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Deferred Compensation
3 Months Ended
Sep. 30, 2011
Deferred Compensation [Abstract] 
Deferred Compensation

5.   DEFERRED COMPENSATION:

 

As of September 30, 2011, the Company owed Brightcap Capital Ltd. ("Brightcap"), for services provided by Dominic Bassani, the Company's Chief Executive Officer ("CEO"), deferred compensation of $315,625.  Of the $315,625, $150,000 of the deferred compensation was earned by Brightcap from January 1, 2009 through June 30, 2009 ("2009 Deferred Compensation") and $130,000 was earned by Brightcap from May 1, 2011 through September 30, 2011 ("2011 Deferred Compensation").  The Company entered into an agreement with Brightcap in June 2009, whereby the 2009 Deferred Compensation earned by Brightcap totaling $150,000, was made due July 1, 2010 and convertible until July 1, 2010 into the Company's restricted common stock, at Brightcap's option, at a price of $1.50 per share, the fair value of the shares at the date of the agreement.  As the conversion price of $1.50 per share approximated the fair value of the shares at the time the conversion agreement was entered into, no beneficial conversion feature existed.  During June 2010, the Company entered into an extension agreement with Brightcap pursuant to which the maturity date and the conversion date of the 2009 Deferred Compensation were extended to July 1, 2011.  As consideration for the extension, an additional $15,000 principal was added to the obligation and the 2009 Deferred Compensation accrues interest commencing July 1, 2010 at 10% per annum.  During June 2011, the Company and Brightcap agreed to extend the maturity date and the conversion date of the 2009 Deferred Compensation until July 1, 2012. As of September 30, 2011, the 2009 Deferred Compensation and accrued interest total $185,625.  Interest expense for the three months ended September 30, 2011 and 2010 was $4,125 for both periods.  The 2011 Deferred Compensation owed Brightcap of $130,000 is non-interest bearing.    The Company also owes Mark A. Smith, the Company's President deferred compensation of $86,204 as of September 30, 2011. 

 

Brightcap and Mr. Smith have the right, soley at their election, to utilize their deferred compensation earned from May 1, 2011 forward, to purchase Units at a price of $2.50 per Unit. See Note 7.