Capital Stock

9 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Capital Stock

On February 22, 2016, warrants to purchase 50,000,000 shares of the Company’s common stock at $0.04 per share were issued in financing agreements with the holders of the Notes. These warrants were valued using the Black Scholes pricing method using the following assumptions: stock price - $0.02, strike price - $$0.04, expected volatility 175.19%, interest rate – 1%, dividend rate – 0%, and expected term – three years. The value of 25,000,000 warrants totaling $412,500, was charged as financing expense. The value of the remaining 25,000,000 warrants was recorded as a beneficial conversion feature of the Convertible Note in the amount of $80,698, which will be amortized over the life of the Convertible Note.

As disclosed in Note 7 – Long-Term Convertible Notes Payable, each of the Notes, as executed, require the Company issue warrants for up to a total of 37,500,000 shares of common stock rather than 25,000,000 shares, respectively, within a three-year term at an exercise price equal to $0.04 per share.  However, management believes that the number of shares issuable upon exercise of each of the warrants was calculated in error without objection from the holders thereof, and that the number of shares issuable upon exercise of each warrant should be 25,000,000 shares. As a result, the value of the warrants as recorded reflects the value of 25,000,000 shares rather than 37,500,000 shares.

Common Stock

During the year ended June 30, 2015, the Company issued the following shares of common stock:

The Company issued 6,193,388 shares of common stock pursuant to consulting and services agreements. The stock issued was fair valued at prices ranging from $.12 to $.18 per share for a total fair value of $799,579.

The Company issued 900,000 shares of common stock in accordance with the Company’s Board of Directors’ compensation policy and for the services of a Board appointed committee. The stock issued was fair valued at $.144 per share for a total fair value of $129,600, which will be expensed quarterly during the year ended June 30, 2015.

The Company issued 4,658,000 shares of common stock for compensation to officers and employees. The stock issued was fair valued at prices ranging from $.0962 to $.144 per share for a total fair value of $648,860.

The Company issued 120,043 shares of common stock in conversion of outstanding debts. The stock issued was fair valued at prices ranging from $.12 to $0.1298 per share for a total value of $15,500.

The Company issued 125,000 shares of common stock in connection with a private placement financing. The stock issued was fair valued at $.149 per share for a total value of $18,645.

The Company issued 78,616 shares of common stock pursuant to an advisory fee agreement in connection with a private placement financing agreement. The stock issued was fair valued at $.159 per share for a total value of $12,500.

The Company sold 1,428,571 units, which consisted of 1,428,571 shares of common stock and 1,428,571 warrants exercisable at $0.10 a share. The stock sold was at $.07 per share for proceeds of $100,000. There were no stipulations, conditions or requirements under the sale.

The Company sold 53,571,429 Units, which consisted of 53,571,429 shares of common stock and 99,000,001 warrants exercisable at varying exercise prices. The stock sold was at $.07 per share for proceeds of $3,250,000. Included in the aforementioned were 7,142,857 Units issued in lieu of a $500,000 payment for fees attributed to this equity raise. An additional 4,457,143 shares were issued as payment of fees for this equity raise as well, which had a fair value at $312,000. There were no stipulations, conditions or requirements under the sale. Exclusive of shares and warrants issued in lieu of fees, the cost of this equity raise was $157,000.

The Company issued 10,500,000 shares of its common stock pursuant to the Share Exchange Agreement with Urban Planet. The stock issued was fair valued at $.0962 per share for a total value of $1,010,100.

The Company issued a total of 72,857,143 shares of its common stock pursuant to the exercise by Shenzhen of certain warrants. The shares issued were at a price per share of $0.07 and $0.0842322 for total proceeds of $5,526,966. There were no stipulations, conditions or requirements under the sale. Exclusive of shares and warrants issued, the cost of this equity raise was $644,057.

The Company issued a total of 6,061,707 shares of its common stock pursuant to an advisory fee agreement with V3 Capital Partners, LLC as a direct result of the warrant exercise. The price per share ranged from $0.07 to $0.0842322 for a total fair value of $460,084 as a cost of the warrant exercise equity raise.

The Company issued 40,000 shares of its common stock for the settlement of amounts due to a shareholder. The stock issued was fair valued at $0.0962 per share for a total value of $3,848.  No gain or loss was recorded on this transaction.

During the nine months ended March 31, 2016, the Company issued the following shares of common stock:

The Company issued 2,000,000 shares of common stock in accordance with the Company’s Board of Directors’ compensation policy. The stock issued was fair valued at $0.03 per share for a total fair value of $60,000, which will be expensed quarterly during the year ended December 31, 2016.

The Company issued 6,850,000 shares of common stock for compensation to officers and employees. The stock issued was fair valued at $0.03 per share for a total fair value of $205,500.

The Company issued 170,000 shares of common stock in conversion of outstanding debts. The stock issued was fair valued at $0.0485 per share for a total value of $8,245.

Preferred Stock

During the year ended June 30, 2015, the Company issued the following shares of preferred stock:

The Company issued 500,000 shares of its Series A Preferred pursuant to the Share Exchange Agreement with Urban Planet. Each share of Series A Preferred issued to the former Urban Planet shareholders is convertible by the holder (1) at any time after 24 months after the original issue date, or (2) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the Series A Preferred into that number of shares of common stock determined by dividing the stated value of such shares of Series A Preferred, which is $10.00 per shares of Series A Preferred, by the conversion price. The conversion price of the Series A Preferred is $0.50, subject to adjustment as stated in the certificate of designation. The shares were fair valued at $.0962 per share, calculated at the conversion rate of 20 shares of common stock for each share of Series A Preferred converted. The total estimated fair value of the Series A Preferred issued was $962,000 based on an as converted basis for the acquisition of Urban Planet.

During the nine months ended March 31, 2016, the Company issued no shares of preferred stock.

Warrants

On February 22, 2016, warrants to purchase 50,000,000 shares of the Company’s common stock at $0.04 per share were issued in a financing agreement with the holder of the Convertible Note.  These warrants were valued using the Black Scholes pricing method using the following assumptions:  stock price - $0.02, strike price - $$0.04, expected volatility 175.19%, interest rate – 1%, dividend rate – 0%, and expected term – three years.  The value of 25,000,000 warrants totaling $412,500, was charged as financing expense.  The value of the remaining 25,000,000 warrants was recorded as a beneficial conversion feature of the Convertible Note in the amount of $80,698, which will be amortized over the life of the Convertible Note.

Warrant activity as of March 31, 2016 and the year ended June 30, 2015 is summarized as follows:

	Twenty-one months ended  March 31, 2016
	Shares		Weighted Average Exercise Price
Warrants outstanding at July 1, 2014		0	$	0.0
Granted		203,439,983		0.075
Exercised		(72,857,143)		0.076
Cancelled/expired		0		—
Warrants outstanding at June 30, 2015		130,582,840	$	0.075
Granted		0		0
Exercised		0		0
Cancelled/expired		(85,378,078)		—
Warrants outstanding at December 31, 2015		45,204,762	$	0.075
Granted		50,000,000	$	0.04
Exercised		0		0
Cancelled/expired		0		—
Warrants exercisable at March 31, 2016		95,204,762	$	0.057

The total warrants outstanding at March 31, 2016 include 21,428,572 warrants that do not yet have a set exercise price, as per the terms of such warrants, the exercise price shall be the five-day volume weighted average price immediately preceding the exercise date of such warrants. See the discussion of the Securities Purchase Agreement in Note 1.