6. Advances by Affiliates
||The Company received cash from Mr. Folkson, the Companys Chief Executive
Officer and related party, $22,350 during the nine months ended March 31, 2014, to supplement the Companys working capital
these advances are recorded in the line item; Advance- related party. The balances are included in short term borrowings
related party balances of $134,517 and 134,517 at March 31, 2014 and June 30, 2013, respectively, is a Note 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. 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 advance- related party is $22,350 which is a short term advance
to the company of which $15,000 was remitted back to Mr. Folkson during the fourth quarter with the balance expected to be repaid
prior to the close of 2014 fiscal year.
Imputed interest expense accrued
on the note payable to Mr. Folkson totaled $8,191 and $7,819 for the nine months ended March 31, 2014 and 2013, respectively.