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Commitments and Contingencies
9 Months Ended
Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

On December 30, 2014, the Company entered into a one-year consulting agreement whereby the consultant would be paid with 1,600,000 shares of the Company’s common stock and cash payments of $10,000 per month. The Company is currently involved in a dispute regarding cash and share amounts owed. The Company maintains the agreements are not enforceable due to non-performance.

 

On July 17, 2015, the Board of Directors of the Company appointed Julie Young as the Company’s Chief Executive Officer, effective July 20, 2015. Ms. Young will serve as the Company’s principal executive officer in this position. As Chief Executive Officer, Ms. Young will be compensated as follows, as set forth in her offer letter dated as of July 17, 2015: (i) an annual salary of $282,000; (ii) the authorization of a grant of 2,000,000 shares of restricted common stock, which will vest immediately upon issuance; (iii) the right to receive an additional grant of 2,000,000 shares of restricted common stock upon the Company’s achievement of a five-day average share price of $0.15 per share; and (iv) eligibility to participate in the Company’s health and other benefit plans on the same terms and conditions as the Company’s other employees.  In the event that Ms. Young’s employment is terminated without cause, she resigns for good reason, or she is terminated within 18 months of a change in control, Ms. Young will receive a severance payment equal to one-year’s salary and will be eligible to participate in the Company’s benefit plans for one year from the date of termination.

 

On July 21, 2015, the Company entered into a Video Production Agreement with Coolfire Studios, LLC to produce 3,500 academic instruction videos. The per video cost is $530, with various payments scheduled over a one-year period.

 

During fiscal 2015, the Company entered into an Advisory Fee Agreement in connection with advisory, due diligence, and financing activities performed by the Advisor in connection with the transaction with Shenzhen.  The Company agreed to pay or issue to the Advisors (i) cash; (ii) Units; (iii) warrants to purchase shares of common stock; and (iv) additional cash and Units in the event any of the Investors exercised SPA Warrants received pursuant to the Securities Purchase Agreement.  The Advisory Fee Agreement ended September 24, 2015 after the Settlement Agreement and Mutual Release, fully described below was signed.

 

Effective February 2015, the Company entered into an Advisory Fee Agreement (the “Advisory Agreement”) with V3 Capital Partners, LLC pursuant to which V3 Capital Partners, LLC and certain of its affiliates (the “Advisors”) provided advisory, due diligence and financing activities performed by the advisors in connection with the transactions contemplated by the Securities Purchase Agreement. Pursuant to the Advisory Agreement, the Company agreed to pay or issue to the Advisors (i) cash; (ii) Units; (iii) warrants to purchase shares of common stock; and (iv) additional cash and Units in the event any of the Investors exercised Warrants received pursuant to the Securities Purchase Agreement.

 

Effective September 24, 2015, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with V3 Capital Partners, LLC, Scot Cohen, Oakway International Ltd., Oakway International and North Haven Equities (together the “V3 Affiliates”) and Guarav Malhotra, Richard Abbe, Jonathan Rudney, Matthew Hull and Kyle Pollack (together, the “Individuals” and together with the V3 Affiliates, the “Advisors”) modifying the terms of the Advisory Agreement as follows: (i) certain of the V3 Affiliates have agreed to forfeit and cancel all warrants previously issued to them pursuant to the Advisory Agreement and agreed to terminate all further rights to additional shares, warrants or other payments due under the Advisory Agreement; (ii) Mr. Cohen has agreed to (A) forfeit and cancel all warrants issued to him under the Securities Purchase Agreement and Advisory Agreement, other than A Warrants to purchase 3,078,572 shares of common stock upon the terms and conditions of the A Warrants as stated in the Securities Purchase Agreement, which were previously issued to him under the Securities Purchase Agreement, and (B) terminate all further rights to additional shares, warrants or other payments due under the Securities Purchase Agreement or Advisory Agreement; (iii) Oakway International Ltd. has agreed to forfeit and cancel all warrants received under the Advisory Agreement and terminate all further rights to additional shares, warrants or other payments due under the Securities Purchase Agreement or Advisory Agreement in exchange for (A) the right to retain A Warrants to purchase 2,857,143 shares of common stock upon the terms and conditions of the A Warrants as stated in the Securities Purchase Agreement, which were previously issued to it under the Securities Purchase Agreement, and (B) receipt of an additional A Warrant to purchase 221,428 shares of common stock upon the terms and conditions of the A Warrants as stated in the Securities Purchase Agreement; (iv) the Individuals will retain the warrants previously issued to them under the Advisory Agreement providing for rights to purchase an aggregate of 3,333,333 shares of common stock upon the same terms and conditions as provided in the Advisory Agreement and agreed to terminate all further rights to additional shares, warrants or other payments due under the Advisory Agreement; and (v) the Company agreed to pay the Advisors a total of $644,000.

 

Each of the parties to the Settlement Agreement has agreed to waive and release any and all claims relating to the Advisory Agreement and services provided by the Advisors thereunder.

 

As a result of the Settlement Agreement, the Company cancelled warrants to purchase a total of 85,378,078 shares of common stock, such that the Company’s total outstanding warrants held by all security holders as of December 31, 2015 provide for the rights to purchase an aggregate of 45,204,762 shares of common stock.

 

On October 12, 2015, the Company entered into a one-year contract for office services in Orlando, Florida at a cost of $129 per month.

 

On October 16, 2015, the Company entered into a Conversion of Accounts Payable Agreement with Krevolin & Horst, LLC (“Krevolin & Horst”) to settle approximately $350,000 in fees for legal services rendered to the Company for (1) a cash payment of $180,000, which was paid in full on October 19, 2015; (2) the issuance of 170,000 shares of its common stock; which were issued on March 10, 2016; and (3) on or before six months from October 16, 2015, a number of shares of its common stock equal to the quotient of $36,000 divided by either (a) the average closing price of the common stock for the 20 trading day period ending April 8, 2016 or (b) $0.05, whichever is greater.

 

On November 3, 2015, the Company’s Board of Directors appointed Mr. Michael Horn and Mr. David Dai to serve on the Company’s Board of Directors, each to serve to serve until the next annual meeting of the Company’s stockholders or until his successor is duly elected and qualified.