NOTE 6 - STOCK OPTIONS

12 Months Ended

Jun. 30, 2011

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

NOTE 6 – STOCK OPTIONS

Stock Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation".  ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the award is recognized as an expense over the requisite service periods in the calculation of net loss.

In determining the fair value of options vested in the current fiscal year, the Company applied the Black-Scholes model using a market value of $0.037, a strike price of $0.02, a ten year term with a 1 % annual interest rate and a volatility factor of 79 %. As a result, an amount of $126,800 was recorded as an expense in the current year and the prior year.

The Company’s board of directors approved the First American Scientific Corp. 2006 Non-qualified Stock Option Plan.  This plan allows the Company to distribute up to 5,000,000 shares of common stock options at a maximum share price of $0.04 to persons employed or associated with the Company.  47,805 shares remain unissued under the Plan. This plan was not approved by the Company’s security holders.

On July 1, 2009, pursuant to the Employment Agreements with two senior officers, the Company was required to grant options to purchase 4,000,000 at an exercise price of $0.02. The options will be issued upon registration of a new Stock Option Plan.

On July 1, 2010, pursuant to the Employment Agreements with two senior officers, the Company was required to grant options to purchase 8,000,000 at an exercise price of $0.02.  The options will be issued upon registration of a new Stock Option Plan.

On June 30, 2011 the Board of Directors was committed, due to the death of the Cal Kantonen, one of its Officers, by way of the grant of stock options to sell 14,000,000 shares at $0.02 per share to Mr. Kantonen’s estate.

There is no express termination date for the options, authorized by the Company’s plans, although the Company’s board may vote to terminate any existing plan.  The exercise price of the options will be determined at the date of grant.

The following is a summary of the Company's open stock option plans:

Equity compensation plans not approved by security holders	Number of securities to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options	Number of securities remaining available for future issuance under equity compensation plans
2006 Stock Option Plan	none	$0.00	47,805
Future Plans	28,000,000	$  0.02	28,047,805
Total	28,000,000		28,047,805

The following is a summary of stock option activity:

	Number of Shares	Weighted Average Exercise Price
Options outstanding and exercisable at June 30, 2009	4,000,000	0.02
Vested during 2010	4,000,000	0.02
Options outstanding and exercisable at June 30, 2010	8,000,000	0.02
Vested during 2011	12,000,000	0.02
Options outstanding and exercisable at June 30, 2011	20,000,000	0.02

As discussed in Note 5, the Company does not have sufficient authorized common stock to satisfy the outstanding options if presented. All options are in the hands of officers of the Company or their Estates, and are currently not expected to be exercised.