12. Related Party Transactions

6 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Notes payable at December 31, 2012 included a $28,000 unsecured convertible note, bearing interest at 8% issued to the Company’s Chief Financial Officer for additional working capital. See Form 10-K for the fiscal year ended June 30, 2012 for additional discussion of the related party note. During the six months ended December 31, 2012, the Company accrued approximately $1,100 in interest expense related to the note and at December 31, 2012 had a total of $5,100 of accrued but unpaid interest expense.

On October 10, 2011, the Company entered into employment agreements with the Company’s Chief Executive Officer and Chief Financial Officer. The agreements have severance provisions and are effective through December 31, 2014. In addition, the Company and the parties had agreed to defer certain compensation to future years. At September 30, 2012, all deferred amounts had been paid. Prior to December 31, 2011, the Company also agreed to defer the January 1, 2012 salary reductions discussed in the agreements due to anticipated increased business activity. The effective date of the salary reduction is currently on hold and will be reviewed on a quarterly basis. Copies of the agreements were attached as exhibits to the Form 10-K filed for the fiscal year ended June 30, 2011.

The Company agreed to amend the ACC loan agreement on August 14, 2012 increasing the maximum amount available under the loan from $300,000 to $400,000. ACC had drawn an additional $50,000 of the available line as of September 30, 2012 at which point the note balance outstanding under the agreement was $350,000. During the quarter ended December 31, 2012, ACC repaid $50,000 on the note reducing the note balance to $300,000. The additional availability was granted under similar terms and conditions to the original loan and was to be used to open an office in Los Angeles, CA. Alanco also received an additional warrant to acquire 60,000 units of ACC at $1.25 per unit. See Note 9 – Investments in the Company’s Form 10-K for the fiscal year ended June 30, 2012 for additional discussion of the ACC investment. In addition to interest, the Company bills ACC for accounting services provided. At December 31, 2012, other receivables included approximately $5,700 of interest receivable related to the ACC loan receivable and $15,000 of billings related to the performance of accounting services.