Commitments and concentrations

6 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONCENTRATIONS

NOTE 7 COMMITMENTS AND CONCENTRATIONS

During the period ended December 31, 2013, the Company madea sale toa single foreign customer for an aggregate of $300,000.

During the period ended December 31, 2013, the Company entered into a consulting agreement for a one year period. The Company advanced $103,000 in cash and issued 54,950 shares of common stock for these services, which shares were valued at their estimated fair value of $100,000. The total consideration paid of $203,000 is being amortized over the one year period of the agreement commencing in September 2013. The unamortized balance of $129,274 is included in prepaid expenses for the cash payment ($62,606) and deferred compensation for the share payment ($66,668).

During the period ended December 31, 2013, the Company entered into employment contracts with two employees, with no set duration, for aggregate compensation of $260,000 per year. The employees were granted an aggregate of 614,000 five year options which vested immediately as to 114,000 options and as to 125,000 options per year over the next 4 years. The options are exercisable at $2.50 per share for 114,000 options, $3.00 per share for 125,000 options, $3.50 per share for 125,000 options, $3.75 for 125,000 options and $4.00 for 125,000 options. The aggregate grant date fair value of the options was approximately $1,419,000, of which $339,372 has been charged to expense during the period ended December 31, 2013. The balance of the fair value of the options will be charged to operations over the vesting period. The options were valued using the Black-Scholes option pricing model with the following assumptions:

Volatility 154% - Dividend rate 0% - Interest rate 1.36-1.66% - Term 5 years