NOTE 13. SUBSEQUENT EVENTS
Subsequent to June 30, 2015 through
July 31, 2015, the Company has issued 199,386 shares issued from the Share Exchange.
In July 2015, the Company granted 200,000
vesting stock options to a 3rd party services provider for consulting services relating to one of our celebrity estates.
The stock options have an exercise price of $0.62 per share and vesting over a two year term.
In July 2015, the Company entered into
an agreement with a service provider to assist the Company and provide expertise as it relates to producing a live stage musical
featuring digital performances. The service provider shall receive 3% of all money received by the Company for producing and presenting
the performances. Additionally, the service provider shall receive 3,000,000 shares of the Company’s common stock on a pro-rata
basis as funds are received by the Company for the performances.
In August 2015, one holder of Common
Stock cancelled their Common Shares in the Company and instead was issued Preferred Shares in the Company. The total of 280,726
of Common Shares were cancelled and 280,726 of Preferred Shares were issued.
In August 2015, the Company entered
into an agreement for a $620,000 bridge loan which bears interest at 7% each year. Interest will be payable at the end of each
calendar year and calculated on a pro rata basis. All unpaid principal plus accrued interest is due at the earliest of the Company’s
receipt of a certain type of proceeds or on the first anniversary of the note.
In September 2015, the Company entered
into an agreement for a $620,000 bridge loan with a party which bears interest at 15% each year along with equity coverage of 248,000
shares of Common Stock. Subsequent to signing, only $356,000 of the note was financed. In January 2016, due to non-completion of
the loan, the agreement was terminated and the loan plus interest was returned to the lender. Because the loan was not completely
funded and subsequently terminated, no equity was issued.
In October 2015, the Company entered
into an agreement for a $1,000,000 bridge loan with Holotrack AG, which bears interest at 7% each year. Interest will be payable
at the end of each calendar year and calculated on a pro rata basis. All unpaid principal plus accrued interest is due at the earliest
of the Company’s receipt of a certain type of proceeds or on the first anniversary of the note.
In November 2015, the Company entered
into an Associate Producer agreement with Holotrack AG to provide financing and production support for “The King”.
In conjunction with this agreement, the company will issue 12,000,000 shares of Series A Preferred Stock. The Board has approved
a change to the Company’s charter to accordingly increase the authorized capital Series A Preferred Stock.
As of August 13, 2015, the Company had
100,000,000 shares of capital stock authorized, of which 18,848,184 were designated as Series A convertible preferred stock. As
of August 13, 2015, 18,848,184 shares of Series A convertible preferred stock issued and outstanding, representing 100% of the
authorized Series A convertible preferred stock. On August 13, 2015 and November 1, 2015, the Company agreed to issue 280,726 and
12,000,000, respectively, shares of Series A convertible preferred stock. Such amounts represented an over issue of an aggregate
of 12,280,726 shares of Series A convertible preferred stock. In order to correct the error, the Company is in the process of filing
an amended certificate of designation with the Nevada Secretary of State, which will have the effect of increasing the number of
authorized Series A preferred shares from 18,848,184 shares to 31,128,910 shares. Following the effectiveness of the amendment,
we will cancel the previously over issued shares and issue new shares in the same number to the same share recipients.
In December 2015, the Company entered
into an agreement for a $1,000,000 bridge loan with Mr Bernhard Burgener which bears interest at 7% each year. Interest will be
payable at the end of each calendar year and calculated on a pro rata basis. All unpaid principal plus accrued interest is due
at the earliest of the completion of the Elvis Presley theatrical concert production (“The King”) or 18 months.
In December 2015, the Company entered
into an agreement for a $500,000 bridge loan with a Third Party which bears interest at 10% each year along with equity coverage
of 1,000,000 shares of the Company’s Common Stock. The loan plus accrued interest was repaid in February 2016.
In December 2015, the Company entered
into an Executive Producer agreement with Mr Bernhard Burgener for “The King” and committed to issue Mr Burgener 12,000,000
common shares.
In November 2015, the Board of Directors
approved a limited share repurchase program for the Company to repurchase up to $5,000,000 of Common Stock of the Company from
the public float. During the second and third fiscal quarter of 2016, the Company has purchased 257,072 of it shares at a total
cost of $309,622, which the company will return to treasury stock.
In January 2016, the Company entered
into amendments with Authentic Brands Group to extend the rights of exclusivity for Marilyn Monroe and Elvis Presley through the
end of the agreements (December 2021).
In January 2016, the Company entered
into a Stock Purchase Agreement with Original Force and U9. The parties purchased a total of 14,760,000 Common Shares for $10,000,000
and received an initial 50% share in the production vehicle for Elvis Presley theatrical concert. In addition, the parties entered
into a 3 year technology license agreement for certain rights to use the Company’s Digital Human Animation technology.
On January 28, 2016, the Company entered
into an agreement with XIX Entertainment and Simon Fuller to be the Executive Producer of The King. The agreement includes a cash
payment over the course of the production and a share of the “off the top” profits of the show. In addition, XIX Entertainment
was issued a warrant to purchase approximately 36,678,000 shares of Common Stock in the Company at $1 a share, with cashless exercise
rights and certain anti-dilution protections.
On February 26, 2016, the Company entered
into an agreement to purchase 100% of the share capital of Float Hybrid Entertainment, Inc. (“Float”), a developer
of interactive experiences for brands such as Pepsi, Microsoft, GE, AKQA, Ericsson, XBOX and Anheuser-Busch. Float was also a founding
developer of the Kinect depth sensor platform and has deep experience of development for a number of yet-to-be-released Virtual
and Augmented Reality Platforms. The Company will issue to the shareholders of Float, 7,250,000 common shares and will pay up to
$1,000,000 in a cash-based earn out over a period of 36 months. The Company anticipates the closing to occur in the fourth quarter
of the year ended June 30, 2016.
On February 27, 2016, the Company entered
into merger agreement with After August, Inc., a California based animation technology company, primarily to acquire ownership
of certain technologies and software tools that we believe will support the Company’s continuing strategy to be the world’s
leading developer of hyper-realistic digital humans. As consideration, the Company paid $300,000 in cash at closing, issued a 3-year,
$2,700,000 promissory note, secured specifically by the acquired technology assets, and is committed to issue 4.8 million shares
of the Company’s common stock. The transaction was closed on April 20, 2016.
In March 2016, the Company entered
into an amicable settlement agreement with Hologram USA, Inc., MDH Hologram Ltd., and Pulse Evolution Corporation reached an amicable
resolution of the litigation related to the 2014 Billboard Music Awards. Costs associated with the litigation have been accrued
during the period ended June 30, 2015. The Company also committed to issue 1,000,000 shares of Common Stock to a professional
services firm in connection with this settlement.
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