8. STOCK PURCHASE OPTIONS AND WARRANTS

6 Months Ended

Dec. 31, 2015

Notes to Financial Statements

8. STOCK PURCHASE OPTIONS AND WARRANTS

The Board of Directors on June 10, 2009 approved the 2009 Long-Term Stock Incentive Plan.  The purpose of the 2009 Long-term Stock Incentive Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by employees and other key individuals.  The 2009 Long-Term Stock Incentive Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company.  A maximum of 1,500,000 shares of the Company's Common Stock is reserved for issuance under stock options to be issued under the 2009 Long-Term Stock Incentive Plan.  The Plan permits the grant of incentive stock options, nonstatutory stock options and restricted stock awards.  The 2009 Long-Term Stock Incentive Plan is administered by the Board of Directors or, at its direction, a Compensation Committee comprised of officers of the Company.

Stock Purchase Options

During the six months ended December 31, 2015 and fiscal year ended June 30, 2015, the Company did not issue any stock purchase options.  

The following table summarizes the changes in options outstanding of the Company during the six months ended December 31, 2015.

Date Issued	Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Expiration Date (yrs)		Value if Exercised
Balance June 30, 2015		80,000		$	0.66	$	0.59		1.20	$	52,900
Granted		-			-		-		-		-
Exercised		-			-		-		-		-
Cancelled/Expired		(25,000	)		0.85		-		-		(21,250	)
Outstanding as of December 31, 2015		55,000		$	0.58	$	0.55		1.21	$	31,650

The following table summarizes the changes in options outstanding of the Company during the fiscal year ended June 30, 2015.

Date Issued	Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Expiration Date (yrs)		Value if Exercised
Balance June 30, 2014		381,429		$	0.55	$	0.12		0.62	$	209,643
Granted		-			-		-		-		-
Exercised		-			-		-		-		-
Cancelled/Expired		(301,429	)		0.52		-		-		(156,743	)
Outstanding as of June 30, 2015		80,000		$	0.66	$	0.59		1.20	$	52,900

Stock Purchase Warrants

During the six months ended December 31, 2015, the Company issued warrants to purchase a total of 2,088,000. The Company issued 100,000 warrants in conjunction to an employment agreement entered into in July 2015 and 1,000,000 warrants in conjunction with a consulting agreement entered into December 2015. The Company issued 50,000 warrants in conjunction with a promissory note executed in October 2015. The company also issued 938,000 warrants as part of a private placement. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The Company apportioned value to the warrants based on the relative fair market value of the Common Stock and warrants.

During the fiscal year ended June 30, 2015, the Company issued warrants to purchase a total of 26,434,199. The Company issued 50,000 warrants in conjunction to extended two convertible note payables and issued 5,876,133 warrants in conjunction to a consulting agreement entered into in July 2014 and 150,000 warrants issued in conjunction with a financial advisory agreement entered into on January 2015. The Company also issued 1,000,000 warrants related to the B Booth agreements which were expensed during the current year.  The company also issued 8,657,701 warrants as part of a private placement to extend the terms during the period, which were converted for cash proceed of $75,000 in exchange for 750,000 shares of common stock. The warrants were valued using the Black-Scholes pricing model under the assumptions noted below. The Company apportioned value to the warrants based on the relative fair market value of the Common Stock and warrants.

The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted:

	December, 31 2015	June 30, 2015
Expected volatility	104-114%	71-142%
Expected dividends	0%	0%
Expected term	3-5 Years	0.25-10 Years
Risk-free interest rate	0.65-1.70%	0.00-2.35%

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the three months ended December 31, 2015.

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Expiration Date (yrs)		Value if Exercised
Outstanding as of June 30, 2015		31,951,788		$	0.43	$	0.50		4.98	$	13,585,289
Granted		2,088,000			0.61		0.36		4.03		1,273,850
Exercised		-			-		-		-		-
Cancelled/Expired		(370,000	)		-		-		-		(177,300	)
Outstanding as of December 31, 2015		33,669,788		$	0.44	$	0.48		4.50	$	14,681,839

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the fiscal year ended June 30, 2015.

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Expiration Date (yrs)		Value if Exercised
Outstanding as of June 30, 2014		8,332,579		$	0.76	$	0.70		2.96	$	6,370,432
Granted		26,434,199			0.24		0.25		5.56		9,821,607
Exercised		(750,000	)		-		-		-		(160,000	)
Cancelled/Expired		(2,065,000	)		-		-		-		(2,446,750	)
Outstanding as of June 30, 2015		31,951,778		$	0.43	$	0.50		4.98	$	13,585,289