Note 3 - Accounts Payable - Related Party

12 Months Ended

Jun. 30, 2014

Notes

Note 3 - Accounts Payable - Related Party

NOTE 3 - ACCOUNTS PAYABLE - RELATED PARTY

As of June 30, 2014, the Company had outstanding accounts payable of $30,000 due to a limited liability company wholly owned by the Company’s President and majority shareholder, Mr. Jay Hooper, which represented a lease payment on an operating lease (see Note 5). 

NOTE 4 – ADVANCES - RELATED PARTY

As of June 30, 2014, $8,661 was due the Company’s President and majority shareholder, Mr. Jay Hooper, for advances made to the Company to pay for operating expenses.  The advances are non-interest bearing and due on demand.  In view of the Company’s limited operations and resources, Mr. Hand did not receive any compensation from the Company for the year ended June 30, 2014.

NOTE 5 – COMMITMENT AND CONTINGENCIES – RELATED PARTY

Operating Lease Obligations

The Company leases a warehouse in El Monte, California, which is owned by a single member limited liability company owned by the Company’s President and majority shareholder, which it plans to sublease in 2014.  The lease commenced December 2, 2013, terminates May 31, 2020, and requires monthly lease payments of $30,000 beginning June 1, 2014.  The monthly lease payment increases to $40,000 on June 1, 2015, $50,000 on June 1, 2016, $60,000 on June 1, 2017, and $70,000 on June 1, 2019.  The lease includes a period of free rent from December 2, 2013 to May 31, 2014.  The Company recognizes rent expense on a straight-line basis over the entire lease period.  Accordingly, for the period December 2, 2013 (Inception) to June 30, 2014, the Company recorded $344,615 of rent expense and a deferred rent liability of $314,615 related to the free rent.  The lease is an operating lease.    

At June 30, 2014, the Company’s minimum operating lease commitments for the next five fiscal years are summarized below.

Years Ending June 30,		Amount
2015	$	370,000
2016		490,000
2017		610,000
2018		730,000
2019 and beyond		1,610,000
Total	$	3,810,000