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9. Advances by Affiliates
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The Company received
cash from Mr. Folkson, the Company’s Chief Executive Officer and related party, $26,350 and $7,750 in 2014 and 2013, respectively,
to supplement the Company’s working capital these short term advances have all been repaid. The amounts included in short
term borrowings – related party of $134,517 and 134,517 in 2014 and 2013, respectively represent a Note Payable which is
repayable upon Mr. Folkson providing the Borrower with written notice of demand, according to certain terms. However Mr. Folkson
may not demand repayment of the Note until the Company is profitable, and in a positive cash flow position. At that time, Mr. Folkson
may demand repayment. Company agrees to make payments equal to 10% of the monthly positive cash flow of the Company until balance
is paid in full. |
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Imputed interest expense
accrued on the note payable to Mr. Folkson totaled $10,911 and $10,516 for the years ended June 30, 2014 and 2013, respectively. |
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