Note 3 - Accounts and Note Payable - Related Party

12 Months Ended

Jun. 30, 2015

Notes

Note 3 - Accounts and Note Payable - Related Party

NOTE 3 - ACCOUNTS AND NOTE PAYABLE - RELATED PARTY

As of June 30, 2015 and 2014, $71,262 and $8,661, respectively, was due to 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 and due on demand.  

A loan of $10,000 due to Mr. Hooper is 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 twelve months ended June 30, 2015.   

NOTE 4 – ACCRUED RENT DUE – RELATED PARTY

Operating Lease Obligation to Related Party

Through its subsidiary, Okra Energy Inc., 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.  We will require approximately $1 million and up to 12 months to complete remediation and building refit prior to being able to re-lease the warehouse building to customers.  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 June 30, 2015 and June 30, 2014, the Company owed $400,000 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 twelve months ended June 30, 2015, the Company recorded $590,770 of rent expense and a deferred rent liability as of June 30, 2015 of $535,384.  As of June 30, 2015 and 2014, the Company owed $400,000 and $30,000, respectively, under this lease obligation. In August, 2015, the lease was assigned to and assumed by Crown Laboratory, Inc.

At June 30, 2015, the Company’s minimum operating lease commitments for the next five fiscal years are summarized below.

Years Ending June 30,		Amount
2016	$	490,000
2017		610,000
2018		730,000
2019		840,000
2020 and beyond		770,000
Total	$	3,440,000