Commitments and Contingencies

9 Months Ended

Mar. 31, 2014

Commitments Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 7       COMMITMENTS AND CONTINGENCIES

During the period ended March 31, 2014, 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 $85,577 is included in prepaid expenses for the cash payment ($43,908) and deferred compensation for the share payment ($41,669).

During the period ended March 31, 2014, 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 (see Note 6).

On March 12, 2014, the Company filed a lawsuit in Florida against IRTH Communications, LLC for breach of contract and fraud, seeking return of $110,500 paid to IRTH and seeking cancellation of 54,950 shares of common stock issued to IRTH for services. The Company has alleged that IRTH defrauded the Company in order to receive the money and shares, and did not perform the agreed services. This case is still pending.

In response, on March 19, 2014, IRTH filed a lawsuit in California against the Company arising out of the same contract and transactions, seeking $73,000 in alleged damages for breach of contract and seeking the lifting of restrictions on said 54,950 shares. The Company has filed a Motion to Dismiss this case based on the prior Florida action. This case is still pending.