C. Accounting Policies

3 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NOTE C - Accounting Policies

Loss per common share – Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted loss per common share assumes the exercise of stock options and warrants using the treasury stock method, if dilutive. Potentially dilutive shares of 622,191,101 and 2,157,821, for the three months ended September 30, 2014, and 2013, respectively were not included in the calculation of diluted shares, as the effect would have been antidilutive.

Trademark Amortization – PuraMed® BioScience trademarks consist of the legal costs associated with registering its LipiGesic®, MigraPure, and PuraMed® BioScience trademarks. As these trademarks have been approved, they are being amortized on a straight-line basis over an estimated useful life of ten years.

Fair Value Measurements

Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1 Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

Level 2 Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.

Level 3 Unobservable inputs that are used when little or no market data is available, which require the Company to develop its own assumptions about how market participants would value the assets or liabilities.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosure each quarter. Assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and June 30, 2014 are summarized as follows:

	Fair Value as of September 30, 2014
	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liability - Warrants	$	-	$	-	$	355	$	355
Derivative Liability – Convertible Debt		-		-		2,380,028		2,380,028
Total	$	-	$	-	$	2,380,383	$	2,380,383

	Fair Value as of June 30, 2014
	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liability - Warrants	$	-	$	-	$	355	$	355
Derivative Liability – Convertible Debt		-		-		2,345,961		2,345,961
Total	$	-	$	-	$	2,346,316	$	2,346,316

The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value on a recurring basis during the three months ended  September 30, 2014:

	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
			Derivative
	Derivative		Liability -
	Liability -		Convertible
	Warrants		Debt			Total
Beginning balance, July 1, 2014	$	355	$	2,345,961		$	2,346,316
Issuance		-		32,000			32,000
Retirements		-		(253,214	)		(253,214	)
Loss on derivative liability		-		255,281			255,281
Ending balance, September 30, 2014	$	355	$	2,380,028		$	2,380,383

A binomial option-pricing model was used to value the derivative liability with the following inputs:

● Stock Price – The Stock Price was based on the closing price of the Company’s common stock on the valuation date. The valuation date can either be the date of issuance of the convertible debt note or the last day of a reporting period (the Valuation Date). Stock prices on the Valuation Dates ranged from $0.004 to $11.80.

● Exercise Price – The exercise price, or conversion price was based on the terms of the associated agreement, which for the convertible notes is usually based on a percentage of the average of the three lowest stock bid prices out of the last 10 trading days prior to the Valuation Date.

● Time to Maturity – The time to maturity was determined based on the length of time between the Valuation Date and the maturity of the associated instruments.

● Risk Free Rate – The risk free rate was based on the US treasury note rate as of the Valuation Dates with term commensurate with the remaining term of the debt. The risk free rate ranged between .09% and 1.60 %.

● Volatility – The volatility was based on the historical volatility of the Company, using a time period to calculate volatility commensurate with the Time to Maturity.  Volatilities used ranged between 278% and 369%.

Recently Enacted Accounting Standards

On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Management is currently evaluating the impact, if any, on adopting ASU 2014-09 on our results of operations or financial condition.  The Company has considered this and other recent accounting pronouncements of which the Company is aware, and the Company believes their adoption has not had, and will not have, any material impact on our financial position or results of operations.