☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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13-3465289
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $.005 par value
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OTC OB
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☑
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(Do not check if a smaller reporting company)
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Emerging growth company ☐
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Page
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4
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PART I
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Item 1
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5
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Item 1A
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8
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Item 1B
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8
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Item 2
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8
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Item 3
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8
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Item 4
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8
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PART II
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Item 5
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9
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Item 6
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9
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Item 7
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10
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Item 7A
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11
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Item 8
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12
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Item 9
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25
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Item 9A
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25
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Item 9B
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26
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PART III
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Item 10
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27
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Item 11
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29
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Item 12
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29
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Item 13
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30
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Item 14
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31
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PART IV
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Item 15
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32
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33
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•
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A new product concept to be marketed under the name iMetabolic “Catalyst”, which is intended to provide the essential vitamins and plant compounds that are necessary to aid in metabolic functions. Such ingredients include broad spectrum B-Complex Vitamins, as well as Green Tea Extract and Resveratrol (polyphenols).
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•
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A new product concept to be marketed under the name iMetabolic “Mini-Meal”, which is intended to provide the essential whey protein isolate intake for a person who is on a four-to-five meal per day diet or needs a snack that will act as a low-calorie, high nutritional value appetite suppressant.
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•
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A new product concept to be marketed under the name iMetabolic “Multi-Pro”, which is intended to provide the essential broad-spectrum vitamins and minerals that are typically marketed as “multi-vitamin supplements;” however, this product is specifically tailored to dovetail with the “Catalyst” so as to virtually eliminate the duplicate consumption of overlapping ingredients that routinely plagues supplement users.
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•
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A new product concept to be marketed under the name iMetabolic “BittX.” This product is premised on the scientific theory that modern horticulture and food producers have systematically promoted foods that are sweet or lack bitterness, which is the flavor typically associated with foods that have the greatest health benefits. Accordingly, this product is intended to reform the body’s disposition toward bitter foods in a subtle, inoffensive way.
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ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Price Range
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|||||||
Fiscal Year Ended June 30, 2017:
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High
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Low
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||||||
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||||||||
Quarter Ended:
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||||||||
September 30, 2016
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$
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0.04
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$
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0.0025
|
||||
December 31, 2016
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$
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0.025
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$
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0.0111
|
||||
March 31, 2017
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$
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0.0369
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$
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0.007
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||||
June 30, 2017
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$
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0.01
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$
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0.0042
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||||
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||||||||
Fiscal Year Ended June 30, 2016:
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||||||||
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||||||||
Quarter Ended:
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||||||||
September 30, 2015
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$
|
0.05
|
$
|
0.05
|
||||
December 31, 2015
|
$
|
0.23
|
$
|
0.23
|
||||
March 31, 2016
|
$
|
0.0216
|
$
|
0.0216
|
||||
June 30, 2016
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$
|
0.04
|
$
|
0.04
|
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Page
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13
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14
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15
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16
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17
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18-24
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PART I. |
FINANCIAL INFORMATION
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Item 1. |
Financial Statements
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As of June 30,
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|||||||
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2017
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2016
|
||||||
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||||||||
ASSETS
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||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
65,308
|
$
|
1,619
|
||||
|
||||||||
Total current assets
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65,308
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1,619
|
||||||
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||||||||
TOTAL ASSETS
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$
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65,308
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$
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1,619
|
||||
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||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
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||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
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$
|
40,202
|
$
|
27,271
|
||||
Accrued liabilities
|
70,758
|
5,760
|
||||||
Convertible note payable
|
50,000
|
—
|
||||||
Convertible note payable – related party
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15,000
|
—
|
||||||
Total current liabilities
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175,960
|
33,031
|
||||||
|
||||||||
Total Liabilities
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$
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175,960
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$
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33,031
|
||||
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||||||||
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||||||||
STOCKHOLDERS’ DEFICIT:
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||||||||
Common stock, $.005 par value 200,000,000 authorized: 79,766,636 and 78,766,636
issued and outstanding as of June 30, 2017 and June 30, 2016, respectively
|
398,833
|
393,833
|
||||||
Preferred stock, $.01 par value 10,000,000 authorized: none issued and outstanding as
of June 30, 2017 and June 30, 2016, respectively
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—
|
—
|
||||||
Additional paid-in capital
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(265,405
|
)
|
(285,405
|
)
|
||||
Accumulated deficit
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(244,080
|
)
|
(139,840
|
)
|
||||
|
||||||||
Total stockholders’ deficit
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(110,652
|
)
|
(31,412
|
)
|
||||
|
||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
65,308
|
$
|
1,619
|
|
Years Ended June 30,
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|||||||
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2017
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2016
|
||||||
|
||||||||
OPERATING EXPENSES:
|
||||||||
General and administrative
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$
|
4,348
|
$
|
78,518
|
||||
Professional fees
|
34,894
|
—
|
||||||
|
||||||||
Total Operating Expenses
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39,242
|
78,518
|
||||||
|
||||||||
OPERATING LOSS
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(39,242
|
)
|
(78,518
|
)
|
||||
|
||||||||
OTHER INCOME:
|
||||||||
Interest Income
|
—
|
16
|
||||||
|
||||||||
Total Other Income
|
—
|
16
|
||||||
|
||||||||
OTHER EXPENSE: | ||||||||
Interest Expense
|
(64,998
|
)
|
—
|
|||||
Total Other Expense
|
(64,998
|
)
|
—
|
|||||
NET LOSS
|
$
|
(104,240
|
)
|
$
|
(78,502
|
)
|
||
|
||||||||
BASIC AND DILUTED PER SHARE DATA:
|
||||||||
Net Loss per common share, basic and diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
Weighted average common shares outstanding, basic and diluted
|
79,750,198
|
78,766,636
|
Additional
|
||||||||||||||||||||
Common Stock
|
Paid-In
|
Accumulated
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
Balances at June 30, 2015
|
78,766,636
|
393,833
|
(285,405
|
)
|
(61,338
|
)
|
47,090
|
|||||||||||||
Net loss
|
—
|
—
|
—
|
(78,502
|
)
|
(78,502
|
)
|
|||||||||||||
Balances at June 30, 2016
|
78,766,636
|
$
|
393,833
|
$
|
(285,405
|
)
|
(139,840
|
)
|
(31,412
|
)
|
||||||||||
Common stock issued for cash
|
1,000,000
|
5,000
|
20,000
|
—
|
25,000
|
|||||||||||||||
Net loss
|
—
|
—
|
—
|
(104,240
|
)
|
(104,240
|
)
|
|||||||||||||
Balances at June 30, 2017
|
79,766,636
|
$
|
398,833
|
$
|
(265,405
|
)
|
(244,080
|
)
|
(110,652
|
)
|
|
||||||||
|
Years Ended June 30,
|
|||||||
|
2017
|
2016
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(104,240
|
)
|
$
|
(78,502
|
)
|
||
Adjustment to reconcile net loss to net cash used in operating activities:
|
||||||||
Changes in assets and liabilities:
|
||||||||
Accounts Payable
|
12,931
|
15,483
|
||||||
Accrued Interest
|
64,998
|
|||||||
|
||||||||
Net Cash Used In Operating Activities
|
(26,311
|
)
|
(63,019
|
)
|
||||
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from Sale of Common Stock
|
25,000
|
—
|
||||||
Proceeds from Convertible Notes Payable – Related Party
|
15,000
|
—
|
||||||
Proceeds from Convertible Notes Payable
|
50,000
|
—
|
||||||
|
||||||||
Net Cash Provided by Financing Activities
|
90,000
|
—
|
||||||
|
||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
63,689
|
(63,019
|
)
|
|||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
1,619
|
64,638
|
||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
65,308
|
$
|
1,619
|
||||
|
||||||||
SUPPLEMENTAL DISCLOSURES:
|
||||||||
Income tax paid
|
$
|
—
|
$
|
—
|
||||
Interest paid
|
$
|
—
|
$
|
—
|
|
2017
|
2016
|
||||||
|
||||||||
Federal loss carryforwards
|
$
|
85,428
|
$
|
48,944
|
||||
State loss carryforwards
|
—
|
—
|
||||||
Other
|
—
|
—
|
||||||
|
85,428
|
48,944
|
||||||
Less: valuation allowances
|
(85,428
|
)
|
(48,944
|
)
|
||||
|
||||||||
|
$
|
—
|
$
|
—
|
(a) |
Effective as of July 1, 2016, the Company issued 1,000,000 shares of its Common Stock for cash of $25,000.
|
|
Weighted
|
|||||||
|
Number of
|
Average
|
||||||
|
Options
|
Exercise Price
|
||||||
|
||||||||
Outstanding at June 30, 2015
|
3,362,767
|
$
|
0.13
|
|||||
Granted
|
—
|
—
|
||||||
Exercised
|
—
|
—
|
||||||
Expired
|
(1,260,000
|
)
|
0.13
|
|||||
Forfeited
|
—
|
—
|
||||||
Outstanding at June 30, 2016
|
2,102,767
|
$
|
0.13
|
|||||
Granted
|
—
|
—
|
||||||
Exercised
|
—
|
—
|
||||||
Expired
|
(870,000
|
)
|
0.24
|
|||||
Forfeited
|
—
|
—
|
||||||
Outstanding at June 30, 2017
|
1,232,767
|
$
|
0.01
|
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||
|
Average
|
Weighted
|
Average
|
Weighted
|
||||||||||||||||||||||||||||
|
Number
|
Remaining
|
Average
|
Aggregate
|
Remaining
|
Average
|
Aggregate
|
|||||||||||||||||||||||||
Exercise
|
of
|
Contractual
|
Exercise
|
Intrinsic
|
Number of
|
Contractual
|
Exercise
|
Intrinsic
|
||||||||||||||||||||||||
Price
|
Shares
|
Life (Years)
|
Price
|
Value
|
Shares
|
Life (Years)
|
Price
|
Value
|
||||||||||||||||||||||||
$0.13
|
32,767
|
0.17
|
$
|
0.13
|
$
|
—
|
32,767
|
0.17
|
$
|
0.13
|
$
|
—
|
||||||||||||||||||||
$0.05
|
1,200,000
|
1.60
|
$
|
0.05
|
$
|
—
|
1,200,000
|
1.60
|
$
|
0.05
|
$
|
—
|
||||||||||||||||||||
|
1,232,767
|
1,232,767
|
|
||||||||||||||||||||||||||||||||
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||
|
Average
|
Weighted
|
Average
|
Weighted
|
||||||||||||||||||||||||||||
|
Number
|
Remaining
|
Average
|
Aggregate
|
Remaining
|
Average
|
Aggregate
|
|||||||||||||||||||||||||
Exercise
|
of
|
Contractual
|
Exercise
|
Intrinsic
|
Number of
|
Contractual
|
Exercise
|
Intrinsic
|
||||||||||||||||||||||||
Price
|
Shares
|
Life (Years)
|
Price
|
Value
|
Shares
|
Life (Years)
|
Price
|
Value
|
||||||||||||||||||||||||
$0.25
|
750,000
|
0.03
|
$
|
0.25
|
$
|
—
|
750,000
|
0.03
|
$
|
0.25
|
$
|
—
|
||||||||||||||||||||
$0.13-$0.16
|
152,767
|
1.04
|
$
|
0.15
|
$
|
—
|
152,767
|
1.04
|
$
|
0.15
|
$
|
—
|
||||||||||||||||||||
$0.05
|
1,200,000
|
2.60
|
$
|
0.05
|
$
|
—
|
1,200,000
|
2.60
|
$
|
0.05
|
$
|
—
|
||||||||||||||||||||
|
2,102,767
|
2,102,767
|
|
||||||||
|
Weighted
|
|||||||
|
Number of
|
Average
|
||||||
|
Shares
|
Exercise
Price |
||||||
|
||||||||
Warrants outstanding - June 30, 2015
|
8,155,748
|
$
|
0.75
|
|||||
Granted
|
—
|
—
|
||||||
Expired
|
—
|
—
|
||||||
|
||||||||
Warrants outstanding - June 30, 2016
|
8,155,478
|
$
|
0.75
|
|||||
Granted
|
—
|
—
|
||||||
Expired
|
3,655,000
|
0.75
|
||||||
Warrants outstanding – June 30, 2017
|
4,500,748
|
$
|
0.75
|
|
||||||||||||||||||||||||||||||||
|
Warrants Outstanding
|
Warrants Exercisable
|
||||||||||||||||||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||
|
Average
|
Weighted
|
Average
|
Weighted
|
||||||||||||||||||||||||||||
|
Number
|
Remaining
|
Average
|
Aggregate
|
Remaining
|
Average
|
Aggregate
|
|||||||||||||||||||||||||
Exercise
|
of
|
Contractual
|
Exercise
|
Intrinsic
|
Number of
|
Contractual
|
Exercise
|
Intrinsic
|
||||||||||||||||||||||||
Price
|
Warrants
|
Life (Years)
|
Price
|
Value
|
Warrants
|
Life (Years)
|
Price
|
Value
|
||||||||||||||||||||||||
$0.75
|
4,500,748
|
0.01
|
$
|
0.75
|
$
|
—
|
4,500,748
|
0.01
|
$
|
0.75
|
$
|
—
|
||||||||||||||||||||
|
4,500,748
|
4.500,748
|
|
||||||||||||||||||||||||||||||||
|
Warrants Outstanding
|
Warrants Exercisable
|
||||||||||||||||||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||
|
Average
|
Weighted
|
Average
|
Weighted
|
||||||||||||||||||||||||||||
|
Number
|
Remaining
|
Average
|
Aggregate
|
Remaining
|
Average
|
Aggregate
|
|||||||||||||||||||||||||
Exercise
|
of
|
Contractual
|
Exercise
|
Intrinsic
|
Number of
|
Contractual
|
Exercise
|
Intrinsic
|
||||||||||||||||||||||||
Price
|
Warrants
|
Life (Years)
|
Price
|
Value
|
Warrants
|
Life (Years)
|
Price
|
Value
|
||||||||||||||||||||||||
$0.75
|
8,155,478
|
0.03
|
$
|
0.75
|
$
|
—
|
8,155,478
|
0.03
|
$
|
0.75
|
$
|
—
|
||||||||||||||||||||
|
8.155.478
|
8.155.478
|
Name
|
|
Age
|
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Position
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Director Since
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Mark W. Conte
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56
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President, Chief Executive Officer, Director
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March 16, 2015
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Kevin J. Pikero
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61
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Chief Financial Officer, Director
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March 16, 2015
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Andrew D. Smith
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58
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Director
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March 16, 2015
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All Other
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Salary
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Compensation
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Total
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Name and Principal Position
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|
Year
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|
($)
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($)
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|
($)
|
|
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|
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|
|
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|
|
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Mark W. Conte (1)
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|
2017
|
|
—
|
|
—
|
|
—
|
|
President, Chief (Principal) Executive Officer, Director
|
|
2016
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
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Kevin J. Pikero (1)
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|
2017
|
|
—
|
|
—
|
|
—
|
|
Chief (Principal) Financial Officer and Director
|
|
2016
|
|
—
|
|
—
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|
—
|
|
|
|
|
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|
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|
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Andrew D. Smith (1)
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2017
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|
—
|
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—
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—
|
|
Director
|
|
2016
|
|
—
|
|
—
|
|
—
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|
(1) |
Messrs. Conte, Pikero and Smith were appointed to their positions on March 16, 2015.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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Amount and Nature of Beneficial Ownership
|
||||
Name and Address of Beneficial Owner (1)
|
Nature of
Security |
Number of
Shares |
Percentage of
Common Stock (1) |
|||
|
|
|
|
|
|
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Mark W. Conte
|
|
Common Stock
|
|
3,900,000 (1)
|
|
5.0% (2)
|
President, Chief (Principal) Executive Officer, Director
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|
|
|
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|
|
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|
|
|
|
|
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Kevin J. Pikero
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Common Stock
|
|
1,500,000 (1)
|
|
1.9%
|
Chief (Principal) Financial Officer and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
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Andrew D. Smith
|
|
Common Stock
|
|
3,900,000 (1)
|
|
5.0% (2)
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Director
|
|
|
|
|
|
|
|
|
|
|
|
|
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All directors and executive officers as a group (3 persons)
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|
Common Stock
|
|
9,300,000 (1)
|
|
11.8%
|
(1) |
Applicable percentage of ownership is based on 79,766,636 shares of common stock outstanding as of June 30, 2017, together with securities exercisable or convertible into shares of common stock within sixty (60) days of June 30, 2017, for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants exercisable or convertible into shares of common stock that are currently exercisable or exercisable within sixty (60) days of June 30, 2017, are deemed to be beneficially owned by the person holding such options or warrants for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Currently none of the officers or directors of the Company hold options or warrants of the Company.
|
(2) |
Share percentages reflect single digit rounding. Actual share ownership to two decimal points is less than 5.0%.
|
|
Year Ended
June 30, 2017 |
Year Ended
June 30, 2016 |
||||||
|
||||||||
Audit Fees (1)
|
$
|
17,000
|
$
|
14,000
|
||||
Audit-Related Fees (2)
|
$
|
0
|
$
|
0
|
||||
Tax Fees (3)
|
$
|
800
|
$
|
0
|
||||
All Other Fees (4)
|
$
|
0
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$
|
0
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(1) |
Audit Fees. Audit fees include fees for professional services performed for the audit of our annual consolidated financial statements, review of quarterly consolidated financial statements included in our SEC filings, and assistance and issuance of consents associated with other SEC filings.
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(2) |
Audit-Related Fees. Audit-related fees are fees for assurance and related services that are reasonably related to the audit. This category includes fees related to assistance consulting on financial accounting/reporting standards.
|
(3) |
Tax Fees. Tax fees primarily include professional services performed with respect to preparation of our federal and state tax returns for our consolidated subsidiaries.
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(4) |
All Other Fees. All other fees include products and services provided, other than the services reported comprising Audit Fees, Audit Related Fees and Tax Fees.
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Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
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21.1*
|
|
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31.1*
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|
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31.2*
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32.1*
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101.INS*
|
|
XBRL Instance Document**
|
101.SCH*
|
|
XBRL Extension Schema Document**
|
101.CAL*
|
|
XBRL Extension Calculation Linkbase Document**
|
101.DEF*
|
|
XBRL Extension Definition Linkbase Document**
|
101.LAB*
|
|
XBRL Extension Labels Linkbase Document**
|
101.PRE*
|
|
XBRL Extension Presentation Linkbase Document**
|
* |
Filed herewith.
|
** |
In accordance with Rule 406T of Regulation S-T, this information is deemed not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
UPD HOLDING CORP.
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Date: October 13, 2017
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By:
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/s/ Mark W. Conte
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Mark W. Conte
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President and Chief Executive Officer
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|
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(Principal Executive Officer)
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|
|
|
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Date: October 13, 2017
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By:
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/s/ Kevin J. Pikero
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Kevin J. Pikero
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|
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Chief Financial Officer
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|
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(Principal Financial Officer)
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Name
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|
Title
|
|
Date
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|
|
|
|
|
|
|
|
|
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/s/ Mark W. Conte
|
|
President, Chief Executive Officer, Director
|
|
October 13, 2017
|
Mark W. Conte
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Kevin J. Pikero
|
|
Chief Financial Officer, Director
|
|
October 13, 2017
|
Kevin J. Pikero
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
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/s/ Andrew D. Smith
|
|
Director
|
|
October 13, 2017
|
Andrew D. Smith
|
|
|
|
|
EXHIBIT 21.1
SUBSIDIARIES
OF
UPD HOLDING CORP.,
A NEVADA CORPORATION
Entity | Jurisdiction of Incorporation or Organization | % Ownership | ||||
iMetabolic Corp. | Nevada | 100% | ||||
Net Edge Devices, LLC | Arizona | 100% |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Mark W. Conte, certify that:
1. | I have reviewed this Annual Report on Form 10-K of UPD Holding Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer 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 control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: October 13, 2017 | /s/ Mark W. Conte |
Mark W. Conte | |
Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Kevin J. Pikero, certify that:
1. | I have reviewed this Annual Report on Form 10-K of UPD Holding Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer 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 control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: October 13, 2017 | /s/ Kevin J. Pikero |
Kevin J. Pikero | |
Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
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 Annual Report of UPD Holding Corp. (the “Company”) on Form 10-K for the fiscal year ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers 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 our knowledge:
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 results of operations of the Company, as of, and for the periods presented in the Report. |
Date: October 13, 2017 | /s/ Mark W. Conte |
Mark W. Conte | |
Chief Executive Officer |
/s/ Kevin J. Pikero | |
Kevin J. Pikero | |
Chief Financial Officer |
Document and Entity Information - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Oct. 13, 2017 |
|
Document And Entity Information | ||
Entity Registrant Name | UPD HOLDING CORP. | |
Entity Central Index Key | 0000836937 | |
Document Type | 10-K | |
Trading Symbol | ESWB | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 414,787 | |
Entity Common Stock, Shares Outstanding | 81,266,636 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2017 |
CONSOLIDATED BALANCE SHEETS - USD ($) |
Jun. 30, 2017 |
Jun. 30, 2016 |
---|---|---|
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 65,308 | $ 1,619 |
Total current assets | 65,308 | 1,619 |
TOTAL ASSETS | 65,308 | 1,619 |
CURRENT LIABILITIES: | ||
Accounts payable | 40,202 | 27,271 |
Accrued liabilities | 70,758 | 5,760 |
Convertible note payable | 50,000 | |
Convertible note payable - related party | 15,000 | |
Total current liabilities | 175,960 | 33,031 |
Total Liabilities | 175,960 | 33,031 |
STOCKHOLDERS' DEFICIT: | ||
Common stock, $.005 par value 200,000,000 authorized: 79,766,636 and 78,766,636 issued and outstanding as of June 30, 2017 and June 30, 2016, respectively | 398,833 | 393,833 |
Preferred stock, $.01 par value 10,000,000 authorized: none issued and outstanding as of June 30, 2017 and June 30, 2016, respectively | ||
Additional paid-in capital | (265,405) | (285,405) |
Accumulated deficit | (244,080) | (139,840) |
Total stockholders' deficit | (110,652) | (31,412) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 65,308 | $ 1,619 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2017 |
Jun. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 79,766,636 | 78,766,636 |
Common stock, outstanding | 79,766,636 | 78,766,636 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
OPERATING EXPENSES: | ||
General and administrative | $ 4,348 | $ 78,518 |
Professional fees | 34,894 | |
Total Operating Expenses | 39,242 | 78,518 |
OPERATING LOSS | (39,242) | (78,518) |
OTHER INCOME: | ||
Interest Income | 16 | |
Total Other Income | 16 | |
OTHER EXPENSE: | ||
Interest Expense | (64,998) | |
Total Other Expense | (64,998) | |
NET LOSS | $ (104,240) | $ (78,502) |
BASIC AND DILUTED PER SHARE DATA: | ||
Net Loss per common share, basic and diluted (in dollars per share) | $ (0.00) | $ (0.00) |
Weighted average common shares outstanding, basic and diluted (in shares) | 79,750,198 | 78,766,636 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Accumulated Deficit [Member] |
Total |
---|---|---|---|---|
Beginning balance at Jun. 30, 2015 | $ 393,833 | $ (285,405) | $ (61,338) | $ 47,090 |
Beginning balance (in shares) at Jun. 30, 2015 | 78,766,636 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (78,502) | (78,502) | ||
Ending balance at Jun. 30, 2016 | $ 393,833 | (285,405) | (139,840) | (31,412) |
Ending balance (in shares) at Jun. 30, 2016 | 78,766,636 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock issued for cash | $ 5,000 | 20,000 | 25,000 | |
Common stock issued for cash (in shares) | 1,000,000 | |||
Net loss | (104,240) | (104,240) | ||
Ending balance at Jun. 30, 2017 | $ 398,833 | $ (265,405) | $ (244,080) | $ (110,652) |
Ending balance (in shares) at Jun. 30, 2017 | 79,766,636 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (104,240) | $ (78,502) |
Changes in assets and liabilities: | ||
Accounts Payable | 12,931 | 15,483 |
Accrued Interest | 64,998 | |
Net Cash Used In Operating Activities | (26,311) | (63,019) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Sale of Common Stock | 25,000 | |
Proceeds from Convertible Notes Payable - Related Party | 15,000 | |
Proceeds from Convertible Notes Payable | 50,000 | |
Net Cash Provided by Financing Activities | 90,000 | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 63,689 | (63,019) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,619 | 64,638 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 65,308 | 1,619 |
SUPPLEMENTAL DISCLOSURES: | ||
Income tax paid | ||
Interest paid |
BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES; GOING CONCERN |
12 Months Ended |
---|---|
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES; GOING CONCERN | NOTE 1 – BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES; GOING CONCERN
Business, Operations and Organization
Esio Water & Beverage Development Corp. was incorporated in Nevada in June 1988 as Richard Barrie Fragrances, Inc. Over the years, the Company changed its name several times, most recently from Tempco, Inc. to Esio Water & Beverage Development Corp. Esio Water & Beverage Development Corp. and its wholly-owned subsidiaries Net Edge Devices, LLC, an Arizona Limited Liability Company, and iMetabolic Corp, (“IMET”) a Nevada Corporation are hereinafter collectively referred to as the “Company.”
On March 16, 2015, the Company issued to the IMET 16 shareholders of record an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock. Prior to the close of the reverse merger, IMET had 10,000,000 common shares outstanding immediately prior to the merger and net liabilities of $20,500. Prior to closing, the predecessor company had 18,566,636 shares outstanding and net assets of $85,378, of which $89,615 was cash and $4,237 was non-cash. As a result of the closing of this transaction, IMET is now a wholly owned subsidiary of the Company and its business and operations represent those of the “Company.”
For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of the Company with IMET considered the accounting acquirer, and the financial statements of the accounting acquirer become the financial statements of the registrant. This transaction is hereinafter referred to as the “Reverse Merger.” The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 60,000,000 common shares issued to the shareholders of IMET in conjunction with the share exchange transaction have been presented as outstanding for all periods.
On December 30, 2015, the Company filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD” stands for United Product Development.
Related Parties
The Company enters into transactions with affiliated entities, or “related parties,” which are recorded net as “Due to Related Parties” in the accompanying Consolidated Balance Sheets. Related party disclosures are governed by ASC Topic 850, Related Party Disclosures. Refer to Note 2 –“Related Party Transactions” for additional information regarding the Company’s related party transactions.
Beneficial Conversion Feature
The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Net Edge Devices, LLC, an Arizona Limited Liability Company, and iMetabolic Corp, (“IMET”) a Nevada Corporation. All significant inter-company accounts and transactions have been eliminated in consolidation.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
Cash and Cash Equivalents
The Company considers those short-term, highly liquid investments with maturities of three months or less as cash and cash equivalents. At times, cash in banks may be in excess of the FDIC limits. The Company has $65,000 in an unrestricted escrow account pending its ongoing funding negotiation.
Management Estimates and Assumptions
The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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 expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates.
Fair Value of Financial Instruments
The fair values of the Company’s financial instruments include cash, accounts payable, accrued expenses and notes payable approximate their carrying amounts because of the short maturities of these instruments or because of restrictions.
As required by the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company's financial instruments consist primarily of cash and cash equivalents, restricted cash receivable and accounts payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
Net Income (Loss) Per Share
The Company calculates net income (loss) per share as required by Accounting Standards Codification subtopic 260-10, Earnings per Share (ASC 260-10”). Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. For the fiscal years ended June 30, 2017 and 2016, the impact of outstanding stock equivalents was 5,733,515 and 10,258,245 respectively.
Stock-Based Compensation
FASB ASC 718 requires companies to measure all stock compensation awards using a fair value method and recognize the related compensation cost in its financial statements. The Company has adopted the provisions of FASB ASC 718 and expenses the fair value of employee stock options and similar awards in the financial statements. The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using the Black-Scholes option pricing model for valuation of the share-based payments. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The simplified method is used to determine compensation expense since historical option exercise experience is limited relative to the number of options issued. The compensation cost is recognized ratably using the straight-line method over the expected vesting period.
The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period.
The Company did not recognize any stock-based administrative compensation for common stock options issued to administrative personnel and consultants during the years ended June 30, 2017 and 2016, respectively. Also during the years ended June 30, 2017 and 2016, the Company did not pay stock based compensation consisting of common stock issued to non-employees.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution. At times, such balances may be in excess of any insured limits.
Deferred Tax Assets.
In assessing the realization of deferred tax assets, management assesses the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely a valuation allowance is established. We adjust the valuation allowance in the period management determines it is more likely than not that deferred tax assets will or will not be realized. To date, we have fully reserved for our deferred tax assets based primarily on our history of recurring losses.
Income Taxes
In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of June 30, 2017 and 2016.
Recently Issued Accounting Pronouncements
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not, or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern, has reoccurring net losses and net capital deficiency. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The June 30, 2017 financial statements do not include any adjustments that might be necessary if UPD Holding Corp. is unable to continue as a going concern.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (i) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses; (ii) obtaining funding from outside sources through the sale of its debt and/or equity securities; and (iii) completing a merger with or acquisition of an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
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RELATED PARTY TRANSACTIONS |
12 Months Ended |
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Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 2 – RELATED PARTY TRANSACTIONS
For the twelve months ended June 30, 2017 and 2016, the President has provided the Company rent at no charge. We believe that the offices are adequate to meet our current operational requirements. We do not own any real property.
On September 1, 2016, through unanimous approval by it Board, the Company opened an escrow to initiate a proposed funding arrangement for future capital demands. The related party portion of this escrow consists of a $15,000 convertible Note held by the Company’s President which matured March 1, 2017. As a result of this date expiring, the President extended the maturity of the note to April 1, 2018. The Company analyzed the extension under ASC 470-50 and concluded that this modification was not considered to be substantial. If not repaid by maturity, the note is convertible into 1,875,000 common shares at $0.0125 per share. If share conversion is not elected, then interest will be due in the amount of $15,000.
As
of June 30, 2017, we owed Mark Conte, our President and Chief Executive Officer, $11,796 in administrative expenses paid on our
behalf. The amount is recorded in accounts payable, and is due upon demand and non-interest bearing.
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging” and determined that the instrument does not qualify for derivative accounting.
The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature and determined that the instrument does have a beneficial conversion feature equivalent. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. |
CONVERTIBLE DEBT |
12 Months Ended |
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Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 3 – CONVERTIBLE DEBT
On September 1, 2016, through unanimous approval by its Board, the Company opened an escrow to initiate a proposed funding arrangement for future capital demands. A single private placement provided $50,000 of this escrow in the form of a convertible note. This convertible note matured on March 1, 2017. As a result of this date expiring, the single private placement has executed an extension of the maturity of the note to April 1, 2018. If not repaid by maturity, the note is convertible into 4,000,000 common shares at $0.0125 per share. If share conversion is not elected, then interest will be due at the face value of the original note of $50,000. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | NOTE 4 – INCOME TAXES
The income tax benefit differs from the amount computed by applying the federal income tax rate of 35% to net loss before income taxes. As of June 30, 2017 and 2016 deferred tax assets consist of the following:
As a result of the Reverse Merger, the Company's ability to utilize the net operating losses of the predecessor company is unlikely under the Internal Revenue Code. Additionally, the future utilization of the net operating loss carryforward to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. As of June 30, 2017 and 2016, the Company's likely Federal and State net operating loss carryforwards were $244,080 and $139,840, respectively. The Company provided a valuation allowance equal to the deferred income tax asset for the year ended June 30, 2017 and 2016 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. The potential tax benefit arising from the loss carryforward will expire in 2035. Additionally, all annual tax returns have been filed and the last two years are open for inspection should the need arise. |
STOCKHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY
Authorized Shares
At June 30, 2017, our authorized capital stock consists of 200,000,000 shares of Common Stock, par value of $.005, and 10,000,000 shares of Preferred Stock, par value $.01. At June 30, 2017 and 2016, there were 79,766,636 and 78,766,636 shares of Common Stock issued and outstanding, respectively, and no shares of Preferred Stock issued and outstanding.
Common Stock
At June 30, 2017, we had a total of 1,232,767 shares reserved for issuance pursuant to the 1,232,767 outstanding options and 4,500,748 outstanding warrants issued by the predecessor company. See “Options and Warrants” below for additional information.
At June 30, 2016, we had a total of 10,258,245 shares reserved for issuance pursuant to the 2,102,767 outstanding options and 8,155,478 outstanding warrants issued by the predecessor company. See “Options and Warrants” below for additional information.
Preferred Stock
The Company’s Board of Directors has the authority to divide the preferred stock shares into series and to fix the voting powers, designation, preference, and relative participating, option or other special rights, and the qualifications, limitations, or restrictions of the shares of any series so established. The Company has issued no preferred stock shares as of June 30, 2017.
Common Stock Issuances
During the fiscal years ended June 30, 2017 and 2016, the Company recorded the issuance of shares of Common Stock as follows:
Options and Warrants
The Company did not grant any options or warrants during the years ended June 30, 2017 and 2016, respectively. As of March 16, 2015, the effective date of the Reverse Merger, the Company had 2,102,767 options outstanding pursuant to the predecessor company’s 1999 Equity Compensation Plan, of which 870,000 options have expired, leaving 1,232,767 options outstanding. In addition, as of the effective date of the Reverse Merger, the Company had 8,155,478 warrants outstanding issued by the predecessor company. Since the Reverse Merger, 3,655,000 have expired and 4,500,748 remain. This remaining balance expires in late 2017 and early 2018. See “Options Granted by Predecessor Company Prior to Reverse Merger” and “Warrants Granted by Predecessor Company Prior to Reverse Merger” below for additional information. Also, additional information about the predecessor company’s options and warrants and expense calculations can be found in that company’s financial statements contained in its Annual Report on Form 10-K filed with the SEC on October 14, 2014.
Options Granted by Predecessor Company Prior to Reverse Merger
On July 13, 1999, the Board of Directors of the predecessor company authorized the 1999 Equity Compensation Plan (the “Plan”). The Plan allowed for the award of incentive stock options, non-statutory stock options or restricted stock awards to certain employees, directors, consultants and independent contractors. The predecessor company reserved an aggregate of 600,000 shares of common stock for distribution under the Plan. Incentive stock options granted under the Plan may be granted to employees only, and may not have an exercise price less than the fair market value of the common stock on the date of grant. Options may be exercised on a one-for-one basis, with a maximum term of ten years from the date of grant. Incentive stock options granted to employees generally vest annually over a four-year period.
A summary of the activity of options under the plan and non-statutory options granted outside the plan follows:
Additional information about outstanding options to purchase the Company’s common stock as of June 30, 2017 is as follows:
The 1,200,000 options were granted to directors on February 3, 2014 and are exercisable at $0.05 for 5 years.
Additional information about outstanding options to purchase the Company’s common stock as of June 30, 2016 is as follows:
The options were granted to directors on February 3, 2014 and are exercisable at $0.05 for 5 years.
Warrants Granted by Predecessor Company Prior to Reverse Merger
Prior to the Reverse Merger, the predecessor company issued 8,155,478 Warrants primarily in connections with financing arrangements and consulting services. Activity relative to these warrants for the year ended June 30, 2017 is as follows:
All the warrants outstanding as of June 30, 2017 are exercisable and expire in 2017 and 2018.
Additional information about outstanding warrants to purchase the Company’s outstanding warrants as of June 30, 2017 is as follows:
Additional information about outstanding warrants to purchase the Company’s outstanding warrants as of June 30, 2016 is as follows:
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SUBSEQUENT EVENTS |
12 Months Ended |
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Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 6 - SUBSEQUENT EVENTS
As a result of the Company’s ongoing financing activities, the two convertible promissory notes were extended to April 1, 2018.
On September 22, 2017, the Company entered into a consulting agreement with Sage Intergroup. 1,500,000 shares were issued in conjunction with the execution of this agreement and a monthly payment of $31,250, payable in arrears was agreed upon for 12 months with the facility to renegotiate from time to time to adjust for increased or decreased demands upon the Consultant.
On October 6, 2017, the Company loaned Record Street Brewing, a Company of which UPD’s CEO is a minority shareholder, $20,000 at the Applicable Federal Rate for the month of October 2017 and a maturity date of October 6, 2018. |
BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES; GOING CONCERN (Policies) |
12 Months Ended |
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Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Operations and Organization | Business, Operations and Organization
Esio Water & Beverage Development Corp. was incorporated in Nevada in June 1988 as Richard Barrie Fragrances, Inc. Over the years, the Company changed its name several times, most recently from Tempco, Inc. to Esio Water & Beverage Development Corp. Esio Water & Beverage Development Corp. and its wholly-owned subsidiaries Net Edge Devices, LLC, an Arizona Limited Liability Company, and iMetabolic Corp, (“IMET”) a Nevada Corporation are hereinafter collectively referred to as the “Company.”
On March 16, 2015, the Company issued to the IMET 16 shareholders of record an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock. Prior to the close of the reverse merger, IMET had 10,000,000 common shares outstanding immediately prior to the merger and net liabilities of $20,500. Prior to closing, the predecessor company had 18,566,636 shares outstanding and net assets of $85,378, of which $89,615 was cash and $4,237 was non-cash. As a result of the closing of this transaction, IMET is now a wholly owned subsidiary of the Company and its business and operations represent those of the “Company.”
For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of the Company with IMET considered the accounting acquirer, and the financial statements of the accounting acquirer become the financial statements of the registrant. This transaction is hereinafter referred to as the “Reverse Merger.” The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 60,000,000 common shares issued to the shareholders of IMET in conjunction with the share exchange transaction have been presented as outstanding for all periods.
On December 30, 2015, the Company filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD” stands for United Product Development. |
Related Parties | Related Parties
The Company enters into transactions with affiliated entities, or “related parties,” which are recorded net as “Due to Related Parties” in the accompanying Consolidated Balance Sheets. Related party disclosures are governed by ASC Topic 850, Related Party Disclosures. Refer to Note 2 –“Related Party Transactions” for additional information regarding the Company’s related party transactions. |
Beneficial Conversion Feature | Beneficial Conversion Feature
The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. |
Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Net Edge Devices, LLC, an Arizona Limited Liability Company, and iMetabolic Corp, (“IMET”) a Nevada Corporation. All significant inter-company accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. |
Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers those short-term, highly liquid investments with maturities of three months or less as cash and cash equivalents. At times, cash in banks may be in excess of the FDIC limits. The Company has $65,000 in an unrestricted escrow account pending its ongoing funding negotiation. |
Management Estimates and Assumptions | Management Estimates and Assumptions
The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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 expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments
The fair values of the Company’s financial instruments include cash, accounts payable, accrued expenses and notes payable approximate their carrying amounts because of the short maturities of these instruments or because of restrictions.
As required by the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company's financial instruments consist primarily of cash and cash equivalents, restricted cash receivable and accounts payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share
The Company calculates net income (loss) per share as required by Accounting Standards Codification subtopic 260-10, Earnings per Share (ASC 260-10”). Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. For the fiscal years ended June 30, 2017 and 2016, the impact of outstanding stock equivalents was 5,733,515 and 10,258,245 respectively. |
Stock-Based Compensation | Stock-Based Compensation
FASB ASC 718 requires companies to measure all stock compensation awards using a fair value method and recognize the related compensation cost in its financial statements. The Company has adopted the provisions of FASB ASC 718 and expenses the fair value of employee stock options and similar awards in the financial statements. The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using the Black-Scholes option pricing model for valuation of the share-based payments. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The simplified method is used to determine compensation expense since historical option exercise experience is limited relative to the number of options issued. The compensation cost is recognized ratably using the straight-line method over the expected vesting period.
The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period.
The Company did not recognize any stock-based administrative compensation for common stock options issued to administrative personnel and consultants during the years ended June 30, 2017 and 2016, respectively. Also during the years ended June 30, 2017 and 2016, the Company did not pay stock based compensation consisting of common stock issued to non-employees. |
Concentration of Credit Risk | Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution. At times, such balances may be in excess of any insured limits. |
Deferred Tax Assets | Deferred Tax Assets.
In assessing the realization of deferred tax assets, management assesses the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely a valuation allowance is established. We adjust the valuation allowance in the period management determines it is more likely than not that deferred tax assets will or will not be realized. To date, we have fully reserved for our deferred tax assets based primarily on our history of recurring losses. |
Income Taxes | Income Taxes
In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of June 30, 2017 and 2016. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not, or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Going Concern | Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern, has reoccurring net losses and net capital deficiency. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The June 30, 2017 financial statements do not include any adjustments that might be necessary if UPD Holding Corp. is unable to continue as a going concern.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (i) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses; (ii) obtaining funding from outside sources through the sale of its debt and/or equity securities; and (iii) completing a merger with or acquisition of an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. |
INCOME TAXES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred tax assets and liabilities | As of June 30, 2017 and 2016 deferred tax assets consist of the following:
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STOCKHOLDERS' EQUITY (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of options activity | A summary of the activity of options under the plan and non-statutory options granted outside the plan follows:
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Schedule of outstanding options to purchase common stock | Additional information about outstanding options to purchase the Company’s common stock as of June 30, 2017 is as follows:
Additional information about outstanding options to purchase the Company’s common stock as of June 30, 2016 is as follows:
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Schedule of warrants granted by predecessor company prior to reverse merger | Activity relative to these warrants for the year ended June 30, 2017 is as follows:
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Schedule of outstanding warrants to purchase outstanding |
Additional information about outstanding warrants to purchase the Company’s outstanding warrants as of June 30, 2017 is as follows:
Additional information about outstanding warrants to purchase the Company’s outstanding warrants as of June 30, 2016 is as follows:
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BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES; GOING CONCERN (Details Narrative) |
12 Months Ended | |||
---|---|---|---|---|
Mar. 16, 2015
USD ($)
Shareholder
shares
|
Jun. 30, 2017
USD ($)
shares
|
Jun. 30, 2016
USD ($)
shares
|
Jun. 30, 2015
USD ($)
|
|
Common stock, outstanding | shares | 79,766,636 | 78,766,636 | ||
Cash | $ 65,308 | $ 1,619 | $ 64,638 | |
Outstanding stock equivalents | shares | 5,733,515 | 10,258,245 | ||
Unrestricted escrow account | $ 65,000 | |||
Predecessor [Member] | ||||
Common stock, outstanding | shares | 18,566,636 | |||
Net assets | $ 85,378 | |||
Cash | 89,615 | |||
Non-cash assets | $ 4,237 | |||
iMetabolic Corp ("IMET") [Member] | ||||
Number of shareholders | Shareholder | 16 | |||
Number of shares issued | shares | 60,000,000 | |||
Percentage of common stock issued | 76.20% | |||
Common stock, outstanding | shares | 10,000,000 | |||
Net liabilities | $ 20,500 |
RELATED PARTY TRANSACTIONS (Details Narrative) |
12 Months Ended | ||
---|---|---|---|
Sep. 01, 2016
USD ($)
shares
$ / shares
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
Related Party Transaction [Line Items] | |||
Administrative expenses | $ 4,348 | $ 78,518 | |
Mr. Mark W. Conte [Member] | |||
Related Party Transaction [Line Items] | |||
Administrative expenses | $ 11,796 | ||
Mr. Mark W. Conte [Member] | Convertible Note [Member] | |||
Related Party Transaction [Line Items] | |||
Face amount | $ 15,000 | ||
Previous maturity date | Mar. 01, 2017 | ||
Debt maturity date | Apr. 01, 2018 | ||
Number of common shares issued upon debt conversion | shares | 1,875,000 | ||
Conversion price (in dollars per share) | $ / shares | $ 0.0125 |
CONVERTIBLE NOTE (Details Narrative) - Private Placement [Member] - Convertible Note [Member] |
Sep. 01, 2016
USD ($)
shares
$ / shares
|
---|---|
Short-term Debt [Line Items] | |
Face amount | $ | $ 50,000 |
Previous maturity date | Mar. 01, 2017 |
Debt maturity date | Apr. 01, 2018 |
Number of common shares issued upon debt conversion | shares | 4,000,000 |
Conversion price (in dollars per share) | $ / shares | $ 0.0125 |
INCOME TAXES (Details) - USD ($) |
Jun. 30, 2017 |
Jun. 30, 2016 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Federal loss carryforwards | $ 85,428 | $ 48,944 |
State loss carryforwards | ||
Other | ||
Deferred tax assets, gross | 85,428 | 48,944 |
Less: valuation allowances | (85,428) | (48,944) |
Deferred tax assets, net |
INCOME TAXES (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Federal and state net operating loss carryforwards | $ 244,080 | $ 139,840 |
Federal income tax rate | 35.00% | |
Operating loss carryforward, expiration year | 2035 |
STOCKHOLDERS' EQUITY (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding begining | 2,102,767 | 3,362,767 |
Granted | ||
Exercised | ||
Expired | (870,000) | (1,260,000) |
Outstanding ending | 2,102,767 | 2,102,767 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding begining | $ 0.13 | $ 0.13 |
Granted | ||
Exercised | ||
Expired | 0.24 | 0.13 |
Forfeited | ||
Outstanding ending | $ 0.01 | $ 0.13 |
STOCKHOLDERS' EQUITY (Details 2) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Class of Warrants and Rights Number of Shares [Roll Forward] | ||
Outstanding, beginning | $ 8,155,478 | $ 8,155,748 |
Granted | ||
Expired | 3,655,000 | |
Outstanding, ending | $ 4,500,748 | $ 8,155,478 |
Class of Warrants and Rights Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning | $ 0.75 | $ 0.75 |
Granted | ||
Expired | 0.75 | |
Outstanding, ending | $ 0.75 | $ 0.75 |
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) |
Sep. 22, 2017 |
Oct. 06, 2017 |
---|---|---|
Record Street Brewing [Member] | ||
Subsequent Event [Line Items] | ||
Loaned amount | $ 20,000 | |
Consulting Agreement [Member] | Sage Intergroup [Member] | ||
Subsequent Event [Line Items] | ||
Number of shares issued | 1,500,000 | |
Periodic payment | $ 31,250 | |
Frequency of periodic payment | Monthly |
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