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Note 16 - Industry Risks
12 Months Ended
Jun. 30, 2014
Disclosure Text Block Supplement [Abstract]  
Additional Financial Information Disclosure [Text Block]

NOTE 16 – INDUSTRY AND COMPANY RISKS – GOING CONCERN


The Company is not current in paying all the costs and expenses of the parent company. Further, it is unlikely that the Company will be able to continue to pay the dividends required to the Series A, B, C and D preferred shareholders. Although dividends were paid as required through June 30, 2014 the Company will not make the dividend payment due by October 15, 2014 in the amount of $133,500. Should the Company miss any two dividend payments, the Company would be in default of the agreements and the preferred shareholders can exercise certain rights including increasing their board representation to board majority. These factors give rise to uncertainty about the Company’s continuing as a going concern.


In addition, the Company is dependent on the operations of its wholly owned subsidiary PSMI to generate the cash needed to meet the expenses of the Company. The Mortgage industry has experienced significant change over the past several years including increased regulatory and compliance requirements, increases in historically low interest rates and the tightening of credit standards. All of this has led to flat origination volumes and a highly competitive recruiting environment for qualified and successful loan originators. These factors have also made it increasingly difficult for the Company’s wholly owned subsidiary PSMI to execute its recruiting strategies at the pace originally contemplated by management. The Company’s plan for sustainability involves cutting cost throughout the organization while growing revenue at PSMI to help support the costs and expenses of the parent.


Due to the full implementation of the fully delegated platform business model and cost cutting efforts the Company generated an operating profit in July 2014. Even with these significant improvements in operations there exists doubt that anticipated growth will occur at the rate necessary to generate the additional cash required to service the obligations of the parent Company. Management has implemented a fully delegated lending platform that promises increased revenue, at the same time reducing costs throughout the organization including ceasing operations in locations that were not generating a profit. The combined loss of the offices where operations have ceased was greater than $1,500,000 during the year ended June 30, 2014.


Management is continuing to implement cost reduction strategies, which may include ending its status as a fully reporting company. Management is also pursuing an additional capital raise which if successful, would be highly dilutive to the holdings of the current common shareholders.


There is no certainty that the Company will be successful in these initiatives in a timely enough manner to curtail the continuing consolidated losses, resume payment of preferred dividends, and continue as a fully reporting company.