Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

Related Party Transactions
12 Months Ended
Jun. 30, 2015
Related Party Transactions [Abstract]  
Related Party Transactions
10. Related Party Transactions The Company received cash from Mr. Folkson, the Company’s Chief Executive Officer and related party, $15,000 and $26,350 in 2015 and 2014, respectively, to supplement the Company’s working capital. These short term advances have all been repaid.


    On May 27, 2015, Mr. Folkson converted the outstanding note payable of $134,517 into 538,068 shares of the Company’s $0.001 par value common stock.
      The amounts previously included in short term borrowings – related party of $0 and 134,517 in 2015 and 2014, respectively had represented a Note Payable which was to be repayable upon Mr.  Folkson providing the borrower with written notice of demand, according to certain terms. However Mr. Folkson was not permitted to demand repayment of the Note until the Company was profitable, and in a positive cash flow position. At that time, Mr. Folkson would have been allowed to demand repayment. The Company had agreed to make payments equal to 10% of the monthly positive cash flow of the Company until balance would have been paid in full. Subsequently, on May 27, 2015, Mr. Folkson converted his note into shares of the Company’s stock.
    Included in short-term borrowings - related party is $5,000 which is a short term advance to the company which is expected to be repaid during the first quarter 2016.
    During the third quarter 2015, Mr. Folkson began accruing a consulting fee of $6,000 per month which the aggregate of $36,000 is reflected in professional fees and presented in the accrued expenses – related party.

The consulting agreement has a term of one year, and then converts into a month to month effective January 1, 2016. This agreement can be terminated after the initial term, with thirty (30) days notice by either party.

    Imputed interest expense accrued on the converted note payable to Mr. Folkson totaled $9,894 and $10,911 for the years ended June 30, 2015 and 2014, respectively.