Stockholders' Deficiency

12 Months Ended

Jun. 30, 2016

Stockholders' Deficiency [Abstract]

STOCKHOLDERS' DEFICIENCY

NOTE 11—STOCKHOLDERS’ DEFICIENCY

Equity

Common Stock includes 100,000,000 shares authorized at no par value.

2015

On April 6, 2015, the Company issued 110,000 shares of Common Stock pursuant to the conversion of a $50,000 note issued by the Company, and 100,000 shares of Common Stock to a consultant in consideration for his service.

On April 9, 2015, the Company completed a Subscription Agreement with Engage International Technology Co. Ltd. pursuant to which Engage International purchased 1,100,000 shares of the Company’s restricted Common Stock, at the price of $0.50 per share for a total purchase price of $550,000. The price was based on the market price of the Company’s stock prior to April 9, 2015 when the agreement was being negotiated. The issuance of the shares was in reliance upon the exemptions from securities registration afforded by Regulation S promulgated under Regulations of the Securities Act of 1933, as amended. The sole purpose and objective of the sale was to use the proceeds received to pay off certain outstanding debts, loans, obligations and liabilities of the Company.

2016

The Company did not have any equity transactions occurred in the year ended June 30, 2016.

Stock Options and Warrants

During the year ended June 30, 2014, two 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 $1,416,000, of which $0 and $225,719 has been charged to operations during the years ended June 30, 2016 and 2015. As of June 30, 2016 and 2015, respectively, the aggregate intrinsic value of all stock options outstanding and expected to vest was approximately $0 and the aggregate intrinsic value of currently exercisable stock options was approximately $0. The intrinsic value of each option share is the difference between the fair market value of our Common Stock and the exercise price of such option share to the extent it is “in-the-money”. Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the assumed market value of our Common Stock on June 30, 2016 and 2015, at $0.27 and $0.5 per share. The total number of in-the-money options outstanding and exercisable as of June 30, 2016 and 2015, was 0. The fair value of the options charged to operations during the year ended June 30, 2015 was $247,430. These two employees left the Company in April 2015 and the remaining unvested options were cancelled. The options were valued using a binomial option pricing model with the following assumptions:

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

	June 30,
	2016						2015
	Number of Options		Weighted Average Exercise  Price		Weighted Average Remaining Contractual Life (Years)		Number of Options		Weighted Average Exercise  Price		Weighted Average Remaining Contractual Life (Years)
Options outstanding at beginning of year		207,750	$	2.73		3.42		614,000	$	3.37		4.37
Changes:
Granted		-						-
Exercised		-						-
Forfeited		-						-
Cancelled		-						406,250		3.69
Options outstanding at end of year		207,750	$	2.73		2.87		207,750	$	2.73		3.42
Options exercisable at end of year		207,750	$	2.73		2.87		207,750	$	2.73		3.42

Stock Warrants

Stock warrants outstanding at June 30, 2016 were as follows:

	Number of Shares		Weighted Average Remaining Contractual Life (Years)
Warrants outstanding at June 30, 2015		525,000		1.48
Changes:
Granted		-
Exercised		-
Forfeited		-
Cancelled		-
Warrants outstanding at June 30, 2016		525,000		0.53
Warrants exercisable at June 30, 2016		525,000		0.53

Date Issued	Expiration Date	Exercise Price		Number of Warrants
July 2013	July 2016	$	2.00		125,000
February 2014	February 2017	$	1.50		200,000
February 2014	February 2017	$	2.00		200,000

On April 9, 2015, in anticipation of and in connection with the share purchase by Engage International, the holder of a warrant to purchase 1,000,000 shares of Common Stock at an exercise price of $1.00, agreed to its cancellation for no consideration.