Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

H. STOCK-BASED COMPENSATION

Common Stock to be issued

Shares to be issued to directors for services

During the nine months ended March 31, 2014, the Company granted an aggregate of 275,000 shares of the Company’s common stock to four of the Company’s directors for services rendered and recognized as directors’

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fees during the nine months ended March 31, 2014 based on their fair value on their grant dates in the aggregate amount of $25,068. The shares due have not been issued as of March 31, 2014 and have been reflected as common shares to be issued in the accompanying consolidated balance sheet.

Stock options

The Company has agreements with certain of its employees and independent contractor consultants that provide grants of options to purchase the Company’s common stock.

A summary of stock options as of March 31, 2014 and for the nine months then ended is as follows:

	Number of Shares		Weighted - Average Exercise Price
Outstanding at June 30, 2013		3,165,583		$ 0.13
Expired		(109,083)		$ 0.63
Outstanding at March 31, 2014		3,056,500		$ 0.12
Exercisable at March 31, 2014		3,056,500		$ 0.12

The weighted-average remaining contractual life of stock options outstanding and exercisable at March 31, 2014 is 4.98 years. The options have no intrinsic value at March 31, 2014.

Stock-based compensation expense was $0 and $0 during the three and nine months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, there was no unrecognized compensation costs related to stock options.

Warrants

In connection with the issuance of certain convertible notes payable, the Company has outstanding 50,000 fully vested warrants to acquire its common stock at an exercise price of $2 per share. The warrants expire in 2014. The warrants have no intrinsic value at March 31, 2014.