Loans from Directors and Officer - Related Parties

Loans from Directors and Officer at September 30, 2013 and June 30, 2013 were $138,817 and $130,689, respectively. The loans bear interest at rates of prime + 2% (5.25% at September 30, 2013) and are all past their due date and in default.

During the three months ended September 30, 2013, the officer of the Company advanced approximately  $25,000 to pay corporate expenses and was repaid approximately $21,000 during the same period.

Loans from Unrelated Parties

Loans from two unrelated parties were received during 2013 totaling $24,211. They bear interest at 10% and as of September 30, 2013 were past their due date and in default.

A loan from an unrelated party with a September 30, 2013 balance of $27,936 was exchanged for a convertible debenture as discussed below in note 5.