9. Advances by Affiliates

·         The Company received cash from Mr. Folkson, the Company’s Chief Executive Officer and related party, in the amount of $15,000 during the nine months ended March 31, 2015, to supplement the Company’s working capital. These advances are recorded in the line item; Advance- related party. The amounts included in short term borrowings – related party balances of $134,517 and $134,517 at March 31, 2015 and June 30, 2014, respectively, is a Note and is repayable to Mr. Folkson 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. The Company agrees to make payments equal to 10% of the monthly positive cash flow of the Company until balance is paid in full.

·         Included in short-term borrowings - related party is $15,000 which is a short term advance to the Company which is expected to be repaid during the fourth quarter 2015.

·         During the third quarter 2015, Mr. Folkson began accruing a consulting fee of $6,000 per month which the aggregate of $18,000 is reflected in professional fees and presented in the accrued expenses – related party.

·         Imputed interest expense accrued on the note payable to Mr. Folkson totaled $8,191 and $8,191 for the nine months ended March 31, 2015 and 2014, respectively.