Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

v3.4.0.3
SUBSEQUENT EVENTS
9 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
NOTE 12 - SUBSEQUENT EVENTS
 
Management has evaluated events subsequent to March 31, 2016, through the date of this filing with the SEC for transactions and other events that may require adjustment to and/or disclosure in such financial statements.
 
In April 2016, our Board of Directors approved the private placement of up to 77,500,000 shares of our common stock to select accredited investors for a total amount of $3,100,000, or $0.04 per share of common stock (the “Offering”). On May 5, 2016, we completed an initial closing of the Offering, pursuant to which we sold 46,250,000 shares of common stock, at $0.04 per share, for a total purchase price of $1,850,000 to two (2) accredited investors. Esenjay, our controlling shareholder and primary credit line holder, participated in the Offering as an investor by purchasing 33,750,000 shares in exchange for the settlement of $1,350,000 of debt owed to Esenjay by the Company. In addition, we sold 12,500,000 shares of common stock to an unrelated accredited investor for $500,000 in cash.
 
The initial closing of the Offering at a price of $0.04 per share triggered an anti-dilution provision under our outstanding warrants pursuant to which an aggregate of 2,907,347 shares of common stock may be purchased upon exercise (See Note 7). As a result, the exercise price of such warrants was reduced to $0.15 per share. The remaining terms, including expiration dates, of all effected warrants remain unchanged.
 
The aggregate 46,250,000 shares discussed above have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. Such shares were offered and sold to the accredited investors in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D.
 
During the period from April 1, 2016 through May 13, 2016 we borrowed an aggregate of $370,000 from Esenjay under our Unrestricted Line of Credit.  As of May 13, 2016, the amount outstanding under the Unrestricted Line of Credit was $1,495,000, with an aggregate of $2,005,000 available under the Unrestricted Line of Credit for future draws at Esenjay’s discretion. As of May 13, 2016, Esenjay owns approximately 67% of our issued and outstanding common stock (See Note 4).