Loans from Directors and Officer - Related Parties

Loans from Directors and Officer at March 31, 2014 and June 30, 2013 were $156,149 and $130,689, respectively. The loans bear interest at rates of prime + 2% (5.25% at March 31, 2014) and are all past their due date and in default. Included in the above loan amounts is accrued interest of $3,316 as of March 31, 2014.

During the nine months ended March 31, 2014, the officer of the Company advanced approximately  $68,000 to pay corporate expenses and was repaid for current and prior advances approximately $46,000 during the same period. The balance due this officer at March 31, 2014 is included in the above $156,149.

Loans from Unrelated Parties

Loans from two unrelated parties were received during fiscal 2013 totaling $24,042. They bear interest at 10% and as of March 31, 2014 were past their due date and in default. Accrued interest was $838 at March 31, 2014.

Loans from two unrelated parties were received during the three months to March 31, 2014 totaling $10,542. They bear interest at 10%.  Accrued interest was $186 at March 31, 2014.

A loan from an unrelated party with a September 30, 2013 balance of $27,963 was exchanged for a convertible debenture as discussed below in note 5.