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Common Stock Warrants

12 Months Ended

Jun. 30, 2017

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 originalprovisions 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, 2017, the Company extended 5,333,334 warrants in connection with the financing addressed in Note 5. The warrants can be purchased at $0.10 per share. The Company reported a $258,183 loss on extinguishment of debt related to the extension of 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			1.20	%
Risk free interest			0.50	%
Expected life		3.5 years

A summary of the status of the Company’s stock warrants as of June 30, 2017 and 2016 is presented below:

										Weighted Ave.
		Stock				Exercise				Exercise
		Warrants				Price				Price

Outstanding and Exercisable, June 30, 2015			10,193,334			$	0.10-1.50			$	0.24

Granted			3,000,000			$	0.20-0.20			$	0.20
Expired/Canceled			(2,000,000	)			-				-
Exercised			-				-				-

Outstanding and Exercisable, June 30, 2016			11,193,334			$	0.10-1.50			$	0.27

Outstanding and Exercisable, June 30, 2017			11,193,334			$	0.10–1.50			$	0.14

A summary of outstanding stock warrants at June 30, 2017 follows:

Number of					Remaining								Weighted
Common Stock					Contracted				Exercise				Ave Exer.
Equivalents			Expir. Date		Life (Years)				Price				Price

50,000			August, 2016			.250			$	0.15			$	0.15
210,000			August, 2016			.250			$	0.15			$	0.15
2,333,334			February 2020			2.750			$	0.10			$	0.10
1,500,000			February 2020			2.750			$	0.10			$	0.10
2,600,000			May 2018			1.000			$	0.15			$	0.15
2,000,000			February 2020			2.750			$	0.20			$	0.20
1,000,000			February 2020			2.750			$	0.20			$	0.20
500,000			February 2020			2.750			$	0.10			$	0.10
1,000,000			February 2020			2.750			$	0.10			$	0.10

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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