STOCKHOLDERS' EQUITY

6 Months Ended

Dec. 31, 2011

STOCKHOLDERS' DEFICIT [Abstract]

STOCKHOLDERS' DEFICIT

3. STOCKHOLDERS' DEFICIT

(a) Preferred stock

Cumulative dividends on preferred stock are accrued at a rate of 5% per annum, payable at the option of the Company. Each holder has the right to convert preferred shares into common stock at the average trading price ten days prior to conversion. The Company has the right to redeem the preferred shares from the date of issue as follows:

Within one year $1.50

2nd year $2.00

3rd year $2.50

4th year $3.00

5th year $3.50

6th year $4.00

increasing $0.50 per year thereafter.

(b) Common stock

During the period ended December 31, 2011, the Company completed two private placements. The first private placement amounted to $23,000 for the issuance of 41,819 units consisting of common stock at $0.55 per share and warrants at $0.001 per warrant to purchase 41,819 shares of common stock on or before March 31, 2013 at an exercise price of $1.00 per share.

The second private placement amounted to $179,000 for the issuance of 511,428 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 511,428 shares of common stock on or before November 29, 2016 at an exercise price of $0.70 per share. Exercise of all the investment warrants may be required in the event that the market price for the common stock exceeds $1.50 per share.

The Company determined that the warrants did not contain any provisions that would preclude equity treatment.

(c) Stock-based compensation

During the period ended December 31, 2011, the Company recorded stock-based compensation expense with respect to vested stock options of $197,974 (six months ended December 31, 2010 - $237,372), which has been included as consulting fees.

Stock-based compensation not yet recognized at December 31, 2011 relating to non-vested stock options was $192,061, which will be recognized over a weighted average period of 1.12 years.

(d) Stock options

The following summarizes information about the Company's options outstanding:

	Number of Options		Price Per Option		Weighted Average Exercise Price
Outstanding, June 30, 2010		4,125,000	$	0.25 to $ 1.00	$	0.36
Granted		2,375,000	$	0.25 to $ 0.85	$	0.58
Outstanding, June 30, 2011 and December 31, 2011		6,500,000	$	0.25 to $ 1.00	$	0.44
Exercisable, June 30, 2011 and December 31, 2011		4,225,000	$	0.25 to $ 1.00	$	0.38

The following summarizes the options outstanding and exercisable:

			Number of Options
Expiry Date	Exercise Price		December 31, 2011		June 30, 2011
December 31, 2013(1)	$	1.00		110,000		110,000
December 31, 2012	$	0.25		2,500,000		2,500,000
November 15, 2013(2)	$	1.00		100,000		100,000
March 9, 2014	$	0.25		125,000		125,000
June 1, 2014	$	0.85		100,000		100,000
October 15, 2014	$	0.50		100,000		100,000
July 31, 2014(3)	$	1.00		415,000		415,000
December 1, 2014	$	0.50		175,000		175,000
December 1, 2014	$	0.85		100,000		100,000
December 31, 2014	$	0.25		1,000,000		1,000,000
April 15, 2015	$	0.50		100,000		100,000
June 1, 2015	$	0.50		175,000		175,000
June 1, 2015	$	0.85		100,000		100,000
October 15, 2015	$	0.50		100,000		100,000
December 1, 2015	$	0.50		175,000		175,000
December 1, 2015	$	0.85		100,000		100,000
April 15, 2016	$	0.50		100,000		100,000
June 1, 2016	$	0.50		175,000		175,000
June 1, 2016	$	0.85		100,000		100,000
October 15, 2016	$	0.50		100,000		100,000
December 1, 2016	$	0.50		175,000		175,000
December 1, 2016	$	0.85		100,000		100,000
April 15, 2017	$	0.50		100,000		100,000
June 1, 2017	$	0.50		175,000		175,000
Total outstanding				6,500,000		6,500,000
Total exercisable				4,225,000		3,950,000

(1) During the year ended June 30, 2011, the expiry date of the 110,000 options was extended from December 31, 2011 to December 31, 2013.

(2) During the year ended June 30, 2011, the expiry date of these options was extended from November 15, 2010 to November 15, 2013.

(3) During the year ended June 30, 2010, the expiry date of these options was extended from December 31, 2010 to July 31, 2014.

The weighted average remaining contractual lives for options outstanding and exercisable at December 31, 2011 are 2.47 and 1.83 years, respectively.

The weighted average grant date fair value of options modified during the six months ended December 31, 2011 was $nil (six months ended December 31, 2010 - $0.44), granted during the six months ended December 31, 2011 was $nil (six months ended December 31, 2010 - $0.57) and vested during the six months ended December 31, 2011 was $nil (six months ended December 31, 2010 - $0.42).

No options were exercised during the six months ended December 31, 2011 and 2010.

The aggregate intrinsic value of options outstanding as at December 31, 2011 was $688,750 of which $612,750 related to options that were exercisable. The aggregate intrinsic values exclude options having a negative aggregate intrinsic value due to awards with exercise prices greater than market value. The intrinsic value is the difference between the market value of the shares and the exercise price of the award as of the measurement date.

(e) Stock purchase warrants

The following summarizes information about the Company's stock purchase warrants outstanding:

	Number of Warrants			Price Per Warrant		Weighted Average Exercise Price
Balance, June 30, 2010		8,763,952				$	0.60
Issued		1,316,553		$	1.00	$	1.00
Exercised		(860,800	)	$	0.50	$	0.50
Expired		(2,970,000	)	$	0.50	$	0.50
Balance, June 30, 2011		6,249,705				$	0.74
Issued		41,819		$	1.00	$	1.00
Issued		511,428		$	0.70	$	0.70
Balance, December 31, 2011		6,802,952				$	0.74

			Number of Warrants
Expiry Date	Exercise Price		December 31, 2011		June 30, 2011
December 31, 2011	$	0.50		670,000		670,000
February 8, 2012	$	0.70		2,123,400		2,123,400
May 14, 2012	$	0.70		507,853		507,853
June 3, 2012	$	0.70		1,631,899		1,631,899
December 31, 2012	$	1.00		503,490		503,490
February 28, 2013	$	1.00		813,063		813,063
March 31, 2013	$	1.00		41,819		0
November 29, 2016	$	0.70		511,428		0
Total outstanding and exercisable				6,802,952		6,249,705