Note 10 - 2013 Stock Option Plan

3 Months Ended

Sep. 30, 2014

Notes

Note 10 - 2013 Stock Option Plan

NOTE 10 – 2013 STOCK OPTION PLAN

Our board of directors adopted and approved our 2013 Stock option Plan (“Plan”) on January 18, 2013, which provides for the granting and issuance of up to 30 million (30,000,000) shares of our common stock.

Our board of directors administers our Plan, however, they may delegate this authority to a committee formed to perform the administration function of the Plan. The board of directors or a committee of the board has the authority to construe and interpret provisions of the Plan as well as to determine the terms of an award.  Our board of directors may amend or modify the Plan at any time. However, no amendment or modification shall adversely affect the rights and obligations with respect to outstanding awards unless the holder consents to that amendment or modification.

The Plan permits us to grant Non-qualified stock options to our employees, directors and consultants.  The options issued under this Plan are intended to be Non-qualified Stock Options in full compliance with Code Section 409A.

The duration of a stock option granted under our Plan cannot exceed ten years.  The exercise price of an incentive stock option cannot be less than 100% of the fair market value of the common stock on the date of grant.

The Plan administrator determines the term of stock options granted under our Plan, up to a maximum of ten years, except in the case of certain events, as described below.  Unless the terms of an optionee's stock option agreement provide otherwise, if an optionee's relationship with us ceases for any reason other than disability or death, the optionee may exercise any vested options for a period of ninety days following the cessation of service.  If an optionee's service relationship with us ceases due to disability or death the optionee or a beneficiary may exercise any vested options for a period of 12 months in the event of disability or death.

Unless the Plan administrator provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic relations order.  An optionee may designate a beneficiary, however, who may exercise the option following the optionee's death.

During the year ended June 30, 2013, the Company granted 8,381,150 to our current President, the options become fully vested upon grant and contained an exercise price of $0.10 per share. On November 22, 2013, we granted 750,000 stock options to a consultant at an exercise price of $0.10 per share, and these options will expire five years from the grant date, and will vest as follows, upon signing the agreement 50,000 options will vest, and then at the end of each three month period, 100,000 options, per the agreement (Note 8).On February 28, 2014, the consultant and the Company terminated the agreement that granted these options and they were forfeited. As of September 30, 2014 and June 30, 2014, 21,618,850 options were available for future grant.

The value of employee and non-employee stock warrants granted during the years ended June 30, 2014 and 2013 was estimated using the Black-Scholes model with the following assumptions:

	January 29, 2013
Expected volatility (based on historical volatility)		501.71	%
Expected dividends		0.00
Expected term in years		10
Risk-free rate		2.030	%

The expected volatility assumption was based upon historical stock price volatility measured on a daily basis. The risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the Company’s employee stock options. The dividend yield assumption is based on our history and expectation of dividend payments.

A summary of the options granted to employees and non-employees under the plan and changes during the periods ended September 30, 2014 and June 30, 2014 is presented below:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (In Years)			Aggregate Intrinsic Value
Balance at July 1, 2013		8,381,150	$	0.10	8.58
Granted		750,000		0.10	5.00		$	-
Exercised		-		-
Forfeited or expired		(750,000)		0.10	5.00
Balance at June 30, 2014		8,381,150	$	0.10		8.58	$	-
Exercisable at June 30, 2014		8,381,150	$	0.10		8.58	$	-
Weighted average fair value of options granted during the period ended June 30, 2014			$	0.10

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (In Years)			Aggregate Intrinsic Value
Balance at July 1, 2014		8,381,150	$	0.10	8.58
Granted		-		-	-		$	-
Exercised		-		-	-
Forfeited or expired		-		-	-
Balance at September 30, 2014		8,381,150	$	0.10		8.33	$	-
Exercisable at September 30, 2014		8,381,150	$	0.10		8.33	$	-
Weighted average fair value of options granted during the year ended September 30, 2014			$	0.10

The following table summarizes information about employee stock options under the 2013 Plan outstanding at September 30, 2014:

Options Outstanding										Options Exercisable
Range of Exercise Price		Number Outstanding at September 30,  2014		Weighted Average Remaining Contractual Life (In years)		Weighted Average Exercise Price		Intrinsic Value		Number Exercisable at September 30, 2014		Weighted Average Exercise Price		Aggregate Intrinsic Value
$	0.10		8,381,150		8.58	$	0.10	$	-		8,381,150	$	0.10	$	-
			8,381,150		8.58	$	0.10	$	-		8,381,150	$	0.10	$	-

The total value of stock options granted during the periods ended September 30, 2014 and June 30, 2014, was none, respectively. For the periods ended September 30, 2014 and 2013, the Company recorded no expense in stock option expense relating to stock option grants, and did not have any expense, respectively, in stock compensation – officers on our statement of operations.

At September 30, 2014 there was no unrecognized compensation cost related to stock options granted under the plan.