Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2013 |
Summary of Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates |
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The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts or revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include deferred income taxes and fair value of stock-based compensation. It is at least reasonably possible a material change in these estimates may occur in the near term. |
Beneficial Conversion Features | Beneficial Conversion Features |
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The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized deferred financing costs are expensed in the period of retirement to interest expense. |
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In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. |
Stock-Based Compensation | Stock-Based Compensation |
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We account for share-based awards to employees in accordance with ASC 718 "Stock Compensation". Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 "Equity", wherein such awards are expensed over the period in which the related services are rendered. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
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Cash and cash equivalents are considered to be all highly liquid investments purchased with an initial maturity of three months or less. |
Concentration of Credit Risk | Concentration of Credit Risk |
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The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution. At times, such balances may be in excess of any insured limits. |
Deferred Financing Costs | Deferred Financing Costs |
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Debt financing costs are amortized over the contractual term of the underlying note payable using the effective interest method. If debt is retired prior to the end of its contractual term, the unamortized deferred financing costs are expensed in the period of the retirement to interest expense. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets |
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Impairment losses are to be recognized when the carrying amount of a long lived asset is not recoverable or exceeds its fair value. The Company evaluates its long lived assets for impairment whenever events or changes in circumstances indicate that a carrying value may not be recoverable. The Company uses estimates of future cash flows over the remaining useful life of a long lived asset or asset group to determine the recoverability of the asset. These estimates only include the net cash flows directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of the asset or asset group. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. During the year ended June 30, 2013, the Company recorded an impairment loss of $532,056 related to an intangible asset. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
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The Company's financial instruments include cash, accounts payable and other accrued expenses and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2013 and 2012. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The hierarchy consists of three levels: |
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· | Level one - Quoted market prices in active markets for identical assets or liabilities; | | | | | | | | |
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· | Level two - Inputs other than level one inputs that are either directly or indirectly observable; and | | | | | | | | |
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· | Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. | | | | | | | | |
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Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter. |
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The Company does not have any assets or liabilities measured at fair value on a recurring basis as of June 30, 2013 and 2012. |
Income Taxes | Income Taxes |
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In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. |
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The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of June 30, 2013 and 2012. |
Income (Loss) Per Share: | Income (Loss) Per Share: |
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Diluted income (loss) per share is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Potentially dilutive securities are options and warrants that are exercisable into common stock and convertible notes payable. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the income per share or decrease the loss per share. At June 30, 2013 and 2012, there were options and warrants outstanding to purchase 10,872,765 and 7,242,287, respectively, shares of the Company's common stock. At June 30, 2012 there were convertible notes payable, plus accrued interest that was convertible into 2,640,999 Share Units (consisting of one share and one warrant). These were converted to 2,656,620 share units during July and August 2012. At June 30, 2013 and 2012, there were no potentially dilutive securities included in the calculation as their effect was anti-dilutive. |
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The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements as follows: |
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| | Loss | | Shares | | Per Share | |
| | (Numerator) | | (Denominator) | | Amount | |
Basic and diluted loss per share | | | | | | | | | |
For the year ended June 30, 2013 | | $ | (1,638,609 | ) | 18,222,741 | | $ | (0.09 | ) |
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For the year ended June 30, 2012 | | $ | (1,291,431 | ) | 12,465,426 | | $ | (0.10 | ) |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
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The Company has implemented all new relevant accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |