NOTE 10 – STOCK OPTIONS AND WARRANTS
The estimated value of the compensatory common stock purchase warrants granted to non-employees in exchange for services and financing expenses is determined using the Black-Scholes evaluation model.
During the year ended June 30, 2013, the Company issued 3,000,000 options for services performed by consultants. These options have a one year life and an exercise price of $0.10 and were valued at a total of $32,545. The Company calculated a relative fair value for these options based on a volatility of 238%, a risk-free interest rate of .17% and a stock price on the date of issuance of $0.02.
During the year ended June 30, 2012, the Company issued 456,131 warrants in conjunction with common stock sold for cash. These warrants have a one year life and an exercise price of $0.15. The Company calculated a relative fair value for these warrants based on a volatility of 300% to 330%, a risk-free interest rate of .37% and a stock price on the date of issuance of $0.08 to $0.20.
Changes in stock options during the years ended June 30, 2013 and 2012 are as follows:
|
| Number of Options | Weighted Average Exercise Price | Value if Exercised |
| Outstanding, June 30, 2011 | 1,000,000 | $ 0.20 | $ 200,000 |
| Granted | - | - | - |
| Exercised | - | - | - |
| Cancelled | - | - | - |
| Outstanding, June 30, 2012 | 1,000,000 | 0.20 | 200,000 |
| Granted | 3,000,000 | 0.10 | 300,000 |
| Exercised | - | - | - |
| Cancelled | - | - | - |
| Expired | (4,000,000) | - | - |
| Outstanding, June 30, 2013 | - | $ - | $ - |
Changes in stock purchase warrants during the years ended June 30, 2013 and 2012 are as follows:
|
| Number of Warrants | Weighted Average Exercise Price | Value if Exercised |
| Outstanding, June 30, 2011 | 24,019,613 | $ 0.11 | $ 2,551,961 |
| Granted | 456,131 | 0.15 | 68,420 |
| Exercised | - | - | - |
| Cancelled | - | - | - |
| Outstanding, June 30, 2012 | 24,475,744 | .011 | 2,620,381 |
| Granted | - | - | - |
| Exercised | - | - | - |
| Cancelled | - | - | - |
| Expired | (24,475,744) | - | - |
| Outstanding, June 30, 2013 | - | $ - | $ - |