Note 5 - Deferred Compensation

9 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

5.

     DEFERRED COMPENSATION:

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

$652,367

and

$874,162

as of

March 31, 2020

and

2019,

respectively. Included in the deferred compensation balances as of

March 31, 2020,

are

$97,946

and

$36,180

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 and Smith as of

March 31, 2019

was

$447,019

and

$79,016,

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

$445,741

and

$244,603

as of

March 31, 2020

and

2019,

respectively, with similar conversion terms as those described above for Bassani and Smith, 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, 2022 (

to be issued pursuant to the

2006

Plan). Smith also 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. During the

nine

months ended

March 31, 2020,

Smith elected to convert

$3,828

of deferred compensation into units of the Company at its

$0.50

per unit offering price (Note

8

). Bassani and Smith also elected to transfer

$436,508

and

$199,573,

respectively, of their respective deferred compensation into their

2020

Convertible Obligations (formerly the

January 2015

Convertible Notes) (Note

7

). In connection with the agreements related to Smith’s

December 31, 2019

transfer, Smith received the right to transfer future deferred compensation to his

2020

Convertible Obligation at his election. The Company also owes a former employee

$72,500,

which is

not

convertible and is non-interest bearing.

The Company recorded interest expense of

$18,498

(

$10,301

with related parties) and

$14,344

(

$11,048

with related parties) for the

nine

months ended

March 31, 2020

and

2019,

respectively.