Stock Option

3 Months Ended

Sep. 30, 2012

Equity [Abstract]

Stock Option

NOTE 5 – STOCK OPTION

On July 30, 2012, the Company entered into two 12-month Consulting Services and Finder’s Fee Agreements (the “Consulting Agreements”) with third parties. The Consulting Agreements require the consultants to provide to the Company, customized problem and opportunity research, new business or services development, strategy development and refinements, acquisition assistance, marketing and investor relation services and the Company is required to grant to each of the consultants a total of 150,000 stock options vesting immediately and exercisable at $0.25 per share. The Company has therefore granted 300,000 stock options which have vested.

The following table summarizes information concerning stock options outstanding as of September 30, 2012:

	Shares		Weighted Average Grant Date Fair Value
Unvested, at June 30, 2012		-		-
Granted		300,000	$	0.25
Vested		300,000
Forfeited		-
Unvested, at September  30, 2012		-	$	0.25

The Company recognized a stock-based compensation of $187,200 out of which $31,200 has been expensed in the current three month period ended September 30, 2012.

Valuation Assumptions

The Company uses the Black-Scholes option-pricing model (“Black-Scholes model”) to determine the fair value of stock options as of the grant date. The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price and expected dividends.

The following table presents the range of the weighted average fair value of options granted and the related assumptions used in the Black-Scholes model for stock option grants made during the three month period ended September 30, 2012:

	Options Granted
	2012
Fair value of options granted	$	0.85
Assumptions used:
Expected life (years) (a)		1.00
Risk free interest rate (b)		0.18	%
Volatility (c)		111	%
Dividend yield (d)		0.00	%

a)	Expected life: The expected term of options granted is determined using the “shortcut” method allowed by SAB No.107. Under this approach, the expected term is presumed to be the mid-point between the vesting date and the end of the contractual term.
b)	Risk-free interest rate: The rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected life of the options.

c)	Volatility: The expected volatility of the Company’s common stock is calculated by using the historical daily volatility of the Company’s stock price calculated over a period of time representative of the expected life of the options.
d)	Dividend yield: The dividend yield rate is not considered in the model, as the Company has not established a dividend policy for the stock.