Stock Options And Warrants

9 Months Ended

Mar. 31, 2016

Stock Options And Warrants

Stock Options and Warrants

9. STOCK OPTIONS AND WARRANTS

Stock Options

Our 2003 Stock Option Plan for Directors, Officers, Employees and Key Consultants (the “2003 Plan”) authorizing the issuance of up to 5,000,000 shares of our common stock pursuant to the grant and exercise of up to 5,000,000 stock options terminated upon the expiration of the remaining options granted under the 2003 Plan on May 24, 2014. In the future, we plan to establish a new stock option plan pursuant to which stock options may be authorized and granted to our executive officers, directors, employees and key consultants. We expect to authorize up to 10% of our issued and outstanding Common Stock for future issuance under such plan. We believe that stock option awards motivate our employees to work to improve our business and stock price performance, thereby further linking the interests of our senior management and our stockholders. The board considers several factors in determining whether awards are granted to an executive officer, including those previously described, as well as the executive’s position, his or her performance and responsibilities, and the amount of options, if any, currently held by the officer and their vesting schedule. Our policy prohibits backdating options or granting them retroactively. As of March 31, 2016, 126,000,000 stock options granted outside of the Plan were outstanding.

The Company used the historical industry index to calculate volatility, since the Company’s stock history did not represent the expected future volatility of the Company’s common stock. The weighted average remaining contractual life of options outstanding as of March 31, 2016 was as follows:

				Weighted
				Average
		Number of		remaining
Exercise		options		contractual
prices		outstanding		life (years)
$	0.015		35,000,000		6.41
$	0.013		63,000,000		6.06
$	0.013		15,000,000		5.97
$	0.053		12,500,000		3.37
$	0.004		500,000		5.54
			126,000,000

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

	Period ended March 31, 2016
			Weighted
			average
			exercise
	Options		price
Outstanding -beginning of period		91,000,000	$	0.012
Granted		35,000,000	$	0.015
Exercised		—		—
Forfeited		—		—
Outstanding - end of period		126,000,000	$	0.013
Exercisable at the end of period		49,235,616	$	0.011
Weighted average fair value of
options granted during the year			$	525,000

Warrants

During the quarter ended March 31, 2016, the Company issued no warrants for services. A summary of the Company’s warrant activity and related information follows:

	Period ended March 31, 2016
			Weighted
			average
			exercise
	Warrants		price
Outstanding -beginning of period		28,019,163	$	0.003
Granted		—	$	—
Exercised		—	$	—
Forfeited		—	$	—
Outstanding and exercisable - end of period		28,019,163	$	0.003

The weighted average remaining contractual life of warrants outstanding as of March 31, 2016 was as follows:

				Weighted
				Average
		Number of		remaining
Exercise		options		contractual
prices		outstanding		life (years)
$	0.003		28,019,163		0.27