In September of 2009 the Company borrowed $20,326 in order
to purchase a truck. The note is secured by the truck, and bears 4.9% interest, with a 60 months repayment term. The
note balance at June 30, 2012 was $9,185.
On July 1, 2012, the truck and a trailer, with the combined
net basis of $13,393, were sold to our franchisee, and the balance of liability assigned to them. In the same transaction,
three painting machines, with the combined net basis of $5,922, were sold for $4,000. Remainder of the $6,000 cash deposit
received from the franchisee prior to June 30, 2012, was used for inventory.