cash	$ 30,436	$ 2,473
Consultant advances	5,000	5,000
Prepaid expenses and deposits	14,076	12,951
Total current assets	49,512	20,424
Property and equipment, net
Total assets	49,512	20,424
Current liabilities:
Accounts payable and accrued expenses	568,643	472,571
Accrued payroll taxes and penalties	314,019	314,019
Promissory notes, related party	626,276	581,276
Current portion of PPP loan payable	14,510	10,595
Total current liabilities	1,523,448	1,378,461
Long-term liabilities
PPP Loan Payable, less current portion	65,090	69,005
Total long-term liabilities	65,090	69,005
Total liabilities	1,588,538	1,447,466
Commitment and Contingencies (Note 18)
Temporary equity
Convertible Preferred Series L	420,476	415,939
Total temporary equity	420,476	415,939
Stockholders’ Deficit:
Preferred stock, no par, 2,000,000 authorized Convertible preferred stock, Series M, 600 designated 0 shares issued and outstanding at September 30, 2021 and June 30, 2021
Common stock, no par value, 500,000,000 authorized, 123,156,941 and 123,156,941 shares issued and outstanding September 30, 2021 and June 30, 2021, respectively	132,974,686	132,974,686
Accumulated Deficit	(134,934,188)	(134,817,667)
Total stockholders’ deficit	(1,959,502)	(1,842,981)
Total liabilities and stockholders’ deficit	$ 49,512	$ 20,424

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Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2021	Jun. 30, 2021
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock share par value (in Dollars per share)
Common stock, shares authorized	500,000,000	500,000,000
Common Stock, shares issued	123,156,941	123,156,941
Common stock, shares outstanding	123,156,941	123,156,941
Common stock share par value (in Dollars per share)
Series M preferred stock
Preferred stock, designated	600	600
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

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Statements of Operations (unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Total Revenue
Cost of Sales
Gross Profit
Operating Expenses:
General and administrative	40,289	78,899
Salaries and wages
Research and development		8,308
Sales and marketing	111	338
Depreciation and amortization		622
Consulting expenses (including share-based compensation)	51,000	51,000
Total Operating Expenses	91,400	139,167
Operating Loss	(91,400)	(139,167)
Other Income (expense)
Interest income		1
Other Income		1,000
Interest expense	(20,584)	(19,861)
Total Other Expense	(20,584)	(18,860)
Net Loss	(111,984)	(158,027)
Preferred Stock Dividends	(4,537)	(4,525)
Net Loss Available to Common Stockholders	$ (116,521)	$ (162,552)
Net Loss per common share:
Basic and diluted (in Dollars per share)
Weighted average number of common shares outstanding:
Basic and diluted (in Shares)	123,156,941	122,876,549

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Statements of Changes in Stockholders’ Deficit (Unaudited) - USD ($)	Common Stock	Accumulated Deficit	Total
Balance at Jun. 30, 2020	$ 132,570,255	$ (134,109,749)	$ (1,539,494)
Balance (in Shares) at Jun. 30, 2020	122,876,549
Cummulative Dividend on Series L CV Preferred		(4,525)	(4,525)
Net loss		(158,027)	(158,027)
Balance at Sep. 30, 2020	$ 132,570,255	(134,272,301)	(1,702,046)
Balance (in Shares) at Sep. 30, 2020	122,876,549
Balance at Jun. 30, 2021	$ 132,974,686	(134,817,667)	(1,842,981)
Balance (in Shares) at Jun. 30, 2021	123,156,941
Cummulative Dividend on Series L CV Preferred		(4,537)	(4,537)
Net loss		(111,984)	(111,984)
Balance at Sep. 30, 2021	$ 132,974,686	$ (134,934,188)	$ (1,959,502)
Balance (in Shares) at Sep. 30, 2021	123,156,941

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Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Statement of Cash Flows [Abstract]
Net loss	$ (111,984)	$ (158,027)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		622
Changes in assets and liabilities:
(Increase) decrease in royalty receivable		10,875
(Increase) decrease in prepaid expenses	(1,125)	(9,631)
Increase (decrease) in accounts payable and accrued expenses	96,072	110,309
Change in right of use asset/lease obligation, net		(108)
Total adjustments	94,947	112,067
Net cash used in operating activities	(17,037)	(45,960)
Cash flows from financing activities:
Proceeds from promissory notes, related party	45,000
Net cash provided by financing activities	45,000
Net increase (decrease) in cash and cash equivalents	27,963	(45,960)
Cash at the beginning of year	2,473	45,960
Cash at end of the period	30,436
Supplemental Disclosure of cash flow information:
Cash paid for interest	1,145
Cash paid for taxes

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Organization and Nature of Business

3 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

ORGANIZATION AND NATURE OF BUSINESS

(1) ORGANIZATION AND NATURE OF BUSINESS

Imaging Diagnostic Systems, Inc. (the “Company” or “IDSI”) is a medical technology company that has developed a new, non-invasive CT scanner called CTLM® that uses a laser beam in place of ionizing X-ray for breast imaging. This technology is called Diffuse Optical Tomography. The CTLM® will provide an adjunctive imaging modality to other methods of imaging the breast such as X-ray mammography, MRI and ultrasound.

Since inception in December 1993 as a Florida corporation and subsequently its reverse merger with Alkan Corp., a New Jersey Corporation on April 14, 1994, we continued operations and changed our state of incorporation from New Jersey to Florida, effective July 1, 1995.

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Going Concern and Management's Plans

3 Months Ended

Sep. 30, 2021

Going Concern and Managements Plans [Abstract]

GOING CONCERN AND MANAGEMENT’S PLANS

(2) GOING CONCERN AND MANAGEMENT’S PLANS

The accompanying financial statements are prepared assuming the Company will continue as a going concern. As of September 30, 2021, the Company had an accumulated deficit of $134,934,188, a stockholders’ deficit of $1,959,502 and a working capital deficiency of $1,473,936. For the three months ended September 30, 2021, net loss totaled $111,984. The net cash used in operating activities for the three months ended September 30, 2021 totaled $17,037. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these financial statements are issued. The ability of the Company to continue as a going concern is dependent upon generating sales and obtaining additional capital and financing. While the Company believes in the viability of its strategy to generate material sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The Company received from the Chinese FDA (“CFDA”) marketing clearance for the CTLM® effective November 16, 2018 to November 15, 2023. However, there can be no assurance that we will obtain U.S. Food and Drug Administration (“FDA”) marketing or other new international marketing clearances, that the CTLM® will achieve market acceptance or that sufficient revenues will be generated from sales of the CTLM® in China or elsewhere to allow us to operate profitably. If our majority shareholder Viable International Investments, LLC (“Viable”) fails to continue funding, the Company would be materially adversely affected and may have to cease operations due to a lack of funding. These matters affect the Company’s liquidity profile, and management’s plans in those regards are discussed in the paragraphs that follow.

During fiscal year 2022, we anticipate that losses from operations will continue until we begin to generate revenues through the sales of CTLM® systems in China. These losses will be primarily due to an anticipated increase in marketing, manufacturing and operational expenses associated with the international commercialization of the CTLM®, expenses associated with FDA approval processes, and the costs associated with advanced product development activities.

The Company’s next focus, after having obtained CFDA approval in China, is on obtaining marketing clearance of its CTLM® Breast Imaging System through the FDA. The premarket approval (“PMA”) process for U.S. marketing clearance is expected to take longer than the Chinese process, and we intend to resume this effort after achieving successful marketing and sales of CTLM® systems in China. Our sales and marketing efforts in China have been significantly hindered by the ongoing COVID-19 pandemic, and therefore we do not expect revenue from China until the third or fourth quarter of fiscal 2022. No sales in other countries are expected in the foreseeable future, as we do not intend to pursue sales in other countries until after obtaining FDA marketing clearance, as to which there can be no assurance.

In analyzing the regulatory path forward, timeline, and costs associated with the level of effort required to upgrade the Company’s Quality Management System (QMS), we have decided not to renew our CE mark (required for sales in the European Union) for this year and to consider reapplying in 2 to 3 years to avoid these regulatory fees. Similarly, we will maintain our Quality Management System to be compliant to ISO 13485:2016 but not certify to ISO 13485:2016 by Underwriters Laboratories (UL) which will allow us to avoid fees associated with certification, travel, and hosting audits. Maintaining our QMS to be ISO 13485:2016 compliant will allow us to quickly schedule an audit with UL and become ISO 13485 certified when necessary.

On October 23, 2019, the Company entered into a consulting agreement (“the Agreement”) effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI’s Chief Scientific Consultant. Pursuant to the Agreement, Dr. Jiang is focused on improving the technical performance and image quality of IDSI’s Computed Tomography Laser Mammography (CTLM^®) breast imaging device. Dr. Jiang has completed the first phase of image quality improvement and is currently collecting image data for evaluation and further technical improvement.

Xi’an IDI has been working with Yiling Hospital Management Group based in Beijing, China (“Yiling”) to evaluate CTLM®’s potential use and application. As of the date of this report, Xi’an IDI has loaned three CTLM® systems to Yiling and Yiling is at the stage of testing and data validation.

It is important that the effectiveness of the image quality improvements be established before Xi’an IDI can resume their sales and marketing efforts in China. Once the Company has substantial revenues and cash flow, it believes it will be able to raise the necessary funding to allow the Company to move forward with its various R&D and regulatory initiatives that have been put on hold due to the COVID-19 pandemic.

The Company’s ability to continue as a going concern and its future success are dependent upon its ability to raise additional capital in the near term to: (1) satisfy its current obligations, (2) continue its research and development efforts, and (3) successfully develop, market, and sell its products. Due to the difficulty of raising additional capital during the current COVID-19 crisis, the Company has been taking aggressive measures to reduce its operating costs in order to preserve cash. The Company’s ability to meet its cash flow requirements through fiscal 2022 and continue its development and commercialization efforts will be dependent on the length and severity of the COVID-19 crisis and the Company’s ability to secure additional funding. There can be no assurance that IDSI will generate sufficient revenue to provide positive cash flows from operations or that sufficient capital will be available, when required, to permit the Company to execute its plan of operations. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and use of estimates

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures. Actual results could differ materially from these estimates.

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended June 30, 2021, contained in our General Form for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on October 12, 2021. The results of operations for the three months ended September 30, 2021, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2022.

(b) Revenue recognition

As of July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The Company sells medical imaging products, parts, and services where permitted to independent distributors and in certain unrepresented territories directly to end-users. The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Any discounts, sales incentives or similar arrangements with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue.

The Company also receives royalties pursuant to a licensing relationship with Trifoil Imaging. Revenue is recognized in the reporting periods in which royalties are due to the Company.

(c) Allowance for doubtful accounts

In the event that management determines that a receivable becomes uncollectible, or events or circumstances change, which result in a temporary cessation of payments from the distributor, we will make our best estimate of probable or potential losses in our accounts receivable balance using the allowance method for each quarterly period. Management will review the receivables at the end of each fiscal year and the appropriate allowance will be made based on current available evidence and historical experience.

Our allowance for doubtful accounts was $850 as of September 30, 2021 and June 30, 2021. These amounts consist of other receivables that have been fully reserved.

(d) Cash and cash equivalents

Holdings of highly liquid investments with original maturities of three months or less and investment in money market funds are considered to be cash equivalents by the Company. There were no cash equivalents at September 30, 2021 and June 30, 2021.

(e) Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit of $250,000. At September 30, 2021 and June 30, 2021, the Company had $0 in excess of the federally insured limit.

The Company did not have any revenue for the three months ended September 30, 2021 and 2020.

(f) Inventory

Inventories, consisting principally of raw materials, work-in-process (including completed units under testing), finished goods and units placed on consignment, are carried at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials consist of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and testing. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment of slow moving or obsolete inventory. The Company maintains a reserve for obsolete inventory and generally makes inventory value adjustments against the reserve.

(g) Property and equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the estimated useful lives of the related assets. Expenditures for renewals and betterments which increase the estimated useful life or capacity of the asset are capitalized; expenditures for repairs and maintenance are expensed when incurred.

(h) Research and development

Research and development expenses consist principally of expenditures for equipment and outside third-party consultants, raw materials which are used in testing and the development of the Company’s CTLM® device or other products and product software. The non-payroll related expenses include testing at outside laboratories, parts associated with the design of initial components and tooling costs, and other costs which do not remain with the developed CTLM® device.

(i) Net loss per share

The Company relies on the guidance provided by ASC 260, (“Earnings per Share”), which requires the reporting of both basic and diluted earnings per share. Basic net loss per share is determined by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive.

The Company had 13,922,657 and 13,922,657 options vested as of September 30, 2021 and June 30, 2021, respectively and 2,830,290 and 2,830,290 options not yet vested as of September 30, 2021 and June 30, 2021, respectively.

(j) Stock-based compensation

In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, an accounting standard update to improve non-employee share-based payment accounting. The accounting standard update more closely aligns the accounting for employee and non-employee share-based payments. The accounting standards update is effective as of the beginning of 2019 with early adoption permitted. We have elected to adopt this standard.

The Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options and similar awards, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of outstanding and vested stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. No stock options were granted during the three months ended September 30, 2021. During the three months ended September 30, 2020, the Board granted options to purchase 157,102 shares with an exercise price of $.51 per share to an employee. Stock options are being expensed pursuant to ASC 718.

The fair value concepts were not changed significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation over the requisite vesting period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model. See Note (17) Stock Options.

(k) Long-lived assets

The Company relies on the guidance provided by ASC 360 (“Property, Plant & Equipment”). ASC 360 requires companies to write down to estimated fair value long-lived assets that are impaired. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In performing the review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the assets, an impairment loss is recognized.

The Company has determined that no impairment losses need to be recognized through the three months ended September 30, 2021 and 2020.

(l) Income taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax positions. 

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of the date these financials were available to be issued, tax years ended June 30, 2018 to 2021 are still potentially subject to audit by the taxing authorities.

(m) Warranty reserve

The Company warrants all products and parts supplied for a period of 12 months from the date of installation or 15 months from the date the products was/were shipped from IDSI, whichever occurs first. Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Based on the Company’s experience, the warranty reserve was estimated based on the replacement cost of the laser and certain electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The Company had no warranty reserve balance as of September 30, 2021 or June 30, 2021.

(n) Impact of recently issued accounting pronouncements

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

(o) Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, receivables, accounts payable, short-term debt and accrued liabilities approximated their fair values due to the short maturity of these instruments. After a review of our accounts receivable, the Company has not recorded an allowance for doubtful accounts. The fair value of the Company’s debt obligations is estimated based on the quoted market prices for the same or similar issues or on current rates offered to the Company for debt of the same remaining maturities. At September 30, 2021 and June 30, 2021, the aggregate fair value of the Company’s debt obligations approximated its carrying value. The Company relies upon the guidance of ASC 820 (“Fair Value Measurements and Disclosures”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly, transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

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Revenue

3 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

REVENUE

(4) REVENUE

The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Sales taxes and other similar taxes are excluded from revenue. 

As of July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The Company had no revenues during the three months ended September 30, 2021 and 2020.

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Related Party Transactions

3 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

(5) RELATED PARTY TRANSACTIONS

Related party revenues

On March 22, 2018, the Board of Directors approved the execution of two agreements with Xi’an of China, an affiliated Company of IDSI. The agreements are a Know How Transfer Contract and a CTLM® Know How Confidentiality Agreement. The contract, having a term of 20 years, stipulates that Xi’an will pay IDSI a know how transfer fee of 25% of revenue for CTLM® product sales in their territory. There were no such sales during the three months ended September 30, 2021 and 2020.

Related party fees

Erhfort, LLC earned a consulting fee of $25,500 for each of the three-month periods ended September 30, 2021 and 2020. Erhfort, LLC regularly reviews the Company’s operations and reports to IDSI’s CEO, Chunming Zhang, who lives in China. Erhfort, LLC is a related party because it owns Company common stock directly and indirectly.

David Fong, serving as the Company’s CFO, earned consulting fees of $25,500 for each of the three-month periods ended September 30, 2021 and 2020. These fees were assigned to his affiliated business, Fong & Associates, LLC.

Related party payables and accrued expenses

As of September 30, 2021 and June 30, 2021, the amount of interest on related party notes due to Erhfort, LLC, which is included in accounts payable, is $102,921 and $83,260, respectively.

As of September 30, 2021 and June 30, 2021, the amount of consulting fees due to Ehrfort, LLC, which is included in accounts payable, is $76,500 and $51,000, respectively.

As of September 30, 2021 and June 30, 2021, the amount of consulting fees due to Fong & Associates, LLC, which is included in accounts payable, is $209,500 and $184,000, respectively.

As of September 30, 2021 and June 30, 2021, the amount of interest on related party notes due to JM One Holdings, LLC, which is included in accrued expenses, is $6,616 and $5,860, respectively. JM One Holdings, LLC is an entity affiliated with the Company’s CFO.

Related party debt

As of September 30, 2021 and June 30, 2021, the amount in promissory notes due to related parties are $626,276 and $581,276, respectively (See Note 12).

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Royalty Receivable

3 Months Ended

Sep. 30, 2021

Royalty Receivable [Abstract]

ROYALTY RECEIVABLE

(6) ROYALTY RECEIVABLE

On June 16, 2006, the Company entered into a Royalty Agreement with Bioscan Inc. whereby the Company established a licensing relationship with Bioscan which granted Bioscan an exclusive sublicensable, royalty-bearing license to make, use, offer for sale, import and otherwise develop and commercialize products in its territory. Bioscan Inc. was subsequently purchased by TriFoil Imaging. During the three months ended September 30, 2021 and 2020, there was no royalty income. As of September 30, 2021 and June 30, 2021, the Company had royalty receivable balances of $0.

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Inventories

3 Months Ended

Sep. 30, 2021

Inventory Disclosure [Abstract]

INVENTORIES

(7) INVENTORIES

Inventories consisted of the following:

	September 30, 2021			June 30, 2021
Raw materials consisting of purchased parts, components and supplies	$	92,587		$	92,587
Finished goods		7,500			7,500
Total Inventory	$	100,087		$	100,087
Allowance for Obsolete Inventory		(100,087	)		(100,087	)
Net Inventory	$	-		$	-

Due to the age of the inventory, lack of demand for parts and lack of sales the Company wrote off all inventory during the year ended June 30, 2017 and has booked an allowance for the entire value of its inventory as of September 30, 2021 and June 30, 2021.

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Prepaid Expenses and Deposits

3 Months Ended

Sep. 30, 2021

Prepaid Expenses And Deposits [Abstract]

PREPAID EXPENSES AND DEPOSITS

(8) PREPAID EXPENSES AND DEPOSITS

The following is a summary of prepaid expenses:

	September 30, 2021		June 30, 2021
Prepaid Software	$	1,331	$	206
Prepaid Rent		962		962
Rent Deposits		1,783		1,783
Consulting Retainers		10,000		10,000
Total Prepaid expenses	$	14,076	$	12,951

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Property and Equipment

3 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

(9) PROPERTY AND EQUIPMENT

The following is a summary of property and equipment, less accumulated depreciation:

	September 30, 2021			June 30, 2021			Useful life
Computers and Equipment	$	12,612		$	12,612		5 years
Third Party Software		10,291			10,291		5 years
Clinical Equipment		15,000			15,000		5 years
Total Property & Equipment	$	37,903		$	37,903
Less: accumulated depreciation		(37,903	)		(37,903	)
Total Property & Equipment - Net	$	-		$	-

Depreciation expense for the three months ended September 30, 2021 and 2020 was $0 and $622 respectively.

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Accounts Payable and Accrued Expenses

3 Months Ended

Sep. 30, 2021

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

(10) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of September 30, 2021 and June 30, 2021, accounts payable and accrued expenses totaled $568,643 and $472,571, respectively, which consists of accounts payable of $560,948 and $465,799 and other accrued expenses of $7,695 and $6,772, respectively.

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Accrued Payroll Taxes and Penalties

3 Months Ended

Sep. 30, 2021

Accrued Payroll Taxes And Penalties Disclosure [Abstract]

ACCRUED PAYROLL TAXES AND PENALTIES

(11) ACCRUED PAYROLL TAXES AND PENALTIES

As of September 30, 2021 and June 30, 2021, the Company owed the IRS $314,019 and $314,019, respectively. Accrued payroll taxes represent outstanding interest and penalties based on prior management’s failure to pay payroll taxes commencing with the quarter ending September 30, 2010. As part of new management’s restructuring plan, the Company received funds from an accredited investor to be able to make a payment to pay off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable International Investments LLC provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting penalty and interest abatement. The amount due at September 30, 2021 of $314,019 represents the interest and penalties. The Company has formally asked the IRS to abate all remaining interest and penalties of $314,019. The Company had a telephone conference on April 18, 2019 with the office of appeals and is waiting for further communications from the appeals officer. As of September 30, 2021, the Company’s tax counsel is in the process of reviewing recent IRS correspondence to determine appeals status and will work towards final resolutions with the IRS on all outstanding liabilities. The Company has decided to wait until all resolutions are final before making any adjustments to the balance of $314,019 owed to the IRS.

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Promissory Notes – Related Party

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

PROMISSORY NOTES – RELATED PARTY

(12) PROMISSORY NOTES – RELATED PARTY

The following table is a summary of the outstanding note balances as of September 30, 2021 and June 30, 2021.

Noteholder	Interest Rate			Maturity Date	September 30, 2021		June 30, 2021
Related Party Notes:
Erhfort, LLC		15	%	12/31/21	$	100,000	$	100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
JM One Holdings, LLC		15	%	12/31/21		20,000		20,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		10,000		10,000
Erhfort, LLC		15	%	12/31/21		10,000		10,000
Viable International Investments, LLC		0	%	On Demand		7,865		7,865
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		3,000		3,000
Viable International Investments, LLC		0	%	On Demand		15,000		-
Viable International Investments, LLC		0	%	On Demand		30,000		-
Xi’an IDI		0	%	On Demand		10,411		10,411
Total Related Party Notes					$	626,276	$	581,276

Erhfort, LLC and Viable International Investments, LLC own Company common stock directly and indirectly. JM One Holdings, LLC is an entity affiliated with the Company’s CFO. Hence, these debts are considered related party debt. Xi’an IDI is affiliated with IDSI due to a licensing agreement.

During the three months ended September 30, 2021, the Company received loan proceeds of $45,000 from Viable International Investments, LLC with annual interest rates of 0%.

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Long-Term Debt

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

LONG-TERM DEBT

(13) LONG-TERM DEBT

The following table is a summary of the outstanding loan balances as of September 30, 2021 and June 30, 2021.

Noteholder	Interest Rate			Maturity Date	September 30, 2021			June 30, 2021
Truist Bank		1	%	5/1/25	$	79,600		$	79,600
Total Debt						79,600			79,600
Current Portion of Debt						(14,510	)		(10,595	)
Total Long-term Debt					$	65,090		$	69,005

Future maturities of long-term debt are as follows as of September 30, 2021:

For the year ended June 30,
2022	$	10,599
2023		15,707
2024		15,866
2025		37,428
	$	79,600

On May 9, 2020, the Company entered into a loan with Truist Bank, a lender pursuant to the Paycheck Protection Program of the CARES Act as administered by the SBA in the amount of $79,600. The loan, in the form of a promissory note, matures on May 11, 2022. No additional collateral or guarantees were provided by the Company for the loan. The PPP loan provides for customary events of default. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, rent payments, mortgage interest and covered utilities during the 24-week period beginning on the date of loan disbursement.  The Company may be required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, and it cannot provide any assurance that it will be eligible for loan forgiveness, or that any amount of the PPP Loan will ultimately be forgiven by the SBA. All aspects of the PPP loan are subject to review by the SBA, including without limitation, the Company’s eligibility for and the size of the loan.  The review procedures have not been made public.  The Company cannot predict the outcome of that review nor be assured that all or any part of the loan will be forgiven.  To the extent that all or part of the PPP loan is not forgiven, the Company will be required to make payments, beginning October 2021, including interest accruing at an annual interest rate of 1.0% beginning on the date of disbursement. As of September 30, 2021 and June 30, 2021, the Company reported an accrued interest balance related to the PPP Loan of $1,079 and $912, respectively. The accrued interest is included in accounts payable and accrued expenses on our balance sheets.

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Leases

3 Months Ended

Sep. 30, 2021

Leases [Abstract]

LEASES

(14) LEASES

In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement, and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on July 1, 2019, meaning we did not restate prior periods. Financial information for periods ended after July 1, 2019 are presented under the guidance in topic 842, while prior periods are presented under Topic 840.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

We may have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

As of September 30, 2021 and June 30, 2021, the Company does not have any leases with terms of more than twelve months.

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Convertible Preferred Stock

3 Months Ended

Sep. 30, 2021

Equity [Abstract]

CONVERTIBLE PREFERRED STOCK

(15) CONVERTIBLE PREFERRED STOCK

The following schedule reflects the number of shares of preferred stock that have been issued, converted and are outstanding as of September 30, 2021:

Security	Date Issued	No. of Shares		Amount		Date of Conversion	No. of Shares Converted		Amount Converted		Balance 9/30/2021
Total Series M Cv Pfd	Various		600	$	6,000,000	Various		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												220,476
						Total redemption value					$	420,476

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 September 30, 2021 and June 30, 2021, the balance of cumulative dividends owed to the investor which is included in redemption value was $220,476 and $215,939, respectively. The total presented on the balance sheet as temporary equity is $420,476 as of September 30, 2021 and $415,939 as of June 30, 2021.

Series M Convertible Preferred Stock

The Company had previously sold 600 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. As of September 30, 2021 and June 30, 2021, the balance of Series M Preferred stock was $0.

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Common Stock

3 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

COMMON STOCK

(16) COMMON STOCK

The Company has 500,000,000 of common shares no par value authorized and 2,000,000 of no par preferred shares authorized.

The Company did not issue any shares of common or preferred stock during the three months ended September 30, 2021 and 2020.

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Stock Options

3 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

STOCK OPTIONS

(17) STOCK OPTIONS

On December 4, 2016, the Board of Directors adopted the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) which was subsequently approved and adopted by majority written consent in lieu of an annual meeting. The purpose of the 2016 Plan is to encourage and enable the officers, employees, directors and other key persons (including consultants) of the Company, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

On August 1, 2020, the Board granted an option to purchase 157,102 shares with an exercise price of $.51 and a fair value of $.51 to an employee. These options will vest when CTLM® 3.0 is ready for Alpha testing and will be expensed at that time. On May 1, 2021, the Board granted an option to purchase 1,500,000 shares with an exercise price of $.51 and fair value of $.13 per share to a consultant. These options will vest over a three-year period. These options will be expensed as they vest.

In computing the impact of stock option grants, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility of a comparable company; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future.

In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company cannot assess its forfeiture rate at this time due to the lack of historical data.

	As of September 30, 2021			As of June 30, 2021
Expected volatility		23% to 44	%		23% to 44 %
Expected term		0.25 to 4.59 Years			0.5 to 4.83 Years
Risk-Free interest rate		0.05% to 3.09	%		0.05% to 3.09	%
Forfeiture rate		0.00	%		0.00	%
Expected dividend rate		0.00	%		0.00	%

At September 30, 2021, the Company has unvested and vested options under the 2016 Plan with exercise prices that range from a low of $.20 per share to a high of $.51 per share. The following table summarizes information about all of the stock options granted, exercised and cancelled under the 2016 Plan at September 30, 2021 and June 30, 2021:

Employees/Consultants	Options		Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2020		15,095,833	$	0.24	2.43 Years	$	-
Granted		1,657,102	$	0.51
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at June 30, 2021		16,752,935	$	0.25	1.76 Years	$	-
Granted		-	$	-
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at September 30, 2021		16,752,935	$	0.27	1.51 Years	$	-

The following table summarizes information about vested and unvested options under the 2016 Plan at September 30, 2021 and June 30, 2021. The Company did not recognize any options expense during the three months ended September 30, 2021 as no options vested during the three-month period.

Employees/Consultants	Unvested			Vested and Exercisable			Total
Outstanding at June 30, 2020		4,123,184			10,972,649			15,095,833
Granted		1,657,102			-			1,657,102
Vested and Exercisable		(2,950,000	)		2,950,000			-
Cancelled		-			-			-
Rounding Adjustment		4			(4	)		-
Outstanding at June 30, 2021		2,830,290			13,922,645			16,752,935
Granted		-			-			-
Vested and Exercisable		-			-			-
Cancelled		-			-			-
Adjustment		-			-			-
Outstanding at September 30, 2021		2,830,290			13,922,645			16,752,935

Unvested options will be expensed under the Black-Scholes options-pricing model when they vest. As of September 30, 2021, remaining options to be expensed when vested are estimated to be $440,459.

At September 30, 2021, the Company has issued options pursuant to six different stock option plans, the most recent being the 2016 Plan. The previous five plans through and including the 2012 Non-Statutory Plan have a remaining total of options vested and exercisable to purchase 12 shares at exercise price of $350 per share.

The tables below summarize information about these five plans:

Employees/Consultants	Options			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2020		13		$	976	2.01 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		(1	)	$	13,500
Outstanding at June 30, 2021		12		$	350	1.11 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		-		$	-
Outstanding at September 30, 2021		12		$	350	.86 Years	$	-

Vested & Exercisable Stock Options	September 30, 2021		June 30, 2021
Employee 2016 Equity Plan		-		-
Director 2016 Equity Plan		-		-
Employee Other Plans		12		12
Directors and Consultants Other Plans		-		-
Total		12		12

The table below summarizes information about all stock options outstanding as of September 30, 2021:

	Outstanding Options						Vested Options
Range of Exercise price	Number Outstanding at September 30, 2021		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life		Number Exercisable at September 30, 2021		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life
$0.20 - $0.51		16,752,935	$	0.27		1.51		13,922,645	$	0.23		1.14
$350		12	$	350		.86		12	$	350		.86
Outstanding options		16,752,947	$	0.27		1.76		13,922,657	$	0.23		1.39

The Company’s common stock, symbol IMDS, was quoted on OTCmarkets.com Pink until September 25, 2014 at which time IDSI’s registration was revoked by the Securities and Exchange Commission (SEC) for failure to timely file its Quarterly and Annual Reports. The last quoted price was $0.1. Because the Company was de-registered and

OTC markets did not provide a quote for IMDS, there is no public market for the Company’s shares. Given the exercise prices adjusted for the reverse split, it is highly unlikely that any employee holding pre-2016 Plan options will exercise them. The Company has sufficient authorized shares available for all outstanding option; however, if exercised, the shares will be issued with a restrictive legend because the Company was not an SEC reporting company until October 2018. Further, given its recent return to SEC reporting status, the Company is unable to file an S-8 Registration Statement to register shares issued because of option exercise pursuant to various stock option agreements.

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

(18) COMMITMENTS AND CONTINGENCIES

The Company previously carried $3,000,000 in product liability insurance to cover both clinical sites and sales. As part of its cost savings initiatives, the Company cancelled the policy as it had not had any adverse experiences after conducting more than 25,000 patient scans worldwide. The Company is now self-insuring the risk of product liability.

From May 2010 to June 2012, claims were made by the IRS for payment of the Company’s accrued payroll taxes, interest and penalties, which as of June 30, 2012 was $1,489,640. The Company engaged tax counsel to handle this matter and intends to fully satisfy its payroll tax obligations. On August 4, 2014, Viable purchased 250 shares of convertible preferred stock for $2,500,000, which gave them a 78.9% voting and economic interest in the Company’s capital stock representing a change in control of the Company. New management’s tax counsel negotiated a new Installment Agreement which stipulated a lump sum payment of $250,000, which was paid on September 4, 2014 and monthly installment payments of $20,000 beginning in September 2014 due on the 18^th of each month until the balance of payroll taxes, interest and penalties are paid in full (Note 11).

During fiscal 2018, as part of new management’s restructuring plan, the Company received funds from an accredited investor to pay off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable International Investments LLC provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting abatement of penalties and interest totaling $314,019. As of September 30, 2021, the Company’s tax counsel is in the process of reviewing recent IRS correspondence to determine appeals status and will work towards final resolutions with the IRS on all outstanding liabilities. The Company has decided to wait until all resolutions are final before making any adjustments to the balance of $314,019 owed to the IRS.

On October 23, 2019, the Company entered into a consulting agreement (“the Agreement”) effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI’s Chief Scientific Consultant. Pursuant to the Agreement, Dr. Jiang is focused on improving the technical performance and image quality of IDSI’s CTLM® breast imaging device. Per the Agreement, the goal of the initial project was to complete image quality improvement by November 1, 2020. A payment of $500,000 will be due upon satisfactory completion of the project. As of September 30, 2021, Dr. Jiang has completed the first phase of image quality improvement and is currently collecting image data for evaluation and further technical improvement. We have yet to establish the effectiveness of the improvements, as completion of the project has been delayed due to the COVID-19 crisis.

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Accounting Policies, by Policy (Policies)

3 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of presentation and use of estimates

(a) Basis of presentation and use of estimates

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures. Actual results could differ materially from these estimates.

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended June 30, 2021, contained in our General Form for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on October 12, 2021. The results of operations for the three months ended September 30, 2021, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2022.

Revenue recognition

(b) Revenue recognition

As of July 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The Company sells medical imaging products, parts, and services where permitted to independent distributors and in certain unrepresented territories directly to end-users. The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Any discounts, sales incentives or similar arrangements with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue.

The Company also receives royalties pursuant to a licensing relationship with Trifoil Imaging. Revenue is recognized in the reporting periods in which royalties are due to the Company.

Allowance for doubtful accounts

(c) Allowance for doubtful accounts

In the event that management determines that a receivable becomes uncollectible, or events or circumstances change, which result in a temporary cessation of payments from the distributor, we will make our best estimate of probable or potential losses in our accounts receivable balance using the allowance method for each quarterly period. Management will review the receivables at the end of each fiscal year and the appropriate allowance will be made based on current available evidence and historical experience.

Our allowance for doubtful accounts was $850 as of September 30, 2021 and June 30, 2021. These amounts consist of other receivables that have been fully reserved.

Cash and cash equivalents

(d) Cash and cash equivalents

Holdings of highly liquid investments with original maturities of three months or less and investment in money market funds are considered to be cash equivalents by the Company. There were no cash equivalents at September 30, 2021 and June 30, 2021.

Concentration of Risk

(e) Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit of $250,000. At September 30, 2021 and June 30, 2021, the Company had $0 in excess of the federally insured limit.

The Company did not have any revenue for the three months ended September 30, 2021 and 2020.

Inventory

(f) Inventory

Inventories, consisting principally of raw materials, work-in-process (including completed units under testing), finished goods and units placed on consignment, are carried at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials consist of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and testing. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment of slow moving or obsolete inventory. The Company maintains a reserve for obsolete inventory and generally makes inventory value adjustments against the reserve.

Property and equipment

(g) Property and equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the estimated useful lives of the related assets. Expenditures for renewals and betterments which increase the estimated useful life or capacity of the asset are capitalized; expenditures for repairs and maintenance are expensed when incurred.

Research and development

(h) Research and development

Research and development expenses consist principally of expenditures for equipment and outside third-party consultants, raw materials which are used in testing and the development of the Company’s CTLM® device or other products and product software. The non-payroll related expenses include testing at outside laboratories, parts associated with the design of initial components and tooling costs, and other costs which do not remain with the developed CTLM® device.

Net loss per share

(i) Net loss per share

The Company relies on the guidance provided by ASC 260, (“Earnings per Share”), which requires the reporting of both basic and diluted earnings per share. Basic net loss per share is determined by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive.

The Company had 13,922,657 and 13,922,657 options vested as of September 30, 2021 and June 30, 2021, respectively and 2,830,290 and 2,830,290 options not yet vested as of September 30, 2021 and June 30, 2021, respectively.

Stock-based compensation

(j) Stock-based compensation

In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, an accounting standard update to improve non-employee share-based payment accounting. The accounting standard update more closely aligns the accounting for employee and non-employee share-based payments. The accounting standards update is effective as of the beginning of 2019 with early adoption permitted. We have elected to adopt this standard.

The Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options and similar awards, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of outstanding and vested stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. No stock options were granted during the three months ended September 30, 2021. During the three months ended September 30, 2020, the Board granted options to purchase 157,102 shares with an exercise price of $.51 per share to an employee. Stock options are being expensed pursuant to ASC 718.

The fair value concepts were not changed significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation over the requisite vesting period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model. See Note (17) Stock Options.

Long-lived assets

(k) Long-lived assets

The Company relies on the guidance provided by ASC 360 (“Property, Plant & Equipment”). ASC 360 requires companies to write down to estimated fair value long-lived assets that are impaired. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In performing the review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the assets, an impairment loss is recognized.

The Company has determined that no impairment losses need to be recognized through the three months ended September 30, 2021 and 2020.

Income taxes

(l) Income taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax positions. 

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of the date these financials were available to be issued, tax years ended June 30, 2018 to 2021 are still potentially subject to audit by the taxing authorities.

Warranty reserve

(m) Warranty reserve

The Company warrants all products and parts supplied for a period of 12 months from the date of installation or 15 months from the date the products was/were shipped from IDSI, whichever occurs first. Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Based on the Company’s experience, the warranty reserve was estimated based on the replacement cost of the laser and certain electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The Company had no warranty reserve balance as of September 30, 2021 or June 30, 2021.

Impact of recently issued accounting pronouncements

(n) Impact of recently issued accounting pronouncements

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

Fair Value of Financial Instruments

(o) Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, receivables, accounts payable, short-term debt and accrued liabilities approximated their fair values due to the short maturity of these instruments. After a review of our accounts receivable, the Company has not recorded an allowance for doubtful accounts. The fair value of the Company’s debt obligations is estimated based on the quoted market prices for the same or similar issues or on current rates offered to the Company for debt of the same remaining maturities. At September 30, 2021 and June 30, 2021, the aggregate fair value of the Company’s debt obligations approximated its carrying value. The Company relies upon the guidance of ASC 820 (“Fair Value Measurements and Disclosures”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly, transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

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Inventories (Tables)

3 Months Ended

Sep. 30, 2021

Inventory Disclosure [Abstract]

Schedule of inventories

	September 30, 2021			June 30, 2021
Raw materials consisting of purchased parts, components and supplies	$	92,587		$	92,587
Finished goods		7,500			7,500
Total Inventory	$	100,087		$	100,087
Allowance for Obsolete Inventory		(100,087	)		(100,087	)
Net Inventory	$	-		$	-

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Prepaid Expenses and Deposits (Tables)

3 Months Ended

Sep. 30, 2021

Prepaid Expenses And Deposits [Abstract]

Schedule of prepaid expenses

	September 30, 2021		June 30, 2021
Prepaid Software	$	1,331	$	206
Prepaid Rent		962		962
Rent Deposits		1,783		1,783
Consulting Retainers		10,000		10,000
Total Prepaid expenses	$	14,076	$	12,951

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Property and Equipment (Tables)

3 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, less accumulated depreciation

	September 30, 2021			June 30, 2021			Useful life
Computers and Equipment	$	12,612		$	12,612		5 years
Third Party Software		10,291			10,291		5 years
Clinical Equipment		15,000			15,000		5 years
Total Property & Equipment	$	37,903		$	37,903
Less: accumulated depreciation		(37,903	)		(37,903	)
Total Property & Equipment - Net	$	-		$	-

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Promissory Notes – Related Party (Tables)

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of outstanding note balances

Noteholder	Interest Rate			Maturity Date	September 30, 2021		June 30, 2021
Related Party Notes:
Erhfort, LLC		15	%	12/31/21	$	100,000	$	100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
JM One Holdings, LLC		15	%	12/31/21		20,000		20,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		100,000		100,000
Erhfort, LLC		15	%	12/31/21		10,000		10,000
Erhfort, LLC		15	%	12/31/21		10,000		10,000
Viable International Investments, LLC		0	%	On Demand		7,865		7,865
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		5,000		5,000
Viable International Investments, LLC		0	%	On Demand		3,000		3,000
Viable International Investments, LLC		0	%	On Demand		15,000		-
Viable International Investments, LLC		0	%	On Demand		30,000		-
Xi’an IDI		0	%	On Demand		10,411		10,411
Total Related Party Notes					$	626,276	$	581,276

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Long-Term Debt (Tables)

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of the outstanding loan balances

Noteholder	Interest Rate			Maturity Date	September 30, 2021			June 30, 2021
Truist Bank		1	%	5/1/25	$	79,600		$	79,600
Total Debt						79,600			79,600
Current Portion of Debt						(14,510	)		(10,595	)
Total Long-term Debt					$	65,090		$	69,005

Schedule of future maturities of long-term debt

For the year ended June 30,
2022	$	10,599
2023		15,707
2024		15,866
2025		37,428
	$	79,600

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Convertible Preferred Stock (Tables)

3 Months Ended

Sep. 30, 2021

Equity [Abstract]

Schedule of preferred stock

Security	Date Issued	No. of Shares		Amount		Date of Conversion	No. of Shares Converted		Amount Converted		Balance 9/30/2021
Total Series M Cv Pfd	Various		600	$	6,000,000	Various		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												220,476
						Total redemption value					$	420,476

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Stock Options (Tables)

3 Months Ended

Sep. 30, 2021

Stock Options (Tables) [Line Items]

Schedule of stock option grants fair value of each option

	As of September 30, 2021			As of June 30, 2021
Expected volatility		23% to 44	%		23% to 44 %
Expected term		0.25 to 4.59 Years			0.5 to 4.83 Years
Risk-Free interest rate		0.05% to 3.09	%		0.05% to 3.09	%
Forfeiture rate		0.00	%		0.00	%
Expected dividend rate		0.00	%		0.00	%

Schedule of vested and unvested options

Employees/Consultants	Unvested			Vested and Exercisable			Total
Outstanding at June 30, 2020		4,123,184			10,972,649			15,095,833
Granted		1,657,102			-			1,657,102
Vested and Exercisable		(2,950,000	)		2,950,000			-
Cancelled		-			-			-
Rounding Adjustment		4			(4	)		-
Outstanding at June 30, 2021		2,830,290			13,922,645			16,752,935
Granted		-			-			-
Vested and Exercisable		-			-			-
Cancelled		-			-			-
Adjustment		-			-			-
Outstanding at September 30, 2021		2,830,290			13,922,645			16,752,935

Schedule of Information about vested & exercisable stock options

Vested & Exercisable Stock Options	September 30, 2021		June 30, 2021
Employee 2016 Equity Plan		-		-
Director 2016 Equity Plan		-		-
Employee Other Plans		12		12
Directors and Consultants Other Plans		-		-
Total		12		12

Schedule of stock options outstanding

	Outstanding Options						Vested Options
Range of Exercise price	Number Outstanding at September 30, 2021		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life		Number Exercisable at September 30, 2021		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life
$0.20 - $0.51		16,752,935	$	0.27		1.51		13,922,645	$	0.23		1.14
$350		12	$	350		.86		12	$	350		.86
Outstanding options		16,752,947	$	0.27		1.76		13,922,657	$	0.23		1.39

2016 Plan [Member]

Stock Options (Tables) [Line Items]

Schedule of stock options granted, exercised and cancelled

Employees/Consultants	Options		Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2020		15,095,833	$	0.24	2.43 Years	$	-
Granted		1,657,102	$	0.51
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at June 30, 2021		16,752,935	$	0.25	1.76 Years	$	-
Granted		-	$	-
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at September 30, 2021		16,752,935	$	0.27	1.51 Years	$	-

Employees/Consultants	Options			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2020		13		$	976	2.01 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		(1	)	$	13,500
Outstanding at June 30, 2021		12		$	350	1.11 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		-		$	-
Outstanding at September 30, 2021		12		$	350	.86 Years	$	-

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Going Concern and Management's Plans (Details)	3 Months Ended
	Sep. 30, 2021 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 134,934,188
Stockholders’ deficit	1,959,502
Working capital	1,473,936
Net loss	111,984
Net cash used in operating activities	$ 17,037

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Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Accounting Policies [Abstract]
Allowance for doubtful accounts	$ 850	$ 850
Federal deposit insurance corporation limit	250,000
Excess of federally insured limit	$ 0	$ 0
Options vested	13,922,657	13,922,657
Options non vested	2,830,290	2,830,290
Board granted options	157,102
Employee shares exercise price	$ 51
Stock option, description	Stock options are being expensed pursuant to ASC 718.
Tax position, description	Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.
Warranty reserve, description	The Company warrants all products and parts supplied for a period of 12 months from the date of installation or 15 months from the date the products was/were shipped from IDSI, whichever occurs first. Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Based on the Company’s experience, the warranty reserve was estimated based on the replacement cost of the laser and certain electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required.

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Related Party Transactions (Details)	1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 22, 2018	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)
Related Party Transactions (Details) [Line Items]
Number of agreements	2
Contract term	20 years
Percentage of transfer fee	25.00%
Amount due to related party		$ 626,276	$ 581,276
Erhfort LLC [Member]
Related Party Transactions (Details) [Line Items]
Consulting fee		25,500
David Fong [Member]
Related Party Transactions (Details) [Line Items]
Consulting fee			25,500
Erhfort, LLC One [Member]
Related Party Transactions (Details) [Line Items]
Accounts Payable		102,921	83,260
Ehrfort, LLC [Member]
Related Party Transactions (Details) [Line Items]
Accounts Payable		76,500	51,000
Fong & Associates, LLC [Member]
Related Party Transactions (Details) [Line Items]
Accounts Payable		209,500	184,000
JM One Holdings, LLC [Member]
Related Party Transactions (Details) [Line Items]
Accrued expenses		$ 6,616	$ 5,860

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Royalty Receivable (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Royalty Receivable [Abstract]
Royalty receivable balances	$ 0	$ 0

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Inventories (Details) - Schedule of inventories - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Schedule of inventories [Abstract]
Raw materials consisting of purchased parts, components and supplies	$ 92,587	$ 92,587
Finished goods	7,500	7,500
Total Inventory	100,087	100,087
Allowance for Obsolete Inventory	(100,087)	(100,087)
Net Inventory

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Prepaid Expenses and Deposits (Details) - Schedule of prepaid expenses - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Schedule of prepaid expenses [Abstract]
Prepaid Software	$ 1,331	$ 206
Prepaid Rent	962	962
Rent Deposits	1,783	1,783
Consulting Retainers	10,000	10,000
Total Prepaid expenses	$ 14,076	$ 12,951

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Property and Equipment (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 0	$ 622

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Property and Equipment (Details) - Schedule of property and equipment, less accumulated depreciation - USD ($)	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Property, Plant and Equipment [Line Items]
Total Property & Equipment	$ 37,903	$ 37,903
Less: accumulated depreciation	(37,903)	(37,903)
Total Property & Equipment - Net
Computers and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total Property & Equipment	$ 12,612	12,612
Useful life	5 years
Third Party Software [Member]
Property, Plant and Equipment [Line Items]
Total Property & Equipment	$ 10,291	10,291
Useful life	5 years
Clinical Equipment [Member]
Property, Plant and Equipment [Line Items]
Total Property & Equipment	$ 15,000	$ 15,000
Useful life	5 years

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Accounts Payable and Accrued Expenses (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Payables and Accruals [Abstract]
Accounts payable and accrued expenses	$ 568,643	$ 472,571
Accounts payable	560,948	465,799
Other accrued expenses	$ 7,695	$ 6,772

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Accrued Payroll Taxes and Penalties (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021	Jun. 27, 2018
Accrued Payroll Taxes And Penalties Disclosure [Abstract]
Accrued payroll taxes	$ 314,019	$ 314,019
Balance of taxes due			$ 381,224
Interest and penalties	314,019
Remaining interest and penalties	314,019
Owed to the IRS	$ 314,019

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Promissory Notes – Related Party (Details) - Viable International Investments [Member]	3 Months Ended
	Sep. 30, 2021 USD ($)
Promissory Notes – Related Party (Details) [Line Items]
Proceeds from loan received	$ 45,000
Annual intrest rates, percentage	0.00%

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Promissory Notes – Related Party (Details) - Schedule of outstanding note balances - USD ($)	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Total Related Party Notes
Total Related Party Notes	$ 626,276	$ 581,276
Erhfort, LLC [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 100,000	100,000
Erhfort, LLC One [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 100,000	100,000
JM One Holdings, LLC [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	JM One Holdings, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 20,000	20,000
Erhfort, LLC Two [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 100,000	100,000
Erhfort, LLC Three [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 100,000	100,000
Erhfort, LLC Four [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 100,000	100,000
Erhfort, LLC Five [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 10,000	10,000
Erhfort, LLC Six [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Erhfort, LLC
Interest Rate	15.00%
Maturity Date	12/31/21
Total Related Party Notes	$ 10,000	10,000
Viable International Investments, LLC [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 7,865	7,865
Viable International Investments, LLC One [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 5,000	5,000
Viable International Investments, LLC Two [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 5,000	5,000
Viable International Investments, LLC Three [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 5,000	5,000
Viable International Investments, LLC Four [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 5,000	5,000
Viable International Investments, LLC Five [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 3,000	3,000
Viable International Investments, LLC Six [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 15,000
Viable International Investments, LLC Seven [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Viable International Investments, LLC
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 30,000
Xi’an IDI [Member]
Promissory Notes – Related Party (Details) - Schedule of outstanding note balances [Line Items]
Noteholder	Xi’an IDI
Interest Rate	0.00%
Maturity Date	On Demand
Total Related Party Notes	$ 10,411	$ 10,411

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Long-Term Debt (Details) - USD ($)	1 Months Ended		3 Months Ended	12 Months Ended
	Oct. 30, 2021	May 09, 2020	Sep. 30, 2021	Jun. 30, 2021
Long-Term Debt (Details) [Line Items]
Loan amount		$ 79,600
Interest rate	1.00%
PPP Loan [Member]
Long-Term Debt (Details) [Line Items]
Accrued interest			$ 1,079	$ 912

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Long-Term Debt (Details) - Schedule of the outstanding loan balances - USD ($)	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Debt Instrument [Line Items]
Total Debt	$ 79,600	$ 79,600
Current Portion of Debt	(14,510)	(10,595)
Total Long-term Debt	$ 65,090	69,005
Truist Bank [Member]
Debt Instrument [Line Items]
Interest Rate	1.00%
Maturity Date	May 01, 2025
Total Debt	$ 79,600	$ 79,600

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Long-Term Debt (Details) - Schedule of future maturities of long-term debt	Sep. 30, 2021 USD ($)
Schedule of future maturities of long-term debt [Abstract]
2022	$ 10,599
2023	15,707
2024	15,866
2025	37,428
Total debt	$ 79,600

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Convertible Preferred Stock (Details) - USD ($)	Jan. 06, 2011	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2010
Convertible Preferred Stock (Details) [Line Items]
Redemption value		$ 220,476	$ 215,939
Total temporary equity		420,476	415,939
Series L Convertible Preferred Stock [Member]
Convertible Preferred Stock (Details) [Line Items]
Converted short term promissory note				$ 350,000
Convertible preferred stock (in Shares)				35
Original purchase price				$ 10,000
Annual rate				9.00%
Conversion of preferred stock to common stock (in Shares)				474
Convertible preferred stock, terms of conversion	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.
Total temporary equity		$ 420,476
Series M Preferred Stock [Member]
Convertible Preferred Stock (Details) [Line Items]
Convertible preferred stock (in Shares)		147,283
Original purchase price		$ 10,000
Annual rate		9.00%
Total temporary equity		$ 0	$ 0
Other equity securities (in Dollars per share)		$ 10,000
Balance shares (in Shares)		0	0

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Convertible Preferred Stock (Details) - Schedule of preferred stock	3 Months Ended
	Sep. 30, 2021 USD ($) shares
Series M Cv Pfd [Member]
Auction Market Preferred Securities, Stock Series [Line Items]
Date Issued
No. of shares (in Shares) | shares	600
Amount of designated preferred shares	$ 6,000,000
Date of Conversion
No. of Shares Converted (in Shares) | shares	600
Amount converted	$ 6,000,000
Balance	0
Dividends	$ 0
Balance	Total redemption value
Balance	$ 0
Series L Cv Pfd [Member]
Auction Market Preferred Securities, Stock Series [Line Items]
Dividends	$ 220,476
Balance	Total redemption value
Balance	$ 420,476
Series L Cv Pfd [Member] | 2/10/2010 [Member]
Auction Market Preferred Securities, Stock Series [Line Items]
Date Issued	Feb. 10, 2010
No. of shares (in Shares) | shares	35
Amount of designated preferred shares	$ 350,000
Date of Conversion	Jan. 06, 2011
No. of Shares Converted (in Shares) | shares	15
Amount converted	$ 150,000
Balance	$ 200,000

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Common Stock (Details) - shares	Sep. 30, 2021	Jun. 30, 2021
Stockholders' Equity Note [Abstract]
Common stock, shares authorized	500,000,000	500,000,000
Preferred stock, shares authorized	2,000,000	2,000,000

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Stock Options (Details) - USD ($)			3 Months Ended
	May 01, 2021	Aug. 01, 2020	Sep. 30, 2021
Share-based Payment Arrangement [Abstract]
Granted options to purchase shares	1,500,000	157,102
Estimated vesting expense (in Dollars)			$ 440,459
Stock options, description			The previous five plans through and including the 2012 Non-Statutory Plan have a remaining total of options vested and exercisable to purchase 12 shares at exercise price of $350 per share.
Purchase exercise price (in Dollars per share)			$ 0.1

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Stock Options (Details) - Schedule of stock option grants fair value of each option	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Stock Options (Details) - Schedule of stock option grants fair value of each option [Line Items]
Forfeiture rate	0.00%	0.00%
Expected dividend rate	0.00%	0.00%
Minimum [Member]
Stock Options (Details) - Schedule of stock option grants fair value of each option [Line Items]
Expected volatility	23.00%	23.00%
Expected term	3 months	6 months
Risk-Free interest rate	0.05%	0.05%
Maximum [Member]
Stock Options (Details) - Schedule of stock option grants fair value of each option [Line Items]
Expected volatility	44.00%	44.00%
Expected term	4 years 7 months 2 days	4 years 9 months 29 days
Risk-Free interest rate	3.09%	3.09%

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Stock Options (Details) - Schedule of stock options granted, exercised and cancelled - 2016 Plan [Member] - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Stock Options (Details) - Schedule of stock options granted, exercised and cancelled [Line Items]
Options, Outstanding	16,752,935	15,095,833
Wtd. Avg. Exercise Price, Outstanding	$ 0.25	$ 0.24
Wtd. Avg. Remaining Term, Outstanding		2 years 5 months 4 days
Aggregate Intrinsic Value, Outstanding
Options, Granted		1,657,102
Wtd. Avg. Exercise Price, Granted		$ 0.51
Aggregate Intrinsic Value, Granted
Options, Exercised
Wtd. Avg. Exercise Price, Exercised
Aggregate Intrinsic Value, Exercised
Options, Cancelled
Wtd. Avg. Exercise Price, Cancelled
Aggregate Intrinsic Value, Cancelled
Options, Outstanding	16,752,935	16,752,935
Wtd. Avg. Exercise Price, Outstanding	$ 0.27	$ 0.25
Wtd. Avg. Remaining Term, Outstanding	1 year 6 months 3 days	1 year 9 months 3 days
Aggregate Intrinsic Value, Outstanding
Vested and Unvested Options [Member]
Stock Options (Details) - Schedule of stock options granted, exercised and cancelled [Line Items]
Options, Outstanding	12	13
Wtd. Avg. Exercise Price, Outstanding	$ 350	$ 976
Wtd. Avg. Remaining Term, Outstanding		2 years 3 days
Aggregate Intrinsic Value, Outstanding
Options, Granted
Wtd. Avg. Exercise Price, Granted
Aggregate Intrinsic Value, Granted
Options, Exercised
Wtd. Avg. Exercise Price, Exercised
Aggregate Intrinsic Value, Exercised
Options, Cancelled		(1)
Wtd. Avg. Exercise Price, Cancelled		$ 13,500
Aggregate Intrinsic Value, Cancelled
Options, Outstanding	12	12
Wtd. Avg. Exercise Price, Outstanding	$ 350	$ 350
Wtd. Avg. Remaining Term, Outstanding	86 years	1 year 1 month 9 days
Aggregate Intrinsic Value, Outstanding

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Stock Options (Details) - Schedule of vested and unvested options - shares	3 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Stock Options (Details) - Schedule of vested and unvested options [Line Items]
Outstanding beginning balance	16,752,935	15,095,833
Granted		1,657,102
Vested and Exercisable
Cancelled
Rounding Adjustment
Outstanding ending balance	16,752,935	16,752,935
Unvested [Member]
Stock Options (Details) - Schedule of vested and unvested options [Line Items]
Outstanding beginning balance	2,830,290	4,123,184
Granted		1,657,102
Vested and Exercisable		(2,950,000)
Cancelled
Rounding Adjustment		4
Outstanding ending balance	2,830,290	2,830,290
Vested and Exercisable [Member]
Stock Options (Details) - Schedule of vested and unvested options [Line Items]
Outstanding beginning balance	13,922,645	10,972,649
Granted
Vested and Exercisable		2,950,000
Cancelled
Rounding Adjustment		(4)
Outstanding ending balance	13,922,645	13,922,645

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Stock Options (Details) - Schedule of Information about vested & exercisable stock options - shares	Sep. 30, 2021	Jun. 30, 2021
Stock Options (Details) - Schedule of Information about vested & exercisable stock options [Line Items]
Vested & Exercisable Stock Options, total	12	12
Employee Two Thousand Sixteen Plan [Member]
Stock Options (Details) - Schedule of Information about vested & exercisable stock options [Line Items]
Vested & Exercisable Stock Options, total
Director Two Thousand Sixteen Equity Plan [Member]
Stock Options (Details) - Schedule of Information about vested & exercisable stock options [Line Items]
Vested & Exercisable Stock Options, total
Employee Other Plans [Member]
Stock Options (Details) - Schedule of Information about vested & exercisable stock options [Line Items]
Vested & Exercisable Stock Options, total	12	12
Directors and Consultants Other Plans [Member]
Stock Options (Details) - Schedule of Information about vested & exercisable stock options [Line Items]
Vested & Exercisable Stock Options, total

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Stock Options (Details) - Schedule of stock options outstanding	3 Months Ended
	Sep. 30, 2021 $ / shares shares
Outstanding Options [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of outstanding | shares	16,752,947
Weighted Averaged Exercise Price (in Dollars per share) | $ / shares	$ 0.27
Weighted Averaged Remaining Life	1 year 9 months 3 days
Vested Options [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Weighted Averaged Exercise Price (in Dollars per share) | $ / shares	$ 0.23
Weighted Averaged Remaining Life	1 year 4 months 20 days
Number of Exercisable | shares	13,922,657
$0.20 - $0.51 [Member] | Outstanding Options [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of outstanding | shares	16,752,935
Weighted Averaged Exercise Price (in Dollars per share) | $ / shares	$ 0.27
Weighted Averaged Remaining Life	1 year 6 months 3 days
$0.20 - $0.51 [Member] | Vested Options [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Weighted Averaged Exercise Price (in Dollars per share) | $ / shares	$ 0.23
Weighted Averaged Remaining Life	1 year 1 month 20 days
Number of Exercisable | shares	13,922,645
$350 [Member] | Outstanding Options [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of outstanding | shares	12
Weighted Averaged Exercise Price (in Dollars per share) | $ / shares	$ 350
Weighted Averaged Remaining Life	86 years
$350 [Member] | Vested Options [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Weighted Averaged Exercise Price (in Dollars per share) | $ / shares	$ 350
Weighted Averaged Remaining Life	86 years
Number of Exercisable | shares	12

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Commitments and Contingencies (Details) - USD ($)		1 Months Ended
	Aug. 04, 2014	Oct. 23, 2019	Sep. 30, 2021	Jun. 29, 2018	Jun. 27, 2018	Sep. 04, 2014	Jun. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
Product liability insurance			$ 3,000,000
Accrued payroll taxes, interest and penalties							$ 1,489,640
Purchase of convertible preferred stock | shares (in Shares)	250
Convertible preferred stock value	$ 2,500,000
Voting and economic interest percentage	78.90%
Lump sum payment						$ 250,000
Monthly installment payments						$ 20,000
Balance of taxes due					$ 381,224
Penalties and interest totaling				$ 314,019
Balance owed to IRS			$ 314,019
Payment of satisfactory completion		$ 500,000