Note 3 - Advances - Related Party

9 Months Ended

Mar. 31, 2015

Notes

Note 3 - Advances - Related Party

NOTE 3 - ACCOUNTS PAYABLE - RELATED PARTY

As of March 31, 2015 and June 30, 2014, $81,262 and $8,661, respectively, was due the Company’s President and majority shareholder, Mr. Jay Hooper, for advances made to the Company to pay for operating expenses.  Advances of $71,262 are non-interest bearing, unsecured, and due on demand.  A loan of $10,000 is unsecured, due on demand, and bears interest at 4%.  In view of the Company’s limited operations and resources, Mr. Hooper did not receive any compensation from the Company for the nine months ended March 31, 2015.

NOTE 5 – ADVANCED RENT DUE – RELATED PARTY

Operating Lease Obligation to Related Party

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 2015.  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 lease is an operating lease. As of December 31, 2014 and June 30, 2014, the Company owed $210,000 and $30,000, respectively, under this lease obligation.  The Company recognizes rent expense on a straight-line basis over the entire lease period.  Accordingly, for the nine months ended December 31, 2014, the Company recorded $443,077 of rent expense and a deferred rent liability as of March 31, 2015 of $487,692 related to the free rent.  As of March 31, 2015 and June 30, 2014, the Company owed $300,000 and $30,000, respectively, under this lease obligation.