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Document and Entity Information (USD $)
12 Months Ended
Jun. 30, 2013
Sep. 11, 2013
Document and Entity Information [Abstract]
Entity Registrant Name QUICK-MED TECHNOLOGIES INC
Entity Central Index Key 0001088206
Current Fiscal Year End Date --06-30
Entity Well-known Seasoned Issuer No
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Smaller Reporting Company
Entity Public Float $ 2,987,692
Entity Common Stock, Shares Outstanding 37,364,154
Document Fiscal Year Focus 2013
Document Fiscal Period Focus FY
Document Type 10-K
Amendment Flag false
Document Period End Date Jun 30, 2013
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BALANCE SHEETS (USD $)
Jun. 30, 2013
Jun. 30, 2012
Current assets:
Cash and cash equivalents $ 49,677 $ 80,502
Accounts receivable 249,583 105,123
Total current assets 299,260 185,625
Property and equipment, net 3,182 1,084
Other assets:
Prepaid expenses 37,943 8,472
Intangible asset, net 382,858 416,669
Total other assets 420,801 425,141
Total assets 723,243 611,850
Current liabilities:
Accounts payable 501,924 714,110
Unearned revenue - current 121,375 100,957
Accrued expenses 61,356 188,275
Current maturity of note payable - related party 77,931 102,025
Current maturity of convertible note payable -related party 1,327,078 1,242,834
Current maturity of convertible note payable -related party 6,249,816 5,913,737
Current maturity of note payable 254,891 254,986
Total current liabilities 8,594,371 8,516,924
License payable 0 160,000
Unearned Revenue - long-term 1,188,749 0
Total liabilities 9,783,120 8,676,924
Commitments and contingencies      
Stockholders' deficit:
Common stock, $0.0001 par value; 100,000,000 authorized shares; 37,346,154 shares issued and outstanding at June 30, 2013 and June 30, 2012, respectively 3,735 3,735
Additional paid-in capital 15,609,340 15,448,353
Outstanding stock options 3,688,992 4,131,709
Accumulated deficit (28,361,944) (27,648,871)
Total stockholders' deficit (9,059,877) (8,065,074)
Total liabilities and stockholders' deficit $ 723,243 $ 611,850
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BALANCE SHEETS (Parenthetical) (USD $)
Jun. 30, 2013
Jun. 30, 2012
Stockholders' deficit:
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 100,000,000 100,000,000
Common stock, shares issued (in shares) 37,346,154 37,346,154
Common stock, shares outstanding (in shares) 37,346,154 37,346,154
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STATEMENTS OF OPERATIONS (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Revenues
Royalty and license fees $ 560,495 $ 450,654
Product sales 330,998 425,842
Research and development service 37,000 121,000
Total revenues 928,493 997,496
Expenses:
Cost of sales 24,983 26,714
Research and development 519,836 847,350
General and administrative expenses 467,203 998,393
Licensing and patent expenses 255,522 299,163
Depreciation and amortization 37,024 64,198
Total operating expenses 1,304,568 2,235,818
Operating loss (376,075) (1,238,322)
Other income (expense):
Interest income 7,648 1,375
Interest expense (446,186) (449,956)
Impairment loss (58,460) 0
Extinguishment of 'License Payable' 160,000 0
Total other expense (336,998) (448,581)
Loss before provision for income taxes (713,073) (1,686,903)
Provision for income taxes 0 0
Net loss $ (713,073) $ (1,686,903)
Net loss per share - basic and diluted (in dollars per share) $ (0.02) $ (0.05)
Weighted average common shares outstanding - basic and diluted (in shares) 37,346,154 37,346,154
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STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (USD $)
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Outstanding Stock Options [Member]
Total
Balance at Jun. 30, 2011 $ 3,725 $ 15,420,363 $ (25,961,968) $ 4,085,808 $ (6,452,072)
Balance (in shares) at Jun. 30, 2011 37,246,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation 45,901 45,901
Stock issuance for cash 10 27,990 28,000
Stock issuance for cash (in shares) 100,000
Net loss 0 0 (1,686,903) (1,686,903)
Balance at Jun. 30, 2012 3,735 15,448,353 (27,648,871) 4,131,709 (8,065,074)
Balance (in shares) at Jun. 30, 2012 37,346,154 37,346,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Forfeited stock-based compensation 0 0 (281,730) (281,730)
Expired stock-based compensation 0 160,987 (160,987) 0
Net loss 0 0 (713,073) 0 (713,073)
Balance at Jun. 30, 2013 $ 3,735 $ 15,609,340 $ (28,361,944) $ 3,688,992 $ (9,059,877)
Balance (in shares) at Jun. 30, 2013 37,346,154 37,346,154
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STATEMENTS OF CASH FLOWS (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Cash flows from operating activities:
Net loss $ (713,073) $ (1,686,903)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 37,024 64,198
Impairment loss on patent 58,460 0
Stock-based compensation 0 45,901
Forfeited stock-based compensation (281,730) 0
Allowance for doubtful accounts 0 200,000
Gain on extinguishment of license payable (160,000) 0
(Increase) decrease in:
Accounts receivable (144,460) 197
Prepaid expenses (29,471) (442)
Increase (decrease) in:
Accounts payable (212,186) 98,718
Accrued interest 426,133 429,900
Unearned revenue 1,209,166 0
Accrued expenses (126,915) 73,694
Net cash provided by (used in) operating activities 62,948 (774,737)
Cash flows from investing activities:
Property and equipment (3,212) (2,315)
Intangible assets (60,560) (101,813)
Net cash used in investing activities (63,772) (104,128)
Cash flows from financing activities:
Proceeds from stock issuance 0 28,000
Payment on notes payable - officer (30,000) (18,000)
Net cash (used in) provided by financing activities (30,000) 10,000
Net decrease in cash and cash equivalents (30,824) (868,865)
Cash and cash equivalents at beginning of year 80,502 949,367
Cash and cash equivalents at end of year 49,677 80,502
Cash paid for:
Interest 20,053 20,054
Income taxes 0 0
Total 20,053 20,054
Non-cash disclosures of investing and financing activities:
Stock-based compensation 0 45,901
Expired stock-based compensation $ (160,987) $ 0
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DESCRIPTION OF BUSINESS
12 Months Ended
Jun. 30, 2013
DESCRIPTION OF BUSINESS [Abstract]
DESCRIPTION OF BUSINESS
NOTE 1 - DESCRIPTION OF BUSINESS

Founded in April 1997, Quick-Med Technologies Inc. (the "Company") is a life sciences company focused on developing proprietary, broad-based technologies in medical and consumer healthcare markets. The Company's three core technologies are: (1) Novel Intrinsically Micro-Bonded Utility Substrate (NIMBUS®), a family of advanced polymers bio-engineered to have antimicrobial, hemostatic, and other properties that can be used in a wide range of applications; (2) Stay Fresh® is a unique chemical formulation for textiles with a durable antimicrobial agent effective against an array of bacteria even after numerous laundering cycles; and (3) MultiStat, a family of advanced patented methods and compounds shown to be effective in skin therapy applications. Currently, NIMBUS technology has been commercialized in an advanced wound care product by our licensee in the institutional market in June 2009. The Company targets NIMBUS technology for additional advanced wound care products, catheters, incontinence products, and other medical devices. Stay Fresh is currently being commercialized with a broad range of potential applications including consumer textile market. MultiStat has been commercialized in a cosmetic product line with the anti-aging products. In each instance, the Company intends to form joint ventures or joint development partnerships with leading firms in the respective industry to co-develop and commercialize its products.

The Company specializes in the research and development of biomedical products and devices for antibacterial applications. The Company conducts research efforts or collaborates with third parties as necessary to develop products and administer the patent process. The Company does not expect to produce nor directly market its products. Instead, the Company intends to partner with clients for those activities

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has continuing losses from operations, negative working capital and an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Jun. 30, 2013
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

All highly liquid investments purchased with maturity of three months or less from the time of purchase are considered to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Intangible Assets

The costs of obtaining license agreements along with the costs to defend the patents underlying the license agreements are capitalized and amortized using the straight-line method over the estimated useful lives of the underlying license agreements. The costs of obtaining and maintaining new patents are capitalized and amortized using the straight-line method over the estimated useful lives of the patents. The cost of patents in process is not amortized until the patent is issued.

 
Property and Equipment

Property and equipment are stated at cost. Depreciation on property and equipment is computed using the straight-line method over the expected useful lives of the assets.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable as of June 30, 2013 represents amounts due from its customers and is reported on the balance sheet reduced by writing off receivables not considered to be collectible. The allowance for doubtful accounts at June 30, 2013 and June 30, 2012 was $0 and $200,000 respectively.

Research and Development Costs

Research and development costs are expensed as incurred.

Earnings Per Share

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. For the periods ended June 30, 2013 and 2012, 16,697,440 and 15,874,774 diluted common stock equivalents, respectively, have been excluded from the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive.

Fair Value Measurements

The Company adopted FASB ASC 820, Fair Value Measurements and Disclosures,   which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. This new accounting standard does not require any new fair value measurements, but rather eliminates inconsistencies in guidance found in various other accounting pronouncements.

This accounting standard establishes a hierarchy for information and valuations used in measuring fair value, which is broken down into three levels. Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities. Level 2 valuations are based on inputs, other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement.

The Company also adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Company has not elected the fair value option for any eligible financial instruments. 

Revenue Recognition

Under the agreement for product development, manufacturing and distribution (the "Agreement") with BASF, the Company shares proportionately on the net sales and related expenses in accordance with the terms of the Agreement.  The Company recognizes revenue of its royalties from the sale of products by BASF when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable.

The Company recognizes royalty fee income based on the net sales of products by our licensees in accordance with the terms of the license agreements.
The Company recognizes revenue of its research and development service including the small business innovation research program and the US Army medical research program based on the research work performed in accordance with the program requirements or statements of work for the joint development agreements.

The Company also recognizes revenue from the non-refundable exclusivity license fee derived from its licensees on a pro rata basis over the term of the related exclusive license agreements. Further, the Company recognizes the exclusive option fee as revenue on a pro rata basis over the term of the related exclusive option agreement

Unearned Revenue

The amount of unearned revenue represents the exclusive option fee, the license fee, and advance royalty fee yet to be earned on a pro rata basis over the exclusive option period of the related option and license agreements.
 
Share-Based Compensation

The Company records share-based payment awards at fair value on the grant date of the awards, based on the estimated number of awards that are expected to vest. The fair value of stock options was determined using the Black-Scholes option-pricing model. The fair value of the restricted stock awards was based on the closing price of the Company's common stock on the date of grant.

Concentration of credit risk of financial instruments

Financial instruments that potentially subject the Company to credit risk consist of cash equivalents and accounts receivable. As of June 30, 2013 and 2012, the Company's cash levels did not exceed the federally insured limit. Beginning December 31, 2010 through December 31, 2012, the Company's bank accounts were fully insured, regardless of the balance of the account at the FDIC-insured institutions as the noninterest-bearing transaction accounts as provided by the section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The credit risk of the accounts receivable is considered limited given the customers' credit rating.

Income Taxes

The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Reclassifications

Certain reclassifications have made to the prior year financial statements in order for them to be in conformity with the current year's presentation.

Recently Issued Accounting Pronouncements

In July 2012, the FASB issued ASU No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This standard, which amends the guidance on testing indefinite-lived intangible assets, other than goodwill, for impairment, provides companies with the option to first perform a qualitative assessment before performing the two-step quantitative impairment test. If the company determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more likely than not to exceed its carrying amount, then the company would not need to perform the two-step quantitative impairment test. This standard does not revise the requirement to test indefinite-lived intangible assets annually for impairment. This standard becomes effective for annual and interim impairment tests performance for fiscal years beginning after September 15, 2012, with early adoption allowed. When impairment of assets exists, the carrying amount of the long-lived asset is reduced to its estimated fair value, less any costs associated with the final settlement.
 
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PROPERTY AND EQUIPMENT
12 Months Ended
Jun. 30, 2013
PROPERTY AND EQUIPMENT [Abstract]
PROPERTY AND EQUIPMENT
NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following at June 30, 2013 and 2012:
 
 
 
2013
  
2012
 
 
 
  
 
Computer equipment
 
$
30,935
  
$
28,990
 
Equipment
  
34,209
   
32,942
 
Less: accumulated depreciation
  
(61,962
)
  
(60,848
)
Net property and equipment
 
$
3,182
  
$
1,084
 
 
Depreciation expense for the years ended June 30, 2013 and 2012 was $1,114 and $2,308, respectively.
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INTANGIBLE ASSETS
12 Months Ended
Jun. 30, 2013
INTANGIBLE ASSETS [Abstract]
INTANGIBLE ASSETS
NOTE 4 – INTANGIBLE ASSETS

License Agreement

The Company has a license agreement with two inventors ("Licensors") for the worldwide rights to the MMP inhibitors and uses thereof.  The license agreement transfers to the Company the technology that is the subject of issued patents as well as pending patent applications, which were filed by the original Inventors. The licenses are amortized on a straight-line basis over the estimated useful lives of the underlying patents or the license agreement. The U.S. patents expire beginning November 2007 through December 2019 and the international patents expire beginning on November 21, 2011 through December 8, 2019.

In November 2002, the Company and the University of Florida Research Foundation (the "University") entered into an agreement whereby the University gave the Company exclusive sub-license rights to the use of its patents and patent applications from the effective date of the agreement until the earlier of the date that no licensed patents remain enforceable patents or the payment of earned royalties ceases more than three calendar quarters. The royalty rate is 3% of the first $10 million of cumulative realized revenues and 1.8% of all subsequent realized revenues.

In June 2007, the Company and the Regents of the University of Michigan ("Michigan") entered into an agreement whereby Michigan gave the Company worldwide exclusive rights including sub-license rights to the use of its patents and patent applications of the uses of MMP inhibitors from the effective date of the agreement until the earlier of the date that no licensed patents remain enforceable patents or the default event.  In addition to the initial license fee of $80,000, the Company will pay a 4% royalty rate of the net sales, 20% of the sublicense income, the annual fee of $50,000 for 2008 and 2009, $75,000 for 2010 and $100,000 in 2011 and in each year thereafter during the term of the agreement.
 
During the fiscal year 2006, the Company was issued both US and international patents for its NIMBUS technology on "Intrinsically Bactericidal Absorbent Dressing And Method Of Fabrication".  These patents expire on December 8, 2019.  The total capitalized costs for this issued patent were $35,470 and are being amortized over the life of the patents.

During the fiscal years 2013 and 2012, the Company was granted certain US and international patents and filed a number of US and international patent applications for its NIMBUS, Stay Fresh, and NimbuDerm technologies and applied for certain trademarks.
 
As of June 30, 2013, there was an impairment of the Company's intangible assets in the amount of $58,460 which was recognized as impairment expense on the Company's statement of operations. The impairment loss resulted from the write-off an in-process patent cost for a country that the Company decided to no longer pursue.
 
 
June 30, 2013
 
June 30, 2012
 
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
 
 
 
 
 
 
Amortized Intangible Assets
 
 
 
 
 
 
 
 
 
License agreement
 
 
619,675
 
 
 
(525,282
)
 
 
648,123
 
 
 
(604,811
)
Patents
 
 
462,365
 
 
 
(173,900
)
 
 
373,357
 
 
 
-
 
Total
 
 
1,082,040
 
 
 
(699,182
)
 
 
1,021,480
 
 
 
(604,811
)
 
Amortization of patents in process commences when the patents are issued.
 
At June 30, 2013, total unamortized capitalized intangible assets costs are approximately $152,000, which are expected to be amortized and recognized over a weighted-average period of ten years.
 
Aggregate Amortization Expense
 
 
35,910
 
 
 
699,182
 
 
 
61,890
 
 
 
604,811
 
 
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COMMITMENTS
12 Months Ended
Jun. 30, 2013
COMMITMENTS [Abstract]
COMMITMENTS
NOTE 5 - COMMITMENTS

The Company has leased a laboratory facility in Gainesville, Florida which was renewed on March 11, 2013. Rent expense for the years ended June 30, 2013 and 2012 was $27,348 and $27,380, respectively.

The following is a schedule of minimum future payments on the operating lease as of June 30, 2013:
 
For the years Ending June 30:
 
 
 
 
 
2014
  
25,800
 
2015
  
15,050
 
Thereafter
  
-
 
 
 
$
40,850
 
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STOCK OPTIONS AND WARRANTS
12 Months Ended
Jun. 30, 2013
STOCK OPTIONS AND WARRANTS [Abstract]
STOCK OPTIONS AND WARRANTS
NOTE 6 – STOCK OPTIONS AND WARRANTS

The Company adopted a qualified equity incentive plan (the "Plan") on March 4, 2001. Under the Plan the Company is authorized to grant up to 3,000,000 shares of common stock. On December 13, 2004, the shareholders approved the Plan and ratified the amendment to increase the total number of shares to be granted under the Plan from 3,000,000 to 4,000,000 effective November 1, 2004.  On November 13, 2007 the shareholders ratified the amendment to increase the total number of shares to be granted under the Plan from 4,000,000 to 6,000,000. This plan expired in March 2011.
 
On November 17, 2009, the Board of Directors (the "Board') granted 681,785 stock options to the board members, employees, consultants as payments for their services and in recognition of individual performance for the year ended June 30, 2009. In addition, the Board granted 248,564 warrants payments to consultants for payments of their services and incentive performance awards.  Of 681,785 stock options grant, approximately 115,428 were awarded to the board members for their services and were vested on the date of grant. Of 248,564 warrants issued, 99,977 warrants were vested immediately on the grant date. The remainder 566,357 stock options and 148,587 warrants were vested one-third immediately, one-third were vested on November 17, 2010 and the remaining one-third were vested on November 17, 2011, assuming the person receiving the equity awards is employed or being utilized by the Company at the time of vesting.  The exercise price of those stock options and warrants is $0.77 per share. The weighted average grant date fair value of options and warrants was $0.48 per share based on the Black-Scholes option-pricing model. The options and warrants expire five years from the date of grant.  During the year ended June 30, 2013, 325,215 options were forfeited.

On October 27, 2008, the Board of Directors (the "Board") granted 1,335,102 stock options to the board members, employees, consultants as payments for their services and in recognition of individual performance for the year ended June 30, 2008. In addition, the Board granted 705,302 warrants payments to consultants for payments of their services and incentive performance awards.  Further, 60,000 shares of restricted common stock were issued to a consultant as payment for services.  Of 1,335,102 stock options grant, approximately 464,102 were awarded to the board members for their services and were vested on the date of grant. Of 705,302 warrants issued, 240,302 warrants were vested immediately on the grant date. The remainder 871,000 stock options and 465,000 warrants were vested one-third immediately, one-third were vested on October 27, 2009 and the remaining one-third were vested on October 27, 2010, assuming the person receiving the equity awards is employed or being utilized by the Company at the time of vesting.  The exercise price of those stock options and warrants is $0.20 per share, which was the closing price of the common stock on the date of grant. The weighted average grant date fair value of options and warrants was $0.19 per share based on the Black-Scholes option-pricing model. The options and warrants expire five years from the date of grant. During the year ended June 30, 2013, 475,938 options were forfeited.

On April 18, 2008, the Board of Directors (the "Board") granted 148,571 shares of restricted common stock as payment for the services rendered by the board members for the year ended June 30, 2007 for those elected to receive common stocks and all shares were immediately vested.  In addition, the Board granted 1,074,666 stock options to the board members, employees, consultants as payments for their services and in recognition of individual performance for the year ended June 30, 2007.  The stock options were vested one-third immediately, one-third was vested on April 17, 2009 and the remaining one-third was vested on April 17, 2010, assuming the person receiving the equity awards is employed by the Company at the time of vesting. The exercise price of those stock options is $0.42 per share, which was the closing price of the common stock on the date of grant.  The weighted average grant date fair value of options was $0.32 per share based on the Black-Scholes option-pricing model.  The options and warrants expire five years from the date of grant.  During the year ended June 30, 2013, 110,000 options were forfeited and 503,080 options expired.

On August 6, 2007, the Board of Directors (the "Board") granted 484,056 non-qualified stock options to the Chief Executive Officer ("CEO") at an exercise price of $0.75 per share. These options were fully vested and immediately exercisable at the date of grant.  In addition, the Board granted 1,452,167 non-qualified stock options at an exercise price of $0.74 per share on September 25, 2007, as part of the CEO's employment agreement. The second stock options are vested and become exercisable 1/16th of the total 1,452,167 options on each three-month anniversary beginning on June 11, 2007.  The average grant date fair value of the options was $0.46 per share based on the Black-Scholes option-pricing model.  These options expire in August and September 2013, five years from the date of grant.
 
The weighted average grant date fair value of options and warrants granted during the fiscal years ended June 30, 2013 and 2012 were estimated on the date of grant using the Black-Scholes option-pricing model with the assumptions used; risk-free interest rate of 3%; dividend yield of 0%; expected volatility of 91%; and estimated life of 5 years. Expected volatility is based on historical volatility of common stock.  The expected term of the options and warrants represents the period of time that options and warrants granted are expected to be outstanding and is derived from historical terms.

A summary of options for the years ended June 30, 2013 and 2012 is shown below:
 
 
 
June 30 2013
  
June 30 2012
 
 
 
Number of Shares
  
Weighted-Average Exercise
Price
  
Number of Shares
  
Weighted-Average Exercise
Price
 
Outstanding at beginning of year
  
4,083,970
  
$
0.58
   
4,794,270
  
$
0.57
 
Granted
  
-
   
-
   
-
   
-
 
Exercised
  
-
   
-
   
-
   
-
 
Forfeited
  
(911,153
)
  
-
   
-
   
-
 
Expired
  
(503,080
)
  
-
   
(710,300
)
  
0.82
 
Outstanding at end of year
  
2,669,737
  
$
0.60
   
4,083,970
  
$
0.58
 
Exercisable at end of year
  
-
       
4,083,970
     
Available for issuance at end of year
  
-
       
-
     
 
Note: Some options expired and some options were forfeited during the year ended June 30, 2013.  The following is a summary of warrants granted, exercised, canceled and outstanding involving the grants in the periods ended June 30, 2013 and 2012.
 
 
 
June 30 2013
  
  
June 30 2012
  
 
 
 
  
  
  
 
 
 
Number of Shares
  
Weighted-Average Exercise
Price
  
Number of Shares
  
Weighted-Average Exercise
Price
 
 
 
  
  
  
 
Outstanding at beginning of year
  
947,994
  
$
0.48
   
974,920
  
$
0.47
 
Granted
  
-
   
-
   
10,714
   
0.02
 
Exercised
  
-
   
-
   
-
   
-
 
Expired
  
(13,410
)
  
0.67
   
(37,640
)
  
0.96
 
Outstanding at end of year
  
934,584
  
$
0.36
   
947,994
  
$
0.48
 
Exercisable at end of year
  
934,584
       
947,994
     
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INCOME TAXES
12 Months Ended
Jun. 30, 2013
INCOME TAXES [Abstract]
INCOME TAXES
NOTE 7 - INCOME TAXES

For federal income tax purposes, the Company elected to capitalize start-up costs incurred during 1999 and 2000 totaling $357,989. The start-up costs were amortized over sixty (60) months beginning in 2001.  An analysis of the components of the (loss) before income taxes and the related income tax (benefit) is presented in the following tables. The tax amounts have been calculated using the 34% federal and 5.5% state income tax rates.

The Company adopted the provisions of ASC 740: Income Taxes.  The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated.  As of June 30, 2013 and 2012, the Company has no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.  In general, the Company is no longer subject to examinations by taxing authorities for tax years prior to 2008.

The (provision) benefit for income taxes consists of the following:
 
 
 
2013
 
 
2012
 
Current
 
$
-
 
 
$
-
 
Deferred
 
 
-
 
 
 
-
 
 
 
$
-
 
 
$
-
 
 
Deferred tax assets for June 30, 2013 and 2012 consist of the following:
 
 
2013
 
 
2012
 
 
 
 
 
 
Deferred tax asset (liability):
 
 
 
 
Depreciation and amortization
 
$
(50,538
 
)
 
$
7,985
 
Stock based compensation
 
 
2,980,409
 
 
 
3,134,667
 
Net operating loss carry forward
 
 
6,037,629
 
 
 
5,709,372
 
Interest accrual
 
 
500,288
 
 
 
339,934
 
Research tax credit
 
 
7,203
 
 
 
7,203
 
Less: valuation allowance
 
 
(9,474,991
)
 
 
(9,199,161
)
Deferred tax asset:
 
$
-
 
 
$
-
 
 
A reconciliation of income tax at the statutory rate to the Company's effective tax rates for the periods ended June 30, 2013 and 2012 is as follows:
 
 
 
2013
 
 
2012
 
 
 
 
 
 
Federal Income tax at statutory rate of 34%
 
$
(242,445
)
 
$
(573,547
)
State tax, net of federal benefit
 
 
(25,775
)
 
 
(52,636
)
Other
 
 
(7,609
)
 
 
33,349
 
Valuation allowance
 
 
275,829
 
 
 
592,834
 
 
 
$
-
 
 
$
-
 
 
As of June 30, 2013, the Company had a net operating loss carry forward of approximately $16,000,000 which will begin to expire in 2017.
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NOTES PAYABLE
12 Months Ended
Jun. 30, 2013
NOTES PAYABLE [Abstract]
NOTES PAYABLE
NOTE 8 – NOTES PAYABLE
 
 
 
 
 
Maturity
  
Interest
Rate
  
Conversion Price
  
June 30, 2013
  
June 30, 2012
 
Related Party
 
  
  
  
  
 
Senior Convertible Note
 
2013
   
8
%
 
$
0.60
  
$
1,053,000
  
$
1,053,000
 
Accrued Interest
              
274,078
   
189,834
 
Total
              
1,327,078
   
1,242,834
 
Less current portion
              
1,327,078
   
-
 
Total long-term
              
-
   
1,242,834
 
 
                    
Others
                    
Senior Convertible Note
 
2014
   
8
%
 
$
0.50
   
150,000
   
150,000
 
Senior Convertible Note
  
2014
   
8
%
 
$
0.50
   
100,000
   
100,000
 
Acrued interest
              
4,891
   
4,986
 
Total
              
254,891
   
254,986
 
Less current portion
              
254,891
   
-
 
Total long-term
              
-
   
254,986
 
 
                    
Related Party
                    
Note Payable
  
2013
   
8
%
      
59,155
   
89,155
 
Accrued interest
              
18,776
   
12,870
 
Total
              
77,931
   
102,025
 
Less current portion
              
77,931
   
30,000
 
Total long-term
              
-
   
72,025
 
 
                    
Related Party
                    
Senior Convertible Note
  
2013
   
6-8
%
 
$
.18-.74
   
3,547,580
   
3,547,580
 
Senior Convertible Note 2
      
8
%
 
$
.42-.63
   
375,000
   
375,000
 
Senior Convertible Note 3
      
8
%
 
$
0.60
   
600,000
   
600,000
 
Accrued interest
              
1,727,236
   
1,391,157
 
Total
              
6,249,816
   
5,913,737
 
Less current portion
              
6,249,816
   
-
 
Total long-term
              
-
   
5,913,737
 
 
On March 31, 2013, the Company combined several of its outstanding and previously issued notes payable to the largest shareholder into a single senior convertible promissory note in the amount of $3,547,580. The original notes were issued on September 30, 2003, June 14, 2007, October 30, 2007, February 11, 2008, May 17, 2008, September 12, 2008, February 26, 2009, May 12, 2009 and March 15, 2010 in the principal amounts of $1,268,625, $208,955, $300,000, $370,000, $485,000, $150,000, $175,000, $375,000 and $215,000, respectively. This senior convertible note is secured by the Company's revenues and assets and is subordinate to the additional senior convertible notes issued to the various parties listed below. Interest rates for these convertible notes range from 6% to 8% and conversion rates range from $0.18 to $0.74.

On March 31, 2010, the Company issued a senior convertible promissory note to a major shareholder for the principal amount of $1,053,000, which consisted of $600,164 in cash, $375,000 principal balance of a prior senior convertible note together with unpaid accrued interest thereon of $77,836.  This senior convertible note is secured by the Company's revenues and assets with the same priority as the Notes 2 and 3 to the Shareholder and the senior convertible notes totaling $250,000.  This note has an annual interest rate of 8%, a maturity date of December 31, 2013.  This note has the conversion price of $0.60 per share of common stock.  The Company has recorded approximately $859,950 as an interest expense as a result of the beneficial conversion feature.

On March 31, 2010, the Company issued two senior convertible promissory notes totaling $250,000 to third parties.  These senior convertible notes are secured by the Company's revenues and assets with  priority below Notes 2 and 3 to the Shareholder and the March 31, 2010 senior convertible note to a major shareholder. These notes have an annual interest rate of 8% with a maturity date of June 30, 2014.  These notes have the convertible price of $1.00 per share of common stock.  The Company has recorded approximately $22,500 as an interest expense as a result of the beneficial conversion feature.  During the year ended June 30, 2011, the conversion price of the $150,000 senior convertible promissory note was reduced to $0.50 per share of common stock as part of the arrangement of the additional investment in the Company's restricted common stock by the note holder. In addition, the conversion price on the $100,000 senior convertible promissory note was also reduced to $0.50 per share of common stock as a result of the additional investment in the Company's restricted common stock.

On December 16, 2010, the Company issued a promissory note to an officer for the principal amount of $113,155, which consisted of a total 100,000 principal balance of four prior convertible notes together with unpaid accrued interest thereon of $13,155.  This note has an annual interest rate of 8%, a maturity date of December 31, 2013.  The outstanding principal amount will be paid at a rate of $1,000, $2,000 and $3,000 each month for the first 12 months, the second 12 months and the third 12 months, respectively. As of June 30 2013, and June 30, 2012, the Company paid an aggregate principal amount of approximately $30,000 and $18,000 respectively, to the officer. The remaining outstanding principal balance and accrued interest will be paid on the maturity date.

In November 2009, the Company finalized and issued a $600,000 2009 senior convertible note payable ("Note 3") to the Shareholder.  The Company received the borrowings (the "Advances") in a series of $45,000 on September 8, 2009, $25,000 on September 11, 2009, $125,000 on September 23, 2009, $100,000 on October 14, 2009, $50,000 on October 28, 2009, $175,000 on November 12, 2009,   $50,000 on December 14, 2009, and $30,000 on February 26, 2010 totaling $600,000.   This senior convertible note is secured by the Company's revenues and assets with the same priority as the March 31, 2010 senior convertible notes, it has a 8% annual interest rate and has a maturity date of December 31, 2013.  This note has the conversion price of $0.60 per share of common stock.  The Company has recorded approximately $215,500 as an interest expense to date for the Advances received as a result of the beneficial conversion feature.  As part of the terms of this note, the maturity dates of all other outstanding senior convertible notes owed to the Shareholder were extended to December 31, 2013.  During the year ended June 30, 2011, the conversion price on a $135,000 portion of the Note 3 was also reduced to $0.50 per share of common stock as a result of the additional investment in the Company's restricted common stock.

Effective May 12, 2009, the Company issued a 2009 senior convertible note payable ("Note 2") to the Shareholder to combine the borrowings (the "Advances") in a series of $35,000 each from May 12, 2009 through August 12, 2009, $50,000 and $45,000 on August 14 and 27, 2009, respectively totaling $375,000. This senior convertible note is secured by the Company's revenues and assets with the same priority as the March 31, 2010 senior convertible notes and has a maturity date of December 31, 2013.  This note has the conversion prices determined by the closing trading prices of the Company's common stock on the dates the Advances were received.

At June 30, 2013, the Company accrued interest of $1,727,236, $274,078, $4,891, and  $18,776 on the convertible notes and the note payable with the Shareholder, the convertible notes with related parties, the convertible note with a third party, and the note payable to a related party, respectively.
 
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FAIR VALUE MEASUREMENTS
12 Months Ended
Jun. 30, 2013
FAIR VALUE MEASUREMENTS [Abstract]
FAIR VALUE MEASUREMENTS
NOTE 9  – FAIR VALUE MEASUREMENTS

The Company adopted  ASC 820, Fair Value Measurements and Disclosures, for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. FASB ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  FASB ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.

FASB ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. FASB ASC 820 establishes and prioritizes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Inputs that are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2013
 
 
 
  
2013
  
  
  
2012
  
 
 
 
Carrying
  
  
  
Carrying
  
  
 
 
 
Value
  
Level 1
  
Level 2
  
Value
  
Level 1
  
Level 2
 
Financial Liabilities
 
  
  
  
  
  
 
Convertible notes payable (2)
 
$
7,831,785
   
-
  
$
7,757,621
  
$
7,155,493
   
-
  
$
6,985,595
 
Total financial liabilities
 
$
7,831,785
   
-
  
$
7,757,621
  
$
7,155,493
   
-
  
$
6,985,595
 
 
(1) Cash Equivalents
 
      The Company's cash equivalents include short-term investments, which are money market funds. Since these are short-term highly liquid investments with original maturities of three months or less at the date of purchase, they present negligible risk of changes in value due to changes in interest rates. These short-term investments are recorded at fair value on the Company's balance sheet based on quoted market prices and observable market inputs.
 
(2) Convertible Notes Payable
 
         As fully described in Note 8, the Company's convertible notes payable are long-term debts with fixed interest rates and the conversion rates at market at the time the funds were received.  In addition, most of these notes are collateralized by the Company's assets and revenues. Further, the debt holders are major shareholders and an officer. The Company estimates the fair value of the convertible notes for disclosure purposes by discounting the future cash flows using rates of debts that management believes are similar in terms and maturity.  The Company's short-term convertible note payable is approximate market value.

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RELATED PARTY TRANSACTIONS
12 Months Ended
Jun. 30, 2013
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS
NOTE 10  – RELATED PARTY TRANSACTIONS

As fully described in Note 9, the Company has several senior convertible note payables with the largest shareholder, a major stockholder, third parties and a promissory note with a related party during the periods ended June 30, 2013 and 2012.

The Company had a consulting agreement with a director to provide services on scientific matters at a monthly fee of $2,500.  The agreement was terminated in October 2012. At June 30, 2013 and 2012, the Company owed $82,500 and $75,000, respectively, to the director.

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EXTINGUISHMENT OF LICENSE PAYABLE
12 Months Ended
Jun. 30, 2013
EXTINGUISHMENT OF LICENSE PAYABLE [Abstract]
EXTINGUISHMENT OF LICENSE PAYABLE
NOTE 11  – EXTINGUISHMENT OF LICENSE PAYABLE

During the year ended June 30, 2013, the Company reached a mutual agreement with a counter party under which $160,000, previously reported as a license payable, was not longer due. Accordingly, the Company has removed this amount from its balance sheet and recorded the related gain on the extinguishment of the license payable.
 
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SUBSEQUENT EVENTS
12 Months Ended
Jun. 30, 2013
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS
NOTE 12 – SUBSEQUENT EVENTS

On August 27, 2013 we announced that Polartec, LLC, a premium producer of textile solutions, has been granted a license to utilize our proprietary STAYFRESH® technology for a range of products and fields of use.
 
In August 2013 the US Patent Office approved patent number 12/830,062  "Polyelectrolyte Complex for Imparting Antimicrobial Properties to a Substrate". This patent will provide protection for an improved method of preparing the Company's NIMBUS antimicrobial products.  The method utilizes a Poly-Electrolyte Complex, or PEC in which a negatively-charged (anionic) polymer is used to stabilize the active antimicrobial agent - a positively-charged (cationic) polymer.  This complex allows the NIMBUS polymer to be bonded to a wider variety of substrates.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Jun. 30, 2013
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Cash and Cash Equivalents
Cash and Cash Equivalents

All highly liquid investments purchased with maturity of three months or less from the time of purchase are considered to be cash equivalents.
Use of Estimates
Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Intangible Assets
Intangible Assets

The costs of obtaining license agreements along with the costs to defend the patents underlying the license agreements are capitalized and amortized using the straight-line method over the estimated useful lives of the underlying license agreements. The costs of obtaining and maintaining new patents are capitalized and amortized using the straight-line method over the estimated useful lives of the patents. The cost of patents in process is not amortized until the patent is issued.

 
Property and Equipment
Property and Equipment

Property and equipment are stated at cost. Depreciation on property and equipment is computed using the straight-line method over the expected useful lives of the assets.

Accounts Receivable and Allowance for Doubtful Accounts
Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable as of June 30, 2013 represents amounts due from its customers and is reported on the balance sheet reduced by writing off receivables not considered to be collectible. The allowance for doubtful accounts at June 30, 2013 and June 30, 2012 was $0 and $200,000 respectively.

Research and Development Costs
Research and Development Costs

Research and development costs are expensed as incurred.
Earnings Per Share
Earnings Per Share

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. For the periods ended June 30, 2013 and 2012, 16,697,440 and 15,874,774 diluted common stock equivalents, respectively, have been excluded from the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive.
Fair Value Measurements
Fair Value Measurements

The Company adopted FASB ASC 820, Fair Value Measurements and Disclosures,   which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. This new accounting standard does not require any new fair value measurements, but rather eliminates inconsistencies in guidance found in various other accounting pronouncements.

This accounting standard establishes a hierarchy for information and valuations used in measuring fair value, which is broken down into three levels. Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities. Level 2 valuations are based on inputs, other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement.

The Company also adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Company has not elected the fair value option for any eligible financial instruments. 

Revenue Recognition
Revenue Recognition

Under the agreement for product development, manufacturing and distribution (the "Agreement") with BASF, the Company shares proportionately on the net sales and related expenses in accordance with the terms of the Agreement.  The Company recognizes revenue of its royalties from the sale of products by BASF when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable.

The Company recognizes royalty fee income based on the net sales of products by our licensees in accordance with the terms of the license agreements.
The Company recognizes revenue of its research and development service including the small business innovation research program and the US Army medical research program based on the research work performed in accordance with the program requirements or statements of work for the joint development agreements.

The Company also recognizes revenue from the non-refundable exclusivity license fee derived from its licensees on a pro rata basis over the term of the related exclusive license agreements. Further, the Company recognizes the exclusive option fee as revenue on a pro rata basis over the term of the related exclusive option agreement
Unearned Revenue
Unearned Revenue

The amount of unearned revenue represents the exclusive option fee, the license fee, and advance royalty fee yet to be earned on a pro rata basis over the exclusive option period of the related option and license agreements.
Share-Based Compensation
Share-Based Compensation

The Company records share-based payment awards at fair value on the grant date of the awards, based on the estimated number of awards that are expected to vest. The fair value of stock options was determined using the Black-Scholes option-pricing model. The fair value of the restricted stock awards was based on the closing price of the Company's common stock on the date of grant.
Concentration of credit risk of financial instruments
Concentration of credit risk of financial instruments

Financial instruments that potentially subject the Company to credit risk consist of cash equivalents and accounts receivable. As of June 30, 2013 and 2012, the Company's cash levels did not exceed the federally insured limit. Beginning December 31, 2010 through December 31, 2012, the Company's bank accounts were fully insured, regardless of the balance of the account at the FDIC-insured institutions as the noninterest-bearing transaction accounts as provided by the section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The credit risk of the accounts receivable is considered limited given the customers' credit rating.

Income Taxes
Income Taxes

The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Reclassifications
Reclassifications

Certain reclassifications have made to the prior year financial statements in order for them to be in conformity with the current year's presentation.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements

In July 2012, the FASB issued ASU No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This standard, which amends the guidance on testing indefinite-lived intangible assets, other than goodwill, for impairment, provides companies with the option to first perform a qualitative assessment before performing the two-step quantitative impairment test. If the company determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more likely than not to exceed its carrying amount, then the company would not need to perform the two-step quantitative impairment test. This standard does not revise the requirement to test indefinite-lived intangible assets annually for impairment. This standard becomes effective for annual and interim impairment tests performance for fiscal years beginning after September 15, 2012, with early adoption allowed. When impairment of assets exists, the carrying amount of the long-lived asset is reduced to its estimated fair value, less any costs associated with the final settlement.
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PROPERTY AND EQUIPMENT (Tables)
12 Months Ended
Jun. 30, 2013
PROPERTY AND EQUIPMENT [Abstract]
Property and Equipment
Property and equipment consist of the following at June 30, 2013 and 2012:
 
 
 
2013
 
 
2012
 
 
 
 
 
 
Computer equipment
 
$
30,935
 
 
$
28,990
 
Equipment
 
 
34,209
 
 
 
32,942
 
Less: accumulated depreciation
 
 
(61,962
)
 
 
(60,848
)
Net property and equipment
 
$
3,182
 
 
$
1,084
 
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INTANGIBLE ASSETS (Tables)
12 Months Ended
Jun. 30, 2013
INTANGIBLE ASSETS [Abstract]
Schedule of Intangible Assets
As of June 30, 2013, there was an impairment of the Company's intangible assets in the amount of $58,460 which was recognized as impairment expense on the Company's statement of operations. The impairment loss resulted from the write-off an in-process patent cost for a country that the Company decided to no longer pursue.
 
 
June 30, 2013
 
June 30, 2012
 
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
 
 
 
 
 
 
Amortized Intangible Assets
 
 
 
 
 
 
 
 
 
License agreement
 
 
619,675
 
 
 
(525,282
)
 
 
648,123
 
 
 
(604,811
)
Patents
 
 
462,365
 
 
 
(173,900
)
 
 
373,357
 
 
 
-
 
Total
 
 
1,082,040
 
 
 
(699,182
)
 
 
1,021,480
 
 
 
(604,811
)
Schedule of Expected Amortization Expense
At June 30, 2013, total unamortized capitalized intangible assets costs are approximately $152,000, which are expected to be amortized and recognized over a weighted-average period of ten years.
 
Aggregate Amortization Expense
 
 
35,910
 
 
 
699,182
 
 
 
61,890
 
 
 
604,811
 
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COMMITMENTS (Tables)
12 Months Ended
Jun. 30, 2013
COMMITMENTS [Abstract]
Minimum future operating lease payments
The following is a schedule of minimum future payments on the operating lease as of June 30, 2013:
 
For the years Ending June 30:
 
 
 
 
 
2014
 
 
25,800
 
2015
 
 
15,050
 
Thereafter
 
 
-
 
 
 
$
40,850
 
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STOCK OPTIONS AND WARRANTS (Tables)
12 Months Ended
Jun. 30, 2013
STOCK OPTIONS AND WARRANTS [Abstract]
Summary of options
A summary of options for the years ended June 30, 2013 and 2012 is shown below:
 
 
 
June 30 2013
 
 
June 30 2012
 
 
 
Number of Shares
 
 
Weighted-Average Exercise
Price
 
 
Number of Shares
 
 
Weighted-Average Exercise
Price
 
Outstanding at beginning of year
 
 
4,083,970
 
 
$
0.58
 
 
 
4,794,270
 
 
$
0.57
 
Granted
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Exercised
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Forfeited
 
 
(911,153
)
 
 
-
 
 
 
-
 
 
 
-
 
Expired
 
 
(503,080
)
 
 
-
 
 
 
(710,300
)
 
 
0.82
 
Outstanding at end of year
 
 
2,669,737
 
 
$
0.60
 
 
 
4,083,970
 
 
$
0.58
 
Exercisable at end of year
 
 
-
 
 
 
 
 
 
 
4,083,970
 
 
 
 
 
Available for issuance at end of year
 
 
-
 
 
 
 
 
 
 
-
 
 
 
 
 
Summary of warrants granted, exercised, canceled and outstanding
Note: Some options expired and some options were forfeited during the year ended June 30, 2013.  The following is a summary of warrants granted, exercised, canceled and outstanding involving the grants in the periods ended June 30, 2013 and 2012.
 
 
 
June 30 2013
 
 
 
 
June 30 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Shares
 
 
Weighted-Average Exercise
Price
 
 
Number of Shares
 
 
Weighted-Average Exercise
Price
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
 
 
947,994
 
 
$
0.48
 
 
 
974,920
 
 
$
0.47
 
Granted
 
 
-
 
 
 
-
 
 
 
10,714
 
 
 
0.02
 
Exercised
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Expired
 
 
(13,410
)
 
 
0.67
 
 
 
(37,640
)
 
 
0.96
 
Outstanding at end of year
 
 
934,584
 
 
$
0.36
 
 
 
947,994
 
 
$
0.48
 
Exercisable at end of year
 
 
934,584
 
 
 
 
 
 
 
947,994
 
 
 
 
 
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INCOME TAXES (Tables)
12 Months Ended
Jun. 30, 2013
INCOME TAXES [Abstract]
Provision for income taxes
The (provision) benefit for income taxes consists of the following:
 
 
 
2013
 
 
2012
 
Current
 
$
-
 
 
$
-
 
Deferred
 
 
-
 
 
 
-
 
 
 
$
-
 
 
$
-
 
Deferred tax assets
Deferred tax assets for June 30, 2013 and 2012 consist of the following:
 
 
2013
 
 
2012
 
 
 
 
 
 
Deferred tax asset (liability):
 
 
 
 
Depreciation and amortization
 
$
(50,538
 
)
 
$
7,985
 
Stock based compensation
 
 
2,980,409
 
 
 
3,134,667
 
Net operating loss carry forward
 
 
6,037,629
 
 
 
5,709,372
 
Interest accrual
 
 
500,288
 
 
 
339,934
 
Research tax credit
 
 
7,203
 
 
 
7,203
 
Less: valuation allowance
 
 
(9,474,991
)
 
 
(9,199,161
)
Deferred tax asset:
 
$
-
 
 
$
-
 
Reconciliation of income tax at the statutory rate to the Company's effective tax rate
A reconciliation of income tax at the statutory rate to the Company's effective tax rates for the periods ended June 30, 2013 and 2012 is as follows:
 
 
 
2013
 
 
2012
 
 
 
 
 
 
Federal Income tax at statutory rate of 34%
 
$
(242,445
)
 
$
(573,547
)
State tax, net of federal benefit
 
 
(25,775
)
 
 
(52,636
)
Other
 
 
(7,609
)
 
 
33,349
 
Valuation allowance
 
 
275,829
 
 
 
592,834
 
 
 
$
-
 
 
$
-
 
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NOTES PAYABLE (Tables)
12 Months Ended
Jun. 30, 2013
NOTES PAYABLE [Abstract]
Long-Term Notes
 
 
 
 
Maturity
  
Interest
Rate
  
Conversion Price
  
June 30, 2013
  
June 30, 2012
 
Related Party
 
  
  
  
  
 
Senior Convertible Note
 
2013
   
8
%
 
$
0.60
  
$
1,053,000
  
$
1,053,000
 
Accrued Interest
              
274,078
   
189,834
 
Total
              
1,327,078
   
1,242,834
 
Less current portion
              
1,327,078
   
-
 
Total long-term
              
-
   
1,242,834
 
 
                    
Others
                    
Senior Convertible Note
 
2014
   
8
%
 
$
0.50
   
150,000
   
150,000
 
Senior Convertible Note
  
2014
   
8
%
 
$
0.50
   
100,000
   
100,000
 
Acrued interest
              
4,891
   
4,986
 
Total
              
254,891
   
254,986
 
Less current portion
              
254,891
   
-
 
Total long-term
              
-
   
254,986
 
 
                    
Related Party
                    
Note Payable
  
2013
   
8
%
      
59,155
   
89,155
 
Accrued interest
              
18,776
   
12,870
 
Total
              
77,931
   
102,025
 
Less current portion
              
77,931
   
30,000
 
Total long-term
              
-
   
72,025
 
 
                    
Related Party
                    
Senior Convertible Note
  
2013
   
6-8
%
 
$
.18-.74
   
3,547,580
   
3,547,580
 
Senior Convertible Note 2
      
8
%
 
$
.42-.63
   
375,000
   
375,000
 
Senior Convertible Note 3
      
8
%
 
$
0.60
   
600,000
   
600,000
 
Accrued interest
              
1,727,236
   
1,391,157
 
Total
              
6,249,816
   
5,913,737
 
Less current portion
              
6,249,816
   
-
 
Total long-term
              
-
   
5,913,737
 
 
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FAIR VALUE MEASUREMENTS (Tables)
12 Months Ended
Jun. 30, 2013
FAIR VALUE MEASUREMENTS [Abstract]
Fair value of assets and liabilities measured on a recurring basis
The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2013
 
 
 
  
2013
  
  
  
2012
  
 
 
 
Carrying
  
  
  
Carrying
  
  
 
 
 
Value
  
Level 1
  
Level 2
  
Value
  
Level 1
  
Level 2
 
Financial Liabilities
 
  
  
  
  
  
 
Convertible notes payable (2)
 
$
7,831,785
   
-
  
$
7,757,621
  
$
7,155,493
   
-
  
$
6,985,595
 
Total financial liabilities
 
$
7,831,785
   
-
  
$
7,757,621
  
$
7,155,493
   
-
  
$
6,985,595
 
 
(1) Cash Equivalents
 
      The Company's cash equivalents include short-term investments, which are money market funds. Since these are short-term highly liquid investments with original maturities of three months or less at the date of purchase, they present negligible risk of changes in value due to changes in interest rates. These short-term investments are recorded at fair value on the Company's balance sheet based on quoted market prices and observable market inputs.
 
(2) Convertible Notes Payable
 
         As fully described in Note 8, the Company's convertible notes payable are long-term debts with fixed interest rates and the conversion rates at market at the time the funds were received.  In addition, most of these notes are collateralized by the Company's assets and revenues. Further, the debt holders are major shareholders and an officer. The Company estimates the fair value of the convertible notes for disclosure purposes by discounting the future cash flows using rates of debts that management believes are similar in terms and maturity.  The Company's short-term convertible note payable is approximate market value.
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DESCRIPTION OF BUSINESS (Details)
Jun. 30, 2013
Technology
DESCRIPTION OF BUSINESS [Abstract]
Number of core technologies 3
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Accounts Receivable and Allowance for Doubtful Accounts
Allowance for Doubtful Accounts $ 0 $ 200,000
Earnings Per Share [Abstract]
Anti-dilutive common stock equivalents excluded from the calculation of diluted earnings per share (in shares) 16,697,440 15,874,774
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PROPERTY AND EQUIPMENT (Details) (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Property and Equipment
Less: accumulated depreciation $ (61,962) $ (60,848)
Net property and equipment 3,182 1,084
Depreciation expense 1,114 2,308
Computer Equipment [Member]
Property and Equipment
Property and equipment, gross 30,935 28,990
Equipment [Member]
Property and Equipment
Property and equipment, gross $ 34,209 $ 32,942
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INTANGIBLE ASSETS (Details) (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets $ 58,460 $ 0
Amortized Intangible Assets
Gross amount 1,082,040 1,021,480
Accumulated amortization (699,182) (604,811)
Aggregate Amortization Expense
Gross amount 35,910 61,890
License Agreement for MMP Inhibitors [Member]
Finite-Lived Intangible Assets [Line Items]
Number of inventors for the rights to the license agreement 2
Sub Licensed rights with the University of Florida Research Foundation [Member]
Finite-Lived Intangible Assets [Line Items]
Royalty rate, first tier (in hundredths) 3.00%
Net sales, first threshold, maximum 10,000,000
Royalty rate, second tier (in hundredths) 1.80%
Net sales, second threshold, minimum 10,000,000
Terms of the sublicense agreement In November 2002, the Company and the University of Florida Research Foundation (the "University") entered into an agreement whereby the University gave the Company exclusive sub-license rights to the use of its patents and patent applications from the effective date of the agreement until the earlier of the date that no licensed patents remain enforceable patents or the payment of earned royalties ceases more than three calendar quarters.
Regents of the University of Michigan [Member]
Finite-Lived Intangible Assets [Line Items]
Royalty rate, first tier (in hundredths) 4.00%
Royalty rate on sublicense granted by the Company (in hundredths) 20.00%
Initial license fees 80,000
License fees due in first year 50,000
License fees due in second year 50,000
License fees due in third year 75,000
License fees due in fourth year and thereafter 100,000
Intrinsically Bactericidal Absorbent Dressing And Method Of Fabrication, Patents [Member]
Amortized Intangible Assets
Gross amount 35,470
License Agreement [Member]
Amortized Intangible Assets
Gross amount 619,675 648,123
Accumulated amortization (525,282) (604,811)
Patent In Process [Member]
Amortized Intangible Assets
Gross amount 462,365 373,357
Accumulated amortization $ (173,900) $ 0
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COMMITMENTS (Details) (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
COMMITMENTS [Abstract]
Rent expense $ 27,348 $ 27,380
Future minimum payments on operating lease [Abstract]
2014 25,800
2015 15,050
Thereafter 0
Total $ 40,850
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STOCK OPTIONS AND WARRANTS (Details) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Nov. 13, 2007
Nov. 01, 2004
Mar. 04, 2001
Jun. 30, 2013
Stock Options [Member]
Jun. 30, 2012
Stock Options [Member]
Jun. 30, 2009
Stock Options [Member]
Jun. 30, 2008
Stock Options [Member]
Jun. 30, 2007
Stock Options [Member]
Jun. 30, 2006
Stock Options [Member]
Nov. 17, 2009
Stock Options [Member]
Oct. 27, 2008
Stock Options [Member]
Jun. 30, 2013
Stock Options [Member]
Tranche 6 [Member]
Jun. 30, 2013
Stock Options [Member]
Tranche 7 [Member]
Jun. 30, 2013
Stock Options [Member]
Tranche 8 [Member]
Oct. 27, 2008
Stock Options [Member]
Board Members [Member]
Tranche 7 [Member]
Nov. 17, 2009
Stock Options [Member]
Board Members [Member]
Tranche 8 [Member]
Sep. 25, 2007
Stock Options [Member]
Chief Executive Officer [Member]
Jun. 30, 2007
Stock Options [Member]
Board Members, Management Employees and Consultants [Member]
Tranche 6 [Member]
Jun. 30, 2008
Stock Options [Member]
Board Members, Management Employees and Consultants [Member]
Tranche 7 [Member]
Jun. 30, 2009
Stock Options [Member]
Board Members, Management Employees and Consultants [Member]
Tranche 8 [Member]
Jun. 30, 2006
Nonqualified Stock Options [Member]
Aug. 06, 2007
Nonqualified Stock Options [Member]
Chief Executive Officer [Member]
Jun. 30, 2007
Nonqualified Stock Options [Member]
Chief Executive Officer [Member]
Tranche 5 [Member]
Jun. 30, 2013
Nonqualified Stock Options [Member]
Chief Executive Officer [Member]
Tranche 5 [Member]
Apr. 18, 2008
Restricted Common Stock [Member]
Jun. 30, 2008
Restricted Common Stock [Member]
Consultants [Member]
Tranche 7 [Member]
Jun. 30, 2007
Restricted Common Stock [Member]
Board Members, Management Employees and Consultants [Member]
Tranche 6 [Member]
Jun. 30, 2013
Warrants [Member]
Jun. 30, 2012
Warrants [Member]
Jun. 30, 2009
Warrants [Member]
Jun. 30, 2008
Warrants [Member]
Jun. 30, 2007
Warrants [Member]
Jun. 30, 2006
Warrants [Member]
Oct. 27, 2008
Warrants [Member]
Jun. 30, 2008
Warrants [Member]
Consultants [Member]
Tranche 7 [Member]
Jun. 30, 2009
Warrants [Member]
Consultants [Member]
Tranche 8 [Member]
Nov. 17, 2009
Warrants [Member]
Consultants [Member]
Tranche 8 [Member]
Oct. 27, 2008
Warrants [Member]
Board Members, Management Employees and Consultants [Member]
Tranche 7 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares) 6,000,000 4,000,000 3,000,000
Number of shares vested on grant date (in shares) 464,102 115,428 484,056 99,977 240,302
Number of remaining shares vesting after date of grant (in shares) 566,357 871,000 148,571 465,000
Options, weighted average grant date fair value (in dollars per share) $ 0.48 $ 0.19 $ 0.32 $ 0.46
Warrants, weighted average grant date fair value (in dollars per share) $ 0.48 $ 0.19
Term of equity-based payment award 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years
Shares granted (in shares) 60,000 148,587
Fair value assumptions used in estimating fair value of options and warrants [Abstract]
Risk-free interest rate (in hundredths) 3.00%
Dividend yield (in hundredths) 0.00%
Expected volatility (in hundredths) 91.00%
Estimated life 5 years
Summary of options [Roll Forward]
Outstanding at beginning of period (in shares) 4,083,970 4,794,270
Granted (in shares) 0 0 1,074,666 1,335,102 681,785 1,452,167
Exercised (in shares) 0 0
Forfeited (in shares) (911,153) 0 110,000 475,938 325,215
Expired (in shares) 503,080 (503,080) (710,300)
Outstanding at end of period (in shares) 2,669,737 4,083,970
Exercisable at end of period (in shares) 0 4,083,970
Available for issuance at end of period (in shares) 0 0
Options, weighted-average exercise price [Roll Forward]
Outstanding at beginning of year (in dollars per share) $ 0.58 $ 0.57 $ 0.74 $ 0.75
Granted (in dollars per share) $ 0 $ 0
Exercised (in dollars per share) $ 0 $ 0
Forfeited (in dollars per share) $ 0 $ 0
Expired (in dollars per share) $ 0 $ 0.82
Outstanding at end of year (in dollars per share) $ 0.6 $ 0.58 $ 0.42 $ 0.2 $ 0.77 $ 0.74 $ 0.75
Non-option equity instruments, number of shares [ Roll Forward]
Outstanding at beginning of period (in shares) 947,994 974,920
Granted (in shares) 0 10,714 705,302 248,564
Exercised (in shares) 0 0
Expired (in shares) (13,410) (37,640)
Outstanding at end of period (in shares) 934,584 947,994
Exercisable at end of period (in shares) 934,584 947,994
Equity instruments other than options, weighted-average exercise price [Roll Forward]
Outstanding at beginning of period (in dollars per share) $ 0.48 $ 0.47
Granted (in dollars per share) $ 0 $ 0.02
Exercised (in dollars per share) $ 0 $ 0
Expired (in dollars per share) $ 0.67 $ 0.96
Outstanding at end of period (in dollars per share) $ 0.36 $ 0.48
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INCOME TAXES (Details) (USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
INCOME TAXES [Abstract]
Start-up costs capitalized for tax purposes $ 357,989
Amortization period of capitalized start-up costs (in months) 60 months
Federal income tax rate (in hundredths) 34.00%
State income tax rate (in hundredths) 5.50%
(Provision) Benefit for Income Tax [Abstract]
Current 0 0
Deferred 0 0
(Provision) benefit for income taxes 0 0
Deferred tax asset (liability):
Depreciation and amortization (50,538) 7,985
Stock based compensation 2,980,409 3,134,667
Net operating loss carry forward 6,037,629 5,709,372
Interest accrual 500,288 339,934
Research tax credit 7,203 7,203
Less: valuation allowance (9,474,991) (9,199,161)
Deferred tax asset 0 0
Income Tax Reconciliation [Abstract]
Federal Income tax at statutory rate (242,445) (573,547)
State tax, net of federal benefit (25,775) (52,636)
Other (7,609) 33,349
Valuation allowance 275,829 592,834
(Provision) benefit for income taxes 0 0
Net operating loss carryforward $ 16,000,000
Expiration year of net operating loss carryforward 2017
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NOTES PAYABLE (Details) (USD $)
12 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Nov. 17, 2009
Jun. 30, 2013
Senior Convertible Note 0.60 [Member]
Related Party [Member]
Jun. 30, 2012
Senior Convertible Note 0.60 [Member]
Related Party [Member]
Mar. 31, 2010
Senior Convertible Note 0.60 [Member]
Major Shareholder [Member]
Jun. 30, 2013
Senior Convertible Note 0.50 1[Member]
Others [Member]
Jun. 30, 2012
Senior Convertible Note 0.50 1[Member]
Others [Member]
Jun. 30, 2013
Senior Convertible Note 0.50 2[Member]
Others [Member]
Jun. 30, 2012
Senior Convertible Note 0.50 2[Member]
Others [Member]
Mar. 31, 2010
Senior Convertible Note 0.50 Total [Member]
Others [Member]
Note
Jun. 30, 2013
Senior Convertible Note 0.50 Total [Member]
Others [Member]
Jun. 30, 2012
Senior Convertible Note 0.50 Total [Member]
Others [Member]
Mar. 15, 2010
Note Payable [Member]
Largest Shareholder [Member]
May 12, 2009
Note Payable [Member]
Largest Shareholder [Member]
Feb. 26, 2009
Note Payable [Member]
Largest Shareholder [Member]
Sep. 12, 2008
Note Payable [Member]
Largest Shareholder [Member]
May 17, 2008
Note Payable [Member]
Largest Shareholder [Member]
Feb. 11, 2008
Note Payable [Member]
Largest Shareholder [Member]
Oct. 30, 2007
Note Payable [Member]
Largest Shareholder [Member]
Jun. 14, 2007
Note Payable [Member]
Largest Shareholder [Member]
Sep. 30, 2003
Note Payable [Member]
Largest Shareholder [Member]
Jun. 30, 2013
2013 Senior Convertible Note [Member]
Related Party [Member]
Jun. 30, 2012
2013 Senior Convertible Note [Member]
Related Party [Member]
Jun. 30, 2013
2013 Senior Convertible Note [Member]
Related Party [Member]
Minimum [Member]
Jun. 30, 2013
2013 Senior Convertible Note [Member]
Related Party [Member]
Maximum [Member]
Jun. 30, 2013
Total of 4 Prior Senior Convertible Notes [Member]
Officer [Member]
Jun. 30, 2012
Total of 4 Prior Senior Convertible Notes [Member]
Officer [Member]
Dec. 16, 2010
Total of 4 Prior Senior Convertible Notes [Member]
Officer [Member]
Note
Jun. 30, 2011
2009 Senior Convertible Note 3 0.50CP [Member]
Largest Shareholder [Member]
Jun. 30, 2013
Total of 2009 Senior Convertible Note 2 [Member]
Related Party [Member]
Jun. 30, 2012
Total of 2009 Senior Convertible Note 2 [Member]
Related Party [Member]
Jun. 30, 2013
Total of 2009 Senior Convertible Note 2 [Member]
Related Party [Member]
Minimum [Member]
Jun. 30, 2013
Total of 2009 Senior Convertible Note 2 [Member]
Related Party [Member]
Maximum [Member]
Aug. 27, 2009
Total of 2009 Senior Convertible Note 2 [Member]
Largest Shareholder [Member]
Aug. 14, 2009
Total of 2009 Senior Convertible Note 2 [Member]
Largest Shareholder [Member]
Aug. 12, 2009
Total of 2009 Senior Convertible Note 2 [Member]
Largest Shareholder [Member]
Jun. 30, 2013
Total of 2009 Senior Convertible Note 3 [Member]
Related Party [Member]
Jun. 30, 2012
Total of 2009 Senior Convertible Note 3 [Member]
Related Party [Member]
Jun. 30, 2013
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Feb. 26, 2010
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Dec. 14, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Nov. 17, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Nov. 12, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Oct. 28, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Oct. 14, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Sep. 23, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Sep. 11, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Sep. 08, 2009
Total of 2009 Senior Convertible Note 3 [Member]
Largest Shareholder [Member]
Jun. 30, 2013
Total of 2013 and 2009 Senior Convertible Note [Member]
Related Party [Member]
Jun. 30, 2012
Total of 2013 and 2009 Senior Convertible Note [Member]
Related Party [Member]
Jun. 30, 2013
Long Term Notes Payable [Member]
Note Payable [Member]
Related Party [Member]
Jun. 30, 2012
Long Term Notes Payable [Member]
Note Payable [Member]
Related Party [Member]
Debt Instrument [Line Items]
Maturity date Dec 31, 2013 Jun 30, 2014 Jun 30, 2014 Jun 30, 2014 Dec 31, 2013 Dec 31, 2013
Interest rate (in hundredths) 8.00% 8.00% 8.00% 8.00% 6.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Conversion price (in dollars per share) $ 0.6 $ 0.5 $ 0.5 $ 1 $ 0.18 $ 0.74 $ 0.5 $ 0.42 $ 0.63 $ 0.6 $ 0.6
Long-term Debt $ 1,053,000 $ 1,053,000 $ 150,000 $ 150,000 $ 100,000 $ 100,000 $ 3,547,580 $ 3,547,580 $ 100,000 $ 375,000 $ 375,000 $ 600,000 $ 600,000 $ 59,155 $ 89,155
Accrued interest 274,078 189,834 4,891 4,986 13,155 1,727,236 1,391,157 18,776 12,870
Total 1,327,078 1,242,834 254,891 254,986 113,155 6,249,816 5,913,737 77,931 102,025
Less current portion 1,327,078 0 254,891 0 6,249,816 0 77,931 30,000
Total long-term 0 1,242,834 0 254,986 0 5,913,737 0 72,025
Face amount of debt 250,000 1,053,000 215,000 375,000 175,000 150,000 485,000 370,000 300,000 208,955 1,268,625 135,000 45,000 50,000 35,000 30,000 50,000 175,000 50,000 100,000 125,000 25,000 45,000
Cash proceeds from debt 600,164
Notes reduction 375,000
Increase (decrease) in interest payable, net 426,133 429,900 77,836
Convertible debt beneficial conversion feature 859,950 22,500 215,500
Number of senior convertible notes issued 2 4
Principal payments by month for the first twelve months 1,000
Principal payments by month for the second twelve months 2,000
Principal payments by month for the third twelve months 3,000
Aggregate principal amount paid to officer $ 30,000 $ 18,000
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FAIR VALUE MEASUREMENTS (Details) (Fair Value, Measurements, Recurring [Member], USD $)
Jun. 30, 2013
Jun. 30, 2012
Financial Liabilities [Abstract]
Convertible notes payable $ 7,831,785 [1] $ 7,155,493 [1]
Total financial liabilities 7,831,785 7,155,493
Level 1 [Member]
Financial Liabilities [Abstract]
Convertible notes payable 0 [1] 0 [1]
Total financial liabilities 0 0
Level 2 [Member]
Financial Liabilities [Abstract]
Convertible notes payable 7,757,621 [1] 6,985,595 [1]
Total financial liabilities $ 7,757,621 $ 6,985,595
[1] Convertible Notes Payable As fully described in Note 8, the Company's convertible notes payable are long-term debts with fixed interest rates and the conversion rates at market at the time the funds were received. In addition, most of these notes are collateralized by the Company's assets and revenues. Further, the debt holders are major shareholders and an officer. The Company estimates the fair value of the convertible notes for disclosure purposes by discounting the future cash flows using rates of debts that management believes are similar in terms and maturity. The Company's short-term convertible note payable is approximate market value.
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RELATED PARTY TRANSACTIONS (Details) (Director [Member], USD $)
12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Director [Member]
Related Party Transaction [Line Items]
Per month expense from transaction with a related party $ 2,500
Amount due to a related party $ 82,500 $ 75,000
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EXTINGUISHMENT OF LICENSE PAYABLE (Details) (USD $)
12 Months Ended
Jun. 30, 2013
EXTINGUISHMENT OF LICENSE PAYABLE [Abstract]
Extinguishment of license payable $ 160,000
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