Note 5 - Deferred Compensation

9 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5.

     DEFERRED COMPENSATION:

The Company owes deferred compensation to various employees, former employees and consultants totaling

$345,929

and

$1,962,885

as of

March 31, 2018

and

2017,

respectively. Included in the deferred compensation balances as of

March 31, 2018,

are

$124,612

and

$72,355

owed Bassani, and Smith, respectively, pursuant to extension agreements effective

January 1, 2015,

whereby unpaid compensation earned after

January 1, 2015,

accrues interest at

4%

per annum and can be converted into shares of the Company’s common stock at the election of the employee during the

first

five

calendar days of any month. The conversion price shall be the average closing price of the Company’s common stock for the last

10

trading days of the immediately preceding month. The deferred compensation owed Bassani, Smith and Edward Schafer (“Schafer”), the Company’s Vice Chairman, as of

March 31, 2017

was

$873,273,

$338,480

and

$118,376,

respectively. The Company also owes various consultants, pursuant to various agreements, for deferred compensation of

$75,478

and

$391,272

as of

March 31, 2018

and

2017,

respectively, with similar conversion terms as those described above for Bassani, Smith and Schafer, with the exception that the interest accrues at

3%

per annum. Bassani and Smith have each been granted the right to convert up to

$300,000

of deferred compensation balances at a price of

$0.75

per share until

December 31, 2018 (

to be issued pursuant to the

2006

Plan). Smith has the right to convert all or part of his deferred compensation balance into the Company’s securities (to be issued pursuant to the

2006

Plan) “at market” and/or on the same terms as the Company is selling or has sold its securities in its then current (or most recent if there is

no

current) private placement. The Company also owes a current employee deferred compensation of

$984

which is convertible into

1,893

shares of the Company’s common stock as of

March 31, 2018

and, a former employee

$72,500,

which is

not

convertible and is non-interest bearing.

During the

nine

months ended

March 31, 2018,

Bassani, Smith and Schafer agreed to cancel deferred compensation owed them as of

November 30, 2017

of

$1,147,210,

$416,656

and

$121,386,

respectively (

$1,685,252

in aggregate). Various consultants also agreed to cancel deferred compensation as of

November 30, 2017

totaling

$718,580.

The total deferred compensation that was cancelled during the

nine

months ended

March 31, 2018

was

$2,403,832,

of which, the

$1,685,252

owed related parties was recorded as an increase in additional paid in capital, while

$718,580

was recorded as a gain from the extinguishment of liabilities. All deferred compensation agreements remain in effect and the Company accrued deferred compensation anew beginning

December 1, 2017.

The Company recorded interest expense of

$32,299

(

$26,084

with related parties) and

$39,592

(

$30,937

with related parties) for the

nine

months ended

March 31, 2018

and

2017,

respectively.