UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2019

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

Commission File Number: 000-52956

QUANTUM MATERIALS CORP.

(Exact name of Registrant as specified in its charter)

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

3055 Hunter Road, San Marcos, Texas		78666
(Address of principal executive offices)		(Zip Code)

512-245-6646

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the 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 [X] No [ ]

Indicate by checkmark 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 such shorter period that the registrant was required to submit such files). Yes [X] 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
	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.

[ ] Yes [ ] No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes [X] No

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

Title of each class		Trading Symbols(s)		Name of each exchange on which registered
N/A		N/A		N/A

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 Par Value

As of May 10, 2019, there were 580,975,473 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

	Page

PART I – FINANCIAL INFORMATION	3

Item 1. Financial Statements	3

Consolidated Balance Sheets	3

Consolidated Statements of Operations	4

Consolidated Statements of Stockholders’ Equity (Deficit)	5

Consolidated Statements of Cash Flows	6

Notes to Consolidated Financial Statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3. Quantitative and Qualitative Disclosures about Market Risk	38

Item 4. Controls and Procedures	39

PART II – OTHER INFORMATION	40

Item 1. Legal Proceedings	40

Item 1A. Risk Factors	40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3. Defaults upon Senior Securities	40

Item 4. Mine Safety Disclosures	40

Item 5. Other Information	40

Item 6. Exhibits	41

Signatures	42

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

QUANTUM MATERIALS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2019			June 30, 2018
	(unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	135,292		$	2,025
Subscription receivable		-			10,000
Accounts Receivable		500,400			-
Prepaid expenses and other current assets		537,578			1,746,181
TOTAL CURRENT ASSETS		1,173,270			1,758,206

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $421,094 and $346,080		550,510			625,524

LICENSES AND PATENTS, net of accumulated amortization of $167,538 and $146,852		25,205			45,891

LONG TERM PORTION OF PREPAID EXPENSES		317,969			184,660

TOTAL ASSETS	$	2,066,954		$	2,614,281

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable	$	1,649,416		$	1,511,691
Accrued expenses		590,300			548,667
Accrued salaries		732,905			682,575
Deferred revenue		1,000,000			-
Notes payable, net of unamortized discount		20,000			-
Short term derivative liability		5,060			-
Current portion of convertible debentures, net of unamortized discount		3,060,219			3,402,421
TOTAL CURRENT LIABILITIES		7,057,900			6,145,354

CONVERTIBLE DEBENTURES, net of current portion, unamortized discount and debt issuance costs		134,513			40,224

TOTAL LIABILITIES		7,192,413			6,185,578

COMMITMENTS AND CONTINGENCIES (See Note 10)		-			-

STOCKHOLDERS’ DEFICIT
Common stock, $.001 par value, authorized 750,000,000 shares, 541,656,945 and 442,564,332 issued and outstanding at March 31, 2019 and June 30, 2018, respectively		541,657			442,564
Common stock issuable		212,767			800,131
Additional paid-in capital		46,560,681			42,030,181
Accumulated deficit		(52,440,564	)		(46,844,173	)
TOTAL STOCKHOLDERS’ DEFICIT		(5,125,459	)		(3,571,297	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,066,954		$	2,614,281

See accompanying notes to these condensed consolidated financial statements.

QUANTUM MATERIALS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
	(unaudited)						(unaudited)

REVENUES	$	400		$	1,000		$	400		$	12,870

OPERATING EXPENSES
General and administrative		1,604,074			1,785,451			4,227,599			4,679,293
Research and development		36,258			28,823			74,794			160,329
TOTAL OPERATING EXPENSES		1,640,332			1,814,274			4,302,393			4,839,622

LOSS FROM OPERATIONS		(1,639,932	)		(1,813,274	)		(4,301,993	)		(4,826,752	)

OTHER EXPENSE (INCOME)
Beneficial conversion expense		-			506,415			143,778			1,275,017
Interest expense, net		241,220			121,228			733,501			976,768
Change in value of derivative liability		2,219			-			108,087			(514,969	)
Accretion of debt discount		157,629			295,765			309,032			1,020,772
TOTAL OTHER EXPENSE		401,068			923,408			1,294,398			2,757,588

NET LOSS	$	(2,041,000	)	$	(2,736,682	)	$	(5,596,391	)	$	(7,584,340	)

LOSS PER COMMON SHARE
Basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		521,743,994			428,394,955			497,693,368			401,191,882

See accompanying notes to these condensed consolidated financial statements.

QUANTUM MATERIALS CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

	Common Stock				Common Stock			Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Issuable			Capital			Deficit			Deficit
Nine Months Ended March 31, 2018

Balances at June 30, 2017		367,955,585	$	367,955	$	-		$	33,880,177		$	(37,443,104	)	$	(3,194,972	)

Common stock issued for cash		458,333		459		-			39,541			-			40,000

Common stock issued for services		3,500,000		3,500		-			329,501			-			333,001

Common stock issued for debenture interest		155,068		155		-			18,453			-			18,608

Common stock issued for debenture conversions		2,500,000		2,500		-			297,500			-			300,000

Stock-based compensation		-		-		-			257,673			-			257,673

Beneficial conversion feature of debenture		-		-		-			752,426			-			752,426

Allocated value of common stock and warrants related to debenture		2,650,000		2,650		572,584			159,699			-			734,933

Net loss		-		-		-			-			(3,027,097	)		(3,027,097	)
Balances at September 30, 2017		377,218,986	$	377,219	$	572,584		$	35,734,970		$	(40,470,201	)	$	(3,785,428	)

Common stock issued for cash		758,334		759		-			52,242			-			53,001

Common stock issued for services		20,170,060		20,170		-			1,514,463			-			1,534,633

Common stock issued for debenture interest		217,258		217		-			25,854			-			26,071

Common stock issued for debenture conversions		4,375,001		4,375		-			520,625			-			525,000

Stock-based compensation		-		-		-			254,055			-			254,055

Beneficial conversion feature of debenture		-		-		-			16,176			-			16,176

Allocated value of common stock and warrants related to debenture		-		-		36,079			30,314			-			66,393

Net loss		-		-		-			-			(1,820,561	)		(1,820,561	)
Balances at December 31, 2017		402,739,639	$	402,740	$	608,663		$	38,148,699		$	(42,290,762	)	$	(3,130,660	)

Common stock issued for cash		499,999		499		-			59,500			-			59,999

Common stock issued for services		6,020,000		6,020		135,962			340,436			-			482,418

Common stock issued for debenture interest		364,694		365		-			23,453			-			23,818

Common stock issued for debenture conversions		250,000		250		-			29,750			-			30,000

Common stock issued for debenture and warrant extensions		3,500,000		3,500		-			206,500			-			210,000

Common stock and stock warrants issued in exchange for accrued salaries		-		-		-			552,183			-			552,183

Stock-based compensation		7,000,000		7,000		-			564,775			-			571,775

Beneficial conversion feature of debenture		-		-		-			506,415			-			506,415

Net loss		-		-		-			-			(2,736,682	)		(2,736,682	)
Balances at March 31, 2018		420,374,332	$	420,374	$	744,625		$	40,431,711		$	(45,027,444	)	$	(3,430,734	)

Nine Months Ended March 31, 2019

Balances at June 30, 2018		442,564,332	$	442,564	$	800,131		$	42,030,181		$	(46,844,173	)	$	(3,571,297	)

Common stock issued for cash		-		-		73,900			-			-			73,900

Common stock issued for services		3,031,375		3,032		43,333			118,224			-			164,589

Common stock issued for debenture interest		344,055		344		-			20,997			-			21,341

Issuance of common stock issuable		513,333		513		(30,800	)		30,287			-			-

Stock-based compensation		-		-		-			207,452			-			207,452

Beneficial conversion feature of debenture		-		-		-			16,870			-			16,870

Allocated value of common stock and warrants related to debenture		-		-		52,765			22,437			-			75,202

Common stock issued in liability settlement		4,516,553		4,517		39,652			7,608			-			51,777

Other									(98,645	)					(98,645	)

Net loss		-		-		-			-			(1,624,946	)		(1,624,946	)
Balances at September 30, 2018		450,969,648	$	450,970	$	978,981		$	42,355,411		$	(48,469,119	)	$	(4,683,757	)

Common stock issued for cash		2,083,333		2,087		-			247,917			-			250,004

Common stock issued for services		12,016,667		12,020		-			469,650			-			481,670

Common stock issued for debenture interest		385,822		390		-			21,069			-			21,459

Issuance of common stock issuable		14,660,000		14,660		(460,305	)		445,645			-			-

Stock-based compensation		-		-		-			327,703			-			327,703

Beneficial conversion feature of debenture		-		-		-			126,908			-			126,908

Allocated value of common stock and warrants related to debenture		-		-		57,366			76,376			-			133,742

Common stock issued in liability settlement		12,197,786		12,198		-			515,979			-			528,177

Net loss		-		-		-			-			(1,930,445	)		(1,930,445	)
Balances at December 31, 2018		492,313,256	$	492,325	$	576,042		$	44,586,658		$	(50,399,564	)	$	(4,744,539	)

Common stock issued for services		5,500,000		5,499		20,347			159,513			-			185,359

Common stock issued for debenture conversions		22,814,393		22,808		-			517,226			-			540,034

Issuance of common stock issuable		14,469,071		14,470		(483,622	)		469,152			-			-

Stock-based compensation		-		-		100,000			637,152			-			737,152

Allocated value of common stock and warrants related to debenture		125,000		125		-			2,376			-			2,501

Common stock issued in liability settlement		6,435,225		6,430		-			188,603			-			195,034

Net loss		-		-		-			-			(2,041,000	)		(2,041,000	)
Balances at March 31, 2019		541,656,945	$	541,657	$	212,767		$	46,560,681		$	(52,440,564	)	$	(5,125,459	)

See accompanying notes to these condensed consolidated financial statements.

QUANTUM MATERIALS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	March 31,
	2019			2018
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,596,391	)	$	(7,584,340	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		95,700			100,728
Amortization of debt issuance costs, and debt discount		239,197			573,958
Stock-based compensation		1,272,307			1,374,786
Stock issued for services		1,836,882			1,725,152
Stock issued for debenture extensions		-			246,000
Beneficial conversion feature		143,778			1,275,017
Deemed interest on extinguishment of debenture		24,164			118,000
Change in fair value of derivative liability		108,087			(514,969	)
Accretion of debt discount and warrant expense		309,032			1,020,772
Effects of changes in operating assets and liabilities:
Accounts receivable		(500,400	)		-
Prepaid expenses and other current assets		8,754			(22,880	)
Accounts payable and accrued expenses		337,757			874,503
Deferred revenue		1,000,000			-
NET CASH USED IN OPERATING ACTIVITIES		(721,133	)		(813,273	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(1,877	)
NET CASH USED IN INVESTING ACTIVITIES		-			(1,877	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		333,900			153,000
Proceeds from issuance of convertible debentures / promissory note		500,500			1,237,000
Proceeds from issuance of note payable		20,000			-
Principal payments on long-term debt		-			(552,650	)
Principal payments on note payable		-			(58,738	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		854,400			778,612

NET INCREASE (DECREASE) IN CASH		133,267			(36,538	)

CASH AND CASH EQUIVALENTS, beginning of period		2,025			52,611

CASH AND CASH EQUIVALENTS, end of period	$	135,292		$	16,073

See accompanying notes to these condensed consolidated financial statements.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

Nature of Operations

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

Going Concern

The Company recorded losses from continuing operations in the current period presented and has a history of losses. As of March 31, 2019, the Company had a working capital deficit of $5,884,630 and net cash used in operating activities was $721,133 for the nine months ended March 31, 2019. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, obtain revenues from operations, raise additional capital, and/or obtain debt financing.

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

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

Basis of Presentation: The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States and include the accounts of the Company and its subsidiaries. All significant inter-company transactions and account balances have been eliminated upon consolidation.

Use of Estimates: The preparation of 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 amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Financial Instruments: Financial instruments consist of cash and cash equivalents, restricted cash, payables, and convertible debentures. The carrying value of these financial instruments approximates fair value due to either their short-term nature or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.

Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets as follows:

Furniture and fixtures			7 years
Computers and software			3 years
Machinery and equipment			3 - 10 years

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Licenses and Patents: Licenses and patents are stated at cost. Amortization is computed on the straight-line basis over the estimated useful life of five years.

Earnings per Share: The Company accounts for earnings per share in accordance with ASC 260 “Earnings Per Share”. Basic earnings per share amounts are calculated by dividing net income (loss) by the weighted average number of common shares outstanding during each period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the periods, including the dilutive effect of stock options and warrants granted. Dilutive stock options and warrants that are issued during a period or that expire or are canceled during a period are reflected in the computations for the time they were outstanding during the periods being reported.

Beneficial Conversion: Debt and equity instruments that contain a beneficial conversion feature are recorded as a deemed dividend to the holders of the convertible notes. The deemed dividend associated with the beneficial conversion is calculated as the difference between the fair value of the underlying common stock less the proceeds that have been received for the equity instrument limited to the value received. The beneficial conversion amount is recorded as beneficial conversion expense and an increase to additional paid-in-capital.

Derivative Instruments: The Company enters into financing arrangements which may consist of freestanding derivative instruments or hybrid instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities”, as well as related interpretation of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the consolidated balance sheets and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument.

The Company estimates fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as freestanding warrants, the Company generally uses the Black-Scholes model, adjusted for the effect of dilution, because it embodies all the requisite assumptions (including trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of the Company’s common stock. Since derivative financial instruments are initially and subsequently carried at fair values, income (expense) going forward will reflect the volatility in these estimates and assumption changes. Increases in the trading price of the Company’s common stock and increases in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the trading price of the Company’s common stock and decreases in trading fair value during a given financial quarter result in the application of non-cash derivative income.

Fair value measurements: The Company estimates fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. The valuation techniques require inputs that are categorized using a three-level hierarchy, from highest to lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and (3) significant unobservable inputs, including those that require considerable judgment for which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, the Company categorizes the entire fair value measurement according to the lowest level of input that is significant to the measurement even though other significant inputs that are more readily observable may have also utilized.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recent Accounting Pronouncements

In July 2017, the FASB issued ASU 2017-11—Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. ASU 2017-11 eliminates the requirement that a down round feature precludes equity classification when assessing whether an instrument is indexed to an entity’s own stock. A freestanding equity-linked financial instrument no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The Company elected to adopt ASU 2017-11 early, effective July 1, 2017, and implemented the pronouncement retrospectively with a cumulative effect adjustment to outstanding financial instruments. The adoption of this guidance did not have an impact on its financial statements. In the fiscal year 2018, the Company had three triggering events related to a down round feature which resulted in recording a charge for beneficial conversion expense of $1,021,500 during the year ended June 30, 2018.

In March 2016, the FASB issued ASU guidance related to stock-based compensation. The new guidance simplifies the accounting for stock-based compensation transactions, including income tax consequences, statement of cash flows presentation, estimating forfeitures when calculating compensation expense, and classification of awards as either equity or liabilities.

The new standard requires all excess tax benefits and tax deficiencies to be recognized as income tax benefit (expense) in the income statement. The new guidance also requires presentation of excess tax benefits as an operating activity on the statement of cash flows rather than a financing activity and requires presentation of cash paid to a tax authority when shares are withheld to satisfy the employer’s statutory income tax withholding obligation as a financing activity. The new guidance also provides for an election to account for forfeitures of stock-based compensation.

The Company adopted the guidance effective July 1, 2017. With respect to the forfeiture election, the Company will continue its current practice of estimating forfeitures when calculating compensation expense. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted the guidance effective July 1, 2017. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendment provides guidance on accounting for the impact of the Tax Cuts and Jobs Act (the “Tax Act”) and allows entities to complete the accounting under ASC 740 within a one-year measurement period from the Tax Act enactment date. This standard is effective upon issuance. The Tax Act has several significant changes that impact all taxpayers, including a transition tax, which is a one-time tax charge on accumulated, undistributed foreign earnings. The Company adopted the guidance effective July 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting. The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The Company adopted the guidance effective July 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Effective July 1, 2018, the Company adopted the Financial Accounting Standards Board’s (“FASB”) provisions of ASC 606, Revenue from Contracts with Customers (ASC 606), using the prospective method for all contracts not completed as of the date of adoption. The Company had no contracts not completed as of the date of adoption, nor had contracts that were modified before the effective date.

Pronouncements Yet To Be Adopted

In February 2016, the FASB issued ASU 2016-02, Leases, which updates guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods after December 15, 2018. The Company will adopt this pronouncement on July 1, 2019. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The Company is in the process of evaluating the impact, if any, of the adoption of this guidance on its consolidated financial statements. The Company does not have any long-term leases as of March 31, 2019.

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31, 2019		June 30, 2018
	(unaudited)

Furniture and fixtures	$	3,502	$	3,502
Computers and software		11,447		11,447
Machinery and equipment		956,655		956,655
		971,604		971,604
Less: accumulated depreciation		421,094		346,080

Total property and equipment, net	$	550,510	$	625,524

Depreciation expense for the nine months ended March 31, 2019 and 2018 was $75,014 and $74,591, respectively.

NOTE 3 – LICENSES AND PATENTS

Licenses and patents consisted of the following:

	March 31, 2019		June 30, 2018
	(unaudited)

William Marsh Rice University	$	40,000	$	40,000
University of Arizona		15,000		15,000
Bayer acquired patents		137,743		137,743
		192,743		192,743
Less: accumulated amortization		167,538		146,852

Total licenses and patents, net	$	25,205	$	45,891

Amortization expense for the nine months ended March 31, 2019 and 2018 $20,686 and $26,137, respectively.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

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

Level 3 – Valuations based on unobservable inputs reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

As of March 31, 2019, and June 30, 2018, the fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates book value due to the short maturity of these instruments. Based upon borrowing rates currently available to the Company for loans with similar terms, the carrying value of its debt obligations approximates fair value. As of March 31, 2019, and June 30, 2018, the Company held no investments. The Company hired an independent resource to value its derivative liability as follows (unaudited):

	Balance at March 31, 2019		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Derivative Liability	$	5,060	$	-	$	-	$	5,060
Note Payable		20,000		-		20,000		-
Convertible debentures		3,194,732		-		3,194,732		-

	$	3,219,792	$	-	$	3,214,732	$	5,060

Level Three Roll-forward

	Derivative Liability			Total

Balance June 30, 2018	$	-		$	-
Fair value of derivative liability reclassified from equity		98,645			98,645
Settlement of derivative liabilities		(201,672	)		(201,672	)
Change in fair value		108,087			108,087
Balance March 31, 2019	$	5,060		$	5,060

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5 – CONVERTIBLE DEBENTURES

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

	March 31,		June 30,		Debenture
	2019		2018		Reference
	(unaudited)
Convertible debentures issued in September 2014	$	25,050	$	25,050	A
Convertible debentures issued in January 2015		-		500,000	B
Convertible debentures issued in April - June 2016		1,075,000		1,075,000	C
Convertible debenture issued in August 2016		200,000		200,000	C
Convertible debentures issued in January - March 2017		60,000		60,000	D
Convertible promissory notes issued in March 2017		222,350		222,350	G
Convertible debenture issued in June 2017		100,000		100,000	I
Convertible debenture issued in July 2017		100,000		100,000	J
Convertible debenture issued in September 2017		645,000		645,000	K
Convertible debenture issued in November 2017		247,500		247,500	K
Convertible debenture issued in November 2017		27,000		27,000	L
Convertible debenture issued in December 2017		75,000		75,000	N
Convertible debenture issued in February 2018		45,000		45,000	O
Convertible debentures issued in March 2018		65,000		65,000	P
Convertible debentures issued in April 2018		60,000		60,000	Q
Convertible debentures issued in April 2018		70,000		70,000	R
Convertible debentures issued in April 2018		20,000		20,000	S
Convertible debentures issued in June 2018		40,000		40,000	T
Convertible debentures issued in July 2018		45,000		-	U
Convertible debentures issued in August 2018		30,000		-	V
Convertible debentures issued in September 2018		25,000		-	W
Convertible debentures issued in December 2018		52,000		-	X

		3,228,900		3,576,900
Less: unamortized discount		34,168		134,255

		3,194,732		3,442,645
Less: current portion		3,060,219		3,402,421

Total convertible debentures, net of current portion	$	134,513	$	40,224

A) September 2014 Convertible Debenture

Between September 16, 2014 and October 28, 2014, the Company entered into Convertible Debenture Agreements to obtain a total of $500,050 in gross proceeds from five non-affiliated parties (collectively hereinafter referred to as the “Debenture Holders”). The Debentures have terms of five years maturing between September 16, 2019 and October 30, 2019. The Debentures bear interest at the rate of 6% per annum and are pre-payable by the Company at any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.15 per share at any date and will receive an equal number of warrants having a strike price of $0.30 per share and a term of five years. None of the Debentures were converted into common shares during the nine months ended March 31, 2019.

Interest expense for the nine months ended March 31, 2019 and 2018 was $1,144 and $1,144, respectively

As of March 31, 2019, and June 30, 2018, $25,050 of principal was outstanding.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

B) January 2015 Convertible Debenture

On January 15, 2015, the Company entered into Convertible Debenture Agreements to obtain $500,000 in gross proceeds from two non-affiliated parties (collectively hereinafter referred to as the “Debenture Holders”). The Debentures have a term of two years maturing on January 15, 2017 and bear interest at the rate of 8% per annum. The debentures are pre-payable by the Company at any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.06 per share at any date. The Debenture Holders received 6,250,000 common stock warrants exercisable at $0.06 per share through January 15, 2017. The debt is secured by a security interest in certain microreactor equipment. The Agreement also provides for the investors to have the right to appoint one member to the Company’s Board of Directors in the event any one of the aforementioned debentures are converted into common stock of the Company. On October 10, 2016, the maturity date of the debentures was extended to January 15, 2018 and the 6,250,000 warrants were converted into common stock for total proceeds of $375,000. On January 12, 2018 the debentures were extended for ten days to January 25, 2018. On January 24, 2018, the debentures were extended to December 15, 2018. As compensation for extending the debentures, the Debenture Holders received 3,500,000 shares of Common Stock, which were valued at $0.06 per share, a total of $210,000 recorded as debt extension expense. On January 14, 2019, partial payment was made of $150,000, and the debentures were extended to March 15, 2019.

On March 22, 2019, the remainder of the outstanding balance was converted to shares of common stock. 11,147,726 shares of common stock were issued, for the outstanding balance of $165,877, plus accrued interest of $29,205.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $348,105, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, two years. Interest expense for the nine months ended March 31, 2019 and 2018 was $49,370 and $30,027, respectively.

As of March 31, 2019, and June 30, 2018, $0 and $500,000 of principal was outstanding, respectively.

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

During the fourth quarter of the year ended June 30, 2017, the Company sold 1,565 Units for total proceeds of $1,565,000 from three affiliated and fourteen non-affiliated parties. In August 2016 the Company sold 200 additional Units for total proceeds of $200,000 and sold $50,000 in proceeds in October 2016. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company. The conversion price was reset to $0.012 per share in June 2018 as a result of a triggering event.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $609,595, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, two years. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019, and 2018, of $2,564 and $220,602, respectively.

The Company recognized a beneficial conversion expense for the nine months ended March 31, 2019, and 2018, of $0 and $1,012,042, respectively.

Interest expense for the nine months ended March 31, 2019, and 2018, of $77,633 and $87,787, respectively.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the years ended June 30, 2018 and 2017, $455,000 and $285,000 of principal was converted into 3,791,666 and 2,375,000 shares of common stock, respectively. As of March 31, 2019, and June 30, 2018, $1,275,000 of principal was outstanding. As of the date of this report, maturities totaling $825,000 of principal have been extended until July and August of 2019, and the remaining $450,000 have not been extended and are past due as of the date of this report.

D) January-March 2017 Convertible Debentures

During the third quarter of the year ended June 30, 2017, the Company sold 2,600 Units for total proceeds of $260,000 from five non-affiliated parties. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company. In evaluating the accounting treatment of this anti-dilution feature, the Company believes that is has control over whether the anti-dilution feature will be exercised. The Company is able to decide on which type of financing is raised, and thus the Company can prevent the issuance of shares at a price below the anti-dilution strike price. The number of Warrants and exercise price is proportionately adjustable for events including subdivisions, combinations or consolidations, reclassifications, exchanges, mergers, and reorganizations.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $73,250, recorded as debt discount and is amortized using the effective interest rate method over the life of the loans, two years. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $3,125 and $52,954, respectively.

During the year ended June 30, 2018, debentures for an aggregate principal amount of $200,000 were converted into 1,666,667 shares of common stock.

Interest expense for the nine months ended March 31, 2019 and 2018 of $3,603 and $10,078, respectively.

As of March 31, 2019, and June 30, 2018, $60,000 of principal was outstanding.

G) March 2017 Convertible Promissory Notes

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

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $43,661, respectively.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $116,015, respectively.

As of March 31, 2018, the Company no longer had a derivative liability related to these notes, and recognized interest expense of $418,786, and a change in derivative liability benefit of $373,004 during the nine months then ended. As of March 31, 2019, the Company had no derivative liability, and did not recognize a change in derivative liability benefit for the nine months then ended.

As of March 31, 2019, and June 30, 2018, $222,350 of principal was outstanding. During the year ended June 30, 2018, the Company paid $319,500 of principal.

I) June 2017 Convertible Debenture

In June 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $100,000. The Note Holder received 250,000 common stock warrants exercisable at $0.12 per share through June 15, 2020. The promissory note has a term of six months maturing on December 16, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $54,340, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. Interest expense was recorded for the nine months ended March 31, 2019 and 2018 of $0. Beneficial conversion expense was recorded for the nine months ended March 31, 2019 and 2018 of $0. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $45,434, respectively. As of March 31, 2019, and June 30, 2018, $100,000 of principal was outstanding. In May 2018 the maturity date was extended to February 1, 2019. This debenture was past due as of the date of this report.

J) July 2017 Convertible Debenture

In July 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $100,000. The Note Holder received 1,000,000 shares of common stock and 250,000 common stock warrants exercisable at $0.12 per share through September 11, 2000. The promissory note originally had a term of six months maturing on December 16, 2017 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to May 24, 2018 in an extension agreement dated April 6, 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $19,010 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized a fair value of the common shares issued at $100,000. The Company recorded a debenture discount of $53,876 and a beneficial conversion expense of $45,544. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $53,875, respectively. As of March 31, 2019, and June 30, 2017, $100,000 of principal was outstanding. In May 2018 the maturity date was extended to February 1, 2019. This debenture was past due as of the date of this report.

As part of the extension agreement, a derivative liability was created, in connection to a “make-whole” provision. The value of this derivative at September 30, 2018 was $49,798, and a change in derivative liability expense of $28,561 for the three months then ended. This derivative liability was settled for 1,591,549 shares during the second quarter of fiscal year 2019, resulting in additional interest expense of $18,002 during the nine months ended March 31, 2019.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $8,000, respectively.

K) September 2017 Convertible Debenture

Debenture A)

In September 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $150,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $150,000. The Note Holder received 1,650,000 shares of common stock and 375,000 common stock warrants exercisable at $0.12 per share through September 11, 2000. The promissory note had a term of six months maturing on March 26, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to February 1, 2019 in an extension agreement dated May 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $19,420 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized a fair value of the common shares issued at $165,000. The Company recorded a debenture discount of $82,720 and a beneficial conversion expense of $45,219. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $82,720, respectively. As of March 31, 2019, and June 30, 2018, $150,000 of principal was outstanding. In May 2018 the maturity date was extended to February 1, 2019. This debenture was past due as of the date of this report.

As part of the extension agreement, a derivative liability was created, in connection to a “make-whole” provision. The value of this derivative at September 30, 2018 was $22,666, and a change in derivative liability expense of $14,483 for the three months then ended. This derivative liability was settled for 1,781,690 shares during the second quarter of 2018, resulting in additional interest expense of $53,234 during the nine months ended March 31, 2019.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $12,000, respectively.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Debenture B)

In September 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $450,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $495,000. The Note Holder received 10,000,000 shares of common stock and 2,000,000 common stock warrants exercisable at $0.12 per share through September 11, 2000. The promissory note had a term of seven months maturing on April 26, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to January 26, 2019 in an extension agreement dated April 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $318,337 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, seven months. The Company also recorded original issue discount (“OID”) of $45,000 as debt discount and is amortized using the effective interest rate method over the life of the loan, eight months. The Company recognized a fair value of the common shares issued at $1,000,000. The Company recorded a debenture discount of $318,337 and a beneficial conversion expense of $131,663. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $279,680, respectively. As of March 31, 2019, $495,000 of principal was outstanding. This debenture was past due as of the date of this report.

As part of the extension agreement, a derivative liability was created, in connection to a “make-whole” provision. The value of this derivative at September 30, 2018 was $43,998, and a change in derivative liability expense of $28,864 for the three months then ended. This derivative liability was settled for 7,432,432 shares during the second quarter of 2018, resulting in additional interest expense of $283,029 during the nine months ended March 31, 2019.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $36,000, respectively.

Debenture C)

In November 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $225,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $247,500. The promissory note has a term of six months maturing on April 26, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to January 26, 2019 in an extension agreement dated April 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

The Company also recorded original issue discount (“OID”) of $22,500 as debt discount and is amortized using the effective interest rate method over the life of the loan, six months.

As of March 31, 2019, $247,500 of principal was outstanding. This debenture was past due as of the date of this report.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $18,000, respectively.

L) November 2017 Convertible Debenture

In November 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $27,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $27,000. The Note Holder received 416,600 common stock warrants exercisable at $0.15 per share through November 7, 2022. The promissory note has a term of 24 months maturing on November 13, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In accounting for the convertible promissory note, the Company allocated the fair value of the warrants to the proceeds received in the amount of $8,310 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 24 months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $2,389 and $1,242, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $1,644 and $834, respectively. As of March 31, 2019, and June 30, 2018, $27,000 of principal was outstanding.

N) December 2017 Convertible Debenture

In December 2017, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $75,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $75,000. The Note Holder received 1,000,000 shares of common stock and 250,000 common stock warrants exercisable at $0.12 per share through December 27, 2020. The promissory note has a term of 6 months maturing on June 30, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to March 30, 2019 in an extension agreement dated June 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $16,176 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $41,175 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $21,530, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $6,000, respectively. As of March 31, 2019, and June 30, 2018, $75,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at September 30, 2018 was $10,380, and a change in derivative liability expense of $8,061 for the three months then ended. This derivative liability was settled for 809,160 shares during the second quarter of fiscal year 2019, resulting in additional interest expense of $21,420 during the nine months ended March 31, 2019.

O) February 2018 Convertible Debenture

In February 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $45,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $45,000. The Note Holder received 1,500,000 shares of common stock and 500,000 common stock warrants exercisable at $0.12 per share through December 27, 2020. The promissory note has a term of 6 months maturing on August 8, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to February 8, 2019 in an extension agreement dated August 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $9,046 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $31,546 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $6,761 and $8,988, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $3,600. As of March 31, 2019, and June 30, 2018, $45,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at September 30, 2018 was $64, and a change in derivative liability expense of $64 for the three months then ended. This derivative liability was settled for 582,955 shares during the second quarter of fiscal year 2019, resulting in additional interest expense of $25,650 during the nine months ended March 31, 2019.

P) March 2018 Convertible Debenture

In March 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $30,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $30,000. The Note Holder received 1,500,000 shares of common stock and 500,000 common stock warrants exercisable at $0.12 per share through March 6, 2021. The promissory note had a term of 6 months maturing on August 8, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to March 6, 2019 in an extension agreement dated August 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $6,625 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $23,374 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $8,677 and $3,065, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $2,400 was recognized, respectively. As of March 31, 2019, and June 30, 2018, $30,000 of principal was outstanding.

In March 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $35,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $35,000. The Note Holder received 1,500,000 shares of common stock and 500,000 common stock warrants exercisable at $0.12 per share through March 23, 2021. The promissory note has a term of six months maturing on September 23, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to March 23, 2019 in an extension agreement dated September 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $8,702 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $26,298 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $12,254 and $1,005, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $2,800, respectively. As of March 31, 2019, and June 30, 2018, $35,000 of principal was outstanding.

The debenture agreements above include a “make-whole” provision, creating a potential derivative liability. The value of this derivative at December 31, 2018 was $20,823, and a change in derivative liability expense of $18,751 for the six months then ended. This derivative liability was settled for 3,950,920 shares during the third quarter of fiscal year 2019, resulting in additional interest expense of $74,844 during the nine months ended March 31, 2019.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Q) April 2018 Convertible Debenture

In April 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $60,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $60,000. The Note Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through April 26, 2021. The promissory note has a term of approximately 6 months maturing on November 1, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to May 1, 2019 in an extension agreement dated September 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $6,175 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $41,175 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, six months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $26,720 and $0, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $0 was recognized. As of March 31, 2019, and June 30, 2018, $60,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at December 31, 2018 was $2,230, and a change in derivative liability expense of $2,182 for the six months then ended. This derivative liability was settled for 2,484,305 shares during the third quarter of fiscal year 2019, resulting in additional interest expense of $97,142 during the nine months ended March 31, 2019.

R) April 2018 Convertible Debenture

In April 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $70,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $70,000. The Note Holder received 1,000,000 shares of common stock and 200,000 common stock warrants exercisable at $0.12 per share through April 25, 2021. The promissory note has a term of 2 years maturing on April 25, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $0 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $31,188 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 2 years. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $11,278 and $0, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $4,262 and $0 was recognized, respectively. As of March 31, 2019, and June 30, 2018, $70,000 of principal was outstanding.

S) April 2018 Convertible Debenture

In April 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $20,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $20,000. The Note Holder received 1,166,660 common stock warrants exercisable at $0.15 per share through April 25, 2023. The promissory note has a term of 2 years maturing on April 19, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $4,384 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $14,384 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 2 years. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $5,230 and $0, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $1,217 and $0 was recognized, respectively. As of March 31, 2019, and June 30, 2018, $20,000 of principal was outstanding.

T) June 2018 Convertible Debenture

In June 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $40,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $40,000. The Note Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through June 7, 2021. The promissory note has a term of approximately 7 months maturing on December 31, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $8,044 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $31,957 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 7 months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $28,526 and $0, respectively. Interest expense for the nine months ended March 31, 2019 and 2018 of $0 was recognized. As of March 31, 2019, and June 30, 2018, $40,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at March 31, 2019 was $3,184, and a change in derivative liability expense of $3,184 for the nine months then ended.

U) July 2018 Convertible Debenture

In July 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $45,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $45,000. The Note Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through July 9, 2021. The promissory note has a term of approximately 7 months maturing on January 31, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $7,235 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $33,485 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 7 months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 of $33,485. Interest expense for the nine months ended March 31, 2019 of $3,600 was recognized. As of March 31, 2019, $45,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at March 31, 2019 was $883, and a change in derivative liability expense of $883 for the nine months then ended.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

V) August 2018 Convertible Debenture

In August 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $30,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $30,000. The Note Holder received 1,250,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through August 27, 2021. The promissory note has a term of approximately 7 months maturing on March 30, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $5,160 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $22,659 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 7 months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 of $22,659. Interest expense for the nine months ended March 31, 2019 of $2,400 was recognized. As of March 31, 2019, $30,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at March 31, 2019 was $552, and a change in derivative liability expense of $552 for the nine months then ended.

W) September 2018 Convertible Debenture

In September 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $25,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $25,000. The Note Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through September 17, 2021. The promissory note has a term of approximately 7 months maturing on April 30, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $4,475 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $19,058 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 7 months. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 of $17,392. Interest expense for the nine months ended March 31, 2019 of $2,000 was recognized. As of March 31, 2019, $25,000 of principal was outstanding.

The debenture agreement includes a “make-whole” provision, creating a potential derivative liability. The value of this derivative at March 31, 2019 was $441, and a change in derivative liability expense of $441 for the nine months then ended.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

X) December 2018 Convertible Debenture

During the second quarter of the year ended June 30, 2019, the Company sold 52 Units for total proceeds of $52,000 from three affiliated and fourteen non-affiliated parties. Each Unit consists of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a period of five years. An additional 45,826 warrants with identical terms, were granted with this debenture. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.08 per-share, subject to normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the Company.

In accounting for the convertible debentures, the Company allocated the fair value of the warrants to the proceeds received in the amount of $6,835, recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, two years. The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 of $1,065.

Interest expense for the nine months ended March 31, 2019 of $1,340.

December 2018 Convertible Promissory Note

In December 2018, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note to obtain $350,000 in gross proceeds from a non-affiliated party (collectively hereinafter referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $350,000. The Note Holder received 3,000,000 shares of common stock and 5,000,000 common stock warrants exercisable at $0.04 per share through December 26, 2021. The promissory note has a term of 20 months maturing on August 14, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.03 per share at any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.

In accounting for the convertible promissory note, the company recorded a beneficial conversion expense of $126,908 and the Company allocated the fair value of the warrants to the proceeds received in the amount of $126,908 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan, 20 months.

On March 22, 2019, the remainder of the outstanding balance was converted to shares of common stock. 11,666,667 shares of common stock were issued, for the outstanding balance of $350,000.

The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 of $126,908. Interest expense for the nine months ended March 31, 2019 of $6,615 was recognized. As of March 31, 2019, $0 of principal was outstanding. This convertible promissory note is not in the table above, as the debt was entered into and paid off in the same fiscal year.

Debt Issuance Costs

The costs related to the issuance of debt are presented on the balance sheet as a direct deduction from the related debt and amortized to interest expense using the effective interest method over the maturity period of the related debt. Amortization expense for the nine months ended March 31, 2019 and 2018 was $309,032 and $41,511 respectively.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 – NOTES PAYABLE

Promissory Note

In September 2018, the Company issued a promissory note secured by the Company’s CEO for $20,000 with an interest rate of 6%, maturing on March 9, 2019. The note is convertible into the Company’s common stock, at the lenders discretion, at a rate of $0.04 per share, with warrants to purchase an equal amount of stock. Interest expense for the nine months ended March 31, 2019 was $667. As of March 31, 2019, $20,000 of principal was outstanding, and is past due as of the date of this report.

NOTE 7 – EQUITY TRANSACTIONS

Common Stock

During the nine months ended March 31, 2019, the Company issued 20,548,042 shares for $822,922 in consulting services, $61,255 of which was accrued at June 30, 2018.

During the nine months ended March 31, 2019, the Company issued 729,877 shares of common stock at the fair market value of $42,796 for payment of debenture interest.

During the nine months ended March 31, 2019, the Company issued 23,149,564 shares of common stock at the fair market value of $636,698 in connection with debenture derivative liabilities, relieving $149,895 of the derivative liability, and resulting in $573,341 of additional interest expense.

Common Stock Issuable

As of March 31, 2019, the company owed a total of 10,749,548 shares of common stock. 4,872,208 shares were in relation to a new debenture borrowing of $405,000 in aggregate, valued at $80,090. 312,500 shares were in relation to the sale of shares for cash, valued at $12,500. 5,564,840 shares were in relation to amounts owed for salaries and consulting fees. These subscribed shares also included 702,250 warrants to purchase shares of common stock at $0.04 per share. The shares are included in the weighted average shares outstanding for purposes of calculation earning per share for the three and nine months ended March 31, 2019.

During the nine months ended March 31, 2019, 21,164,612 shares with a fair value of $604,383, were issued, reducing shares issuable.

Stock Warrants

A summary of activity of the Company’s stock warrants for the nine months ended March 31, 2019 is presented below (unaudited):

						Weighted
	Weighted					Average		Weighted
	Average					Remaining		Average
	Exercise Price		Number of Warrants			Contractual Term in Years		Grant Date Fair Value

Balance as of June 30, 2018	$	0.11		36,781,726			2.80	$	0.09
Expired		-		-					-
Granted		0.10		8,964,708					0.04
Exercised		-		-					-
Cancelled		0.12		(833,333	)				0.15

Balance as of March 31, 2019	$	0.10		44,913,101			2.08	$	0.08

Vested and exercisable as of March 31, 2019	$	0.10		44,913,101			2.08	$	0.08

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Outstanding warrants at March 31, 2019 expire during the period September 2019 to December 2023 and have exercise prices ranging from $0.03 to $0.30, valued at $4,705,468. These warrants are issued for salary conversions of employees and consultants, and the origination warrants related to debentures.

NOTE 8 – STOCK-BASED COMPENSATION

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

In October 2009 the Board of Directors authorized the approval of a stock option plan covering 7,500,000 shares of common stock, which was increased to 10,000,000 shares in December 2009 and approved by stockholders in January 2010. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2019, 9,200,000 options have been granted, with terms ranging from five to ten years, and 800,000 have been cancelled leaving a balance of 8,400,000 of options outstanding. During the nine months ended March 31, 2019, the Company issued 1,500,000 shares of restricted stock out of the plan, leaving 100,000 options or grants available for grant under the plan.

In March 2012, 3,500,000 stock options, with a term of five years, were granted outside of a stock option plan. In March 2017, the term of these options was extended for an additional five years. In June 2016, and 2017, 6,000,000 and 17,000,000 stock options were granted, with a term of ten years, were granted, respectively, outside of a stock option plan. In February 2019, 5,000,000 stock options, with a term of five years, were granted outside of a stock option plan. 3,000,000 shares were cancelled, leaving a balance of 28,500,000 as of March 31, 2019 outstanding outside of a defined option plan.

In January 2013 the Board of Directors authorized the approval of a stock option plan covering 20,000,000 shares of common stock, which was increased to 60,000,000 shares in March 2013 and approved by stockholders in March 2013. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2019, 84,153,473 options have been granted, with terms ranging from five to ten years, 3,325,000 have been exercised and 21,211,707 have been cancelled, and 59,616,766 remain outstanding.

On February 17, 2016, the Shareholders approved the 2015 Employee Benefit and Consulting Services Compensation Plan covering 15,000,000 shares. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive stock options. As of March 31, 2019, 16,900,000 options have been granted with a term of five years, and 2,225,000 have been cancelled leaving a balance outstanding of 14,675,000 options.

Incentive Stock Options: The Company estimates the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model. The volatility is based on expected volatility over the expected life of thirty-six to sixty months. Compensation cost is not reduced by the Company for estimated forfeitures based on historical forfeiture rates for options granted after July 1, 2018. For grants prior to July 1, 2018, compensation cost was recognized based on awards that are ultimately expected to vest, therefore, the Company has reduced the cost for estimated forfeitures based on historical forfeiture rates, which were between 14% and 17%. As the Company has not historically declared dividends, the dividend yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions. There is no assurance the value realized by an optionee will be at or near the value estimated by the Black-Scholes-Merton model.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following assumptions were used for the periods indicated:

	Nine Months Ended
	March 31,
	2019			2018
	(unaudited)
Expected volatility		122.52% - 126.99	%		129.46	%
Expected dividend yield		-			-
Risk-free interest rates		2.46% - 2.95	%		2.62	%
Expected term (in years)		5.0			5.0

The computation of expected volatility during the nine months ended March 31, 2019 and 2018 was based on the historical volatility. Historical volatility was calculated from historical data for the time approximately equal to the expected term of the option award starting from the grant date. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for the period corresponding with the expected life of the option.

A summary of the activity of the Company’s stock options for the nine months ended March 31, 2019 is presented below (unaudited):

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value

Balance as of June 30, 2018	$	0.09		85,616,914			4.00	$	0.11	$	-
Expired		-		-					-
Granted		0.03		28,500,000					0.03
Exercised		-		-					-
Cancelled		0.07		(2,925,148	)				0.05

Balance as of March 31, 2019	$	0.07		111,191,766			4.02	$	0.09	$	-

Vested and exercisable as of March 31, 2019	$	0.07		100,459,599			3.76	$	0.09	$	-

Outstanding options at March 31, 2019, expire during the period May 2019 to June 2026 and have exercise prices ranging from $0.02 to $0.17.

Compensation expense associated with stock options for the nine months ended March 31, 2019 and 2018 was $1,171,581 and $655,528 respectively and was included in general and administrative expenses in the consolidated statements of operations.

At March 31, 2019, the Company had 10,732,167 shares of nonvested stock option awards. The total cost of nonvested stock option awards which the Company had not yet recognized was $245,491 at March 31, 2019. Such amounts are expected to be recognized over a period of 0.75 years.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Restricted Stock: To encourage retention and performance, the Company granted certain employees restricted shares of common stock with a fair value per share determined in accordance with conventional valuation techniques, including but not limited to, arm’s length transactions, net book value or multiples of comparable company earnings before interest, taxes, depreciation and amortization, as applicable. Generally, the stock vests over a 3-year period. A summary of the activity of the Company’s restricted stock awards for the nine months ended March 31, 2019, and year ended June 30, 2018 is presented below (unaudited):

	Number of
	Nonvested,			Weighted
	Unissued			Average
	Restricted			Grant Date
	Share Awards			Fair Value

Nonvested, unissued restricted shares outstanding at June 30, 2017		1,500,000			0.21
Granted		5,500,000			0.06
Vested		(7,000,000	)		0.09
Forfeited		-			-
Nonvested, unissued restricted shares outstanding at June 30, 2018		-		$	-
Granted		-			-
Vested		-			-
Forfeited		-			-
Nonvested, unissued restricted shares outstanding at March 31, 2019		-		$	-

Compensation expense associated with restricted stock awards for the nine months ended March 31, 2019 and 2018 was $100,000 and $343,509, respectively, and was included in general and administrative expenses in the consolidated statements of operations.

The total cost of nonvested stock awards which the Company had not yet recognized was $0 at March 31, 2019.

NOTE 9 – LOSS PER SHARE

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

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

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
	(unaudited)						(unaudited)

Net loss	$	(2,041,000	)	$	(2,736,682	)	$	(5,596,391	)	$	(7,584,340	)

Weighted average common shares outstanding:
Basic and diluted		521,743,994			428,394,955			497,693,368			401,191,882

Basic and diluted loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Agreement with University of Arizona

Solterra entered into an exclusive Patent License Agreement with the University of Arizona (“UA”) in July 2009. On March 3, 2017, Solterra entered into an amended license agreement with UA. Pursuant to UA License Agreement, as amended, Solterra is obligated to pay minimum annual royalties of $50,000 by June 30, 2017, $125,000 by September 15, 2017 and $200,000 on each June 30th thereafter, subject to adjustments for increases in the consumer price index. Such minimum royalty payments shall be credited against royalties due in each respective royalty year, July 1 to June 30, following the due date. Royalties based on net sales are 2% of net sales of licensed products for non-display electronic component applications and 2.5% of net sales of licensed products for printed electronic displays. The UA License Agreements and subsequent amendments have been filed on Form 8-K and are incorporated by reference herein. The Company is in the process of renegotiating the minimum royalty commitments and while oral modifications have been agreed to a final amendment has not been finalized. As of March 31, 2019, no royalties have been accrued for this obligation.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Agreement with Texas State University

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

Operating Leases

The Company leases certain office and lab space under a month-to-month operating lease agreement.

Rental expense for the operating lease for the nine months ended March 31, 2019 and 2018 was $57,142 and $115,541, respectively.

NOTE 11 — LITIGATION

The Company was served in Hays County, Texas in a complaint for breach of contract in February 2017. In April 2017, the Company settled this complaint for $129,000 payable over a four-month period. As of the filing date of this Form 10-Q, the balance in arrears is $95,000 plus interest and other charges which has been accrued at March 31, 2019. The Company repaid $237,300 in principal plus interest to L2 Capital LLC and $101,700 plus interest to SBI Investments LLC on September 30, 2017, and $149,555 plus interest to L2 Capital LLC and $64,095 plus interest to SBI Investments LLC on November 3, 2017, respectively.

CAUSE NUMBER 17-2033; Hays County, Texas

Two lenders, SBI Investments LLC, 2014-1, and L2 Capital, LLC, asked Quantum Materials’ transfer agent, Empire Stock Transfer, Inc., to set aside fifty million (50,000,000) shares of stock as collateral for four loan agreements Quantum Materials had entered into in late March 2017. This joint request occurred despite the fact that or about September 30, 2017 Quantum had repaid $339,000 (plus accrued interest of $10,170) on two of the loans. Subsequently, in November 2017, the Company also repaid $213,650 and $8,636 of accrued interest on two of the remaining loans on their due dates.

Quantum filed suit for an injunction to stop the release of the stock. The two lenders, SBI Investments LLC, 2014-1 (SBI), and L2 Capital, LLC (L2), hired the national law firm of K&L Gates to stop the injunction; problematically, this same firm had previously represented Quantum Materials. Quantum filed a motion to disqualify the law firm for that conflict, and they subsequently withdrew.

New counsel for SBI and L2, Cleveland Terrazas PLLC, brought suit against Quantum for $1.5 million on the four notes that had been repaid and were not in actual default, though SBI Investments LLC, 2014-1, and L2 Capital, LLC claimed technical defaults. The court in Hays County granted Quantum’s temporary injunction and set the full case for trial. The next day, SBI Investments LLC, 2014-1, and L2 Capital, LLC dismissed their suit against Quantum and refiled similar actions in Kansas and Florida on the notes claiming that one note was paid on a Monday when it was due on a Sunday, demanding late payment in stock (they refused cash), and another was paid on a Friday when it was due Saturday, claiming a pre-payment penalty. All three suits are related to the same transactions. The lenders claim 140% interest, attorney’s fees, 20 million shares of stock, and damages. Quantum maintains all loans have been paid timely.

The Company denies all the above-mentioned allegations and will vigorously defend all claims.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

CAUSE NUMBER: 17CV06093; Johnson County, Kansas

The Kansas lawsuit is based on the same nucleus of facts. The putative default is the failure to properly and timely file a Form S-1 with the SEC. Three causes of action are alleged: the first is breach of contracts regarding the Registration Rights Agreement against Quantum; the second claim is for breach of contract of the first L2 promissory note against Quantum; the final claim is for breach of contract regarding the second L2 promissory note against both Quantum and Squires, individually.

The Company denies all the above-mentioned allegations and will vigorously defend all claims.

CAUSE NUMBER: 2017-025283-CA-01; Miami-Dade County, Florida

The Florida lawsuit largely mirrors the suit in Kansas; defaults are alleged as follows:

On July 6, 2017, Quantum filed a revised Form 10-Q/A report (the Report) with the SEC, restating its financial statements. In comparison to the unrestated financial statement previously filed by Quantum, the Revised Report materially and adversely affects SBI’s rights with respect to the notes. This restatement of financial statements constituted a breach of each of the notes. Furthermore, because each note contains a cross-default clause, each of Quantum’s breaches of a specific note also constituted a breach of every other note.

On July 27, 2017, Quantum’s auditor resigned, and replaced its auditor without seeking or obtaining the consent of SBI. This replacement of Quantum’s auditor constituted an alleged breach of the SBI notes. Because each note contains a cross-default clause, each of Quantum’s breaches of a specific note also constituted a breach of every other note.

The Company denies all the above-mentioned allegations and will vigorously defend all claims.

The case was reheard in late March 2018 and a 45-day continuance was decided resulting in an April 30, 2018 rehearing. After a day of litigation in San Marcos, QTMM’s motion to enjoin L2 and SBI and prevent them from obtaining stock before a full trial on the merits was granted on October 27, 2017, by Judge Gary Steel. L2 and SBI objected to the injunction and appealed to the Third Court of Appeals in Austin, TX. On March 8, 2018, in a unanimous opinion, the Third Court of Appeals denied the appeal, sustained the injunction in favor of QTMM and awarded costs of court.

On March 29, 2018, at a discovery hearing, wherein QTMM asked the court to order L2 and SBI to produce evidence to support their positions, L2 and SBI requested and received a stay of litigation, postponing the trial date of April 2018, which they had previously requested, and also postponing discovery until rulings in Florida and Kansas, or until further order of the court. The court also announced that when Florida and Kansas have spoken, discovery will be expedited. A jurisdiction hearing for the Florida case on August 15, 2018 resulted in the lawsuit being dismissed and a hearing in Kansas resulted in partial dismissal. Mediation is scheduled in May 21, 2019 in Dallas, Texas.

The Company expects to be successful in the L2 and SBI litigation. The ultimate outcome is not determinable and as such, no liability has been recorded for this contingent liability at March 31, 2019.

Quantum v. K&L Gates, Inc., 18-2393, pending in Hays County, Texas.

In September 2017, Quantum filed an injunction suit against two of its lenders, SBI Investments, LLC, 2014-1 and L2 Capital LLC, in Hays County, Texas (428th Judicial District; Cause No. 17-2033). On October 2017, these two lenders intervened in the proceeding, asserted affirmative claims for monetary damages against Quantum, and opposed Quantum’s request for temporary injunctive relief. The lenders’ law firm was K&L Gates. In 2016, the Board of Directors for Quantum retained the law firm of K&L Gates. In this professional capacity, K&L Gates attended confidential board meetings and reviewed, inter alia, corporate secrets. K&L Gates billed approximately $100,000 per month. The Company has accrued $319,000 in relation to this action. Quantum moved to disqualify K&L Gates. The day before Quantum’s motion to disqualify was ruled on, K&L Gates withdrew in lieu of the Austin law firm Cleveland & Terrazas. On September 21, 2018, the “Deputy General Counsel of K&L Gates,” Mr. Charles Tea, sent a demand for payment of over $300,000 to Quantum’s CEO. On October 16, 2018, Quantum filed suit against K&L Gates alleging Breach of Fiduciary Duty, Deceptive Trade Practices, and Legal Malpractice.

QUANTUM MATERIALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Nine Months Ended
	March 31,
	2019		2018
	(unaudited)

Cash paid for interest	$	6,904	$	29,023

Cash paid for income taxes	$	-	$	-

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

	Nine Months Ended
	March 31,
	2019		2018
	(unaudited)

Conversion of debentures, and accrued interest into shares of common stock	$	699,517	$	855,000

Allocated value of common stock and warrants issued with convertible debentures	$	208,945	$	602,544

Debenture extension paid in shares of common stock	$	-	$	167,354

Stock issued for amounts in accounts payable	$	81,602	$	-

Stock and stock warrants issued for conversion of accrued salaries	$	-	$	249,900

Prepaid expense paid in shares of common stock	$	750,000	$	1,242,232

Financing of prepaid insurance	$	-	$	12,738

NOTE 13 – TRANSACTIONS WITH AFFILIATED PARTIES

At March 31, 2019 and June 30, 2018, the Company had accrued salaries payable to executives in the amount of $468,825 and $568,575, respectively.

During the year ended June 30, 2017, the Company issued a convertible debenture to a family member of a former key executive for proceeds of $200,000. This transaction is described in more detail in Note 5 under the debenture reference C) April – June, August, October and November 2016 Convertible Debentures.

In February 2019, the Company granted 5,000,000 shares of common stock, vested immediately, to the CEO of the Company, Stephen Squires, valued at $100,000. At March 31, 2019, these shares were not issued, and are reported in common stock issuable in the equity section of the Balance Sheet.

NOTE 14 - SUBSEQUENT EVENTS

April – June, August, October and November 2016 Convertible Debentures — On April 5, 2019, the Company entered into extension agreements for $700,000 of this debenture series. On May 6, 2019, the Company entered into an extension agreement for an additional $125,000. In exchange for these extensions, the Company will issue 9,531,250 shares of restricted Common Stock. As of the date of this report, the shares were not issued.

September 2017 Convertible Debentures — On April 5, 2019, the Company converted $742,500 of principal, and $54,000 of accrued interest on these debentures into 17,000,000 shares of common stock (see Note 5, reference K).

Share issuances

During the period April 1, 2019 through the date of this report, the Company issued 16,160,195 for services.

During the period April 1, 2019 through the date of this report, the Company issued 17,000,000 for the conversion of debentures to common stock.

During the period April 1, 2019 through the date of this report, the Company issued 6,000,000 shares to the CEO for compensation.

During the period April 1, 2019 through the date of this report, the Company issued 125,000 shares which were issuable at March 31, 2019, in connection with the sale of common stock.

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

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

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

The following discussion should be read in conjunction with the Company’s risk factors, consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Form 10-K filed October 15, 2018 for the fiscal year ended June 30, 2018. Except for the historical information contained herein, the discussion in this Form 10-Q contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear herein. The Company’s actual results could differ materially from those discussed here.

The financial information furnished herein has not been audited by an independent accountant; however, in the opinion of management, all adjustments (only consisting of normal recurring accruals) necessary for a fair presentation of the results of operations for the three and nine-month periods ended March 31, 2019 and 2018 have been included.

Business Overview

We are a nanotechnology company specializing in the design, development, production and supply of nanomaterials, including quantum dots (“QDs”), tetrapod quantum dots (“TQDs”), and other nanoparticles for a range of applications in televisions, displays and other optoelectronics, photovoltaics, solid state lighting, life sciences, security ink, battery, and sensor sectors of the market. Our wholly owned operating subsidiary, Solterra Renewable Technologies, Inc. (“Solterra”), is focused on the next generation photovoltaic (solar cell) market, using quantum dot semiconductors.

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

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

QDs also have applications in solar cells, where their characteristics enable conversion of light energy into electricity with the potential for significantly higher efficiency than existing technologies. In traditional solar cells, a photon can only be converted into a fixed amount of energy per photon, regardless of the photon’s total energy. Excess energy is converted to heat which further lowers the efficiency of the panel. QD-based solar cells have the potential to significantly exceed this efficiency because QDs are capable of generating multiple electrons per photon strike rather than converting the extra energy of high energy photons to heat as in the case of traditional solar cells. QD solar cells can also convert the infrared portion of the spectrum that is not absorbed by traditional solar cells. These attributes make the theoretical maximum efficiency of QD solar cells substantially higher that of traditional silicon solar cells. We believe the use of QDs in solar cells will create the opportunity for a step change in efficiency and performance in printed photovoltaic cells.

A key challenge for the quantum dot industry has been and may continue to be its ability to scale up production volumes sufficiently to meet growing demand for QDs while maintaining product quality and consistency and reducing the overall costs of supply to stimulate new applications. QDs remain an expensive product, but we anticipate rapid growth of the QD market.

History of the Company

We were formed in January 2007 as a Nevada corporation in the business of the exploitation of mineral interests. We acquired Solterra in November 2008 and changed our business to the development of QDs.

Intellectual Property Portfolio

In October 2008, Solterra entered into a license agreement with the University of Arizona, which was later amended, (the “UA License”) pursuant to which Solterra has been granted exclusive rights to use the University of Arizona’s patented screen-printing techniques in the production and sale of organic light emitting diodes (“OLEDs”) incorporating QDs in printed electronic displays and other printed electronic components. This technology was developed at University of Arizona by Dr. Ghassan Jabbour, a member of the Company’s Board of Directors.

In 2014, the Company acquired a patent portfolio from Bayer AG that included patents and patent applications covering the high-volume manufacture of QDs, including heavy metal-free compositions, various methods for enhancing quantum dot performance, and a quantum dot based solar cell technology (the “Bayer Patents”).

The Bayer Patents, the UA License, organically developed technologies and our proprietary continuous flow manufacturing process comprise our fundamental asset platform. We believe that the intellectual property and proprietary technologies position the Company to become a leader in the overall nanomaterials and quantum dot industry, and a preferred supplier of high performance QDs and TQDs to an expanding range of applications.

Corporate Realignment

In 2016, Mr. Squires returned as President and CEO and implemented a cost reduction initiative streamlining the G&A overhead and devoting more resources to R&D and commercialization readiness. These efforts have resulted in further optimization of the chemistry and the products. Through this refinement, we have been able to continually refine and increase the throughput of our production equipment to the metric ton range of QDs per year. All our discoveries are purposely developed to be compatible with our patented flow manufacturing process. Management believes that this and a number of other material performance enhancement discoveries made by us provide us with the ability to provide industry leading material performance at a very competitive price point.

License Agreement

In November 2018, the Company entered into a license and development agreement with Amtronics India LLC related to the volume production of quantum dots in Assam, India. The agreement is part of a larger project for the design, training, research and development of a quantum dot manufacturing facility in Assam. This project has been under discussion for nearly three years. A ground-breaking ceremony took place in Assam on January 16, 2019, and the Company anticipates operations being established and operational prior to year-end 2019. In addition to an upfront fee and royalty, the agreement provides for the Company to sell equipment and training services, which the Company expects will provide additional revenues.

The Company believes that the terms of the licensing agreement will enable the Company to begin to leverage its intellectual property portfolio and to begin generating revenues without overburdening the Company’s scientific staff in a manner that would disrupt new discovery. The other participants in the Assam project have the responsibility of, among other things, developing the site, constructing the facilities and hiring staff. The Company has agreed to construct and supply the proprietary equipment, assisting in the development and scale up of the 3^rd generation solar, display and SSL products, training and providing a broad range of consulting services at additional cost, representing a potential ongoing revenue opportunity for the Company.

On or about December 23, 2018, Assam Electronics Development Corporation LTD (an Indian government enterprise involved in the development of the manufacturing facility in India) paid the first investment of $1M USD into the overall project fund. Amtronics then transferred a $500K USD commitment fee to the group that has secured the $20M investment funding. In terms of direct funding, the Company received a $500,000 payment from Amtron/Amtronics in March 2019. The Indian monetary system has layers of oversight and approvals for international remittance of funds which the Company believes caused the delay of the payment from the previously reported schedule. In order to avoid similar delays in the future, Amtron/Amtronics have informed the Company that they are in the process of issuing a letter of credit for the balance of funds owing for the license fee as well as equipment purchases. The Company believes that once this letter of credit is in place it will provide more timely payments going forward. In the meantime, the Company has proceeded readying the production equipment in order to maintain project momentum.

In addition to Company’s efforts to commercialize its QD-LED remote phosphor technology for displays, the Company plans for its core focus in 2019 to be research and development for the optimization of its 3^rd generation perovskite QD based solar technology in preparation of scaling up to commercial production levels in Assam, India.

Liquidity and Capital Resources

Going Concern

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

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

The Company has continued to maintain aggressive cost control measures, although we plan on increasingly to focus more resources on research and development during the last half of fiscal year 2019, and fiscal year 2020. To further streamline operations, the Company has continued to analyze its operating costs and to make reductions where management believes prudent.

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

As of March 31, 2019, we had a working capital deficit of $5,884,630, with total current assets and liabilities of $1,173,270 and $7,192,413 respectively. Included in the liabilities are $682,575 owed to our officers, directors and employees for services rendered and accrued through March 31, 2019, $3,060,219 of convertible debentures, net of unamortized discount and $34,168 of notes payable that are due within one year. $1,847,500 of these debentures are past due as of the date of this report. As a result, we have relied on financing through the issuance of common stock and convertible debentures.

As of March 31, 2019, we have cash and cash equivalent assets of $135,292. We continue to incur losses in operations. Over the past five years we have primarily relied on sales of common stock and debt instruments to support operations as well as employees and consultants agreeing to defer payment of wages and fees owed to them and/or converting such wages and fees into securities of the Company. Management believes it may be necessary for the Company to rely on external financing to supplement working capital to meet the Company’s liquidity needs in the fiscal years ended 2019 and 2020; the success of securing such financing on terms acceptable to the Company, if at all, cannot be assured. If we are unable to achieve the financing necessary to continue our plan of operations, our stockholders may lose their entire investment in the Company.

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

	Nine Months Ended
	March 31,
	2019			2018

Operating activities	$	(721,133	)	$	(813,273	)
Investing activities		-			(1,877	)
Financing activities	$	854,400		$	778,612

Operating Activities. Net cash used in operating activities was $721,133 for the nine months ended March 31, 2019 compared to $813,273 for the same period of 2018, a decrease in cash used of $92,140. The decrease was primarily driven by increased stock issued for services, and increased deferred revenue, although this was offset by an increase in net loss for the nine months ended March 31, 2019, and decreased payments on accounts payable.

Investing Activities. Net cash used in investing activities was primarily related to purchases of equipment. No purchases of capital equipment occurred in the nine months ended March 31, 2019 and were $1,877 for the nine months ended March 31, 2018.

Financing Activities. Net cash provided by financing activities was $854,400 for the nine months ended March 31, 2019 compared to $778,612 for the same period of 2018, an increase of $75,788. The increase is primarily due to an increase of proceeds for the sale of common stock, fewer principal payments on debentures and notes payable due to maturities, partially offset by fewer issuances of convertible debentures and notes payable during the nine months ended March 31, 2019.

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes we will be able to meet our obligations and continue our operations for the next fiscal year. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to reflect the carrying value and classification of assets and liabilities should we be unable to continue as a going concern.

Financing Arrangements

Over the course of meeting our capital needs, we have entered into various debentures and debt instruments, which generally have short maturity terms, typically 6 to 18 months. Many of these instruments were accompanied by shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock. The outstanding principal amount of these instruments at March 31, 2019 was $3,006,550. The terms of the instruments are set forth in the following table.

Issuance Date		Outstanding Principal Amount ($) (1)		Interest Rate			Conversion Price ($)		Maturity Term	No. of Shares Exercisable Under Related Warrant		Warrants Strike Price ($)		Warrant Exercise Period
Sep-14			25,050		6	%		0.15	September 2019 - October 2019		3,333,667		0.3		Sep-19

April - June 2016 (2)			1,075,000		8	%		0.01	March 2018 - July 2019		5,686,590		0.15		Aug-21
August 2016 (3)			200,000		8	%		0.01	Aug-18		833,200		0.15		Aug-21
January - March 2017	(3)		60,000		8	%		0.12	January - March 2019		10,831,600		0.15		January 2022 - March 2022
Jun-17	(3)		100,000		8	%		0.12	Feb-19		250,000		0.12		Jun-20
Jul-17	(3)		100,000		8	%		0.12	Feb-19		250,000		0.12		Jul-20
Sep-17	(3)		150,000		8	%		0.12	Feb-19		375,000		0.12		Sep-20
Sep-17	(3)		495,000		8	%		0.12	Jan-19		2,000,000		0.12		Sep-20
Nov-17	(3)		247,500		8	%		0.12	Jan-19		-		-		-
Nov-17			27,000		8	%		0.12	Nov-19		416,600		0.15		Nov-22
Dec-17	(3)		75,000		8	%		0.12	Mar-19		250,000		0.12		Dec-20
Feb-18	(3)		45,000		8	%		0.12	Feb-19		500,000		0.12		Dec-20
Mar-18	(3)		65,000		8	%		0.12	Mar-19		500,000		0.12		Mar-21
Apr-18	(3)		60,000		8	%		0.12	Mar-19		500,000		0.12		Mar-21
Apr-18			70,000		8	%		0.12	Apr-21		200,000		0.12		Apr-21
Apr-18			20,000		8	%		0.12	Apr-20		1,166,660		0.15		Apr-23
Jun-18			40,000		8	%		0.12	Oct-19		1,000,000		0.12		Jun-21
Jul-18			45,000		8	%		0.12	Oct-19		1,000,000		0.12		Jun-21
Aug-18			30,000		8	%		0.12	Oct-19		1,000,000		0.12		Aug-21
Sep-18			25,000		8	%		0.12	Oct-19		1,000,000		0.12		Sep-21
Dec-18			52,000		8	%		0.12	Dec-20		262,458		0.15		Dec-23

(1)	This table does not include $222,350 of promissory notes held by SBI Investments LLC, 2014-1, and L2 Capital, LLC issued as consideration for an equity line of credit that did not close in the form of promissory notes, which bear interest at 8% per annum, matured on December 29, 2017 and are considered past due at the time of this report. The promissory notes are convertible into unregistered and restricted shares of shares of the Company’s common stock only if there is an Event of Default, as defined in the notes. These amounts are subject to ongoing litigation, and the Company does not intend to pay the balances or honor a conversion until the litigation has concluded. See Note 11 to the Notes to Condensed Consolidated Financial Statements.
(2)	$250,000 is past due as of the date of this report.
(3)	This debenture is past due as of the date of this report

Results of Operations

Three Months Ended March 31, 2019, Compared to Three Months Ended March 31, 2018.

Revenue

Revenue for the three months ended March 31, 2019 and 2018 was nominal. No revenue was recorded for the license and development agreement in Assam, India for the three months ended March 31, 2019, as our performance obligation has not been fulfilled as of March 31, 2019.

General and administrative expenses

During the three months ended March 31, 2019, the Company incurred $1,604,074 of general and administrative expenses compared with $1,785,451 incurred in the three-month period ended March 31, 2018, a decrease of $181,377, or 10.2%. The decrease in general and administrative expenses was primarily due to decreases in compensation, including stock-based compensation, and other professional fees, partially offset by increased legal and audit, and corporate expenses.

Included in general and administrative expenses for the three months ended March 31, 2019 and 2018 are the following:

	Three Months Ended
	March 31,
	2019		2018

Compensation	$	94,800	$	183,410	$	(88,610	)	-48.3	%
Stock-based compensation		737,152		863,059		(125,907	)	-14.6	%
Legal and audit expenses		61,574		19,636		41,938		213.6	%
Corporate expenses		170,686		136,441		34,245		25.1	%
Other professional fees		507,950		550,913		(42,963	)	-7.8	%
Depreciation		25,001		25,081		(80	)	-0.3	%
Amortization		6,911		6,911		-		0.0	%
Total General and Administrative Expenses	$	1,604,074	$	1,785,451	$	(181,377	)	-10.2	%

Research and development expenses

During the three months ended March 31, 2019, the Company incurred $36,258 of research and development expenses, an increase of $7,435, or 25.8% from the $28,823 recorded for the three months ended March 31, 2018. The increase is primarily due to increased expenditures for lab equipment, repairs and maintenance, and chemicals and consumables in the San Marcos facility.

Beneficial conversion feature on convertible debenture

During the three months ended March 31, 2019 the Company incurred $0 of beneficial conversion expense compared to $506,415 recorded for the three months ended March 31, 2018. The decrease in beneficial conversion expenses was due to beneficial conversion feature of a certain debentures entered into during the three months ending March 31, 2018, and no new debentures being entered into during the three months ended March 31, 2019.

Interest expense, net

Interest expense recorded for the three months ended March 31, 2019 was $241,220 compared to $121,228 in the three months ended March 31, 2018, an increase of $119,992, or 99.0%. The increased interest expense recorded in the three months ending March 31, 2019 was primarily related to amounts charged to interest expense related to derivative liability settlements, of approximately $172,000, and deemed interest related to debt conversion to common stock of approximately $24,000.

Change in value of derivative liability

During the three months ended March 31, 2019 the Company recorded an expense of $2,219 related to the change in value of derivative liability. The expense is related to the change in value of the derivative related to the “make-whole” provision issued in relation to certain debenture extensions during prior quarters.

Accretion of debt discount

During the three months ended March 31, 2019 the Company recorded $157,629 of accretion of debt discount expense, a decrease of $138,136, or 46.7% from the $295,765 recorded for the three months ended March 31, 2018. The decrease in accretion of debt discount expense is primarily related to the issuance of the debt discount on convertible debentures outstanding being fully recognized.

	Three Months Ended
	March 31,				Increase/
	2019		2018		(Decrease)			%
Statement of Operations Information:

Revenues	$	400	$	1,000	$	(600	)		-60.0	%
General and administrative		1,604,074		1,785,451		(181,377	)		-10.2	%
Research and development		36,258		28,823		7,435			25.8	%
Beneficial conversion expense		-		506,415		(506,415	)		-100.0	%
Interest expense, net		241,220		121,228		119,992			99.0	%
Change in fair value of derivative liabilities		2,219		-		2,219			-	%
Accretion of debt discount		157,629		295,765		(138,136	)		-46.7	%

Nine Months Ended March 31, 2019, Compared to Nine Months Ended March 31, 2018.

Revenue

Revenue for the nine months ended March 31, 2018 was $12,870. This revenue is from the sale of sale of samples to potential customers, for testing and evaluation of licensed product. Revenue for the nine months ended March 31, 2019 was $400. No revenue was recorded for the license and development agreement covering Assam, India for the nine months ended March 31, 2019, as our performance obligation has not been fulfilled as of March 31, 2019.

General and administrative expenses

During the nine months ended March 31, 2019, the Company incurred $4,227,599 of general and administrative expenses compared with $4,679,293 incurred in the nine-month period ended March 31, 2018, a decrease of $451,694, or 9.7%. The decrease in general and administrative expenses was primarily due to decreases in compensation expenses, including stock-based compensation, and legal and audit expenses, partially offset by other professional fees and corporate expenses.

Included in general and administrative expenses for the nine months ended March 31, 2019 and 2018 are the following:

	Nine Months Ended
	March 31,				Increase/
	2019		2018		(Decrease)			%

Compensation	$	372,933	$	688,978	$	(316,045	)		-45.9	%
Stock-based compensation		1,272,307		1,374,787		(102,480	)		-7.5	%
Legal and audit expenses		209,283		418,545		(209,262	)		-50.0	%
Corporate expenses		503,488		438,238		65,250			14.9	%
Other professional fees		1,773,894		1,658,017		115,877			7.0	%
Depreciation		75,008		74,591		417			0.6	%
Amortization		20,686		26,137		(5,451	)		-20.9	%
Total General and Administrative Expenses	$	4,227,599	$	4,679,293	$	(451,694	)		-9.7	%

Research and development expenses

During the nine months ended March 31, 2019, the Company incurred $74,794 of research and development expenses, a decrease of $85,535, or 53.3% from the $160,329 recorded for the nine months ended March 31, 2018. The decrease is primarily due to decreased expenditures for lab equipment, repairs and maintenance, and chemicals and consumables in the San Marcos facility.

Beneficial conversion feature on convertible debenture

During the nine months ended March 31, 2019 the Company incurred $143,778 of beneficial conversion expense compared to $1,275,017 recorded for the nine months ended March 31, 2018. The decrease in beneficial conversion expenses of $1,131,239, or 88.7% was due primarily to issuance of new convertible debentures, and the adoption of ASU 2017-11 during the nine months ending March 31, 2018.

Interest expense, net

Interest expense recorded for the nine months ended March 31, 2019 was $733,501 compared to $976,768 in the nine months ended March 31, 2018, a decrease of $243,267, or 24.9%. The decreased interest expense recorded in the nine months ending March 31, 2019 was primarily related to the deemed interest expense charges on debenture extinguishment, recorded in the nine months ending March 31, 2018. This was partially offset by amounts charged to interest expense related to derivative liability settlements of approximately $572,000 during the current nine-month period.

Change in value of derivative liability

During the nine months ended March 31, 2018 the Company recorded a benefit of $514,969 related to the change in value of derivative liability. The benefit is related to the change in value of the convertible debentures feature issued in March and May of 2017. During the nine months ended March 31, 2019 the Company recorded an expense of $108,087 related to the change in value of derivative liability. The expense is related to the change in value of the “make-whole” provision issued in relation to debenture extensions during the nine-month period.

Accretion of debt discount

During the nine months ended March 31, 2019 the Company recorded $309,032 of accretion of debt discount expense, a decrease of $711,740, or 69.7% from the $1,020,772 recorded for the nine months ended March 31, 2018. The decrease in accretion of debt discount expense is primarily related to the issuance of the debt discount on convertible debentures outstanding being fully recognized.

	Nine Months Ended
	March 31,					Increase/
	2019		2018			(Decrease)			%
Statement of Operations Information:

Revenues	$	400	$	12,870		$	(12,470	)		-96.9	%
General and administrative		4,227,599		4,679,293			(451,694	)		-9.7	%
Research and development		74,794		160,329			(85,535	)		-53.3	%
Beneficial conversion expense		143,778		1,275,017			(1,131,239	)		-88.7	%
Interest expense, net		733,501		976,768			(243,267	)		-24.9	%
Change in value of derivative liability		108,087		(514,969	)		623,056			-121.0	%
Accretion of debt discount		309,032		1,020,772			(711,740	)		-69.7	%

Off-balance sheet arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file under the Exchange Act 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 disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Due to the inherent limitation of controls systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(f) under the Securities Exchange Act of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this report, because of material weaknesses in our internal control over financial reporting.

In connection with the preparation of our Annual Report on Form 10-K for the fiscal year ended June 30, 2018, management concluded that, as of June 30, 2018, our internal control over financial reporting was not effective, as a result of material weaknesses in our control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. The material weaknesses identified in our internal control over financial reporting related to the lack of timely and effective review of the Company’s period-end closing process and adequate personnel and resources.

Remediation Plan

Management is committed to remediating the material weaknesses discussed above. The Company has recruited experienced US GAAP/financial reporting professional to augment and upgrade its finance and accounting staff to address issues of accuracy, completeness, adequate segregation of duties, and timeliness in financial statement preparation and reporting. However, the Company may be unable to remediate this weakness until it has received additional funding that may be necessary to hire additional personnel. Until the Company has sufficient internal finance and accounting staff, it plans to work closely with external financial advisors to review and monitor its accounting procedures, perform internal audit procedures, and to prepare its consolidated financial statements and reports. In addition, The Company does not believe it has sufficient documentation with its existing financial processes, risk assessment and internal controls. Until it has sufficient internal finance and accounting staff, it plans to work closely with external financial advisors to document the existing financial processes, risk assessment, and internal controls systematically. The Company believes its recently hired personnel, or through professional engagement of consultants, will improve its documentation and internal control processes and procedures.

Changes in Internal Control over Financial Reporting

During the last fiscal quarter, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, except as set forth above.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

Not applicable.

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

From January 1, 2019 to March 31, 2019, we had the following sales and issuances of unregistered equity securities:

Date of Sale

Title of Security

Number Sold

Consideration
Received and
Description of
Underwriting or
Other Discounts to
Market Price or
Convertible
Security Afforded
to Purchases

Exemption from Registration Claimed

If Option, Warrant or
Convertible Security,
Security, Terms
of Exercise or Conversion

Security Holder

January 2019

Common Stock

2,000,000

Shares issued for services; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Blue Heron Capital

January 2019

Common Stock

3,500,000

Shares issued for services; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Sound Capital, Inc.

February 2019

Common Stock

3,164,894

Shares issued for debenture; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Lucas Hoppel

February 2019

Common Stock

1,116,279

Shares issued for debenture; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Lucas Hoppel

March 2019

Common Stock

3,786,026

Shares issued for debenture; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Lucas Hoppel

March 2019

Common Stock

8,477,792

Shares issued for debentures; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Lucas Hoppel

March 2019

Common Stock

4,484,305

Shares issued for debenture; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Lucas Hoppel

March 2019

Common Stock

11,666,667

Shares issued for debenture conversion; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Amtronics, LLC

March 2019

Common Stock

5,573,863

Shares issued for debenture conversion; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Carson Diversified Investments

March 2019

Common Stock

5,573,863

Shares issued for debenture conversion; no commissions paid

Section 4(2); and/or Rule 506

Not applicable

Carson Haysco Holdings, LP

These transactions were conducted in reliance on the exemptions from the registration requirements of the Securities Act of 1933, as amended, based on the private sale of the securities and the Company’s relationships with the security holders.

Item 3. Defaults Upon Senior Securities

We issued $1,275,000 of convertible debentures between April 2016 and August 2016. The maturities range from March 29, 2018 to July 31, 2019, and $450,000 in principal amount of these debentures is past due at the date of this report. We are currently in discussions with certain holders regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms. We are planning on settling the debt we cannot extend.

We issued $60,000 of convertible debentures between January 2017. The maturity of this debenture is January 17, 2019 and $60,000 in principal amount of these debentures is past due at the date of this report. We plan to enter arrangements with holders to settle this debt.

We issued a $100,000 convertible debenture in June 2017. The maturity of this debenture is February 1, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $100,000 convertible debenture in July 2017. The maturity of this debenture is February 1, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $150,000 convertible debenture in September 2017. The maturity of this debenture is February 1, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $450,000 convertible debenture in September 2017. The debenture had an original issue discount of 10%, or $45,000, having a total carrying value of $495,000. The maturity of this debenture is January 26, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $225,000 convertible debenture in November 2017. The debenture had an original issue discount of 10%, or $22,500, having a total carrying value of $247,500. The maturity of this debenture is January 26, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $75,000 convertible debenture in December 2017. The maturity of this debenture is March 30, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $45,000 convertible debenture in February 2018. The maturity of this debenture is February 8, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $30,000 convertible debenture in March 2018. The maturity of this debenture is March 6, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

We issued a $35,000 convertible debenture in March 2018. The maturity of this debenture is March 23, 2019 and is past due at the date of this report. We are currently in discussions with this debtor regarding these matters, although we have not obtained a written waiver or entered an amendment revising these terms.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Arrangements” and “Other Information – Partial Payment and Temporary Stand Still Agreement.”.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

31(a)		Rule 13a-14(a) Certification — Principal Executive Officer*

31(b)		Rule 13a-14(a) Certification — Principal Financial Officer*

32(a)		Section 1350 Certification — Principal Executive Officer *

32(b)		Section 1350 Certification — Principal Financial Officer *

101.INS		XBRL Instance Document *

101.SCH		Document, XBRL Taxonomy Extension *

101.CAL		Calculation Linkbase, XBRL Taxonomy Extension Definition *

101.DEF		Linkbase, XBRL Taxonomy Extension Labels *

101.LAB		Linkbase, XBRL Taxonomy Extension *

101.PRE		Presentation Linkbase *

*Filed herewith.

SIGNATURES

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

	QUANTUM MATERIALS CORP.

Date: May 17, 2019	/s/ Stephen Squires
	Stephen Squires
	Principal Executive Officer

Date: May 17, 2019	/s/ Robert A. Phillips
	Robert A. Phillips
	Principal Financial Officer

Exhibit 31(a)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Stephen Squires, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Quantum Materials Corp. for the period ending March 31, 2019:

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(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 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; 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 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.

May 17, 2019	*/s/ STEPHEN SQUIRES*
	Stephen Squires, Principal Executive Officer

Exhibit 31(b)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Robert A. Phillips, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Quantum Materials Corp. for the period ending March 31, 2019;

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.

May 17, 2019	*/s/ Robert A. Phillips*
	Robert A. Phillips, Principal Financial Officer

Exhibit 32(a)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18U.S.C. SECTION 1350

In connection with the Quarterly Report of Quantum Materials Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen Squires, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	By:	*/s/ STEPHEN SQUIRES*
		Stephen Squires
		Principal Executive Officer
		May 17, 2019

Exhibit 32(b)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18U.S.C. SECTION 1350

In connection with the Quarterly Report of Quantum Materials Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Phillips, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	By:	*/s/ Robert A. Phillips*
		Robert A. Phillips
		Principal Financial Officer
		May 17, 2019

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2019	May 10, 2019
Document And Entity Information
Entity Registrant Name	QUANTUM MATERIALS CORP.
Entity Central Index Key	0001403570
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		580,975,473
Trading Symbol	QTMM
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Jun. 30, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 135,292	$ 2,025
Subscription receivable		10,000
Accounts Receivable	500,400
Prepaid expenses and other current assets	537,578	1,746,181
TOTAL CURRENT ASSETS	1,173,270	1,758,206
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $421,094 and $346,080	550,510	625,524
LICENSES AND PATENTS, net of accumulated amortization of $167,538 and $146,852	25,205	45,891
LONG TERM PORTION OF PREPAID EXPENSES	317,969	184,660
TOTAL ASSETS	2,066,954	2,614,281
CURRENT LIABILITIES
Accounts payable	1,649,416	1,511,691
Accrued expenses	590,300	548,667
Accrued salaries	732,905	682,575
Deferred revenue	1,000,000
Notes payable, net of unamortized discount	20,000
Short term derivative liability	5,060
Current portion of convertible debentures, net of unamortized discount	3,060,219	3,402,421
TOTAL CURRENT LIABILITIES	7,057,900	6,145,354
CONVERTIBLE DEBENTURES, net of current portion, unamortized discount and debt issuance costs	134,513	40,224
TOTAL LIABILITIES	7,192,413	6,185,578
COMMITMENTS AND CONTINGENCIES (See Note 10)
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, authorized 750,000,000 shares, 541,656,945 and 442,564,332 issued and outstanding at March 31, 2019 and June 30, 2018, respectively	541,657	442,564
Common stock issuable	212,767	800,131
Additional paid-in capital	46,560,681	42,030,181
Accumulated deficit	(52,440,564)	(46,844,173)
TOTAL STOCKHOLDERS' DEFICIT	(5,125,459)	(3,571,297)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 2,066,954	$ 2,614,281

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 421,094	$ 346,080
Licenses and patents, accumulated amortization	$ 167,538	$ 146,852
Common stock, par value	$ .001	$ .001
Common stock, shares authorized	750,000,000	750,000,000
Common stock, shares issued	541,656,945	442,564,332
Common stock, shares outstanding	541,656,945	442,564,332

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
REVENUES	$ 400	$ 1,000	$ 400	$ 12,870
OPERATING EXPENSES
General and administrative	1,604,074	1,785,451	4,227,599	4,679,293
Research and development	36,258	28,823	74,794	160,329
TOTAL OPERATING EXPENSES	1,640,332	1,814,274	4,302,393	4,839,622
LOSS FROM OPERATIONS	(1,639,932)	(1,813,274)	(4,301,993)	(4,826,752)
OTHER EXPENSE (INCOME)
Beneficial conversion expense		506,415	143,778	1,275,017
Interest expense, net	241,220	121,228	733,501	976,768
Change in value of derivative liability	2,219		108,087	(514,969)
Accretion of debt discount	157,629	295,765	309,032	1,020,772
TOTAL OTHER EXPENSE	401,068	923,408	1,294,398	2,757,588
NET LOSS	$ (2,041,000)	$ (2,736,682)	$ (5,596,391)	$ (7,584,340)
LOSS PER COMMON SHARE Basic and diluted	$ (0.00)	$ (0.01)	$ (0.01)	$ (0.02)
WEIGHTED AVERAGE SHARES OUTSTANDING Basic and diluted	521,743,994	428,394,955	497,693,368	401,191,882

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Common Stock [Member]	Common Stock Issuable [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balances at Jun. 30, 2017	$ 367,955		$ 33,880,177	$ (37,443,104)	$ (3,194,972)
Balances, shares at Jun. 30, 2017	367,955,585
Common stock issued for cash	$ 459		39,541		40,000
Common stock issued for cash, shares	458,333
Common stock issued for services	$ 3,500		329,501		333,001
Common stock issued for services, shares	3,500,000
Common stock issued for debenture interest	$ 155		18,453		18,608
Common stock issued for debenture interest, shares	155,068
Common stock issued for debenture conversions	$ 2,500		297,500		300,000
Common stock issued for debenture conversions, shares	2,500,000
Stock-based compensation			257,673		257,673
Beneficial conversion feature of debenture			752,426		752,426
Allocated value of common stock and warrants related to debenture	$ 2,650	572,584	159,699		734,933
Allocated value of common stock and warrants related to debenture, shares	2,650,000
Net loss				(3,027,097)	(3,027,097)
Balances at Sep. 30, 2017	$ 377,219	572,584	35,734,970	(40,470,201)	(3,785,428)
Balances, shares at Sep. 30, 2017	377,218,986
Balances at Jun. 30, 2017	$ 367,955		33,880,177	(37,443,104)	(3,194,972)
Balances, shares at Jun. 30, 2017	367,955,585
Beneficial conversion feature of debenture					1,275,017
Net loss					(7,584,340)
Balances at Mar. 31, 2018	$ 420,374	744,625	40,431,711	(45,027,444)	(3,430,734)
Balances, shares at Mar. 31, 2018	420,374,332
Balances at Jun. 30, 2017	$ 367,955		33,880,177	(37,443,104)	(3,194,972)
Balances, shares at Jun. 30, 2017	367,955,585
Balances at Jun. 30, 2018	$ 442,564	800,131	42,030,181	(46,844,173)	(3,571,297)
Balances, shares at Jun. 30, 2018	442,564,332
Balances at Sep. 30, 2017	$ 377,219	572,584	35,734,970	(40,470,201)	(3,785,428)
Balances, shares at Sep. 30, 2017	377,218,986
Common stock issued for cash	$ 759		52,242		53,001
Common stock issued for cash, shares	758,334
Common stock issued for services	$ 20,170		1,514,463		1,534,633
Common stock issued for services, shares	20,170,060
Common stock issued for debenture interest	$ 217		25,854		26,071
Common stock issued for debenture interest, shares	217,258
Common stock issued for debenture conversions	$ 4,375		520,625		525,000
Common stock issued for debenture conversions, shares	4,375,001
Stock-based compensation			254,055		254,055
Beneficial conversion feature of debenture			16,176		16,176
Allocated value of common stock and warrants related to debenture		36,079	30,314		66,393
Net loss				(1,820,561)	(1,820,561)
Balances at Dec. 31, 2017	$ 402,740	608,663	38,148,699	(42,290,762)	(3,130,660)
Balances, shares at Dec. 31, 2017	402,739,639
Common stock issued for cash	$ 499		59,500		59,999
Common stock issued for cash, shares	499,999
Common stock issued for services	$ 6,020	135,962	340,436		482,418
Common stock issued for services, shares	6,020,000
Common stock issued for debenture interest	$ 365		23,453		23,818
Common stock issued for debenture interest, shares	364,694
Common stock issued for debenture conversions	$ 250		29,750		30,000
Common stock issued for debenture conversions, shares	250,000
Stock-based compensation	$ 7,000		564,775		571,775
Stock-based compensation, shares	7,000,000
Beneficial conversion feature of debenture			506,415		506,415
Common stock and stock warrants issued in exchange for accrued salaries			552,183		552,183
Common stock issued for debenture and warrant extensions	$ 3,500		206,500		210,000
Common stock issued for debenture and warrant extensions, shares	3,500,000
Net loss				(2,736,682)	(2,736,682)
Balances at Mar. 31, 2018	$ 420,374	744,625	40,431,711	(45,027,444)	(3,430,734)
Balances, shares at Mar. 31, 2018	420,374,332
Balances at Jun. 30, 2018	$ 442,564	800,131	42,030,181	(46,844,173)	(3,571,297)
Balances, shares at Jun. 30, 2018	442,564,332
Common stock issued for cash		73,900			73,900
Common stock issued for services	$ 3,032	43,333	118,224		164,589
Common stock issued for services, shares	3,031,375
Common stock issued for debenture interest	$ 344		20,997		21,341
Common stock issued for debenture interest, shares	344,055
Stock-based compensation			207,452		207,452
Beneficial conversion feature of debenture			16,870		16,870
Allocated value of common stock and warrants related to debenture		52,765	22,437		75,202
Issuance of common stock issuable,	$ 513	(30,800)	30,287
Issuance of common stock issuable, shares	513,333
Common stock issued in liability settlement	$ 4,517	39,652	7,608		51,777
Common stock issued in liability settlement, shares	4,516,553
Other			(98,645)		(98,645)
Net loss				(1,624,946)	(1,624,946)
Balances at Sep. 30, 2018	$ 450,970	978,981	42,355,411	(48,469,119)	(4,683,757)
Balances, shares at Sep. 30, 2018	450,969,648
Balances at Jun. 30, 2018	$ 442,564	800,131	42,030,181	(46,844,173)	(3,571,297)
Balances, shares at Jun. 30, 2018	442,564,332
Common stock issued for services					831,615
Common stock issued for debenture interest					$ 42,796
Common stock issued for debenture interest, shares					729,877
Common stock issued for debenture conversions					$ 540,040
Beneficial conversion feature of debenture					143,778
Net loss					(5,596,391)
Balances at Mar. 31, 2019	$ 541,657	212,767	46,560,681	(52,440,564)	(5,125,459)
Balances, shares at Mar. 31, 2019	541,656,945
Balances at Sep. 30, 2018	$ 450,970	978,981	42,355,411	(48,469,119)	(4,683,757)
Balances, shares at Sep. 30, 2018	450,969,648
Common stock issued for cash	$ 2,087		247,917		250,004
Common stock issued for cash, shares	2,083,333
Common stock issued for services	$ 12,020		469,650		481,670
Common stock issued for services, shares	12,016,667
Common stock issued for debenture interest	$ 390		21,069		21,459
Common stock issued for debenture interest, shares	385,822
Stock-based compensation			327,703		327,703
Beneficial conversion feature of debenture			126,908		126,908
Allocated value of common stock and warrants related to debenture		57,366	76,376		133,742
Issuance of common stock issuable,	$ 14,660	(460,305)	445,645
Issuance of common stock issuable, shares	14,660,000
Common stock issued in liability settlement	$ 12,198		515,979		528,177
Common stock issued in liability settlement, shares	12,197,786
Net loss				(1,930,445)	(1,930,445)
Balances at Dec. 31, 2018	$ 492,325	576,042	44,586,658	(50,399,564)	(4,744,539)
Balances, shares at Dec. 31, 2018	492,313,256
Common stock issued for services	$ 5,499	20,347	159,513		185,359
Common stock issued for services, shares	5,500,000
Common stock issued for debenture conversions	$ 22,808		517,226		540,034
Common stock issued for debenture conversions, shares	22,814,393
Stock-based compensation		100,000	637,152		737,152
Beneficial conversion feature of debenture
Allocated value of common stock and warrants related to debenture	$ 125		2,376		2,501
Allocated value of common stock and warrants related to debenture, shares	125,000
Issuance of common stock issuable,	$ 14,470	(483,622)	469,152
Issuance of common stock issuable, shares	14,469,071
Common stock issued in liability settlement	$ 6,430		188,603		195,034
Common stock issued in liability settlement, shares	6,435,225
Net loss				(2,041,000)	(2,041,000)
Balances at Mar. 31, 2019	$ 541,657	$ 212,767	$ 46,560,681	$ (52,440,564)	$ (5,125,459)
Balances, shares at Mar. 31, 2019	541,656,945

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (5,596,391)	$ (7,584,340)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	95,700	100,728
Amortization of debt issuance costs, and debt discount	239,197	573,958
Stock-based compensation	1,272,307	1,374,786
Stock issued for services	1,836,882	1,725,152
Stock issued for debenture extensions		246,000
Beneficial conversion feature	143,778	1,275,017
Deemed interest on extinguishment of debenture	24,164	118,000
Change in fair value of derivative liability	108,087	(514,969)
Accretion of debt discount and warrant expense	309,032	1,020,772
Effects of changes in operating assets and liabilities:
Accounts receivable	(500,400)
Prepaid expenses and other current assets	8,754	(22,880)
Accounts payable and accrued expenses	337,757	874,503
Deferred revenue	1,000,000
NET CASH USED IN OPERATING ACTIVITIES	(721,133)	(813,273)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(1,877)
NET CASH USED IN INVESTING ACTIVITIES		(1,877)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock	333,900	153,000
Proceeds from issuance of convertible debentures / promissory note	500,500	1,237,000
Proceeds from issuance of note payable	20,000
Principal payments on long-term debt		(552,650)
Principal payments on note payable		(58,738)
NET CASH PROVIDED BY FINANCING ACTIVITIES	854,400	778,612
NET INCREASE (DECREASE) IN CASH	133,267	(36,538)
CASH AND CASH EQUIVALENTS, beginning of period	2,025	52,611
CASH AND CASH EQUIVALENTS, end of period	$ 135,292	$ 16,073

Basis of Presentation

9 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

NOTE 1 – BASIS OF PRESENTATION

Nature of Operations

Going Concern

Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets as follows:

Furniture and fixtures			7 years
Computers and software			3 years
Machinery and equipment			3 - 10 years

Licenses and Patents: Licenses and patents are stated at cost. Amortization is computed on the straight-line basis over the estimated useful life of five years.

Recent Accounting Pronouncements

Pronouncements Yet To Be Adopted

Property and Equipment

9 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31, 2019		June 30, 2018
	(unaudited)

Furniture and fixtures	$	3,502	$	3,502
Computers and software		11,447		11,447
Machinery and equipment		956,655		956,655
		971,604		971,604
Less: accumulated depreciation		421,094		346,080

Total property and equipment, net	$	550,510	$	625,524

Depreciation expense for the nine months ended March 31, 2019 and 2018 was $75,014 and $74,591, respectively.

Licenses and Patents

9 Months Ended

Mar. 31, 2019

Finite-Lived Intangible Assets, Net [Abstract]

Licenses and Patents

NOTE 3 – LICENSES AND PATENTS

Licenses and patents consisted of the following:

	March 31, 2019		June 30, 2018
	(unaudited)

William Marsh Rice University	$	40,000	$	40,000
University of Arizona		15,000		15,000
Bayer acquired patents		137,743		137,743
		192,743		192,743
Less: accumulated amortization		167,538		146,852

Total licenses and patents, net	$	25,205	$	45,891

Amortization expense for the nine months ended March 31, 2019 and 2018 $20,686 and $26,137, respectively.

Fair Value of Financial Instruments

9 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Financial Instruments

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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

	Balance at March 31, 2019		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Derivative Liability	$	5,060	$	-	$	-	$	5,060
Note Payable		20,000		-		20,000		-
Convertible debentures		3,194,732		-		3,194,732		-

	$	3,219,792	$	-	$	3,214,732	$	5,060

Level Three Roll-forward

	Derivative Liability			Total

Balance June 30, 2018	$	-		$	-
Fair value of derivative liability reclassified from equity		98,645			98,645
Settlement of derivative liabilities		(201,672	)		(201,672	)
Change in fair value		108,087			108,087
Balance March 31, 2019	$	5,060		$	5,060

Convertible Debentures

9 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Convertible Debentures

NOTE 5 – CONVERTIBLE DEBENTURES

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

	March 31,		June 30,		Debenture
	2019		2018		Reference
	(unaudited)
Convertible debentures issued in September 2014	$	25,050	$	25,050	A
Convertible debentures issued in January 2015		-		500,000	B
Convertible debentures issued in April - June 2016		1,075,000		1,075,000	C
Convertible debenture issued in August 2016		200,000		200,000	C
Convertible debentures issued in January - March 2017		60,000		60,000	D
Convertible promissory notes issued in March 2017		222,350		222,350	G
Convertible debenture issued in June 2017		100,000		100,000	I
Convertible debenture issued in July 2017		100,000		100,000	J
Convertible debenture issued in September 2017		645,000		645,000	K
Convertible debenture issued in November 2017		247,500		247,500	K
Convertible debenture issued in November 2017		27,000		27,000	L
Convertible debenture issued in December 2017		75,000		75,000	N
Convertible debenture issued in February 2018		45,000		45,000	O
Convertible debentures issued in March 2018		65,000		65,000	P
Convertible debentures issued in April 2018		60,000		60,000	Q
Convertible debentures issued in April 2018		70,000		70,000	R
Convertible debentures issued in April 2018		20,000		20,000	S
Convertible debentures issued in June 2018		40,000		40,000	T
Convertible debentures issued in July 2018		45,000		-	U
Convertible debentures issued in August 2018		30,000		-	V
Convertible debentures issued in September 2018		25,000		-	W
Convertible debentures issued in December 2018		52,000		-	X

		3,228,900		3,576,900
Less: unamortized discount		34,168		134,255

		3,194,732		3,442,645
Less: current portion		3,060,219		3,402,421

Total convertible debentures, net of current portion	$	134,513	$	40,224

A) September 2014 Convertible Debenture

Interest expense for the nine months ended March 31, 2019 and 2018 was $1,144 and $1,144, respectively

As of March 31, 2019, and June 30, 2018, $25,050 of principal was outstanding.

B) January 2015 Convertible Debenture

As of March 31, 2019, and June 30, 2018, $0 and $500,000 of principal was outstanding, respectively.

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

The Company recognized a beneficial conversion expense for the nine months ended March 31, 2019, and 2018, of $0 and $1,012,042, respectively.

Interest expense for the nine months ended March 31, 2019, and 2018, of $77,633 and $87,787, respectively.

D) January-March 2017 Convertible Debentures

During the year ended June 30, 2018, debentures for an aggregate principal amount of $200,000 were converted into 1,666,667 shares of common stock.

Interest expense for the nine months ended March 31, 2019 and 2018 of $3,603 and $10,078, respectively.

As of March 31, 2019, and June 30, 2018, $60,000 of principal was outstanding.

G) March 2017 Convertible Promissory Notes

The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $43,661, respectively.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $116,015, respectively.

As of March 31, 2019, and June 30, 2018, $222,350 of principal was outstanding. During the year ended June 30, 2018, the Company paid $319,500 of principal.

I) June 2017 Convertible Debenture

J) July 2017 Convertible Debenture

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $8,000, respectively.

K) September 2017 Convertible Debenture

Debenture A)

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $12,000, respectively.

Debenture B)

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $36,000, respectively.

Debenture C)

The Company also recorded original issue discount (“OID”) of $22,500 as debt discount and is amortized using the effective interest rate method over the life of the loan, six months.

As of March 31, 2019, $247,500 of principal was outstanding. This debenture was past due as of the date of this report.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $18,000, respectively.

L) November 2017 Convertible Debenture

N) December 2017 Convertible Debenture

O) February 2018 Convertible Debenture

P) March 2018 Convertible Debenture

Q) April 2018 Convertible Debenture

R) April 2018 Convertible Debenture

S) April 2018 Convertible Debenture

T) June 2018 Convertible Debenture

U) July 2018 Convertible Debenture

V) August 2018 Convertible Debenture

W) September 2018 Convertible Debenture

X) December 2018 Convertible Debenture

Interest expense for the nine months ended March 31, 2019 of $1,340.

December 2018 Convertible Promissory Note

On March 22, 2019, the remainder of the outstanding balance was converted to shares of common stock. 11,666,667 shares of common stock were issued, for the outstanding balance of $350,000.

Debt Issuance Costs

Notes Payable

9 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Notes Payable

NOTE 6 – NOTES PAYABLE

Promissory Note

Equity Transactions

9 Months Ended

Mar. 31, 2019

Equity [Abstract]

Equity Transactions

NOTE 7 – EQUITY TRANSACTIONS

Common Stock

During the nine months ended March 31, 2019, the Company issued 20,548,042 shares for $822,922 in consulting services, $61,255 of which was accrued at June 30, 2018.

During the nine months ended March 31, 2019, the Company issued 729,877 shares of common stock at the fair market value of $42,796 for payment of debenture interest.

Common Stock Issuable

During the nine months ended March 31, 2019, 21,164,612 shares with a fair value of $604,383, were issued, reducing shares issuable.

Stock Warrants

A summary of activity of the Company’s stock warrants for the nine months ended March 31, 2019 is presented below (unaudited):

						Weighted
	Weighted					Average		Weighted
	Average					Remaining		Average
	Exercise Price		Number of Warrants			Contractual Term in Years		Grant Date Fair Value

Balance as of June 30, 2018	$	0.11		36,781,726			2.80	$	0.09
Expired		-		-					-
Granted		0.10		8,964,708					0.04
Exercised		-		-					-
Cancelled		0.12		(833,333	)				0.15

Balance as of March 31, 2019	$	0.10		44,913,101			2.08	$	0.08

Vested and exercisable as of March 31, 2019	$	0.10		44,913,101			2.08	$	0.08

Stock-Based Compensation

9 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

NOTE 8 – STOCK-BASED COMPENSATION

The following assumptions were used for the periods indicated:

	Nine Months Ended
	March 31,
	2019			2018
	(unaudited)
Expected volatility		122.52% - 126.99	%		129.46	%
Expected dividend yield		-			-
Risk-free interest rates		2.46% - 2.95	%		2.62	%
Expected term (in years)		5.0			5.0

A summary of the activity of the Company’s stock options for the nine months ended March 31, 2019 is presented below (unaudited):

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value

Balance as of June 30, 2018	$	0.09		85,616,914			4.00	$	0.11	$	-
Expired		-		-					-
Granted		0.03		28,500,000					0.03
Exercised		-		-					-
Cancelled		0.07		(2,925,148	)				0.05

Balance as of March 31, 2019	$	0.07		111,191,766			4.02	$	0.09	$	-

Vested and exercisable as of March 31, 2019	$	0.07		100,459,599			3.76	$	0.09	$	-

Outstanding options at March 31, 2019, expire during the period May 2019 to June 2026 and have exercise prices ranging from $0.02 to $0.17.

	Number of
	Nonvested,			Weighted
	Unissued			Average
	Restricted			Grant Date
	Share Awards			Fair Value

Nonvested, unissued restricted shares outstanding at June 30, 2017		1,500,000			0.21
Granted		5,500,000			0.06
Vested		(7,000,000	)		0.09
Forfeited		-			-
Nonvested, unissued restricted shares outstanding at June 30, 2018		-		$	-
Granted		-			-
Vested		-			-
Forfeited		-			-
Nonvested, unissued restricted shares outstanding at March 31, 2019		-		$	-

The total cost of nonvested stock awards which the Company had not yet recognized was $0 at March 31, 2019.

Loss Per Share

9 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Loss Per Share

NOTE 9 – LOSS PER SHARE

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

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
	(unaudited)						(unaudited)

Net loss	$	(2,041,000	)	$	(2,736,682	)	$	(5,596,391	)	$	(7,584,340	)

Weighted average common shares outstanding:
Basic and diluted		521,743,994			428,394,955			497,693,368			401,191,882

Basic and diluted loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

Commitments and Contingencies

9 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Agreement with University of Arizona

Agreement with Texas State University

Operating Leases

The Company leases certain office and lab space under a month-to-month operating lease agreement.

Rental expense for the operating lease for the nine months ended March 31, 2019 and 2018 was $57,142 and $115,541, respectively.

Litigation

9 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Litigation

NOTE 11 — LITIGATION

CAUSE NUMBER 17-2033; Hays County, Texas

The Company denies all the above-mentioned allegations and will vigorously defend all claims.

CAUSE NUMBER: 17CV06093; Johnson County, Kansas

The Company denies all the above-mentioned allegations and will vigorously defend all claims.

CAUSE NUMBER: 2017-025283-CA-01; Miami-Dade County, Florida

The Florida lawsuit largely mirrors the suit in Kansas; defaults are alleged as follows:

The Company denies all the above-mentioned allegations and will vigorously defend all claims.

Quantum v. K&L Gates, Inc., 18-2393, pending in Hays County, Texas.

Supplemental Cash Flow Information

9 Months Ended

Mar. 31, 2019

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Nine Months Ended
	March 31,
	2019		2018
	(unaudited)

Cash paid for interest	$	6,904	$	29,023

Cash paid for income taxes	$	-	$	-

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

	Nine Months Ended
	March 31,
	2019		2018
	(unaudited)

Conversion of debentures, and accrued interest into shares of common stock	$	699,517	$	855,000

Allocated value of common stock and warrants issued with convertible debentures	$	208,945	$	602,544

Debenture extension paid in shares of common stock	$	-	$	167,354

Stock issued for amounts in accounts payable	$	81,602	$	-

Stock and stock warrants issued for conversion of accrued salaries	$	-	$	249,900

Prepaid expense paid in shares of common stock	$	750,000	$	1,242,232

Financing of prepaid insurance	$	-	$	12,738

Transactions with Affiliated Parties

9 Months Ended

Mar. 31, 2019

Transactions with Affiliated Parties

NOTE 13 – TRANSACTIONS WITH AFFILIATED PARTIES

At March 31, 2019 and June 30, 2018, the Company had accrued salaries payable to executives in the amount of $468,825 and $568,575, respectively.

Subsequent Events

9 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

NOTE 14 - SUBSEQUENT EVENTS

Share issuances

During the period April 1, 2019 through the date of this report, the Company issued 16,160,195 for services.

During the period April 1, 2019 through the date of this report, the Company issued 17,000,000 for the conversion of debentures to common stock.

During the period April 1, 2019 through the date of this report, the Company issued 6,000,000 shares to the CEO for compensation.

During the period April 1, 2019 through the date of this report, the Company issued 125,000 shares which were issuable at March 31, 2019, in connection with the sale of common stock.

Basis of Presentation (Policies)

9 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Going Concern

Basis of Presentation

Use of Estimates

Financial Instruments

Property and Equipment

Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets as follows:

Furniture and fixtures			7 years
Computers and software			3 years
Machinery and equipment			3 - 10 years

Licenses and Patents

Licenses and Patents: Licenses and patents are stated at cost. Amortization is computed on the straight-line basis over the estimated useful life of five years.

Earnings Per Share

Beneficial Conversion

Derivative Instruments

Fair Value Measurements

Recent Accounting Pronouncements

Pronouncements Yet to be Adopted

Pronouncements Yet To Be Adopted

Basis of Presentation (Tables)

9 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Property and Equipment Estimated Useful Lives

Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets as follows:

Furniture and fixtures			7 years
Computers and software			3 years
Machinery and equipment			3 - 10 years

Property and Equipment (Tables)

9 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	March 31, 2019		June 30, 2018
	(unaudited)

Furniture and fixtures	$	3,502	$	3,502
Computers and software		11,447		11,447
Machinery and equipment		956,655		956,655
		971,604		971,604
Less: accumulated depreciation		421,094		346,080

Total property and equipment, net	$	550,510	$	625,524

Licenses and Patents (Tables)

9 Months Ended

Mar. 31, 2019

Finite-Lived Intangible Assets, Net [Abstract]

Schedule of Licenses and Patents

Licenses and patents consisted of the following:

	March 31, 2019		June 30, 2018
	(unaudited)

William Marsh Rice University	$	40,000	$	40,000
University of Arizona		15,000		15,000
Bayer acquired patents		137,743		137,743
		192,743		192,743
Less: accumulated amortization		167,538		146,852

Total licenses and patents, net	$	25,205	$	45,891

Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value Derivative Liability

The Company hired an independent resource to value its derivative liability as follows (unaudited):

	Balance at March 31, 2019		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Derivative Liability	$	5,060	$	-	$	-	$	5,060
Note Payable		20,000		-		20,000		-
Convertible debentures		3,194,732		-		3,194,732		-

	$	3,219,792	$	-	$	3,214,732	$	5,060

Schedule of Derivative Liability Level Three Roll-forward

Level Three Roll-forward

	Derivative Liability			Total

Balance June 30, 2018	$	-		$	-
Fair value of derivative liability reclassified from equity		98,645			98,645
Settlement of derivative liabilities		(201,672	)		(201,672	)
Change in fair value		108,087			108,087
Balance March 31, 2019	$	5,060		$	5,060

Convertible Debentures (Tables)

9 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Convertible Debentures

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

	March 31,		June 30,		Debenture
	2019		2018		Reference
	(unaudited)
Convertible debentures issued in September 2014	$	25,050	$	25,050	A
Convertible debentures issued in January 2015		-		500,000	B
Convertible debentures issued in April - June 2016		1,075,000		1,075,000	C
Convertible debenture issued in August 2016		200,000		200,000	C
Convertible debentures issued in January - March 2017		60,000		60,000	D
Convertible promissory notes issued in March 2017		222,350		222,350	G
Convertible debenture issued in June 2017		100,000		100,000	I
Convertible debenture issued in July 2017		100,000		100,000	J
Convertible debenture issued in September 2017		645,000		645,000	K
Convertible debenture issued in November 2017		247,500		247,500	K
Convertible debenture issued in November 2017		27,000		27,000	L
Convertible debenture issued in December 2017		75,000		75,000	N
Convertible debenture issued in February 2018		45,000		45,000	O
Convertible debentures issued in March 2018		65,000		65,000	P
Convertible debentures issued in April 2018		60,000		60,000	Q
Convertible debentures issued in April 2018		70,000		70,000	R
Convertible debentures issued in April 2018		20,000		20,000	S
Convertible debentures issued in June 2018		40,000		40,000	T
Convertible debentures issued in July 2018		45,000		-	U
Convertible debentures issued in August 2018		30,000		-	V
Convertible debentures issued in September 2018		25,000		-	W
Convertible debentures issued in December 2018		52,000		-	X

		3,228,900		3,576,900
Less: unamortized discount		34,168		134,255

		3,194,732		3,442,645
Less: current portion		3,060,219		3,402,421

Total convertible debentures, net of current portion	$	134,513	$	40,224

A) September 2014 Convertible Debenture

Interest expense for the nine months ended March 31, 2019 and 2018 was $1,144 and $1,144, respectively

As of March 31, 2019, and June 30, 2018, $25,050 of principal was outstanding.

B) January 2015 Convertible Debenture

As of March 31, 2019, and June 30, 2018, $0 and $500,000 of principal was outstanding, respectively.

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

The Company recognized a beneficial conversion expense for the nine months ended March 31, 2019, and 2018, of $0 and $1,012,042, respectively.

Interest expense for the nine months ended March 31, 2019, and 2018, of $77,633 and $87,787, respectively.

D) January-March 2017 Convertible Debentures

During the year ended June 30, 2018, debentures for an aggregate principal amount of $200,000 were converted into 1,666,667 shares of common stock.

Interest expense for the nine months ended March 31, 2019 and 2018 of $3,603 and $10,078, respectively.

As of March 31, 2019, and June 30, 2018, $60,000 of principal was outstanding.

G) March 2017 Convertible Promissory Notes

The Company recognized accretion of debt discount expense for the nine months ended March 31, 2019 and 2018 of $0 and $43,661, respectively.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $116,015, respectively.

As of March 31, 2019, and June 30, 2018, $222,350 of principal was outstanding. During the year ended June 30, 2018, the Company paid $319,500 of principal.

I) June 2017 Convertible Debenture

J) July 2017 Convertible Debenture

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $8,000, respectively.

K) September 2017 Convertible Debenture

Debenture A)

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $12,000, respectively.

Debenture B)

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $36,000, respectively.

Debenture C)

The Company also recorded original issue discount (“OID”) of $22,500 as debt discount and is amortized using the effective interest rate method over the life of the loan, six months.

As of March 31, 2019, $247,500 of principal was outstanding.

Interest expense for the nine months ended March 31, 2019 and 2018 of $0 and $18,000, respectively.

L) November 2017 Convertible Debenture

N) December 2017 Convertible Debenture

O) February 2018 Convertible Debenture

P) March 2018 Convertible Debenture

Q) April 2018 Convertible Debenture

R) April 2018 Convertible Debenture

S) April 2018 Convertible Debenture

T) June 2018 Convertible Debenture

U) July 2018 Convertible Debenture

V) August 2018 Convertible Debenture

W) September 2018 Convertible Debenture

X) December 2018 Convertible Debenture

Interest expense for the nine months ended March 31, 2019 of $1,340.

December 2018 Convertible Promissory Note

On March 22, 2019, the remainder of the outstanding balance was converted to shares of common stock. 11,666,667 shares of common stock were issued, for the outstanding balance of $350,000.

Equity Transactions (Tables)

9 Months Ended

Mar. 31, 2019

Equity [Abstract]

Summary of Activity of Company's Stock Warrants

A summary of activity of the Company’s stock warrants for the nine months ended March 31, 2019 is presented below (unaudited):

						Weighted
	Weighted					Average		Weighted
	Average					Remaining		Average
	Exercise Price		Number of Warrants			Contractual Term in Years		Grant Date Fair Value

Balance as of June 30, 2018	$	0.11		36,781,726			2.80	$	0.09
Expired		-		-					-
Granted		0.10		8,964,708					0.04
Exercised		-		-					-
Cancelled		0.12		(833,333	)				0.15

Balance as of March 31, 2019	$	0.10		44,913,101			2.08	$	0.08

Vested and exercisable as of March 31, 2019	$	0.10		44,913,101			2.08	$	0.08

Stock-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

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

The following assumptions were used for the periods indicated:

	Nine Months Ended
	March 31,
	2019			2018
	(unaudited)
Expected volatility		122.52% - 126.99	%		129.46	%
Expected dividend yield		-			-
Risk-free interest rates		2.46% - 2.95	%		2.62	%
Expected term (in years)		5.0			5.0

Summary of Award Activity Under Stock Option Plans

A summary of the activity of the Company’s stock options for the nine months ended March 31, 2019 is presented below (unaudited):

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value

Balance as of June 30, 2018	$	0.09		85,616,914			4.00	$	0.11	$	-
Expired		-		-					-
Granted		0.03		28,500,000					0.03
Exercised		-		-					-
Cancelled		0.07		(2,925,148	)				0.05

Balance as of March 31, 2019	$	0.07		111,191,766			4.02	$	0.09	$	-

Vested and exercisable as of March 31, 2019	$	0.07		100,459,599			3.76	$	0.09	$	-

Summary of Award Activity Under Restricted Stock Plans

A summary of the activity of the Company’s restricted stock awards for the nine months ended March 31, 2019, and year ended June 30, 2018 is presented below (unaudited):

	Number of
	Nonvested,			Weighted
	Unissued			Average
	Restricted			Grant Date
	Share Awards			Fair Value

Nonvested, unissued restricted shares outstanding at June 30, 2017		1,500,000			0.21
Granted		5,500,000			0.06
Vested		(7,000,000	)		0.09
Forfeited		-			-
Nonvested, unissued restricted shares outstanding at June 30, 2018		-		$	-
Granted		-			-
Vested		-			-
Forfeited		-			-
Nonvested, unissued restricted shares outstanding at March 31, 2019		-		$	-

Loss Per Share (Tables)

9 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Loss Per Share

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

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
	(unaudited)						(unaudited)

Net loss	$	(2,041,000	)	$	(2,736,682	)	$	(5,596,391	)	$	(7,584,340	)

Weighted average common shares outstanding:
Basic and diluted		521,743,994			428,394,955			497,693,368			401,191,882

Basic and diluted loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

Supplemental Cash Flow Information (Tables)

9 Months Ended

Mar. 31, 2019

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

The following is supplemental cash flow information:

	Nine Months Ended
	March 31,
	2019		2018
	(unaudited)

Cash paid for interest	$	6,904	$	29,023

Cash paid for income taxes	$	-	$	-

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

	Nine Months Ended
	March 31,
	2019		2018
	(unaudited)

Conversion of debentures, and accrued interest into shares of common stock	$	699,517	$	855,000

Allocated value of common stock and warrants issued with convertible debentures	$	208,945	$	602,544

Debenture extension paid in shares of common stock	$	-	$	167,354

Stock issued for amounts in accounts payable	$	81,602	$	-

Stock and stock warrants issued for conversion of accrued salaries	$	-	$	249,900

Prepaid expense paid in shares of common stock	$	750,000	$	1,242,232

Financing of prepaid insurance	$	-	$	12,738

Basis of Presentation (Details Narrative) - USD ($)	9 Months Ended		12 Months Ended
Basis of Presentation (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Working capital deficit	$ 5,884,630
Net cash used in operating activities	$ (721,133)	$ (813,273)
Beneficial conversion expense			$ 1,021,500
Licenses and Patents [Member]
Estimated useful lives assets	5 years

Basis of Presentation - Schedule of Property and Equipment Estimated Useful Lives (Details)	9 Months Ended
	Mar. 31, 2019
Furniture and Fixtures [Member]
Property and equipment estimated useful lives	7 years
Computer and Software [Member]
Property and equipment estimated useful lives	3 years
Machinery and Equipment [Member] \| Minimum [Member]
Property and equipment estimated useful lives	3 years
Machinery and Equipment [Member] \| Maximum [Member]
Property and equipment estimated useful lives	10 years

Property and Equipment (Details Narrative) - USD ($)	9 Months Ended
Property and Equipment (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 75,014	$ 74,591

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Property and equipment, gross	$ 971,604	$ 971,604
Less: accumulated depreciation	421,094	346,080
Total property and equipment, net	550,510	625,524
Furniture and Fixtures [Member]
Property and equipment, gross	3,502	3,502
Computers and Software [Member]
Property and equipment, gross	11,447	11,447
Machinery and Equipment [Member]
Property and equipment, gross	$ 956,655	$ 956,655

Licenses and Patents (Details Narrative) - USD ($)	9 Months Ended
Licenses and Patents (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Finite-Lived Intangible Assets, Net [Abstract]
Amortization expense	$ 20,686	$ 26,137

Licenses and Patents - Schedule of Licenses and Patents (Details) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Licenses and patents, gross	$ 192,743	$ 192,743
Less: accumulated amortization	167,538	146,852
Total licenses and patents, net	25,205	45,891
William Marsh Rice University [Member]
Licenses and patents, gross	40,000	40,000
University of Arizona [Member]
Licenses and patents, gross	15,000	15,000
Bayer Acquired Patents [Member]
Licenses and patents, gross	$ 137,743	$ 137,743

Fair Value of Financial Instruments - Schedule of Fair Value Derivative Liability (Details) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Derivative Liability	$ 5,060
Note Payable	20,000
Convertible debentures	3,194,732
Fair value of derivative liability	3,219,792
Level 1 [Member]
Derivative Liability
Note Payable
Convertible debentures
Fair value of derivative liability
Level 2 [Member]
Derivative Liability
Note Payable	20,000
Convertible debentures	3,194,732
Fair value of derivative liability	3,214,732
Level 3 [Member]
Derivative Liability	5,060
Note Payable
Convertible debentures
Fair value of derivative liability	$ 5,060

Fair Value of Financial Instruments - Schedule of Derivative Liability Level Three Roll-forward (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Beginning Balance
Fair value of derivative liability reclassified from equity			98,645
Settlement of derivative liabilities			(201,672)
Change in fair value	$ 2,219		108,087	$ (514,969)
Ending Balance	5,060		5,060
Derivative Liability [Member]
Beginning Balance
Fair value of derivative liability reclassified from equity			98,645
Settlement of derivative liabilities			(201,672)
Change in fair value			108,087
Ending Balance	$ 5,060		$ 5,060

Convertible Debentures (Details Narrative) - USD ($)											1 Months Ended															3 Months Ended							6 Months Ended	9 Months Ended		12 Months Ended
Convertible Debentures (Details Narrative) - USD ($)	Mar. 22, 2019	Mar. 22, 2019	Jan. 14, 2019	May 31, 2018	Jan. 24, 2018	Jan. 12, 2018	Sep. 30, 2017	Oct. 31, 2016	Oct. 10, 2016	Jan. 15, 2015	Dec. 31, 2018	Sep. 30, 2018	Aug. 31, 2018	Jul. 31, 2018	Jun. 30, 2018	Apr. 30, 2018	Mar. 31, 2018	Feb. 28, 2018	Dec. 31, 2017	Nov. 30, 2017	Jul. 31, 2017	Jun. 30, 2017	Mar. 31, 2017	Aug. 31, 2016	Oct. 28, 2014	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018	Sep. 16, 2014
Debt Instrument [Line Items]
Debt instrument principal amount															$ 3,576,900											$ 3,228,900								$ 3,228,900		$ 3,576,900
Value of debenture converted into shares																																		699,517	$ 855,000
Interest expense																																		573,341
Convertible promissory note															$ 3,442,645											$ 3,194,732								3,194,732		$ 3,442,645
Proceeds from issuance of convertible debenture																																		$ 500,500	1,237,000
Warrants exercise price per share																										$ 0.04								$ 0.04
Sale of stock transaction during period, shares																																		312,500
Warrant to purchase of common stock																										702,250								702,250
Common stock, par value															$ .001											$ .001								$ .001		$ .001
Accretion of debt discount																										$ 157,629			$ 295,765					$ 309,032	1,020,772
Beneficial conversion expense																											$ 126,908	$ 16,870	506,415	$ 16,176	$ 752,426			143,778	1,275,017
Derivative liability																										149,895								149,895
September 2014 Convertible Debenture [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																									$ 500,050												$ 500,050
Debt term																									5 years
Maturity date description																									September 16, 2019 and October 30, 2019
Debt interest rate																									6.00%												6.00%
Debenture, conversion price																									$ 0.15												$ 0.15
Warrants strike price per share																									$ 0.30
Warrants term																									5 years												5 years
Value of debenture converted into shares
Interest expense																																		1,144	1,144
Convertible promissory note															$ 25,050											25,050								25,050		$ 25,050
January 2015 Convertible Debenture [Member]
Debt Instrument [Line Items]
Debt term										2 years
Debt interest rate										8.00%
Debenture, conversion price										$ 0.06
Value of debenture converted into shares	$ 165,877
Interest expense																																		49,370	30,027
Convertible promissory note															$ 500,000											0								0		$ 500,000
Proceeds from issuance of convertible debenture										$ 500,000
Debt instruments maturity date			Mar. 15, 2019		Dec. 15, 2018	Jan. 25, 2018			Jan. 15, 2018	Jan. 15, 2017
Common stock warrants exercisable shares										6,250,000
Warrants exercise price per share					$ 0.06					$ 0.06
Warrants converted into common stock									6,250,000
Proceeds from issuance of warrants									$ 375,000
Number of share issued					3,500,000
Debt extension expenses					$ 210,000
Partial payment of convertible debenture			$ 150,000
Debt conversion, converted instrument, shares issued	11,147,726
Accrued interest	$ 29,205	$ 29,205
Allocated value of warrants related to debenture										$ 348,105
April - June, August, October and November 2016 Convertible Debentures [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																										1,150,000								$ 1,150,000
Debt term																																2 years		2 years
Debt interest rate																						8.00%										8.00%
Debenture, conversion price															$ 0.012							$ 0.12										$ 0.12				$ 0.012
Warrants term																						5 years										5 years
Value of debenture converted into shares																																				$ 455,000
Interest expense																																		$ 77,633	87,787
Convertible promissory note															$ 1,275,000											450,000								450,000		$ 1,275,000
Warrants exercise price per share																						$ 0.15										$ 0.15
Debt conversion, converted instrument, shares issued																																				3,791,666
Allocated value of warrants related to debenture																																		609,595
Sale of stock transaction during period, shares																								200								1,565
Sale of stock transaction during period								$ 50,000																$ 200,000								$ 1,565,000
Warrant to purchase of common stock																						4,166										4,166
Common stock, par value																						$ 0.001										$ 0.001
Accretion of debt discount																																		2,564	220,602
Beneficial conversion expense																																		0	1,012,042
April - June, August, October and November 2016 Convertible Debentures [Member] \| Until July and August of 2019 [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															825,000																					$ 825,000
April - June, August, October and November 2016 Convertible Debentures [Member] \| Unsecured Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																						$ 1,000										$ 1,000
January-March 2017 Convertible Debentures [Member]
Debt Instrument [Line Items]
Debt term																																2 years
Debt interest rate																						8.00%										8.00%
Debenture, conversion price																						$ 0.12										$ 0.12
Warrants term																						5 years										5 years
Value of debenture converted into shares																																				200,000
Interest expense																																		3,603	10,078
Convertible promissory note															60,000											60,000								60,000		$ 60,000
Warrants exercise price per share																						$ 0.15										$ 0.15
Number of share issued																																				1,666,667
Allocated value of warrants related to debenture																																		73,250
Sale of stock transaction during period, shares																																2,600
Sale of stock transaction during period																																$ 260,000
Warrant to purchase of common stock																						4,166										4,166
Common stock, par value																						$ 0.001										$ 0.001
Accretion of debt discount																																		3,125	52,954
January-March 2017 Convertible Debentures [Member] \| Unsecured Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																						$ 1,000										$ 1,000
March 2017 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Debt interest rate																							6.00%
Interest expense																																		0	116,015
Convertible promissory note															222,350											222,350								222,350		$ 222,350
Proceeds from issuance of convertible debenture																							$ 285,000
Warrants exercise price per share																							$ 0.13
Proceeds from issuance of warrants																							$ 86,673
Accretion of debt discount																																		0	43,661
Debt original issue discount																							$ 31,850
Recognized interest expense																																			418,786
Change in derivative liability benefit																																			373,004
Payment of convertible debt																																				319,500
March 2017 Convertible Promissory Notes [Member] \| Equity Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt interest rate																							8.00%
March 2017 Convertible Promissory Notes [Member] \| SBI Investment LLC [Member]
Debt Instrument [Line Items]
Common stock warrants exercisable shares																							253,525
Percentage of warrant to purchase shares																							50.00%
March 2017 Convertible Promissory Notes [Member] \| SBI Investment LLC [Member] \| Equity Purchase Agreement [Member]
Debt Instrument [Line Items]
Sale of stock transaction during period																							$ 5,000,000
Commitment fees																							$ 63,000
March 2017 Convertible Promissory Notes [Member] \| L2 Capital, LLC [Member]
Debt Instrument [Line Items]
Common stock warrants exercisable shares																							760,576
Percentage of warrant to purchase shares																							50.00%
March 2017 Convertible Promissory Notes [Member] \| L2 Capital, LLC [Member] \| Equity Purchase Agreement [Member]
Debt Instrument [Line Items]
Sale of stock transaction during period																							$ 5,000,000
Commitment fees																							$ 147,000
June 2017 Convertible Debenture [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															100,000											100,000								100,000		100,000
June 2017 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Maturity date description																						The promissory note has a term of six months maturing on December 16, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance date to the principal.
Debt interest rate																						8.00%										8.00%
Debenture, conversion price																						$ 0.12										$ 0.12
Value of debenture converted into shares																						$ 100,000
Interest expense																																		$ 0	0
Convertible promissory note																						$ 100,000										$ 100,000
Debt instruments maturity date																						Dec. 16, 2017												Feb. 01, 2019
Warrants exercise price per share																						$ 0.12										$ 0.12
Warrants converted into common stock																						250,000
Proceeds from issuance of warrants																						$ 54,340
Accretion of debt discount																																		$ 0	45,434
Beneficial conversion expense																																		0	0
July 2017 Convertible Debenture [Member]
Debt Instrument [Line Items]
Interest expense																																		0	8,000
Change in derivative liability benefit																												28,561
Derivative liability											$ 49,798																$ 49,798						$ 49,798
Additional interest expense																																		$ 18,002
Settlement of derivative liability, shares																																		1,591,549
July 2017 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																	$ 100,000				$ 100,000	$ 100,000							100,000			$ 100,000			100,000
Maturity date description																					The promissory note originally had a term of six months maturing on December 16, 2017 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to May 24, 2018 in an extension agreement dated April 6, 2018.
Debt interest rate																					8.00%
Debenture, conversion price																					$ 0.12
Convertible promissory note																					$ 100,000
Proceeds from issuance of convertible debenture																					$ 100,000
Debt instruments maturity date				Feb. 01, 2019																	Apr. 06, 2018
Warrants exercise price per share																					$ 0.12
Warrants converted into common stock																					250,000
Proceeds from issuance of warrants																					$ 19,010
Accretion of debt discount																																		$ 0	53,875
Beneficial conversion expense																					45,544
Debt original issue discount																					$ 53,876
Number of common shares issuable																					1,000,000
September 2017 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount							$ 150,000								150,000		165,000									150,000			165,000		$ 150,000			150,000	165,000	150,000
Maturity date description							The promissory note had a term of six months maturing on March 26, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to February 1, 2019 in an extension agreement dated May 2018.
Debt interest rate							8.00%																								8.00%
Debenture, conversion price							$ 0.12																								$ 0.12
Interest expense																																		0	12,000
Proceeds from issuance of convertible debenture							$ 150,000
Debt instruments maturity date				Feb. 01, 2019			Mar. 26, 2018
Warrants exercise price per share							$ 0.12																								$ 0.12
Warrants converted into common stock							375,000
Proceeds from issuance of warrants							$ 19,240
Accretion of debt discount							82,720																											0	82,720
Beneficial conversion expense							45,219
Debt original issue discount							$ 19,420																								$ 19,420
Change in derivative liability benefit																												14,483
Number of common shares issuable							1,650,000
Derivative liability												$ 22,666																22,666
Additional interest expense																																		53,234
Settlement of derivative liability, shares																																	1,781,690
September 2017 Convertible Debenture One [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount							$ 495,000																			495,000					$ 495,000			495,000
Maturity date description							The promissory note had a term of seven months maturing on April 26, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to January 26, 2019 in an extension agreement dated April 2018.
Debt interest rate							8.00%																								8.00%
Debenture, conversion price							$ 0.12																								$ 0.12
Interest expense																																		0	36,000
Proceeds from issuance of convertible debenture							$ 450,000
Debt instruments maturity date							Apr. 26, 2018
Warrants exercise price per share							$ 0.12																								$ 0.12
Warrants converted into common stock							2,000,000
Proceeds from issuance of warrants							$ 318,337
Number of share issued							1,000,000
Debt extension expenses							$ 318,337
Accretion of debt discount																																		0	279,680
Beneficial conversion expense							131,663
Debt original issue discount							$ 45,000																								$ 45,000
Change in derivative liability benefit																												28,864
Number of common shares issuable							10,000,000
Derivative liability												43,998																43,998
Additional interest expense																																		283,029
Settlement of derivative liability, shares																											7,432,432
September 2017 Convertible Debenture Two [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																				$ 247,500						247,500								247,500
Maturity date description																				The promissory note has a term of six months maturing on April 26, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to January 26, 2019 in an extension agreement dated April 2018.
Debt interest rate																				8.00%
Debenture, conversion price																				$ 0.12
Interest expense																																		$ 0	18,000
Proceeds from issuance of convertible debenture																				$ 225,000
Debt instruments maturity date																				Jan. 26, 2019														Apr. 26, 2018
Debt original issue discount																				$ 22,500
November 2017 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															27,000					$ 27,000						27,000								$ 27,000		27,000
Debt term																				24 months
Maturity date description																				The promissory note has a term of 24 months maturing on November 13, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate																				8.00%
Debenture, conversion price																				$ 0.12
Interest expense																																		1,644	834
Proceeds from issuance of convertible debenture																				$ 27,000
Debt instruments maturity date																				Nov. 07, 2022
Warrants exercise price per share																				$ 0.15
Warrants converted into common stock																				416,600
Proceeds from issuance of warrants																				$ 8,310
Accretion of debt discount																																		2,389	1,242
December 2017 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															75,000				$ 75,000							75,000				$ 75,000				75,000		75,000
Debt term																			6 months
Maturity date description																			The promissory note has a term of 6 months maturing on June 30, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to March 30, 2019 in an extension agreement dated June 2018.
Debt interest rate																			8.00%											8.00%
Debenture, conversion price																			$ 0.12											$ 0.12
Interest expense																																		0	6,000
Proceeds from issuance of convertible debenture																			$ 75,000
Debt instruments maturity date																			Jun. 30, 2018
Warrants exercise price per share																			$ 0.12											$ 0.12
Warrants converted into common stock																			250,000
Proceeds from issuance of warrants																			$ 41,175
Accretion of debt discount																																		0	21,530
Beneficial conversion expense																			$ 16,176
Change in derivative liability benefit																												8,061
Number of common shares issuable																			1,000,000
Derivative liability												10,380																10,380
Additional interest expense																																		21,420
Settlement of derivative liability, shares																																	809,160
February 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															45,000			$ 45,000								45,000								45,000		45,000
Debt term																		6 months
Maturity date description																		The promissory note has a term of 6 months maturing on August 8, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to February 8, 2019 in an extension agreement dated August 2018.
Debt interest rate																		8.00%
Debenture, conversion price																		$ 0.12
Interest expense																																		$ 0	0
Proceeds from issuance of convertible debenture																		$ 45,000
Debt instruments maturity date																		Feb. 08, 2019																Aug. 08, 2018
Warrants exercise price per share																		$ 0.12
Warrants converted into common stock																		500,000
Proceeds from issuance of warrants																		$ 31,546
Accretion of debt discount																																		$ 6,761	8,988
Beneficial conversion expense																		$ 9,046
Change in derivative liability benefit																												64
Number of common shares issuable																		1,500,000
Derivative liability												64																64
Additional interest expense																																		25,650
Settlement of derivative liability, shares																																	582,955
March 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															30,000		$ 30,000									30,000			$ 30,000					30,000	$ 30,000	30,000
Debt term																	6 months
Maturity date description																	The promissory note had a term of 6 months maturing on August 8, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to March 6, 2019 in an extension agreement dated August 2018.
Debt interest rate																	8.00%												8.00%						8.00%
Debenture, conversion price																	$ 0.12												$ 0.12						$ 0.12
Interest expense																																		0	$ 2,400
Proceeds from issuance of convertible debenture																	$ 30,000
Debt instruments maturity date																	Aug. 08, 2018
Warrants exercise price per share																	$ 0.12												$ 0.12						$ 0.12
Warrants converted into common stock																	500,000
Proceeds from issuance of warrants																	$ 23,374
Accretion of debt discount																																		8,677	$ 3,065
Beneficial conversion expense																	$ 6,625
Number of common shares issuable																	1,500,000
March 2018 Convertible Debenture One [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															35,000		$ 35,000												$ 35,000						$ 35,000	35,000
Debt term																	6 months
Maturity date description																	The promissory note had a term of six months maturing on September 23, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to March 23, 2019 in an extension agreement dated September 2018.
Debt interest rate																	8.00%												8.00%						8.00%
Debenture, conversion price																	$ 0.12												$ 0.12						$ 0.12
Interest expense																																		0	$ 2,800
Proceeds from issuance of convertible debenture																	$ 35,000
Debt instruments maturity date																	Sep. 23, 2018
Warrants exercise price per share																	$ 0.12												$ 0.12						$ 0.12
Warrants converted into common stock																	500,000
Proceeds from issuance of warrants																	$ 26,298
Accretion of debt discount																																		12,254	$ 1,005
Beneficial conversion expense																	$ 8,702
Change in derivative liability benefit																																	$ 18,751
Number of common shares issuable																	1,500,000
Derivative liability											20,823																$ 20,823						$ 20,823
Additional interest expense																																		74,844
Settlement of derivative liability, shares																																	3,950,920
April 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															60,000	$ 60,000										60,000								60,000		60,000
Debt term																6 months
Maturity date description																The promissory note has a term of approximately 6 months maturing on November 1, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The maturity date of the Note was extended to May 1, 2019 in an extension agreement dated September 2018.
Debt interest rate																8.00%
Debenture, conversion price																$ 0.12
Interest expense																																		0	0
Proceeds from issuance of convertible debenture																$ 60,000
Debt instruments maturity date																Nov. 01, 2018
Warrants exercise price per share																$ 0.12
Warrants converted into common stock																1,000,000
Proceeds from issuance of warrants																$ 41,175
Accretion of debt discount																																		26,720	0
Beneficial conversion expense																$ 6,175
Change in derivative liability benefit																																	$ 2,182
Number of common shares issuable																2,000,000
Derivative liability											2,230																2,230						2,230
Additional interest expense																																		$ 97,142
Settlement of derivative liability, shares																																		2,484,305
April 2018 Convertible Debenture One [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															70,000	$ 70,000										70,000								$ 70,000		70,000
Debt term																2 years
Maturity date description																The promissory note has a term of 2 years maturing on April 25, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate																8.00%
Debenture, conversion price																$ 0.12
Interest expense																																		4,262	0
Proceeds from issuance of convertible debenture																$ 70,000
Debt instruments maturity date																Apr. 25, 2020
Warrants exercise price per share																$ 0.12
Warrants converted into common stock																200,000
Proceeds from issuance of warrants																$ 31,188
Accretion of debt discount																																		11,278	0
Beneficial conversion expense																$ 0
Number of common shares issuable																1,000,000
April 2018 Convertible Debenture Two [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															20,000	$ 20,000										20,000								20,000		20,000
Debt term																2 years
Maturity date description																The promissory note has a term of 2 years maturing on April 19, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate																8.00%
Debenture, conversion price																$ 0.12
Interest expense																																		1,217	0
Proceeds from issuance of convertible debenture																$ 20,000
Debt instruments maturity date																Apr. 19, 2020
Warrants exercise price per share																$ 0.15
Warrants converted into common stock																1,166,660
Proceeds from issuance of warrants																$ 14,384
Accretion of debt discount																																		5,230	0
Beneficial conversion expense																$ 4,384
June 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															$ 40,000																					$ 40,000
Debt term															7 months
Maturity date description															The promissory note has a term of approximately 7 months maturing on December 31, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate															8.00%																					8.00%
Debenture, conversion price															$ 0.12																					$ 0.12
Interest expense																																		0	0
Proceeds from issuance of convertible debenture															$ 40,000
Debt instruments maturity date															Dec. 31, 2018
Warrants exercise price per share															$ 0.12																					$ 0.12
Warrants converted into common stock															1,000,000
Proceeds from issuance of warrants															$ 31,957
Accretion of debt discount																																		28,526	0
Beneficial conversion expense															$ 8,044
Change in derivative liability benefit																																		3,184
Number of common shares issuable															2,000,000
June 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount															$ 40,000											40,000								40,000		$ 40,000
Derivative liability																										3,184								3,184
July 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount														$ 45,000												45,000								45,000
Debt term														7 months
Maturity date description														The promissory note has a term of approximately 7 months maturing on January 31, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate														8.00%
Debenture, conversion price														$ 0.12
Interest expense																																		3,600
Proceeds from issuance of convertible debenture														$ 45,000
Debt instruments maturity date														Jan. 31, 2019
Warrants exercise price per share														$ 0.12
Warrants converted into common stock														1,000,000
Proceeds from issuance of warrants														$ 33,485
Accretion of debt discount																																		33,485
Beneficial conversion expense														$ 7,235
Change in derivative liability benefit																																		883
Number of common shares issuable														2,000,000
Derivative liability																										883								883
August 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount													$ 30,000													30,000								30,000
Debt term													7 months
Maturity date description													The promissory note has a term of approximately 7 months maturing on March 30, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate													8.00%
Debenture, conversion price													$ 0.12
Interest expense																																		2,400
Proceeds from issuance of convertible debenture													$ 30,000
Debt instruments maturity date													Mar. 30, 2019
Warrants exercise price per share													$ 0.12
Warrants converted into common stock													1,000,000
Proceeds from issuance of warrants													$ 22,659
Accretion of debt discount																																		22,659
Beneficial conversion expense													$ 5,160
Change in derivative liability benefit																																		552
Number of common shares issuable													1,250,000
Derivative liability																										552								552
September 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount												$ 25,000														25,000		$ 25,000						25,000
Debt term												7 months
Maturity date description												The promissory note has a term of approximately 7 months maturing on April 30, 2018 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate												8.00%																8.00%
Debenture, conversion price												$ 0.12																$ 0.12
Interest expense																																		2,000
Proceeds from issuance of convertible debenture												$ 25,000
Debt instruments maturity date												Apr. 30, 2018
Warrants exercise price per share												$ 0.12																$ 0.12
Warrants converted into common stock												1,000,000
Proceeds from issuance of warrants												$ 19,058
Accretion of debt discount																																		17,392
Beneficial conversion expense												$ 4,475
Change in derivative liability benefit																																		441
Number of common shares issuable												2,000,000
Derivative liability																										441								441
December 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Interest expense																																		1,340
Proceeds from issuance of warrants																																		6,835
Accretion of debt discount																																		1,065
December 2018 Convertible Debenture [Member] \| Securities Purchase Agreement [Member] \| June 30, 2019 [Member]
Debt Instrument [Line Items]
Debt instrument principal amount																										$ 1,000								$ 1,000
Debt term																																		2 years
Debt interest rate																										8.00%								8.00%
Debenture, conversion price																										$ 0.08								$ 0.08
Warrants term																										5 years								5 years
Warrants exercise price per share																										$ 0.15								$ 0.15
Warrants converted into common stock																																		45,826
Sale of stock transaction during period, shares																																		52
Sale of stock transaction during period																																		$ 52,000
Warrant to purchase of common stock																										4,166								4,166
Common stock, par value																										$ 0.001								$ 0.001
December 2018 Convertible Convertible Promissory Note [Member] \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount											$ 350,000															$ 0	$ 350,000						$ 350,000	$ 0
Debt term											20 months
Maturity date description											The promissory note has a term of 20 months maturing on August 14, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
Debt interest rate											8.00%																8.00%						8.00%
Debenture, conversion price											$ 0.03																$ 0.03						$ 0.03
Warrants term											20 months																20 months						20 months
Value of debenture converted into shares		$ 350,000
Interest expense																																		6,615
Proceeds from issuance of convertible debenture											$ 350,000
Debt instruments maturity date											Aug. 14, 2020
Warrants exercise price per share											$ 0.04																$ 0.04						$ 0.04
Warrants converted into common stock											5,000,000
Proceeds from issuance of warrants											$ 126,908
Debt conversion, converted instrument, shares issued		11,666,667
Accretion of debt discount																																		126,908
Beneficial conversion expense											$ 126,908
Number of common shares issuable											3,000,000
Debt [Member]
Debt Instrument [Line Items]
Amortization expense																																		$ 309,032	$ 41,511

Convertible Debentures - Schedule of Convertible Debentures (Details) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Debt Instrument [Line Items]
Convertible debenture	$ 3,228,900	$ 3,576,900
Less: unamortized discount	34,168	134,255
Total convertible debentures	3,194,732	3,442,645
Less: current portion	3,060,219	3,402,421
Total convertible debentures, net of current portion	134,513	40,224
Convertible Debentures Issued in September 2014 [Member]
Debt Instrument [Line Items]
Convertible debenture	25,050	25,050
Convertible Debentures Issued in January 2015 [Member]
Debt Instrument [Line Items]
Convertible debenture		500,000
Convertible Debentures Issued in April - June 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	1,075,000	1,075,000
Convertible Debenture Issued in August 2016 [Member]
Debt Instrument [Line Items]
Convertible debenture	200,000	200,000
Convertible Debentures Issued in January - March, 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	60,000	60,000
Convertible Promissory Notes Issued in March 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	222,350	222,350
Convertible Debenture Issued in June 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	100,000	100,000
Convertible Debenture Issued in July 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	100,000	100,000
Convertible Debenture Issued in September 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	645,000	645,000
Convertible Debenture Issued in November 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	247,500	247,500
Convertible Debenture Issued in November 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	27,000	27,000
Convertible Debenture Issued in December 2017 [Member]
Debt Instrument [Line Items]
Convertible debenture	75,000	75,000
Convertible Debenture Issued in February 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	45,000	45,000
Convertible Debentures Issued in March 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	65,000	65,000
Convertible Debentures Issued in April 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	60,000	60,000
Convertible Debentures Issued in April 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	70,000	70,000
Convertible Debentures Issued in April 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	20,000	20,000
Convertible Debentures Issued in June 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	40,000	40,000
Convertible Debenture Issued in July 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	45,000
Convertible Debentures Issued in August 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	30,000
Convertible Debentures Issued in September 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	25,000
Convertible Debentures Issued in December 2018 [Member]
Debt Instrument [Line Items]
Convertible debenture	$ 52,000

Notes Payable (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
Notes Payable (Details Narrative) - USD ($)	Sep. 30, 2018	Mar. 31, 2019
Interest expense		$ 573,341
Notes payable		20,000
CEO [Member]
Secured promissory note	$ 20,000
Debt interest rate	6.00%
Debt maturity date	Mar. 09, 2019
Interest expense		$ 667
Lender [Member]
Debt, conversion price		$ .04

Equity Transactions (Details Narrative) - USD ($)	3 Months Ended						9 Months Ended
Equity Transactions (Details Narrative) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Mar. 31, 2019	Jun. 30, 2018
Common stock shares issued for services, value	$ 185,359	$ 481,670	$ 164,589	$ 482,418	$ 1,534,633	$ 333,001	$ 831,615
Common stock issued for debenture interest, shares							729,877
Common stock issued for debenture interest		$ 21,459	$ 21,341	23,818	26,071	18,608	$ 42,796
Common stock issued for debenture conversions	540,034			$ 30,000	$ 525,000	$ 300,000	540,040
Debenture derivative liabilities	149,895						149,895
Additional interest expense							$ 573,341
Number of common stock issuable							10,749,548
Number of shares relation to new debenture borrowing, shares							4,872,208
Debenture borrowing amount	$ 405,000						$ 405,000
Shares relation to new debenture borrowing, value							$ 80,090
Number of common stock shares issued for cash, shares							312,500
Number of common stock shares issued for cash, value							$ 12,500
Number of shares relation with salaries and consulting fees							5,564,840
Warrants to purchase common stock	702,250						702,250
Warrants exercise price per share	$ 0.04						$ 0.04
Number of common stock issued for reduction in shares issuable, shares							21,164,612
Common stock issued for reduction in shares issuable, value							$ 604,383
September 2019 to December 2023 [Member]
Warrants outstanding	$ 4,705,468						$ 4,705,468
September 2019 to December 2023 [Member] \| Minimum [Member]
Warrants exercise price per share	$ 0.03						$ 0.03
September 2019 to December 2023 [Member] \| Maximum [Member]
Warrants exercise price per share	$ 0.30						$ 0.30
Common Stock [Member]
Common stock issued for debenture conversions, shares							23,149,564
Common stock issued for debenture conversions							$ 636,698
Consulting Services [Member]
Number of common stock shares issued for services							20,548,042
Common stock shares issued for services, value							$ 822,922
Accrued consulting services cost								$ 61,255

Equity Transactions - Summary of Activity of Company's Stock Warrants (Details) - Stock Warrant [Member]	9 Months Ended
	Mar. 31, 2019 $ / shares shares
Weighted Average Exercise Price Beginning Balance	$ 0.11
Weighted Average Exercise Price Expired
Weighted Average Exercise Price Granted	0.10
Weighted Average Exercise Price Exercised
Weighted Average Exercise Price Cancelled	0.12
Weighted Average Exercise Price Ending Balance	0.10
Weighted Average Exercise Price Vested and exercisable	$ 0.10
Number of Warrants Beginning Balance \| shares	36,781,726
Number of Warrants Expired \| shares
Number of Warrants Granted \| shares	8,964,708
Number of Warrants Exercised \| shares
Number of Warrants Cancelled \| shares	(833,333)
Number of Warrants Ending Balance \| shares	44,913,101
Number of Warrants Vested and exercisable \| shares	44,913,101
Weighted Average Remaining Contractual Term in Years	2 years 9 months 18 days
Weighted Average Remaining Contractual Term in Years	2 years 29 days
Weighted Average Remaining Contractual Term in Years Vested and exercisable	2 years 29 days
Weighted Average Grant Date Fair Value Beginning Balance	$ 0.09
Weighted Average Grant Date Fair Value Expired
Weighted Average Grant Date Fair Value Granted	0.04
Weighted Average Grant Date Fair Value Exercised
Weighted Average Grant Date Fair Value Cancelled	0.15
Weighted Average Grant Date Fair Value Ending Balance	0.08
Weighted Average Grant Date Fair Value Vested and exercisable	$ 0.08

Stock-Based Compensation (Details Narrative) - USD ($)	1 Months Ended					9 Months Ended
Stock-Based Compensation (Details Narrative) - USD ($)	Feb. 28, 2019	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2012	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018	Feb. 17, 2016	Mar. 31, 2013	Jan. 31, 2013	Dec. 31, 2009	Oct. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option outstanding						111,191,766		85,616,914
Expected (life) term						5 years	5 years
Dividend yield
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, shares	5,000,000	17,000,000		6,000,000	3,500,000
Options term	5 years	10 years		10 years	5 years
Number of options cancelled, shares	3,000,000
Stock option outstanding						28,500,000
Dividend yield						0.00%
Compensation expense						$ 1,171,581	$ 655,528
Nonvested stock option awards, shares						10,732,167
Cost of nonvested stock option awards not yet recognized						$ 245,491
Period of nonvested stock option awards not yet recognized for recognition						9 months
Stock Options [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term						5 years
Expected (life) term						36 months
Historical forfeiture rates						14.00%
Option expiration year						2019-02
Stock option exercise price per share						$ 0.02
Stock Options [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term						10 years
Expected (life) term						60 months
Historical forfeiture rates						17.00%
Option expiration year						2026-06
Stock option exercise price per share						$ 0.17
Stock Options [Member] \| Stock Option Plan Authorized 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized, shares												10,000,000	7,500,000
Options granted, shares						9,200,000
Number of options cancelled, shares						800,000
Stock option outstanding						8,400,000
Number of restricted stock shares issued						1,500,000
Number of shares available for grant under the plan						100,000
Stock Options [Member] \| Stock Option Plan Authorized 2009 [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term						5 years
Stock Options [Member] \| Stock Option Plan Authorized 2009 [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term						10 years
Stock Options [Member] \| Stock Option Plan Authorized 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized, shares										60,000,000	20,000,000
Options granted, shares						84,153,473
Number of options cancelled, shares						21,211,707
Stock option outstanding						59,616,766
Options exercised, shares						3,325,000
Stock Options [Member] \| 2015 Employee Benefit And Consulting Services Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized, shares									15,000,000
Options granted, shares						16,900,000
Options term						5 years
Number of options cancelled, shares						2,225,000
Stock option outstanding						14,675,000
Extended Term [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options term			5 years
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense						$ 100,000	$ 343,509
Cost of nonvested stock option awards not yet recognized						$ 0
Option vesting period						3 years

Stock-Based Compensation - Schedule of Valuation Assumptions Used to Estimate Fair Value of Stock Options (Details)	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Payment Arrangement [Abstract]
Expected volatility, minimum	122.52%
Expected volatility, maximum	126.99%
Expected volatility		129.46%
Expected dividend yield
Risk-free interest rates, minimum	2.46%
Risk-free interest rates, maximum	2.95%
Risk-free interest rates		2.62%
Expected term (in years)	5 years	5 years

Stock-Based Compensation - Summary of Award Activity Under Stock Option Plans (Details)	9 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Share-based Payment Arrangement [Abstract]
Weighted Average Exercise Price, Beginning Balance	$ 0.09
Weighted Average Exercise Price, Expired
Weighted Average Exercise Price, Granted	0.03
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Cancelled	0.07
Weighted Average Exercise Price, Ending Balance	0.07
Weighted Average Exercise Price, Vested and exercisable	$ 0.07
Number of Optioned Shares, Beginning Balance \| shares	85,616,914
Number of Optioned Shares, Expired \| shares
Number of Optioned Shares, Granted \| shares	28,500,000
Number of Optioned Shares, Exercised \| shares
Number of Optioned Shares, Cancelled \| shares	(2,925,148)
Number of Optioned Shares, Ending Balance \| shares	111,191,766
Number of Optioned Shares, Vested and exercisable \| shares	100,459,599
Weighted Average Remaining Contractual Term in Years, Beginning Balance	4 years
Weighted Average Remaining Contractual Term in Years, Ending Balance	4 years 7 days
Weighted Average Remaining Contractual Term in Years, Vested and exercisable	3 years 9 months 3 days
Weighted Average Optioned Grant Date Fair Value, Beginning Balance	$ 0.11
Weighted Average Optioned Grant Date Fair Value, Expired
Weighted Average Optioned Grant Date Fair Value, Granted	0.03
Weighted Average Optioned Grant Date Fair Value, Exercised
Weighted Average Optioned Grant Date Fair Value, Cancelled	0.05
Weighted Average Optioned Grant Date Fair Value, Ending Balance	0.09
Weighted Average Optioned Grant Date Fair Value, Vested and exercisable	$ 0.09
Aggregate Intrinsic Value, Beginning Balance \| $
Aggregate Intrinsic Value, Ending Balance \| $
Aggregate Intrinsic Value, Vested and exercisable \| $

Stock-Based Compensation - Summary of Award Activity Under Restricted Stock Plans (Details) - Restricted Stock [Member] - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2019	Jun. 30, 2018
Number of Nonvested, Unissued Restricted Shares Awards, Beginning Balance		1,500,000
Number of Nonvested, Unissued Restricted Shares Awards, Granted		5,500,000
Number of Nonvested, Unissued Restricted Shares Awards, Vested		(7,000,000)
Number of Nonvested, Unissued Restricted Shares Awards, Forfeited
Number of Nonvested, Unissued Restricted Shares Awards, Ending Balance
Weighted Average Grant Date Fair Value, Beginning Balance		$ 0.21
Weighted Average Grant Date Fair Value, Granted		0.06
Weighted Average Grant Date Fair Value, Vested		0.09
Weighted Average Grant Date Fair Value, Forfeited
Weighted Average Grant Date Fair Value, Ending Balance

Loss Per Share - Schedule of Computation of Basic and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended						9 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net loss	$ (2,041,000)	$ (1,930,445)	$ (1,624,946)	$ (2,736,682)	$ (1,820,561)	$ (3,027,097)	$ (5,596,391)	$ (7,584,340)
Weighted average common shares outstanding: Basic and diluted	521,743,994			428,394,955			497,693,368	401,191,882
Basic and diluted loss per share	$ (0.00)			$ (0.01)			$ (0.01)	$ (0.02)

Commitments and Contingencies (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Rental expense	$ 57,142	$ 115,541
Solterra Renewable Technologies, Inc. [Member] \| University of Arizona [Member] \| Patent Licensing Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalties payable due in first installment period	50,000
Royalties payable due in second installment period	125,000
Royalties, future minimum payments due on each june 30 every year thereafter	$ 200,000
Solterra Renewable Technologies, Inc. [Member] \| University of Arizona [Member] \| Patent Licensing Agreement [Member] \| Non-display Electronic Component Applications [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of adjusted gross sales	2.00%
Solterra Renewable Technologies, Inc. [Member] \| University of Arizona [Member] \| Patent Licensing Agreement [Member] \| Printed Electronic Displays [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of adjusted gross sales	2.50%

Litigation (Details Narrative) - USD ($)				1 Months Ended				9 Months Ended
Litigation (Details Narrative) - USD ($)	Sep. 21, 2018	Nov. 03, 2017	Sep. 30, 2017	Nov. 30, 2017	Sep. 30, 2017	Apr. 30, 2017	Mar. 31, 2016	Mar. 31, 2019	Dec. 31, 2017
Litigation settlement						$ 129,000
Accrued litigation interest arrears plus interest								$ 95,000
Quantum's CEO [Member]
Repayment of litigation settlements	$ 300,000
L2 Capital, LLC [Member]
Repayment of litigation settlements		$ 149,555	$ 237,300
SBI Investments LLC [Member]
Repayment of litigation settlements		$ 64,095	$ 101,700
SBI Investments LLC and L2 Capital, LLC [Member]
Repayment of loans				$ 213,650	$ 339,000
Accrued interest				$ 8,636					$ 10,170
Damages sought, value per month							$ 100,000
Accrued damage sought value							$ 319,000
SBI Investments LLC and L2 Capital, LLC [Member] \| Four Loan Agreement [Member]
Number of common stock shares issued as collateral								50,000,000
SBI, L2 and Cleveland Terrazas PLLC [Member] \| Lenders [Member]
Percentage of interest claimed								140.00%
Number of shares issued for damages claim								20,000,000
SBI, L2 and Cleveland Terrazas PLLC [Member] \| Four Notes [Member]
Repayment of default amount								$ 1,500,000

Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($)	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 6,904	$ 29,023
Cash paid for income taxes
Conversion of debentures, and accrued interest into shares of common stock	699,517	855,000
Allocated value of common stock and warrants issued with convertible debentures	208,945	602,544
Debenture extension paid in shares of common stock		167,354
Stock issued for amounts in accounts payable	81,602
Stock and stock warrants issued for conversion of accrued salaries		249,900
Prepaid expense paid in shares of common stock	750,000	1,242,232
Financing of prepaid insurance		$ 12,738

Transactions with Affiliated Parties (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended		12 Months Ended
	Feb. 28, 2019	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018
Related Party Transaction [Line Items]
Proceeds from issuance of convertible debenture		$ 500,500	$ 1,237,000
Issuance of common stock granted, shares		28,500,000
Executives [Member]
Related Party Transaction [Line Items]
Due to related party		$ 468,825			$ 568,575
Family Member of Former Key Executive [Member] \| Convertible Debt [Member]
Related Party Transaction [Line Items]
Proceeds from issuance of convertible debenture				$ 200,000
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Issuance of common stock granted, shares	5,000,000
Issuance of common stock granted, shares	$ 100,000

Subsequent Events (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended							9 Months Ended	12 Months Ended
Subsequent Events (Details Narrative) - USD ($)	Apr. 05, 2019	Apr. 02, 2019	Aug. 31, 2016	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2019	Jun. 30, 2018	May 06, 2019
Debt instrument principal amount				$ 3,228,900							$ 3,228,900	$ 3,576,900
Stock issued during period for services, value				185,359	$ 481,670	$ 164,589	$ 482,418	$ 1,534,633	$ 333,001		$ 831,615
Sale of stock transaction during period, shares											312,500
April - June, August, October and November 2016 Convertible Debentures [Member]
Debt instrument principal amount				$ 1,150,000							$ 1,150,000
Debt conversion, converted instrument, shares issued												3,791,666
Sale of stock transaction during period, shares			200							1,565
Subsequent Event [Member]
Stock issued during period for services		16,160,195
Stock issued for debenture conversions, shares		17,000,000
Sale of stock transaction during period, shares		125,000
Subsequent Event [Member] \| Chief Executive Officer [Member]
Stock issued for compensation, shares		6,000,000
Subsequent Event [Member] \| April - June, August, October and November 2016 Convertible Debentures [Member] \| Extension Agreements [Member]
Debt instrument principal amount	$ 700,000												$ 125,000
Restricted common stock issued during period	95,321,250
Subsequent Event [Member] \| September 2017 Convertible Debenture [Member]
Debt instrument principal amount	$ 742,500
Accrued interest	$ 54,000
Debt conversion, converted instrument, shares issued	17,000,000