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4. Note Receivable
6 Months Ended
Dec. 31, 2014
Receivables [Abstract]  
Note Receivable

Note receivable of $373,000 and $409,000 at December 31, 2014 and June 30, 2014 respectively, represents a note due from American Citizenship Center, LLC (“ACC”),a related party. Under modifications made during October 2014, ACC and the Company amended the loan agreement to increase the loan amount to $388,000. The $373,000 balance at December 31, 2014 represents the outstanding amount drawn on the $388,000 loan amountwhich includes $9,000 of accounting fees for July through September 2014 and a $10,000 loan fee. In addition, the minimum monthly payments from September through December 2014 were reduced to $5,000. The minimum payment required starting in January 2015 returns to $25,000 and the entire loan balance is payable in full by the maturity date of August 31, 2015.

 

In January 2015, ACC and the Company again modified the loan agreement by revising the payment terms to require minimum monthly payments starting in January 2015to the greater of $5,000 or ten percent (10%) of the gross monthly revenue for such month. Based on the history of the note modifications, the recent modification hereto, and ACC’s history of an ability to make a certain level of payments, the Company has classified $60,000 of the note as current and $313,000 of the note as long-term.ACC is currently in compliance with all terms of the January 2015 amendment.

 

In early September 2014, President Obama made a commitment that he would act on immigration reform via “Executive Action” after the United States mid-term elections that occurred during early November 2014. In November 2014, the President made an announcement that expanded the previously established (2012) deferred action plan. ACC’s current business plan is designed to capitalize on the significant opportunity due to the expanded deferred action plan. No provision for collectability has been recorded as of December 31, 2014 as current ACC financial projections indicate the note will be paid under the amended terms by the maturity date of August 31, 2015.