Stockholder's equity (Deficit)

9 Months Ended

Mar. 31, 2014

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY (DEFICIT)

NOTE 6       STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock

The Company is authorized to issue 100,000,000 shares of no par value Common Stock.  At March 31, 2014, 21,447,247 shares were issued and outstanding.

During the period ended March 31, 2014, the Company issued common shares as follows:

The Company issued 1,030,650 shares of common stock for $775,605 of which $722,135 has been received and $53,470 has been recorded as a receivable for common stock. The $53,470 has been recorded as a reduction in common stock.

The Company issued 35,147 shares of common stock for services. These shares were valued at the trading price of the Company’s common shares on the date it was agreed the shares would be issued of $100,490 which has been charged to operations during the period.

The Company issued 200,000 shares of common stock for the conversion of a $200,000 note. The shares were valued at their trading price on the conversion date of $533,000. The value of the shares in excess of the note of $333,000 has been charged to operations during the period.

The Company issued 54,950 common shares for services to be performed over a one year period, which were valued at their estimated fair value of $100,000 based on the trading price of the Company’s common shares. The value of these shares has been recorded as deferred compensation and is being amortized over the one year period during which the related services will be received. At March 31, 2014 $41,669 of deferred compensation remains to be amortized (see Note 7).

On July 31, 2013, the Company’s registration statement on Form S-1 became effective. The Company is offering for sale a maximum of 6,250,000 shares of its no par value common stock at a price of $1.60 per share. As of March 31, 2014, no shares had been sold pursuant to the offering.

Stock options

Two employees were granted an aggregate of 614,000 five year options (see Note 7) 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 $339,376 has been charged to operations during the period ended March 31, 2014. 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

In conjunction with the conversion of the $200,000 note described above the Company issued an aggregate of 400,000 three year options exercisable 200,000 options at $1.50 per share and 200,000 options at $2.00 per share.

The aggregate grant date fair value of the options was approximately $580,600 has been charged to operations during the period ended March 31, 2014. The options were valued using the Black-Scholes option pricing model with the following assumptions:

Volatility 108% - Dividend rate 0% - Interest rate 0.86% - 1.66% - Term 3 years

The Company issued 1,000,000 five year options exercisable at $1.00 per share for services.

The aggregate grant date fair value of the options was approximately $1,654,000 has been charged to operations during the period ended March 31, 2014. The options were valued using the Black-Scholes option pricing model with the following assumptions:

Volatility 108% - Dividend rate 0% - Interest rate 0.86% - 1.66% - Term 3 years