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Stock Options

3 Months Ended

Sep. 30, 2016

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

8. Stock Options

In connection with the employment agreement signed with the Chief Financial Officer on April 11, 2016, Jonathan Adams received options to acquire 3 million shares exercisable at $0.06 per share, the closing price on that date. These Options Group A shall become vested and exercisable (i) as to 1 million shares on April 11, 2017, (ii) as to 1 million shares on April 11, 2018, and (iii) as to 1 million shares on April 11, 2019.

The fair market value of the stock options is estimated using the Black Scholes valuation model and the Company uses the following methods to determine its underlying assumptions: expected volatilities are based on the historical volatilities of 3 comparable companies of the daily closing price of their respective common stock; the expected term of options granted is based on the average time outstanding method; and the risk free interest rate is based on the US Treasury bonds issued with similar life terms to the expected life of the grant.

The following key assumptions were used in the valuation model to value stock option grants for each respective period:

Valuation Date	4/11/2016			4/11/2016			4/11/2016
Stock Price	$	0.06		$	0.06		$	0.06
Exercise Price	$	0.06		$	0.06		$	0.06
Term (expected term for options)		1.00			2.00			3.00
Volatility		56.49	%		58.45	%		97.82	%
Annual Rate of Quarterly Dividends		0.00	%		0.00	%		0.00	%
Discount Rate - Bond Equivalent Yield		0.53	%		0.70	%		0.85	%
Call Option Value ($Millions)	$	0.01		$	0.02		$	0.04
Fair Value	$	13,467		$	19,523		$	36,489

Stock option transactions under the Company’s plans for the years ended June 30, 2016 is summarized below:

						Weighted
				Weighed-		Average		Aggregate
				Average		Remaining		Intrinsic
		Shares		Exercise		Contractual		Value
Options		(Thousand)		Price		Term		(Thousand)
	Outstanding at July 1, 2015		—		—		—		—
	Granted		3,000		0.06		2		—
	Exercised		—		—		—		—
	Forfieted		—		—		—		—
	Outstanding at June 30, 2016		3,000		0.06		2
	Granted		—		—		—		—
	Exercised		—		—		—		—
	Forfieted		—		—		—		—
	Outstanding at September 30, 2016		3,000		0.06		2

The compensation expense includes $8,848 related to the stock options described above.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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