B. Stock-Based Compensation and Warrants

9 Months Ended

Mar. 31, 2017

The Company has stock-based compensation plans and reports stock-based compensation expense for all stock-based compensation awards based on the estimated grant date fair value. The value of the compensation cost is amortizedon a straight-line basis over the requisite service periods of the award (generally the option vesting term).

The Company estimates fair value using the Black-Scholes valuation model.

The Company has several employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company. The plans require that options be granted at a price not less than market on the date of grant and are more fully discussed in our Form 10-K for the year ended June 30, 2016.

The following table summarizes the Company’s stock option activity during the first nine months of fiscal 2017:

				Weighted
			Weighted	Average
			Average	Remaining		Aggregate		Aggregate
			Exercise Price	Contractual		Instrinsic		Fair
		Shares	Per Share	Term (1)		Value (2)		Value (3)

Outstanding July 1, 2016		1,200,000	$0.58	2.03	$	-	$	273,500
	Granted	-	-	-		-		-
	Exercised	-	-	-		-		-
	Forfeited or expired	-	-	-		-		-
Outstanding March 31, 2017		1,200,000	$0.58	1.28	$	-	$	273,500
Exercisable March 31, 2017		1,200,000	$0.58	1.28	$	-	$	273,500

(1)	Remaining contractual term presented in years.
(2)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
	awards and the closing price of the Company's common stock as of March 31, 2017, for those awards that
	have an exercise price below the closing price as of March 31, 2017 of $0.13.
(3)	Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation.

As of March 31, 2017, there was no unamortized Black Scholes value remaining to be recognized as stock-based compensation expense.

As of March 31, 2017, the Company had 140,000 outstanding warrants. The following table summarizes the Company’s warrant activity during the nine months ended March 31, 2017.

		Warrants Outstanding			Warrants Exercisable
				Weighted			Weighted
		Number of		Average	Number of		Average
		Shares		Exercise Price	Shares		Exercise Price
Warrants Outstanding, July 1, 2016		140,000	$	0.75	20,000	$	0.75
	Granted	-		-	-		-
	Previously Granted, Vested	-		-	90,000		0.75
	Exercised	-		-	-		-
	Canceled/Expired	-		-	-		-
Warrants Outstanding, March 31, 2017		140,000	$	0.75	110,000	$	0.75