10. LINE OF CREDIT
|12 Months Ended|
Jun. 30, 2014
|Line Of Credit|
|Line of credit||
Effective October 29, 2013, the Company entered into a revolving line of credit agreement in the amount of $250,000, which was increased to $500,000 on March 12, 2014. The line of credit is collateralized by all assets of the Company plus a $250,000 certificate of deposit owned by a stockholder of the Company who is also the guarantor for the line of credit. The Company agreed to issue the stockholder 50 million shares of common stock as consideration for providing the guarantee. The stock, valued at $500,000, has not been issued as of June 30, 2014 and is included in common stock payable on the accompanying consolidated balance sheets. In addition, the Company granted its Chief Executive Officer 50 million shares of common stock valued at $285,000, as consideration to the Chief Executive Officer to provide a personal guarantee to the stockholder for 50% of any loss that might be incurred under his guarantee. This stock has not been issued as of June 30, 2014 and is included in common stock payable on the accompanying consolidated balance sheets. The line carries interest at the Wall Street Journal Prime rate + 1.0% with a floor rate of 6.5% (6.5% at June 30, 2014). Interest is payable monthly with all outstanding principal and interest due on January 30, 2016.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef
No definition available.