F. STOCKHOLDERS' DEFICIT

12 Months Ended

Jun. 30, 2013

Equity [Abstract]

STOCKHOLDER'S DEFICIT

During August to October 2010, pursuant to an S-1 Registration, the Company sold a total of 174,760 shares of common stock at prices ranging from $0.41 to $0.74 per share, for total proceeds of $90,000 to Lincoln Park Capital, LLC. In addition 2,754 shares, in the amount of $1,492, were provided to Lincoln Park Capital, LLC as financing commitment shares. This left 1,475,240 registered shares as of June 30, 2011 available for future sales pursuant to the effective S-1 Registration Statement.

During the fiscal year ended June 30, 2012, pursuant to the S-1 Registration, the Company sold a total of 767,287 shares of common stock at prices ranging from $0.25 to $0.293 per share, for total proceeds of $200,000 to Lincoln Park Capital, LLC. In addition, 6,120 shares, in the amount of $1,602, were issued to Lincoln Park Capital, LLC as commitment shares. This left 707,953 registered shares available as of June 30, 2012 for future sales pursuant to the S-1 Registration Statement. The Lincoln Park Capital Agreement expired in October 2012.

During March 2013, the Company reclassified the previously undesignated 5,000,000 shares to common stock. This increased the Company’s authorized common stock from 45,000,000 to 50,000,000 shares. During June 2013, the Company increased its authorized common stock from 50,000,000 shares to 1,000,000,000 shares.

Common Stock for Services

During the fiscal year ended June 30, 2012, the Company issued a total of 623,120 common shares to certain persons in consideration for financial, management, marketing, legal and promotional services, valued at a total of $150,103 based on common stock prices ranging from $0.15 to $0.293.

During the fiscal year ended June 30, 2013, the Company issued a total of 2,900,000 common shares to certain persons in consideration for marketing and promotional services, valued at a total of $96,000 based on common stock prices ranging from $0.02 to $0.04.

Equity Securities for Cash

During the year ended June 30, 2011, the Company sold 244,000 shares of restricted common stock with warrants for $36,600, $24,400 for stock and $12,200 for the warrants, to accredited or qualified investors in isolated transactions, at prices ranging from $0.30 to $0.50 per unit, of which there are two shares and one warrant per unit.

During the year ended June 30, 2011, the Company sold 1,321,000 shares of restricted common stock with warrants for $330,250, to thirty-three private investors at a rate of $0.50 per unit, of which there are two shares and one warrant per unit. In accordance with guidance in ASC 815-40-25-1 and ASC 815-40-25-8, the Company has determined the warrants issued have net cash settlement provisions that require classification as derivative liabilities rather than permanent equity. In accordance with such accounting rules, derivative instruments are recorded at fair value and marked-to-market each period until they are exercised or expire, with any change in the fair value charged or credited to income each period. Because these warrants do not trade in an active securities market, their fair value was estimated using a binomial option-pricing model.

During the fiscal year ended June 30, 2012, the Company issued 500,000 cashless warrants, at a conversion rate of $0.25 per share, to four separate consulting firms in connection with the successful entry into the Walgreen and CVS pharmacy drugstores and the associated marketing support. Because these warrants do not trade in an active securities market, their fair value was estimated using the Black Scholes model and were valued at $181,500. These warrants expire after three years from date of issuance. The Company classifies these warrants within permanent equity as additional paid-in capital in accordance with FASB ASC 815-40.

During the fiscal year ended June 30, 2012, the Company issued 400,000 cashless warrants, at a conversion price of $0.25 per share, to CEO Russell W. Mitchell in connection with the successful entry into the Walgreen and CVS pharmacy drugstores. Because these warrants do not trade in an active securities market, their fair value was estimated using the Black Scholes model, and were valued at $141,000. These warrants expire after three years from date of issuance. The Company classifies these warrants within permanent equity as additional paid-in capital in accordance with FASB ASC 815-40.

During the fiscal year ended June 30, 2012, the Company sold 380,000 shares of restricted common stock with 190,000 warrants for $95,000, to four private investors at a rate of $0.50 per unit, of which there are two shares and one warrant per unit. In accordance with guidance in ASC 815-40-25-1 and ASC 815-40-25-8, the Company has determined the warrants issued have net cash settlement provisions that require classification as derivative liabilities rather than permanent equity. In accordance with such accounting rules, derivative instruments are recorded at fair value and marked-to-market each period until they are exercised or expire, with any change in the fair value charged or credited to income each period. Because these warrants do not trade in an active securities market, their fair value was estimated using a binomial option-pricing model.

During the fiscal year ended June 30, 2012, the Company sold 70,000 shares of restricted common stock with warrants for $17,500, $10,414 for stock and $7,086 for the warrants, to three private investors at a rate of $0.50 per unit, of which there are two shares and one warrant per unit.

During the fiscal year ended June 30, 2012, the Company sold 358,000 shares of restricted common stock for $53,700 to three private investors at a rate of $0.15 per share.

The following inputs and variables were included in the calculations for warrants and cashless warrants for the year ended June 30, 2012:

	Warrants	Cashless Warrants
Stock Price	$ 0.33 to $0.55	$0.30 to $0.405
Exercise Price	$0.50	$0.25
Volatility	256% to 281%	315% to 331%
Expected Dividends	$0	$0
Expected Term (Years)	3	3
Discount Rate	0.3% to 0.7%	0.4%

During 2013, the Company sold 430,000 shares of restricted common stock for net proceeds of $61,350, to four private investors at a price of $0.15 per share.

During 2013, the Company issued a total of 14,161,889 common shares in payment of principal and interest due on convertible notes totaling $259,418. The shares were valued at $0.012 to $0.022 per share.

Warrant Activities

The following table summarizes our warrant activities for the years ended June 30, 2013 and 2012:

	Shares	Weighted Average Exercise Price
Outstanding at July 1, 2011	1,057,500	$                   0.70
Issued	1,125,000	0.29
Exercised	0	0.00
Cancelled or expired	0	0.00
Outstanding at June 30, 2012	2,182,500	0.49
Issued	3,210,830	0.01
Exercised	(1,605,921)	0.01
Cancelled or expired	0	0.00
Outstanding at June 30, 2013	3,787,409	$                   0.27