Note 9 - Stockholders' Equity

3 Months Ended

Sep. 30, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

9.     STOCKHOLDERS' EQUITY:

Series B Preferred stock:

At July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter. The Series B Preferred stock is mandatorily redeemable at $2.00 per share by the Company three years after issuance and accordingly was classified outside of shareholders’ equity. The 200 shares have reached their maturity date, but due to the cash constraints of the Company have not been redeemed.

During the years ended June 30, 2015 and 2014, the Company declared dividends of $2,000 and $2,000 respectively. During the three months ended September 30, 2015, the Company declared dividends of $500. At September 30, 2015, accrued dividends payable are $8,500.

Common stock:

Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights. The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future.

Centerpoint holds 704,309 shares of the Company’s common stock. These shares of the Company’s common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest. The Company accounts for these shares similar to treasury stock.

During the three months ended September 30, 2015, the Company issued 29,934 shares of the Company’s common stock at prices ranging from $0.76 to $1.15 per share for services valued at $25,952, in the aggregate, to consultants and an employee.

During the three months ended September 30, 2015, the Company issued 12,500 shares of the Company’s restricted common stock upon receipt of its subscription receivable of $13,125 for the exercise of 12,500 warrants.

During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company’s common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015. Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Company’s restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note.

During the three months ended September 30, 2015, Smith and various consultants elected to convert $82,861 and $88,856 of deferred compensation, respectively, into 99,159 and 109,715 shares, respectively, of the Company’s common stock at conversion rates ranging from $0.76 to $1.15 per share.

Warrants:

As of September 30, 2015, the Company had approximately 8.3 million warrants outstanding, with exercise prices from $0.75 to $3.00 and expiring on various dates through December 31, 2020.

The weighted-average exercise price for the outstanding warrants is $1.24, and the weighted-average remaining contractual life as of September 30, 2015 is 4.5 years.

During the three months ended September 30, 2015, warrants to purchase 957,806 shares of common stock of the Company at prices between $2.25 and $3.10 per share expired.

During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company’s common stock at a reduced exercise price of $1.05, for the period from July 1, 2015 through July 15, 2015. As a result of the offering, 265,894 warrants were exercised and 265,894 shares of the Company’s restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a collateralized promissory note receivable for $105,000, for the three months ended September 30, 2015.

Stock options:

The Company’s 2006 Consolidated Incentive Plan, as amended (the “2006 Plan”), provides for the issuance of options to purchase up to 22,000,000 shares of the Company’s common stock. Terms of exercise and expiration of options granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years.

The Company recorded compensation expense related to employee stock options of $15,320 and nil for the three months ended September 30, 2015 and 2014, respectively. The Company granted no options during the three months ended September 30, 2015 and 2014, respectively.

A summary of option activity under the 2006 Plan for the three months ended September 30, 2015 is as follows:

	Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at July 1, 2015		4,413,870	$	1.88		4.1		-
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		-		-
Outstanding at September 30, 2015		4,413,870	$	1.88		4.1	$	253,000
Exercisable at September 30, 2015		4,313,870	$	1.91		4.0	$	213,000

The following table presents information relating to nonvested stock options as of September 30, 2015:

	Options		Weighted Average Grant-Date Fair Value
Nonvested at July 1, 2015		100,000	$	0.76
Granted		-		-
Vested		-		-
Nonvested at September 30, 2015		100,000	$	0.76

The total fair value of stock options that vested during the three months ended September 30, 2015 and 2014 was nil for both periods, respectively. As of September 30, 2015, the Company had $35,146 of unrecognized compensation cost related to stock options.

Stock-based employee compensation charges in operating expenses in the Company’s financial statements for the three months ended September 30, 2015 and 2014 are as follows:

	Three months ended September 30, 2015		Three months ended September 30, 2014
General and administrative:
Fair value of stock options expensed	$	1,838	$	-
Total	$	1,838	$	-
Research and development:
Fair value of stock options expensed	$	13,482	$	-
Total	$	13,482	$	-