Common Stock Warrants

12 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Note 6 - Common Stock Warrants

Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB ASC 480-10 “Share Based Payment” using the modified-prospective-transition method. Under this transition method, total compensation cost recognized in the statement of operations for the years ended June 30, 2007 and 2006 includes compensation costs for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of FASB ASC 480-10, and compensation costs for all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of FASB ASC 480-10. The Company estimates the fair value of each stock award at the grant date by using the Black-Scholes option pricing model.

During the year ended June 30, 2014, the Company issued 2,333,334 warrants at an exercise price of $0.15 per share and 1,500,000 warrants at an exercise price of $0.20 per share in connection with the financing addressed in Note 3. The Company reported $691,667 of expense during the year ended June 30, 2014 related to these warrant issuances. The expense of these warrants was calculated using the Black-Scholes option pricing model using the following assumptions:

Dividend yield	0%
Expected volatility	2.03% – 2.12%
Risk free interest	0.31% - 0.40%
Expected life	2 years

During the year ended June 30, 2015, the Company issued 1,500,000 warrants in connection with the financing addressed in Note 3, of which 1,000,000 can be purchased at $0.10 per share and 500,000 at $0.15 per share. The Company reported $78,133 of expense during the year ended June 30, 2015 related to these warrant issuances. The expense of these warrants was calculated using the Black-Scholes option pricing model using the following assumptions:

Dividend yield	0%
Expected volatility	1.18%
Risk free interest	.50%
Expected life	1 year

A summary of the status of the Company’s stock warrants as of June 30, 2015 and 2014 is presented below:

	Stock Warrants		Exercise Price		Weighted Ave. Exercise Price
Outstanding and Exercisable, June 30, 2013		4,860,000	$	0.75-1.50	$	0.35
Granted		3,833,334	$	0.15-0.20	$	0.17
Expired/Canceled		-		-		-
Exercised		-		-		-
Outstanding and Exercisable, June 30, 2014		8,693,334	$	0.15-1.50	$	0.28
Granted		1,500,000	$	0.10-0.15	$	0.12
Expired/Canceled		-		-		-
Exercised		-		-		-
Outstanding and Exercisable, June 30, 2015		10,193,334	$	0.10–1.50	$	0.24

A summary of outstanding stock warrants at June 30, 2015 follows:

Number of		Remaining				Weighted
Common Stock		Contracted		Exercise		Ave Exer.
Equivalents	Expir. Date	Life (Years)		Price		Price
50,000	October, 2015		.250	$	0.15	$	0.15
210,000	September, 2015		.250	$	0.15	$	0.15
500,000	December 2015		.500	$	0.75	$	0.75
500,000	December 2015		.500	$	0.15	$	0.15
250,000	December 2015		.500	$	1.00	$	1.00
250,000	December 2015		.500	$	0.15	$	0.15
250,000	December 2015		.500	$	1.50	$	1.50
250,000	December 2015		.500	$	0.15	$	0.15
2,333,334	February 2016		.750	$	0.15	$	0.15
1,500,000	June 2016		1.000	$	0.20	$	0.20
2,600,000	May 2018		2.000	$	0.15	$	0.15
500,000	February 2016		.750	$	0.15	$	0.15
1,000,000	February 2016		.750	$	0.10	$	0.10