STOCKHOLDERS' DEFICIT (Tables)

12 Months Ended

Jun. 30, 2014

The fair value of the Company’s stock options was estimated on the measurement date using the Black-Scholes option pricing model with the following weighted average assumptions:

	2014			2013
Expected life (years)		3.29			3.17
Interest rate		1.17	%		1.09	%
Volatility		104.25	%		78.50	%
Dividend yield		0.00	%		0.00	%
Estimated forfeitures		0.00	%		0.00	%

Stock options outstanding

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

	Number of Options			Price Per Option		Weighted Average Exercise Price
Outstanding, June 30, 2013		5,900,000		$	0.25 to $ 1.00	$	0.43
Granted		1,100,000		$	0.25 to $ 0.50	$	0.34
Cancelled		(1,000,000	)	$	0.50	$	0.50
Forfeited		(100,000	)	$	0.50	$	0.50
Outstanding, June 30, 2014		5,900,000		$	0.25 to $ 1.00	$	0.40
Exercisable, June 30, 2014		5,250,000		$	0.25 to $ 1.00	$	0.42

Schedule of nonvested options

A summary of the status of non-vested options as of June 30, 2014 is as follows;

	Number of Options			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2013		450,000		$	0.66
Options granted		1,100,000			0.34
Options forfeited		(100,000	)		0.50
Options vested		(800,000	)		0.53
Non-vested at June 30, 2014		650,000		$	0.30

Stock options outstanding and exercisable

The following summarizes the options outstanding and exercisable:

			Number of Options
Expiry Date	Exercise Price		June 30, 2014		June 30, 2013
March 9, 2014	$	0.25		125,000		125,000
June 1, 2014	$	0.85		100,000		100,000
July 31, 2014	$	1.00		415,000		415,000
October 15, 2014	$	0.50		100,000		100,000
November 15, 2014⁽¹⁾	$	1.00		100,000		100,000
December 1, 2014	$	0.50		75,000		75,000
December 1, 2014	$	0.85		100,000		100,000
December 31, 2014 ⁽²⁾	$	1.00		110,000		110,000
December 31, 2014 ⁽³⁾	$	0.25		1,000,000		1,500,000
April 15, 2015	$	0.50		100,000		100,000
June 1, 2015	$	0.50		75,000		75,000
June 1, 2015	$	0.85		100,000		100,000
October 15, 2015	$	0.50		-		100,000
December 1, 2015	$	0.50		75,000		75,000
December 1, 2015	$	0.85		100,000		100,000
April 15, 2016	$	0.50		-		100,000
June 1, 2016	$	0.50		75,000		75,000
June 1, 2016	$	0.85		100,000		100,000
June 30, 2016	$	0.25		2,000,000		2,000,000
October 15, 2016	$	0.50		-		100,000
December 1, 2016	$	0.50		75,000		75,000
December 1, 2016	$	0.85		100,000		100,000
February 19, 2017	$	0.31		750,000		-
April 15, 2017	$	0.50		-		100,000
June 1, 2017	$	0.50		75,000		75,000
January 13, 2019	$	0.25		50,000		-
January 13, 2020	$	0.25		50,000		-
January 13, 2021	$	0.25		50,000		-
Total outstanding				5,900,000		5,900,000
Total exercisable				5,250,000		5,450,000

⁽¹⁾

During the fiscal year ended June 30, 2014, the expiry date of 100,000 options was extended from November 15, 2013 to November 15, 2014.

⁽²⁾

During the fiscal year ended June 30, 2014, the expiry date of 110,000 options was extended from March 31, 2014 to December 31, 2014.

⁽³⁾

During the fiscal year ended June 30, 2014, the expiry date of 500,000 options was extended from March 31, 2014 to December 31, 2014.

Restricted share activity

Restricted share activity is summarized as follows:

	Shares		Weighted Average Grant Date Fair Value per Share
Outstanding as of June 30, 2013		-		-
Granted		1,950,000	$	0.34
Cancelled		-		-
Forfeited		-		-
Outstanding as of June 30, 2014		1,950,000	$	0.34

Status of non-vested restricted shares

A summary of the status of non-vested restricted shares as of June 30, 2014 is as follows:

	Number of Restricted Stock Awards			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2013		-		$	-
Awards granted		1,950,000			0.34
Awards forfeited		-			-
Awards vested		(537,500	)		0.34
Non-vested at June 30, 2014		1,412,500		$	0.34

Stock purchase warrants

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

	Number of Warrants			Price Per Share		Weighted Average Exercise Price

Balance, June 30, 2013		34,966,559				$	0.58
Issued		8,215,244		$	0.30 - $0.60	$	0.31
Expired		(4,848,216	)	$	0.70 - $1.00	$	0.72
Exercised ⁽¹⁾		(1,743,030	)	$	0.17	$	0.17
Balance, June 30, 2014		36,590,557		$	0.30 - $1.00	$	0.46

⁽¹⁾

During the fiscal year ended June30, 2014, 1,076,363 investor warrants exercisable at $0.50 and 666,667 investor warrants exercisable at $0.60 were re-priced to $0.17 and were exercised.

			Number of Warrants
Expiry Date	Exercise Price		June 30, 2014		June 30, 2013

December 31, 2013 ⁽¹⁾	$	0.50		-		3,710,000
December 31, 2013 ⁽²⁾	$	0.70		-		3,963,152
December 31, 2013 ⁽³⁾	$	1.00		-		1,558,929
December 29, 2013 ⁽⁴⁾	$	0.70		-		311,428
January 3, 2014 ⁽⁵⁾	$	0.70		-		856,692
January 31, 2014 ⁽⁶⁾	$	0.70		-		2,360,459
February 14, 2014 ⁽⁷⁾	$	0.70		-		300,000
February 28, 2014	$	0.70		-		21,421
March 31, 2014 ⁽⁸⁾	$	0.57		-		1,675,000
May 31, 2014 ^{(1), (3)}	$	0.50		-		-
July 17, 2014	$	0.31		300,000		300,000
August 31, 2014	$	0.60		2,129,999		2,796,666
August 31, 2014 ⁽²⁾	$	0.70		799,709		799,708
September 30, 2014 ^{(1), (2)}	$	0.50		3,808,604		926,604
November 30, 2014 ⁽⁴⁾	$	0.50		100,000		-
January 31, 2015	$	0.50		4,150,000		4,150,000
February 28, 2015 ⁽²⁾	$	0.50		5,049,356		4,936,500
February 28, 2015 ^{(2), (3)}	$	0.30		249,382		-
May 25, 2015 ^{(1), (2), (5), (6), (8)}	$	0.50		10,952,548		6,000,000
July 31, 2015	$	0.50		88,000		-
September 13, 2015^{(2), (4)}	$	0.30		235,715		-
September 13, 2015	$	0.60		144,757		-
October 1, 2015⁽⁷⁾	$	0.30		7,044,251		-
December 1, 2015	$	0.30		1,238,236		-
November 29, 2016	$	0.70		300,000		300,000
Total outstanding				36,590,557		34,966,559
Total exercisable				36,590,557		34,891,559

⁽¹⁾

During the fiscal year ended June 30, 2014, the expiry date of 2,682,000 warrants was extended to September 30, 2014, and the expiry date of 1,028,000 warrants was extended to May 25, 2015.

⁽²⁾

During the fiscal year ended June 30, 2014, the expiry date of 71,429 warrants was extended to September 13, 2015 and re-priced to $0.30, and the expiry date of 200,000 warrants was extended to September 30, 2014, and the expiry date of 96,213 warrants was extended to February 28, 2015 and re-priced at $0.30, and the expiry date of 112,857 warrants was extended to February 28, 2015 and re-priced at $0.50.

⁽³⁾

During the fiscal year ended June 30, 2014, the expiry date of 1,076,363 warrants was extended to May 31, 2014 and re-priced to $0.17 and 153,169 warrants extended to February 28, 2015 and re-priced to $0.30.

⁽⁴⁾

During the fiscal year ended June 30, 2014, the expiry date of 100,000 warrants was extended to November 30, 2014 and re-priced at $0.50, and 14,286 warrants extended to September 13, 2015 and re-priced to $0.30.

⁽⁵⁾

During the fiscal year ended June 30, 2014, the expiry date of 856,692 warrants was extended to May 25, 2015 and re-priced to $0.50.

⁽⁶⁾

During the fiscal year ended June 30, 2014, the expiry date of 1,392,856 warrants was extended to May 25, 2015 and re-priced to $0.50, and 150,000 warrants extended to September 13, 2015 and re-priced to $0.30.

⁽⁷⁾

During the fiscal year ended June 30, 2014, the expiry date of 300,000 warrants was extended to October 1, 2015 and re-priced to $0.30.

⁽⁸⁾

During the fiscal year ended June 30, 2014, the expiry date of 1,675,000 warrants was extended to May 25, 2015 and re-priced to $0.50.

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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