PROMISSORY NOTES

3 Months Ended

Aug. 31, 2011

Notes to Financial Statements

PROMISSORY NOTES

Working Capital Loan. On June 30, 2011, we received a $250,000 line of credit for use in facilitating purchase orders we have received for our televisions. The line of credit is documented by a Promissory Note and Security Agreement to CC Fund, LLC, a Nevada limited liability company (the “Note”). Under the terms of the Note, we initially borrowed $250,000 which was used for procurement of necessary components for, and for the manufacture and delivery of, our SIGMAC-branded televisions. On August 24, 2011, we increased the maximum amount available under this loan to $350,000 and borrowed an additional $50,000. As of August 31, 2011, the principal balance owed was $300,000 and accrued interest owed was $7,583. On September 30, 2011 the due date of this short-term financing was extended to October 31, 2011. The Note, as currently amended and extended, bears interest at a rate of one percent (1%) per month and is now due on or before the earliest of the following:

• Our receipt of equity funding in a total, cumulative amount of not less than $1,500,000; or
• Our receipt of gross revenues, less related Costs of Goods Sold, in an amount sufficient to pay the principal and interest then due and owing under the Note; or
• October 31, 2011.

At the option of the holder, the final due date of the Note may be extended for one or more additional terms of ninety (90) days upon written notice. The Note may be pre-paid in whole or in part at any time without penalty. The Note is secured by all of our assets, including inventory and accounts receivable.

We also owe $10,000 in the form of a non-interest bearing demand loan to a related party.