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C. Note Receivable
6 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Note Receivable

Note receivable of $250,400 and $322,800 at December 31, 2015 and June 30, 2015, respectively, represents a note due from American Citizenship Center, LLC (“ACC”), a related party. At December 31, 2015, payments totaling $15,100 are in arrears, including principal and interest payments. In January 2016, ACC and the Company modified the loan agreement by deferring any principal payments to August 31, 2016, at which time minimum monthly payments of $10,000 are payable and continue through November 30, 2016. The minimum monthly payments are increased to $20,000 on December 31, 2016 and January 31, 2017 and to $30,000 starting February 28, 2017 with the balance due on the unchanged maturity date of August 31, 2017. All other terms of the note, including the interest rate of 9.5% per annum remained the same. Based on the minimum monthly payments noted above, the Company has classified $60,000 of the note as current and $190,400 of the note as long-term as of December 31, 2015. All interest was brought current as of February 12, 2016.

 

ACC’s business plan is based on the Executive Action, known as DAPA, issued by President Obama in November 2014. In February 2015, twenty-six states filed a lawsuit to stop the program and the court granted an injunction meaning that the U.S. Government cannot proceed with rolling out the program until the court case is resolved. In January 2016, after a series of legal actions more fully described in the Company’s Form 10-K for the fiscal year ended June 30, 2015, the Supreme Court granted an oral hearing scheduled for April 2016 with a ruling to be made in June 2016. The delay in the DAPA program resulting from the court case has negatively impacted ACC’s operations and consequently its ability to make the minimum required payments under the current loan terms. ACC is implementing other immigration and citizenship services to improve operations while the DAPA case is pending in the Supreme Court. However, a positive DAPA ruling or other immigration reform is significant to ACC’s ability to meet its financial obligations. The Company has recorded a reserve of $50,000 as of December 31, 2015.