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Note 1. Presentation: Liquidity and Capital Resources (Policies)
9 Months Ended
Mar. 31, 2014
Policies  
Liquidity and Capital Resources

Liquidity and Capital Resources

 

For the three months ended March 31, 2014 and 2013, the Company incurred a net loss of $161,752 and $61,121, respectively. The Company incurred a net loss of $225,441 for the nine months ended March 31, 2014 compared to net income of $28,718 for the nine months ended March 31, 2013.  The Company had an accumulated deficit of $1,095,432 and $869,991 at March 31, 2014 and June 30, 2013, respectively. As discussed further in Note 7, we were not in compliance with one of the loan covenants.  If the line of credit is not renewed, we will need to find additional sources of financing. In order to assure adequate availability of operating capital under our line of credit and to more fully take advantage of accumulated deferred tax assets, we have undertaken a strategy to sell the building that currently houses our operations in Utah and to lease back the premises.  Management is confident that the sale of this property will generate significant resources to reduce debt and generate a significant profit in the quarter in which the transaction occurs.  The amount of cash to be generated is expected to be between $3,000,000 and $4,000,000 which will be used to meet debt obligations of the Company and will generate a profit of $2,500,000 to $3,000,000 which will be sufficient to utilize the majority, if not all of our deferred tax assets.  Failure to successfully implement these strategies could result in a full valuation allowance being recorded on the Company’s deferred tax assets and failure to obtain additional financing would have a material adverse effect on our business operations.  There is no assurance that the Company will be able to successfully complete this transaction.