UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended ~~September~~December 3031, 2015.


¨	Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .

Commission file number: 000-28311

SIBLING GROUP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


TEXAS	76-0270334
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

7380 W. Sand Lake Road Suite 500; Orlando, FL 32819

(Address of Principal Executive Office) (Zip Code)

(407) 734-1531

(Registrant’s telephone number, including area code)

(Former name, former address, and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ¨ Yes þ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes þ No

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 202,509,291 shares of common stock are outstanding as of ~~October~~February 2915, ~~2015~~2016.

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	1
	Condensed Consolidated Balance Sheets as of September 30, 2015 (unaudited) and June 30, 2015	1
	Condensed Consolidated Balance Sheets as of December 31, 2015 (unaudited) and June 30, 2015	1
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2015 and 2014 (unaudited)	2
	Condensed Consolidated Statements of Operations for the six months ended December 31, 2015 and 2014 (unaudited)	2
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2015 and 2014 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2015 and 2014 (unaudited)	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1715
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2220
ITEM 4.	CONTROLS AND PROCEDURES	2321
	PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	2422
ITEM 1A.	RISK FACTORS	2422
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2422
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2422
ITEM 4.	MINE SAFETY DISCLOSURES	2422
ITEM 5.	OTHER INFORMATION	2422
ITEM 6.	EXHIBITS	2523
	SIGNATURES	2624

INTRODUCTORY NOTES

This Quarterly Report on Form 10-Q for Sibling Group Holdings, Inc. (“SIBE” or the “Company”) may contain forward-looking statements. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate” and “continue” or similar words. Forward-looking statements include information concerning possible or assumed future business success or financial results. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. We believe that it is important to communicate future expectations to investors. However, there may be events in the future that we are not able to accurately predict or control. Accordingly, we do not undertake any obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2015 and other periodic reports filed with the Securities and Exchange Commission (“SEC”). Accordingly, to the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company, please be advised that SIBE’s actual financial condition, operating results and business performance may differ materially from that projected or estimated in such forward-looking statements.

The information contained in this report, except as specifically dated, is as of ~~September~~December 3031, 2015.

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

Condensed Consolidated Balance Sheets

	September 30, 2015			June 30, 2015
	December 31, 2015			June 30, 2015
	(Unaudited)
ASSETS
Current assets
Cash	$	31,~~374~~009,~~291~~792		$	5,415,744
Accounts receivable, net		~~164~~31,~~600~~296			50,605
Prepaid expenses		~~374~~572,~~700~~637			288,075
Total current assets		31,~~913~~613,~~591~~725			5,754,424
Fixed Assets, net		4546,~~967~~539			15,632
Intangible assets, net		1,~~271~~420,~~915~~361			1,231,295
		1,317,882			1,246,927
		1,466,900			1,246,927
Total assets	$	53,~~231~~080,~~473~~625		$	7,001,351
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	1506,~~013,785~~023		$	1,852,602
Accrued liabilities		1921,~~525~~207			165,571
Deferred revenue		1737,~~087,468~~503			645,830
Short-term notes payable		~~100,000~~—			130,000
Due to related party		27,367			27,367
Due to shareholders		36,900			36,900
Total current liabilities		21,~~285~~329,~~045~~000			2,858,270
Commitments and contingencies (Note 8)
Stockholders' equity
Preferred stock, $0.0001 par value; 500,000 authorized; 500,000 and no shares issued and outstanding at September 30, 2015 and June 30, 2015.		962,000			962,000
Preferred stock, $0.0001 par value; 500,000 authorized; 500,000 issued and outstanding at December 31, 2015 and June 30, 2015.		962,000			962,000
Common stock, $0.0001 par value; 500,000,000 shares authorized; 202,509,291 issued and outstanding at September 30, 2015 and June 30, 2015.		20,251			20,251
Common stock, $0.0001 par value; 500,000,000 shares authorized; 202,509,291 issued and outstanding at December 31, 2015 and June 30, 2015.		20,251			20,251
Additional paid-in capital		18,800,182			18,800,182
Accumulated deficit		(1618,~~836~~030,~~005~~808	)		(15,639,352	)
Total stockholders' equity		21,~~946~~751,~~428~~625			4,143,081
Total liabilities and stockholders' equity	$	53,~~231~~080,~~473~~625		$	7,001,351

See accompanying notes to the unaudited condensed consolidated financial statements.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended						Six months ended
	September 30,
	December 31, 2015						December 31, 2015
	2015			2014			2015			2014
Revenues	$	~~514~~494,~~352~~544		$	~~529~~570,~~760~~374		$	1,008,896		$	1,100,134
Cost of goods sold		~~464~~583,~~953~~338			~~201~~207,~~548~~556			1,048,291			409,104
Gross profit		49,399			328,212
Gross profit (loss)		(88,794	)		362,818			(39,395	)		691,030
Operating expenses
General and administrative		~~930~~965,~~445~~346			1580,~~296,027~~877			1,895,791			1,876,904
Professional fees		~~309~~268,~~072~~097			~~370~~513,~~766~~806			577,169			884,572
Total operating expenses		1,~~239~~233,~~517~~443			1,~~666~~094,~~793~~683			2,472,960			2,761,476
Loss from operations		(1,~~190~~322,~~118~~237	)		(1731,~~338,581~~865	)		(2,512,355	)		(2,070,446	)
Other income (expense)
Other income (expense)		—			(129,718	)
Other (expense)		—			(129,719	)		—			(259,437	)
Interest income (expense)		(61,~~593~~580	)		(1678,~~231~~952	)		(8,174	)		(95,183	)
Gain on debt settlements		58			—
Loss on derivative		—			(151,171	)		—			(151,171	)
Total other income (expense)		(6,535	)		(145,949	)
Gain on debt settlements		129,015			—			129,073
Net loss	$	(1,196,653	)	$	(1,484,530	)
Total other income (expense)		127,435			(359,842	)		120,899			(505,791	)
Net loss per share – basic and diluted	$	(0.01	)	$	(0.03	)
Net loss	$	(1,194,802	)	$	(1,091,707	)	$	(2,391,456	)	$	(2,576,237	)
Weighted average shares outstanding, basic and diluted		202,509,291			43,175,842
Net loss per share	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.06	)
Weighted average shares outstanding, basic and diluted		202,509,291			49,096,886			202,509,291			46,136,364

See accompanying notes to the unaudited condensed consolidated financial statements.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended
	Six months ended
	September 30,
	December 31,
	2015			2014
Cash flows from operating activities
Net loss	$	(12,~~196~~391,~~653~~456	)	$	(12,~~484~~576,~~530~~237	)
Adjustments to reconcile net loss to net cash (used in) operating activities
Common stock issued for directors/board committee fees		—			3264,~~400~~800
Common stock issued for services		—			~~210~~597,~~400~~487
Common stock issued for compensation		—			604,800
Depreciation		5,~~116~~952			—
Amortization of intangibles and debt discount		93186,~~055~~109			~~129~~276,~~718~~754
Changes in operating assets and liabilities
Accounts receivable		~~(113~~19,~~995~~309	)		(~~258~~18,~~222~~917	)
Accounts payable		(~~838~~1,~~817~~346,580	)		~~208~~509,~~149~~419
Accrued liabilities		(~~146~~144,~~046~~365	)		(7822,~~212~~395	)
Deferred revenue		~~441~~91,~~638~~673			~~724~~238,~~359~~030
Prepaid expenses		(86284,~~625~~562	)		(4110,~~812~~058	)
Net cash provided by (used in) operating activities		(1,842,327	)		84,050
Derivative liability		—			151,171
Due to related parties		—			10,000
Net cash (used in) operating activities		(3,863,920	)		(275,146	)
Cash flows from investing activities
Purchase of fixed assets		(3536,~~451~~857	)		—
Additional investing in intangibles		(~~133~~375,~~675~~175	)		—
Net cash (used in) operating activities		(~~169~~412,~~126~~032	)		—
Cash flows from financing activities
Repayment of notes payable		(30130,000	)		—
Net cash (used in) financing activities		(30,000	)		—
Repayment of line of credit		—			(100,000	)
Net change in cash	$	(2,041,453	)	$	84,050
Proceeds of short term notes payable		—			100,000
Proceeds of notes payable		—			250,000
Net cash provided by (used in) financing activities		(130,000	)		250,000
Net change in cash	$	(4,405,952	)	$	(25,146	)
Cash, beginning of period		5,415,744			27,250
Cash, end of period	$	31,~~374~~009,~~291~~792		$	~~111~~2,~~300~~104
Supplemental disclosure of cash flow information
Cash paid for interest	$	38,~~264~~227		$	115,~~275~~774
Cash paid for income taxes	$	—		$	—
Supplemental disclosure of non-cash operating and financing activities
Common stock issued for settlement of accounts payable	$	—		$	1,000

See accompanying notes to the unaudited condensed consolidated financial statements.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~DECEMBER ~~MONTHS~~31, ~~ENDED~~2015 ~~SEPTEMBER~~AND JUNE 30, 2015 ~~AND 2014~~

Note 1 - Nature of Operations and ~~Basis of Presentation~~Liquidity

Organization

Sibling Group Holdings, Inc., d/b/a Global Personalized Academics (the “Company”), was incorporated under the laws of the State of Texas on December 28, 1988, as "Houston Produce Corporation". On June 24, 1997, the Company changed its name to "Net Masters Consultants, Inc." On November 27, 2002, the Company changed its name to "Sona Development Corporation" in an effort to restructure the business image to attract prospective business opportunities. The Company name changed on May 14, 2007 to "Sibling Entertainment Group Holdings, Inc." and on August 15, 2012, the Company name was changed to "Sibling Group Holdings, Inc." On July 20, 2015, the Company issued a press release announcing its intent to do business under the name of Global Personalized Academics (“GPA”). The Company isintends into ~~the~~formally ~~process~~change ofits ~~completing~~name ~~the~~to ~~steps~~GPA, ~~required~~and ~~for~~has ~~the~~taken ~~name~~steps ~~change~~towards tothis ~~GPA.~~achieving this objective.

BlendedSchools.Net

Blended Schools provides online curriculum with approximately 200 master courses for the K-12 marketplace, all Common Core compatible; a complete hosted course authoring and learning management system environment featuring both Blackboard and Canvas; and the new Language Institute, with online courses in Arabic, Chinese, Spanish, French, Japanese, Latin, Russian, German and Hindi, all oriented to meet today’s ESL requirements.

Urban Planet Media & Entertainment, Corp.

Each share of ~~preferred~~Series ~~stock~~A Preferred issued to the former Urban Planet shareholders is convertible by the holder (1) at any time after 24 months after the original issue date or (2) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the ~~preferred~~Series ~~stock~~A Preferred into that number of shares of common stock determined by dividing the stated value of such shares of ~~preferred~~Series A Preferred stock, which is $10.00 per ~~preferred~~shares ~~share~~of Series A Preferred, by the conversion price. The conversion price of the ~~preferred~~Series ~~stock~~A Preferred is $0.50, subject to adjustment as stated in the certificate of designation.

Urban Planet is a mobile media company providing content and solutions in the education, healthcare and literary markets.

On June 16, 2015, the Company concluded that it was necessary to write down the value of the investment in Urban Planet, based on industry information from an independent third party, to two times the revenue reported by Urban Planet for the calendar year 2014, which totaled $249,692. As a result, the Company incurred a non-cash impairment charge in the amount of $1,722,408. The Company’s determination to recognize the impairment charge was based on the expiration of a grant and service agreement that previously contributed to Urban Planet revenues and the Company’s decision to suspend the development of a proposed Urban Planet product. The Company does not expect to incur any material future cash expenditures in connection with the write-down of Urban Planet.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

Shenzhen City Qianhai Xinshi Education Management Co., Ltd.

During the year ended June 30, 2015, the Company received a strategic investment from Shenzhen City Qianhai Xinshi Education Management Co., Ltd., a company based and operating in the People’s Republic of China (“Shenzhen”). The strategic investment was provided to accelerate the Company’s growth and expansion into critical strategic markets around the world, including China.

Effective on February 27, 2015, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Shenzhen and certain accredited and institutional investors (together with Shenzhen, the “Investors”). Pursuant to the Securities Purchase Agreement, the Investors purchased an aggregate of 53,571,429 Units (each, a “Unit”) for an aggregate cash raise of $3,250,000. Costs directly attributed to this equity raise aggregated $157,000. Included in the aforementioned were 7,142,857 Units issued in lieu of a $500,000 payment for fees attributed to this equity raise. An additional 4,457,143 shares were issued as payment of fees for this equity raise as well, which were fair valued at $312,000. Each Unit consists of: (1) a share of the Company’s common stock; (2) a warrant giving each of the Investors the right to purchase one additional share of common stock for each share owned at any time and from time to time for a period of five years at an exercise price of $0.07 per share (each, an “A Warrant”); (3) a warrant giving each of the Investors the right to purchase one additional share of common stock for each share owned at any time and from time to time for a period of one year following the effectiveness of a registration statement covering the resale of the total number of shares of common stock acquired by the Investors in the transaction at an exercise price equal to the five-day volume weighted average price immediately preceding the exercise date (each, a “B Warrant”); and (4) only as part of and in connection with the purchase of the shares underlying the B Warrants (the “B Warrant Shares”), a warrant giving each of the Investors the right to purchase 0.50 shares of common stock for each B Warrant Share purchased by such Investors at any time and from time to time for a period of five years at an exercise price equal to the purchase price of the B Warrant Shares (each, an “Additional Warrant” and together with the A Warrants and the B Warrants, the “Warrants”). The exercise prices of the Warrants may be reduced if the Company issues additional shares of common stock or securities convertible into common stock at a price lower than the Warrant exercise prices for so long as the Warrants remain outstanding. If all shares underlying all Warrants are ultimately issued, the Company will issue an aggregate of 187,500,001 shares of common stock pursuant to the Securities Purchase Agreement for additional proceeds.

On April 6, 2015, Shenzhen exercised the A Warrants in full and a portion of the B Warrants resulting in an additional 72,857,143 shares of common stock being issued to Shenzhen in exchange for an aggregate purchase price of $5,526,966. Pursuant to the terms of the Securities Purchase Agreement, 42,857,143 of the shares received upon issuance of the A Warrants were issued at a price per share of $0.07. The remaining 30,000,000 shares received upon the partial exercise of the B Warrants were issued at a price per share of $0.0842322, which is equivalent to the volume weighted average price for the Company’s common stock for the five trading days preceding April 6, 2015, the date of exercise. Cash costs attributed to this portion of the equity raise was $644,057 and an additional 6,061,707 shares, which were fair valued at $460,084 were issued in lieu of cash fees for this warrant exercise equity raise.

As a result of the exercise of the B Warrants and pursuant to the terms of the B Warrants, the Company issued Shenzhen Additional Warrants to purchase an aggregate of 15,000,000 shares of the Company’s common stock at any time and from time to time for a period of five years from the date of the Additional Warrants at an exercise price per share equal to $0.0842322, the purchase price of the shares issued pursuant to the B Warrants.

Following the exercise of the Warrants, Shenzhen holds 115,714,286 shares of the Company’s common stock, or 57.14% of the Company’s total issued and outstanding shares of common stock as of ~~September~~December 3031, 2015.

Pursuant to the terms of the remaining Warrants, Shenzhen has the potential to purchase up to an additional 34,285,714 shares of the Company’s common stock. If all shares underlying all Warrants held by Shenzhen are ultimately issued to Shenzhen, Shenzhen will hold an aggregate of 150,000,000 shares of the Company’s common stock. Of Shenzhen’s remaining Warrants, 15,000,000 are exercisable at $0.0842322 per share, which would result in an additional $1,263,483 in proceeds to the Company. Because the purchase price of the remaining 19,285,714 shares that Shenzhen has the right to acquire pursuant to its Warrants is dependent on the price of the Company’s common stock if and when such Warrants are exercised, the Company is unable to calculate the gross proceeds that would be received upon exercise of such Warrants.

Liquidity and Management’s Plan

Historically, our principal sources of cash have included revenue from operating activities, proceeds from the issuance of common and preferred stock, and proceeds from the issuance of short-term debt. Our principal uses of cash have included cash used in operations, payments relating to purchases of property and equipment and repayments of borrowings. We expect that our principal uses of cash in the future will be for product development, further development of intellectual property, as well as general working capital and capital expenditure requirements.

~~SIBLING~~We ~~GROUP~~had ~~HOLDINGS~~working capital of $284,725 ~~INC~~and $1,009,792 in cash as of December 31, 2015, compared to working capital of $2,896,154 and $5,415,744 in cash as of June 30, 2015. Management believes that the Company’s current cash and cash equivalents will not be sufficient to meet working capital and capital expenditure requirements for the next 12 months. As a result, the ability of the Company to continue as a going concern is dependent on generating future profitable operations and raising additional capital needed until the Company generates profits. Management is therefore seeking to raise additional debt and/or equity capital. There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing working capital requirements.

~~d/b/~~While we used a ~~GLOBAL~~substantial ~~PERSONALIZED~~amount ~~ACADEMICS~~of cash since June 30, 2015, management believes the investments made to develop new product offerings internationally, additions to its executive management and sales team to capitalize on future growth opportunities throughout the U.S. South America, China, among others, and investments made in infrastructure and curriculum development, will provide the foundation for near-term revenue growth. Until such time as we are able to generate positive cash flow from operations, management will continue to focus on reducing discretionary costs and expenses, matching staffing levels with existing and forecasted sales levels, and directing existing cash resources to activities intended to increase revenue.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

Note 2 - Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated. During 2014, the Company changed its fiscal financial reporting year -end from December 31 to be June 30, which represents the operating year ends of Blended Schools and Urban Planet. These condensed consolidated financial statements should be read in conjunction with the more complete information and the Company’s audited consolidated financial statements and related notes thereto included in the Company’s annual report on Form 10-K for the year ended June 30, 2015. The operating results for the three and six months ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016.

(b) Going Concern

The financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the ~~quarter~~six months ended ~~September~~December 3031, 2015, the Company had a net loss of $12,~~196~~391,~~653~~456 and negative cash flow from operations of $13,~~842~~863,~~327~~920. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on generating future profitable operations and raising additional capital needed until the Company generates profits. There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs. The accompanying financial statements do not include any adjustments relative to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty. Management has developed new product offerings internationally as well as focused on increasing sales by hiring seven new sales team members to provide coverage for most of the United States and South America. The Company has also implemented cost reduction programs to reduce discretionary expenses.

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities, debt discounts, valuation of intangibles acquired in our acquisition, impairment of intangibles, deferred tax assets, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(d) Allowance for Doubtful Accounts

Accounts receivables are recorded at their estimated collectible amounts. Management evaluates the collectability of its receivables periodically, largely based on the historical trends with the customer as well as current financial information available. If it is deemed appropriate, an allowance is recorded as an expense in the current period. As of ~~September~~December 3031, 2015 and June 30, 2015, the Company recorded $3,926, and $3,926, respectively, in allowance for doubtful accounts.

(e) Intangibles

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the quarter ended September 30, 2015 and the year ended June 30, 2015, the Company recorded an impairment charge of $0 and $1,722,408, respectively.

~~SIBLING~~(e) ~~GROUP HOLDINGS, INC.~~Intangibles

~~d/b/~~Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a ~~GLOBAL~~comparison ~~PERSONALIZED~~of ~~ACADEMICS~~the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended December 31, 2015 and the year ended June 30, 2015, the Company recorded an impairment charge of $0 and $1,722,408, respectively.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(f) Capitalized Software Costs

The Company develops software for internal use. Software development costs incurred during the application development stage are capitalized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), 350, “Intangibles — Goodwill and Other”. The Company amortizes these costs over the estimated useful life of the software, which is generally three years. Capitalized software development costs are stated at cost less accumulated amortization. The Company capitalized internally developed software or content costs of $0 and $28,131, respectively, for the ~~quarter~~six months ended ~~September~~December 3031, 2015 and year ended June 30, 2015.

(g) Revenue Recognition

The Company typically will receive in full or a large prepayment on account for the use of its Blended School courses for the successive K-12 school year commencing on July 1, as well as smaller prepayments for its Urban Planet Writing Planet contracts. Revenues are amortized ratably over the contract term with the customer, typically over twelve months. Deferred revenues represent customer prepayments on account for the subscribed software and course content.

(h) Income Taxes

The Company utilizes FASB ASC 740, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the estimated tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income. The Company’s recent equity raises and possibly past restructuring events have resulted in the occurrence of a triggering event as defined in Section 382 of the Internal Revenue Code of 1986, as amended, which could limit the use of the Company’s net operating loss carryforwards. The Company has yet to undertake a study to quantify any limitations on the use of its net operating loss carryforwards.

(i) Financial Instruments

In accordance with the requirements of FASB ASC 820, “Financial Instruments, Disclosures about Fair Value of Financial Instruments”, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The carrying values of cash, accounts payable, and amounts due to related parties approximate fair values due to the short-term maturity of the instruments.

Certain assets and liabilities that are measured at fair value on a recurring basis are measured in accordance with FASB ASC Topic 820-10-05, “Fair Value Measurements” (“Topic 820-10-05”). Topic 820-10-05 defines fair value, establishes a framework for measuring fair value and expands the disclosure requirements regarding fair value measurements for financial assets and liabilities as well as for non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis in the financial statements.

Topic 820-10-05 requires fair value measurement be classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(j) Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC 718, “Compensation – Stock Compensation” (“ASC 718”). Under the provisions of ASC 718, stock-based compensation cost is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model and/or market price of conversion shares, and is recognized as expense over the requisite service period. The BSM model requires various highly judgmental assumptions, including volatility and expected option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience. Further, if the extent of the Company’s actual forfeiture rate is different from the estimate, then the stock-based compensation expense is adjusted accordingly.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50 “Equity Based Payments to Non-Employees” (“ASC 505-50”). Costs are measured at the estimated fair market value of the consideration received, or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.

(k) Loss per Share

The Company computes loss per share in accordance with FASB ASC 260, “Earnings Per Share” (“ASC 260”), which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. ASC 260 requires companies that have multiple classes of equity securities to use the “two-class” of “if converted method” in computing earnings per share. The Company computes loss per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. The Company has excluded all common equivalent shares outstanding for warrants to purchase common stock from the calculation of diluted net loss per share because all such securities are antidilutive for the periods presented. As of ~~September~~December 3031, 2015 and June 30, 2015, there were common stock equivalents outstanding of 45,204,762 and 130,582,840, respectively.

(l) Recent Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). The amendments in ASU 2014-15 provide guidance about management’s responsibility to evaluate whether there is a substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt; (2) require an evaluation every reporting period including interim periods; (3) provide principles for considering the mitigating effect of management’s plans; (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; (5) require an express statement and other disclosures when substantial doubt is not alleviated; and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in ASU 2014-15 are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted.

~~SIBLING~~In ~~GROUP~~June ~~HOLDINGS~~2014, ~~INC~~the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. ASU 2014-09, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASC 2014-09 would supersede some cost guidance included in ASC Subtopic 605-35, “Revenue Recognition – Construction-Type and Production-Type Contracts”. ASC 2014-09 removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, ASC 2014-09 improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. ASC 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09, for one year. to be effective for periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently reviewing the provisions of ASU 2014-09 to determine if there will be any impact on the Company’s results of operations, cash flows or financial condition.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

In June 2014, the FASB issued ASU 2014-09,“Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. ASU 2014-09, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASC 2014-09 would supersede some cost guidance included in ASC Subtopic 605-35, “Revenue Recognition – Construction-Type and Production-Type Contracts”. ASC 2014-09 removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, ASC 2014-09 improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. ASC 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09, for one year, to be effective for periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently reviewing the provisions of ASU 2014-09 to determine if there will be any impact on the Company’s results of operations, cash flows or financial condition.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”). The amendments in ASU 2014-12 apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities.

Entities may apply the amendments in ASU 2014-12 either (1) prospectively to all awards granted or modified after the effective date or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying ASU 2014-12 as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. ASU 2014-12 is not expected to have a material impact on our results of operations, cash flows or financial condition.

All other new accounting pronouncements issued but not yet effective or adopted have been deemed to be not relevant to the Company and, accordingly, are not expected to have a material impact once adopted.

Note 3 – Acquisition Activity

On January 28, 2015, the Company entered into the Share Exchange Agreement with Urban Planet and its shareholders pursuant to which the Company issued up to 10,500,000 shares of its common stock, and 500,000 shares of its Series A ~~convertible~~Preferred ~~preferred stock~~ to the shareholders of Urban Planet in exchange for all of the issued and outstanding shares of Urban Planet. An additional 2,000,000 shares of common stock were agreed to be issued to key current and past employees and consultants. These shares were issued in May 2015 and expensed in the amount of $192,400 at the then fair value accordingly.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

The identified assets and liabilities acquired for the issuance of equity in the Urban Planet acquisition as of January 28, 2015 are as follows:


*Fair Value of Assets Acquired:*
Cash	$	29,756
Accounts Receivable		53,447
Prepaid Expenses		1,862
Other Current Assets		24,068
Fixed Assets		3,967
Software and content		577,167
Other Assets		5,000
*Liabilities Assumed:*
Accounts Payable		(259,755	)
Deferred Revenue		(31,342	)
Other Accrued Liabilities		(154,478	)
Net Value	$	249,692

Each share of preferred stock issued to the former Urban Planet shareholders is convertible by the holder (i) at any time after 24 months after the original issue date or (ii) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the preferred stock into that number of shares of common stock determined by dividing the stated value of such shares of preferred stock, which is $10.00 per preferred share, by the conversion price. The conversion price of the preferred stock is $0.50, subject to adjustment as stated in the certificate of designation.9

Each share of Series A Preferred issued to the former Urban Planet shareholders is convertible by the holder (i) at any time after 24 months after the original issue date or (ii) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the Series A Preferred into that number of shares of common stock determined by dividing the stated value of such shares of Series A Preferred, which is $10.00 per share of Series A Preferred, by the conversion price. The conversion price of the Series A Preferred is $0.50, subject to adjustment as stated in the certificate of designation.

The Company has written down the value of the investment in Urban Planet using industry information from an independent third-party appraiser to two times revenue reported by Urban Planet for calendar year 2014, or $249,692. The resulting loss of $1,722,408 was reported as “Impairment of UPM assets acquired” in the consolidated statements of operations filed as part of the Company’s Annual Report on Form 10-K for the year ended June 30, 2015.

The consolidated unaudited pro-forma results of operations of the Company as if Urban Planet and Blended Schools had been acquired as of July 1, 2014 are as follows:

		Three months ended September 30,
	Three months ended			Six months ended
		2015			2014
	December 31, 2014			December 31, 2014
Revenues	$	$616,960	~~514,352~~	$	$1,199,291	~~582,330~~
Net Loss	$	$(1,437,265	~~(1,196,654~~)	)$	$(2,956,877	~~(1,519,412~~)	)

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

Note 4 – Intangible Assets

Intangible assets are comprised of software and content from the following acquisitions as well as the costs to upgrade the quality of the videos in the course content:

	September 30, 2015			June 30, 2015
	December 31, 2015			June 30, 2015
ClassChatter	$	58,000		$	58,000
PLC Consultants		24,000			24,000
DWSaba Consulting		40,000			40,000
Blended Schools		1,187,534			1,187,534
Urban Planet		368,415			605,298
Video Project		~~156~~397,~~000~~500			0
Total		12,~~833~~075,~~949~~449			1,914,832
Less accumulated amortization		(~~562~~655,~~034~~088	)		(683,537	)
Net	$	1,~~271~~420,~~915~~361		$	1,231,295

The intangibles are being amortized over a one to five-year period. The annual amortization for each of the next five years is expected to approximate $337,860, $337,860, $337,860, $217,715 and $0, beginning with June 30, 2016, respectively.

Note 5 – Accrued Liabilities

Accrued liabilities consist of the following:

	September 30, 2015		June 30, 2015
	December 31, 2015		June 30, 2015
Accrued compensation	$	0	$	82,984
Accrued interest		~~375~~0		39,188
Accrued miscellaneous		1921,~~150~~207		43,399
	$	1921,~~525~~207	$	165,571

Note 6 - Short-Term Notes Payable, Due to Shareholders and Due to Related Party

Short -term notes payable, due to shareholders and due to related party consists of the following:

	September 30, 2015		June 30, 2015
	December 31, 2015		June 30, 2015
Short term note (a)	$	100,000	$	100,000
Short-term note (a)	$	0	$	100,000
Due to shareholders and related party (b)		64,267		64,267
Outstanding debenture in default (c)		0		30,000
Total short term notes payable due to shareholder and due to related party	$	164,267	$	194,267
Total short-term notes payable due to shareholder and due to related party	$	64,267	$	194,267

———————

(a)

At June 30, 2015, the Company re-financed its line of credit with a note payable balance of $100,000. This represents a short -term note with an annual interest rate of 4.5%. At ~~September~~December 3031, 2015 and June 30, 2015, the note had accrued interest in the amount of $~~375~~0 and $375, respectively.

(b)

Advances and loans from shareholders total $36,900 for the Company and $10,009 for Urban Planet.

Due to related party consists of amounts due to Measurement Planet, an Urban Planet joint venture, in the amount of $17,358.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(c)

On December 30, 2010, the Company entered into conversion agreements with all but one of the holders of the Series AA debentures previously issued by the Company and held on that date. Pursuant to the conversion agreements, the holders accepted a total of 1,039,985 shares of convertible series common stock and 100% of the membership interests of a new, wholly-owned subsidiary of the Company, Debt Resolution, LLC, in full settlement of their debentures, underlying warrants and accrued interest as of that date. The conversion agreements released all claims that 43 of the holders of the debentures had, have, or might have against the Company. Following this transaction, the Company ~~now~~had ~~has~~ a debenture balance of $30,000 and accrued interest of $35,483 ~~and $22,125~~ as of June 30, 2015 ~~and 2014~~, ~~respectively,~~ which was in default at June 30, 2015. Payment in full was made on August 3, 2015.

The Company compensates a related party, under no formal consulting services contract, a consulting fee plus reimbursement of travel expenses on a month-to-month basis. The amount ~~paid for the quarter ending September 30, 2015 was $54,000. The amount~~ included in accounts payable at ~~September~~year-end ~~30, 2015~~ is $0.

Note 7 - Capital Stock

In 2012, the Company’s shareholders approved the Amended and Restated Certificate of Incorporation authorizing 510,000,000 shares of capital stock, 500,000,000 of which are designated as common stock and 10,000,000 of which are designated as preferred stock. The shareholders also approved the conversion of the series common stock to common stock at a ratio of 151.127 shares of common stock for each share of series common stock and a reverse split of the common stock at a ratio of 100 to 1. As a result of the conversion, all of the Company’s outstanding shares of series common stock were converted into 14,827,161 shares of common stock.

On January 29, 2015, the Board of Directors approved a series of 500,000 shares of Series A ~~convertible~~Preferred ~~preferred stock~~ for issuance in connection with the Urban Planet share exchange, and filed the Certificate of Designation of Powers, Preferences and Rights of Series A Convertible Preferred Stock with the Secretary of State of Texas. Each share of Series A ~~preferred~~Preferred ~~stock~~ shall have a par value of $0.0001 per share and a stated value equal to $10.00.

Common Stock

During the three months ended September 30, 2015, the Company issued no shares of common stock.

During the year ended June 30, 2015, the Company issued the following shares of common stock:

The Company issued 6,193,388 shares of common stock pursuant to consulting and services agreements. The stock issued was fair valued at prices ranging from $.12 to $.18 per share for a total fair value of $799,579.

The Company issued 900,000 shares of common stock in accordance with the Company’s Board of Directors’ compensation policy and for the services of a Board appointed committee. The stock issued was fair valued at $.144 per share for a total fair value of $129,600, which will be expensed quarterly during the year ended June 30, 2015.

The Company issued 4,658,000 shares of common stock for compensation to officers and employees. The stock issued was fair valued at prices ranging from $.0962 to $.144 per share for a total fair value of $648,860.

The Company issued 120,043 shares of common stock in conversion of outstanding debts. The stock issued was fair valued at prices ranging from $.12 to $0.1298 per share for a total value of $15,500.

The Company issued 125,000 shares of common stock in connection with a private placement financing. The stock issued was fair valued at $.149 per share for a total value of $18,645.

The Company issued 78,616 shares of common stock pursuant to an advisory fee agreement in connection with a private placement financing agreement. The stock issued was fair valued at $.159 per share for a total value of $12,500.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

The Company sold 1,428,571 units, which consisted of 1,428,571 shares of common stock and 1,428,571 warrants exercisable at $0.10 a share. The stock sold was at $.07 per share for proceeds of $100,000. There were no stipulations, conditions or requirements under the sale.

The Company sold 53,571,429 Units, which consisted of 53,571,429 shares of common stock and 99,000,001 warrants exercisable at varying exercise prices. The stock sold was at $.07 per share for proceeds of $3,250,000. Included in the aforementioned were 7,142,857 Units issued in lieu of a $500,000 payment for fees attributed to this equity raise. An additional 4,457,143 shares were issued as payment of fees for this equity raise as well, which had a fair value at $312,000. There were no stipulations, conditions or requirements under the sale. Exclusive of shares and warrants issued in lieu of fees, the cost of this equity raise was $157,000.

The Company issued 10,500,000 shares of its common stock pursuant to the Share Exchange Agreement with Urban Planet. The stock issued was fair valued at $.0962 per share for a total value of $1,010,100.

The Company issued a total of 72,857,143 shares of its common stock pursuant to the exercise by Shenzhen of certain warrants. The shares issued were at a price per share of $0.07 and $0.0842322 for total proceeds of $5,526,966. There were no stipulations, conditions or requirements under the sale. Exclusive of shares and warrants issued, the cost of this equity raise was $644,057.

The Company issued a total of 6,061,707 shares of its common stock pursuant to an advisory fee agreement with V3 Capital Partners, LLC as a direct result of the warrant exercise. The price per share ranged from $0.07 to $0.0842322 for a total fair value of $460,084 as a cost of the warrant exercise equity raise.

The Company issued 40,000 shares of its common stock for the settlement of amounts due to a shareholder. The stock issued was fair valued at $0.0962 per share for a total value of $3,848. No gain or loss was recorded on this transaction.

During the six months ended December 31, 2015, the Company issued no shares of common stock.

Preferred Stock

During the ~~three~~year ~~months~~ ended ~~September~~June 30, 2015, the Company issued nothe following shares of ~~Preferred~~preferred ~~Stock.~~stock:

~~During~~The Company issued 500,000 shares of its Series A Preferred pursuant to the ~~year~~Share ~~ended~~Exchange ~~June~~Agreement 30with Urban Planet. Each share of Series A Preferred issued to the former Urban Planet shareholders is convertible by the holder (1) at any time after 24 months after the original issue date or (2) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the Series A Preferred into that number of shares of common stock determined by dividing the stated value of such shares of Series A Preferred, ~~2015~~which is $10.00 per shares of Series A Preferred, by the ~~Company~~conversion ~~issued~~price. The conversion price of the ~~following~~Series A Preferred is $0.50, subject to adjustment as stated in the certificate of designation. The shares were fair valued at $.0962 per share, calculated at the conversion rate of 20 shares of common stock for each share of Series A Preferred ~~Stock:~~converted. The total estimated fair value of the Series A Preferred issued was $962,000 based on an as converted basis for the acquisition of Urban Planet.

~~The~~During ~~Company issued 500,000 shares of its preferred stock pursuant to~~ the ~~Share~~six ~~Exchange Agreement with Urban Planet. Each share of preferred stock issued to the former Urban Planet shareholders is convertible by the holder (1) at any time after 24~~ months ~~after~~ended ~~the~~December original issue date or (2) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the preferred stock into that number of shares of common stock determined by dividing the stated value of such shares of preferred stock31, ~~which is $10.00 per preferred share~~2015, by the ~~conversion~~Company ~~price.~~issued ~~The~~no ~~conversion price of the preferred stock is $0.50, subject to adjustment as stated in the certificate of designation. The~~ shares ~~were fair valued at $.0962 per share, calculated at the conversion rate~~ of ~~20 shares of common stock for each share of~~ preferred ~~converted. The total estimated fair value of the preferred~~ stock ~~issued was $962,000 based on an as converted basis for the acquisition of Urban Planet~~.

1312

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

Warrants

Warrant activity as of ~~September~~December 3031, 2015 and the year ended June 30, 2015 is summarized as follows:

	Fifteen months ended September 30, 2015
	Eighteen months ended December 31, 2015
	Shares			Weighted Average Exercise Price
Warrants outstanding at July 1, 2014		0		$	0.0
Granted		203,439,983			0.075
Exercised		(72,857,143)	)		0.076
Cancelled/expired		0			—
Warrants outstanding at June 30, 2015		130,582,840		$	0.075
Granted		0			0
Exercised		0			0
Cancelled/expired		(85,378,078)	)		**—
Warrants outstanding at September 30, 2015		45,204,762		$	0.075
Warrants outstanding at December 31, 2015		45,204,762		$	0.075
Warrants exercisable at September 30, 2015		45,204,762		$	0.075
Warrants exercisable at December 31, 2015		45,204,762		$	0.075

~~———————~~The total warrants outstanding at December 31, 2015 include 21,428,572 warrants that do not yet have a set exercise price, as per the terms of such warrants, the exercise price shall be the five-day volume weighted average price immediately preceding the exercise date of such warrants. See the discussion of the Securities Purchase Agreement in Note 1.

The cancelled warrants include 27,742,928 warrants that did not have a set exercise price, and were to be set at the five-day volume weighted average price immediately preceding the exercise date of such warrants. As such, no weighted average price is available.

The total warrants outstanding at September 30, 2015 include 21,428,572 warrants that do not yet have a set exercise price, as per the terms of such warrants, the exercise price shall be the five-day volume weighted average price immediately preceding the exercise date of such warrants. See the discussion of the Securities Purchase Agreement in Note 1.

Note 8 – 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.

14During 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.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

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 ~~September~~December 3031, 2015 provide for the rights to purchase an aggregate of 45,204,762 shares of common stock.

SIBLING GROUP HOLDINGS, INC.

d/b/a GLOBAL PERSONALIZED ACADEMICS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

Note 9 – Subsequent Events

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; 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.

16Note 9 – Subsequent Events

None

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the financial condition and results of operations of Sibling Group Holdings, Inc. (the “Company”). The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto.

Overview

The Company, which does business as Global Personalized Academics (“GPA”), is an innovative education company that provides virtual and classroom learning to help students across the globe transform the way they learn. GPA aims to take online learning to the next level with the latest technologies and education practices to help students reach their full potential.

The Company offers the following products and services:

Online Courses – The Company sells digital curriculum for grades K-12 directly to schools and districts in the U.S. The current catalog includes over 190 courses, all created by the GPA team of subject matter experts and sold in a variety of licensing models. Our catalog includes core, electives, AP, world languages and credit recovery courses.

Teacher Training – The Company provides professional development directly to schools and districts in the U.S. on a fee for service basis. Training is delivered online and face-to-face. Training is sold as a separate service or bundled with other products as a value-add.

Learning Management System Hosting – The Company provides access to learning management software directly to schools and districts in the U.S. This service is not sold separately, but is included as a value-add when combined with online courses and teacher training in a “Network Membership” model.

Online School – The Company provides end-to-end solutions to schools and districts in the U.S. and around the world. This service provides online courses, learning management system and a teacher in exchange for tuition on a per student, per semester basis.

International Dual-Diploma – Based on the Online School offering, these products expand the opportunity for international students by providing the chance to earn a U.S. high school diploma along with their local diploma. This program includes a fixed set of 12 semester courses delivered over two to three years. Courses are sold on a per student, per semester basis and targeted toward international students interested in attending a U.S. college or university.

Most of the K-12 course content has been created by the GPA team of subject matter experts. GPA upgrades each course very three years to ensure it meets the latest standards of pedagogy and content. GPA uses multiple learning management systems and other software systems to effectively deliver the content to the individual student.

Through professional development services, online curriculum licensing, curriculum bundled with learning management system access and administration and its Learning Institute, we service more than 150 school districts.

The Company is not dependent on one or a few major clients, and no client accounts for more than 10% of our revenues.

The Company is a Texas corporation incorporated on December 28, 1988.

1715

Recent Developments

Recent Acquisitions

As of May 30, 2014, the Company completed the acquisition of the assets of BlendedSchools.Net (“Blended Schools”) for a purchase price of $550,000, which included the assumption of $446,187 of Blended Schools’ debt and cash payments totaling $103,813. In addition, the Company agreed to pay certain other debts of Blended Schools as provided for in the asset purchase agreement. Blended Schools provides online curriculum with 192 master courses for the K-12 marketplace, all Common Core compatible; a complete hosted course authoring and learning management system environment featuring both Blackboard and Canvas; and the new Language Institute, with online courses in Arabic, Chinese, Spanish, French, Japanese, Latin, Russian, German and Hindi, all oriented to meet today’s ESL requirements.

On January 28, 2015, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Urban Planet Media & Entertainment, Corp. (“Urban Planet”) and its shareholders pursuant to which the Company issued 10,500,000 shares of its common stock, $0.0001 par value, and 500,000 shares of its Series A ~~convertible~~Convertible ~~preferred~~Preferred ~~stock~~Stock (“Series A Preferred”) to the shareholders of Urban Planet in exchange for all of the issued and outstanding shares of Urban Planet. Each share of ~~preferred~~Series ~~stock~~A Preferred issued to the former Urban Planet shareholders is convertible by the holder (1) at any time after 24 months after the original issue date or (2) at any time after delivery of notice by the Company of the occurrence of certain conversion events set forth in the certificate of designation establishing the preferred stock into that number of shares of common stock determined by dividing the stated value of such shares of ~~preferred~~Series ~~stock~~A Preferred, which is $10.00 per ~~preferred~~shares ~~share~~of Series A Preferred, by the conversion price. The conversion price of the ~~preferred~~Series ~~stock~~A Preferred is $0.50, subject to adjustment as stated in the certificate of designation.

The Company continues to evaluate acquisition and partnership opportunities that will compliment its vision within the K-12 education markets, representing education technologies, personalized learning, curriculum and private school organizations.

Capital Investments and Change in Control

During the quarter ended March 31, 2015, the Company received a strategic investment from Shenzhen City Qianhai Xinshi Education Management Co., Ltd., a company based and operating in the People’s Republic of China (“Shenzhen”). The strategic investment was provided to accelerate the Company’s growth and expansion into critical strategic markets around the world, including China. Effective on February 27, 2015, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Shenzhen and certain accredited and institutional investors (together with Shenzhen, the “Investors”). Pursuant to the Securities Purchase Agreement, the Investors purchased an aggregate of 53,571,429 Units (each, a “Unit”) for an aggregate cash raise of $3,250,000. Each Unit consists of: (1) a share of the Company’s common stock; (2) a warrant giving each of the Investors the right to purchase one additional share of common stock for each share owned at any time and from time to time for a period of five years at an exercise price of $0.07 per share (each, an “A Warrant”); (3) a warrant giving each of the Investors the right to purchase one additional share of common stock for each share owned at any time and from time to time for a period of one year following the effectiveness of a registration statement covering the resale of the total number of shares of common stock acquired by the Investors in the transaction at an exercise price equal to the five-day volume weighted average price immediately preceding the exercise date (each, a “B Warrant”); and (4) only as part of and in connection with the purchase of the shares underlying the B Warrants (the “B Warrant Shares”), a warrant giving each of the Investors the right to purchase 0.50 shares of common stock for each B Warrant Share purchased by such Investors at any time and from time to time for a period of five years at an exercise price equal to the purchase price of the B Warrant Shares (each, an “Additional Warrant” and together with the A Warrants and the B Warrants, the “Warrants”). The exercise prices of the Warrants may be reduced if the Company issues additional shares of common stock or securities convertible into common stock at a price lower than the Warrant exercise prices for so long as the Warrants remain outstanding. If all shares underlying all Warrants are ultimately issued, the Company will issue an aggregate of 187,500,001 shares of common stock pursuant to the Securities Purchase Agreement for additional proceeds.

1816

Following the exercise of the Warrants, Shenzhen holds 115,714,286 shares of the Company’s common stock, or approximately 57% of the Company’s total issued and outstanding shares of common stock as of ~~September~~December 3031, 2015.

The Company also entered into a Securities Purchase Agreement with an accredited investor, effective as of February 27, 2015 (“the Purchase Agreement”). Pursuant to the Purchase Agreement, the investor purchased an aggregate of 1,428,571 shares of the Company’s common stock for aggregate proceeds of $100,000. Additionally, the investor received a warrant giving him the right to purchase up to 1,428,571 shares of common stock at any time and from time to time for a period of five years at an exercise price of $0.10 per share.

Advisory Fee Agreement

During fiscal 2015, the Company entered into an Advisory Fee Agreement (the “Advisory Fee Agreement”) with V3 Capital Partners, LLC and certain of its affiliates (the “Advisor”) in connection with advisory, due diligence and financing activities performed by the Advisor in connection with the transaction with Shenzhen pursuant to the Securities Purchase Agreement. Pursuant to the Advisory Fee Agreement, the Company paid or issued to Advisor: (1) a cash payment of $57,000; (2) $312,000 of Units on the same terms and conditions as those issued in connection with the Shenzhen transaction; and (3) a warrant giving the Advisor the right to purchase up to an aggregate of 26,785,714 shares of common stock at any time and from time to time for a period of five years at an exercise price of $0.07 per share. Additionally, the Company agreed to pay Advisor a pro rata portion of the advisory fees detailed above in (1) and (2) on a similar percentage basis as the above fees upon exercise of any A Warrant, B Warrant or Additional Warrant and the fees described in clause (3) on a similar percentage basis as the above fee on the exercise of the B Warrant. The Company also agreed to pay $100,000 of Shenzhen’s and Advisor’s legal and due diligence expenses.

1917

Effective as of September 24, 2015, the Company entered into a Settlement Agreement and Mutual Release, and Addendum to Settlement Agreement and Mutual Release (the “Addendum,” and together, the “Settlement Agreement”), with the Advisors V3 Capital Partners, LLC, Scot Cohen, Oakway International Ltd., Oakway International and North Haven Equities, LLC (together, the “V3 Affiliates”) and Gaurav 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 Fee Agreement. Pursuant to the Settlement Agreement, the Advisors and the Company agreed to modify the payments due to the Advisors under the Advisory Fee Agreement as follows: (1) certain of the V3 Affiliates have agreed to forfeit and cancel all warrants previously issued to them pursuant to the Advisory Fee Agreement and agreed to terminate all further rights to additional shares, warrants or other payments due under the Advisory Fee Agreement; (2) Mr. Cohen has agreed to (A) forfeit and cancel all warrants issued to him under the Securities Purchase Agreement and Advisory Fee 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 Fee Agreement; (3) Oakway International Ltd. has agreed to forfeit and cancel all warrants received under the Advisory Fee Agreement and terminate all further rights to additional shares, warrants or other payments due under the Securities Purchase Agreement or Advisory Fee 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; (4) the Individuals will retain the warrants previously issued to them under the Advisory Fee 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 Fee Agreement and agreed to terminate all further rights to additional shares, warrants or other payments due under the Advisory Fee Agreement; and (5) 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 Fee Agreement and services provided by the Advisors thereunder.

As a result of the Settlement Agreement, the Company canceled 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 ~~September~~December 3031, 2015 provide for the rights to purchase an aggregate of 45,204,762 shares of common stock.

Debentures

On December 30, 2010, the Company entered into conversion agreements with all but one of the holders of the Series AA debentures previously issued by the Company and held on that date. Pursuant to the conversion agreements, the holders accepted a total of 1,039,985 shares of convertible series common stock and 100% of the membership interests of a wholly-owned subsidiary of the Company, Debt Resolution, LLC, in full settlement of their debentures, underlying warrants and accrued interest as of that date. Subsequently, series common stock was converted to shares of the Company’s common stock. The conversion agreements released all claims that 43 of the 44 total holders of the debentures had, have, or might have against the Company. Following this transaction, the Company had a debenture balance of $30,000 and accrued interest of $35,483 as of June 30, 2015, which was in default at June 30, 2015. On August 3, 2015, the Company paid a total of $65,904 in full satisfaction of the outstanding debenture, consisting of the principal amount and accrued interest.

Our Business Strategy

In fiscal 2015, ~~GPA~~we built aan executive and sales team, ofthe ~~individuals~~members ~~who~~of which have demonstrated long-term success in the education market. We ~~and~~also added aadditional ~~significant~~staff ~~number of new team members~~ to provide ongoing support to help our schools realize student success. In fiscal 2015, ~~the~~our ~~Company’s~~management ~~new~~ team worked to refine the overall Company strategy to ~~concentrate~~focus on K-12 online learning tools and created a strategic plan for revenue growth. For 2016, ~~the~~our ~~Company~~focus will ~~focus~~be to capitalize on ~~developing~~the investments made in our executive management and ~~enhancing~~sales team, as well as our infrastructure and curriculum, to develop and enhance the Blended Schools content to better compete in all markets; refining our sales and marketing initiatives to drive an increase in sales; and meeting a growing international demand for U.S. K-12 education tools.

In furtherance of these ~~goals~~objectives, ~~the~~we ~~Company~~have ~~has~~ engaged a ~~reputable~~ public relations and communications firm to advise on the branding and positioning of the Company in the education marketplace, and ~~has~~are focused on hiring additional experienced and successful individuals to build up ~~its~~our leadership team. In addition, the Company will continue to work to form partnerships and develop certain of its products to grow its position in the online education market, including the expanding credit recovery program market.

2018

Domestic Sales and Marketing

We believe that every teacher should have access to the latest education technology tools and teaching techniques regardless of school size, budget or zip code. GPA focuses all domestic sales and marketing efforts on small school districts with student populations between 1,000 and 10,000. The Company currently serves 150 U.S. school districts, with the largest customer representing 3% of total revenue. GPA has expanded the domestic sales team to include seven new members who are working to leverage existing relationships and cultivate new leads.

International Sales and Marketing

In August 2015, the Company began working with our strategic partner, Shenzhen, to develop the Chinese market for GPA products. The two companies created both an English language learning (“ELL”) and international dual diploma program for Chinese students. Shenzhen and GPA have worked to establish partnerships with education marketing and sales companies to sell the products into Chinese schools. GPA staff ~~have~~has worked closely with the Shenzhen staff to present the program directly to schools and learning centers in the country to enroll students in the program. While we anticipated the rollout of this program during 2015, and therefore incurred substantial costs in furtherance of such anticipated rollout, such rollout was delayed, resulting in the loss of substantial projected revenue during the six-month period ending December 31, 2015. The Company ~~expects~~currently toanticipates ~~have~~having pilot programs in place by the spring of 2016 with full program implementation in the fall of 2016.

The international dual diploma program developed for China can be used in other countries as well. The Company intends to take both the ELL and international dual diploma program and work with other organizations that are successfully selling educational products and services in their home countries to bring the GPA ELL and international dual diploma program to additional markets.

Recent Trends

International demand for U.S. secondary education content has significantly increased as a result of the demand for U.S. college and university degrees. According to the Institute of International Education, the number of students worldwide pursuing higher education degrees from countries outside of their home countries grew from 3.0 million in 2005 to 4.3 million in 2011, and is projected to reach 8.0 million by 2025. As a result, international high schools have implemented dual diploma programs ~~which~~that ~~allows~~allow students to receive a diploma from their local high school and from a U.S. based high school.

The Company is working to leverage local partnerships in countries where there is significant demand for U.S. K-12 content to provide products to the rapidly growing market of international students.

In addition, the growth and quality improvement in online learning and mounting pressure on educators to boost retention and graduation rates have contributed to a substantial growth in online credit recovery programs that allow students to earn credits toward high school graduation. More than half of the school districts in the U.S. offer online courses and services because of their efficiency, low cost and flexibility. We intend to develop and improve additional products to expand our presence in this rising market.

Results of Operations

Three Months Ended ~~September~~December 3031, 2015 Compared to Three Months Ended ~~September~~December 3031, 2014

During the three-month period ended September 30, 2015, we recorded revenue of $514,352, primarily from the Blended Schools division, acquired in 2014, as compared to $529,760 in revenue for the three months ended September 30, 2014. Total operating expenses for the three-month period ended September 30, 2015 were $1,239,517, consisting of salaries of our management and staff, consulting expenses and professional fees. This is compared to total operating expenses for the three-month period ended September 30, 2014 of $1,666,793, consisting of salaries of our management and staff, consulting expenses and professional fees.Revenue

~~Interest~~During ~~expense on our existing debt for~~ the three-month ~~periods~~period ended ~~September~~December 3031, 2015, ~~and~~we ~~2014~~recorded ~~was~~revenue of $6494,~~593~~544, ~~and~~primarily from the Blended Schools division, acquired in 2014, as compared to $16570,~~231~~374 in revenue for the three months ended December 31, ~~respectively~~2014. ~~Amortization~~The ofdecrease ~~intangibles~~in ~~and~~revenue ~~debt~~is ~~discount~~principally ~~amounted~~attributable to ~~$93~~issues with the Pennsylvania State budget. The Pennsylvania State Legislature has been unable to pass a budget which has left School Districts without funding. The majority of the Blended Schools Division sales are in Pennsylvania,~~055~~ and ~~$129~~the budget impasse has adversely affected sales this year. While no assurances can be given,~~718~~ ~~for~~due to the ~~three~~Company’s sales cycle, which principally results in the negotiation of contracts during the six months ~~ended~~ending ~~September~~June 30, ~~2015~~and our existing and ~~2014~~anticipated sales pipeline, ~~respectively~~we believe that our sales will significantly increase through the end of the current fiscal year, and accelerate beginning in fiscal 2016.

2119

Sales, General and Administrative Expense

Total operating expenses for the three-month period ended December 31, 2015 were $1,233,443, compared to total operating expenses for the three-month period ended December 31, 2014 of $1,094,683. Operating expenses consist of salaries of our management and staff, consulting expenses and professional fees. The increase in operating expenses during the period ended December 31, 2015 is principally attributable to the addition of executive management, sales and other personnel, which added $628,048 to expenses during the period ended December 31, 2015, and the non-recurring payment of certain contractual, travel, and other costs incurred in connection with the anticipated rollout of our programs in China, which added $84,775.67 in costs during the period December 31, 2015.

Interest Expense

Interest expense on our existing debt for the three-month periods ended December 31, 2015 and 2014 was $1,633 and $78,952, respectively. Amortization of intangibles and debt discount amounted to $93,054 and $129,719 for the three months ended December 31, 2015 and 2014, respectively.

Income Taxes

There is no income tax expense recorded for the three months ended December 31, 2015 and 2014, due to the Company's net losses. As of December 31, 2015, the Company has tax net operating loss carry forwards and a related deferred tax asset, offset by a full valuation allowance.

Net Loss

Our net loss for the three months ended December 31, 2015 was $1,194,802, as compared to a net loss of $1,091,707 for the three months ended December 31, 2014. This year-over-year increase in net loss is primarily attributable to increased sales, general and administrative expenses during the quarter, and lower sales and gross profit. On a per share basis, our loss was $0.01 per share for the three months ended December 31, 2015, as compared to a loss of $0.02 per share for the three months ended December 31, 2014.

Six Months Ended December 31, 2015 Compared to Six Months Ended December 31, 2014

Revenue

During the six-month period ended December 31, 2015, we recorded revenue of $1,008,896 compared to $1,100,134 in revenue for the six months ended December 31, 2014, both principally attributable to the Blended Schools division. The Company acquired the Blended Schools division in May 2014. While no assurances can be given, due to the Company’s sales cycle, which principally results in the negotiation of contracts during the six months ending June 30, and our existing and anticipated sales pipeline, we believe that our sales will significantly increase through the end of the current fiscal year, and accelerate beginning in fiscal 2016.

Sales, General and Administrative Expense

Total operating expenses for the six-month period ended December 31, 2015 were $2,472,960, compared to total operating expenses for the six-month period ended December 31, 2014 of $2,761,476. Operating expenses consist of salaries of our management and staff, consulting expenses and professional fees. Operating expenses during the period ended December 31, 2015 reflect the addition of executive management, sales and other personnel, which added $1,040,994 to expenses during the six month period ended December 31, 2015, and the non-recurring payment of certain contractual, travel, and other costs incurred in connection with the anticipated rollout of our programs in China, which added $169,009 in costs during the six-month period ended December 31, 2015.

Interest Expense

Interest expense on our existing debt for the six periods ended December 31, 2015 and 2014 was $8,227 and $95,183, respectively. Amortization of intangibles and debt discount amounted to $186,109 and $259,436 for the six months ended December 31, 2015 and 2014, respectively.

Income Taxes

There is no income tax expense recorded for the six months ended December 31, 2015 and 2014, due to the Company's net losses. As of December 31, 2015, the Company has tax net operating loss carry forwards and a related deferred tax asset, offset by a full valuation allowance.

Net Loss

Our net loss for the six months ended December 31, 2015 was $2,391,456, as compared to a net loss of $2,576,237 for the six months ended December 31, 2014. This year-over-year decrease in net loss is primarily attributable to other expenses during the six-month period ending December 31, 2014, which were non-recurring, and, to a lesser extent, a gain on debt settlements, offset, in principal part, by a gross loss during the six-month period ending December 31, 2015. On a per share basis, our loss was $0.01 per share for the six months ended December 31, 2015, as compared to a loss of $0.06 per share for the six months ended December 31, 2014.

Liquidity and Capital Resources

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had working capital of $1284,~~628,546~~725 and $31,~~374~~009,~~291~~792 in cash as of ~~September~~December 3031, 2015, compared to working capital of $2,896,154 and $5,415,744 in cash as of June 30, 2015.

Net cash used by operating activities was $13,~~842~~863,~~328~~920 for the ~~three~~six months ended ~~September~~December 3031, 2015, compared to ~~net cash provided by operating activities of~~ $84275,~~050~~146 for the ~~three~~six months ended ~~September~~December 3031, 2014. The increase of $13,~~926~~588,~~377~~774 of cash used by operating activities for the quarter was primarily a result of payments made on obligations, including accounts payable and debt settlements versus reduced cash collections of accounts receivable.

We had capital expenditures of $3536,~~451~~858 for the purchase of laptops for new management and staff members for the ~~three~~six months ended ~~September~~December 3031, 2015, as well as a net outlay of $~~133~~375,~~675~~175 for intangibles for the video production project to enhance our course content. We have no plans for the purchase of real property in the foreseeable future.

On August 3, 2015, the Company paid a total of $65,904 in full satisfaction of the one remaining outstanding Series AA debenture, which was in default at June 30, 2015, consisting of the principal amount due of $30,000 and accrued interest.

~~The~~Historically, ~~ability~~our ofprincipal ~~the~~sources ~~Company~~of tocash ~~continue~~have asincluded arevenue ~~going~~from ~~concern~~operating isactivities, ~~dependent~~proceeds onfrom ~~generating~~the ~~future~~issuance ~~profitable~~of ~~operations~~common and ~~raising~~preferred ~~additional~~stock, ~~capital~~and ~~needed~~proceeds ~~until~~from the ~~Company~~issuance ~~generates~~of ~~profits~~short-term debt. ~~There~~Our ~~can~~principal beuses noof ~~assurance~~cash ~~that~~have ~~the~~included ~~Company~~cash ~~will~~used bein ~~able~~operations, topayments ~~raise~~relating ~~the~~to ~~necessary~~purchases ~~funds~~of ~~when~~property ~~needed~~and toequipment ~~finance~~and ~~its~~repayments ~~ongoing~~of ~~costs~~borrowings. ~~Management~~ ~~has~~We ~~developed~~expect ~~new~~that ~~product~~our ~~offerings~~principal ~~internationally~~uses asof ~~well~~cash asin ~~focused~~the onfuture ~~increasing~~will ~~sales~~be byfor ~~hiring~~product ~~seven~~development, ~~new~~further ~~sales~~development ~~team~~of ~~members~~intellectual toproperty, ~~provide~~as ~~coverage~~well ~~for~~as ~~most~~general ofworking ~~the~~capital ~~United States~~ and ~~South~~capital ~~America.~~expenditure ~~The Company has also implemented cost reduction programs to reduce discretionary expenses~~requirements.

Management believes that the Company’s current cash and cash equivalents will not be sufficient to meet working capital and capital expenditure requirements for the next 12 months. As a result, the ability of the Company to continue as a going concern is dependent on generating future profitable operations and raising additional capital needed until the Company generates profits. Management is therefore seeking to raise additional debt and/or equity capital. There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing working capital requirements.

While we used a substantial amount of cash since June 30, 2015, management believes the investments made to develop new product offerings internationally, additions to its executive management and sales team to capitalize on future growth opportunities throughout the U.S. South America, China, among others, and investments made in infrastructure, will provide the foundation for near-term revenue growth. Until such time as we are able to generate positive cash flow from operations, management will continue to focus on reducing discretionary costs and expenses, matching staffing levels with existing and forecasted sales levels, and and directing existing cash resources to activities intended to increase revenue.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure on contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions and conditions.

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and may potentially result in materially different results under different assumptions and conditions. Our critical accounting policies are summarized in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2015. In the first three months of fiscal 2016, there were no changes to the significant accounting policies.

Off Balance Sheet Arrangements

There are no off balance sheet arrangements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls

The Company has established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and, as such, is accumulated and communicated to the Company’s management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management, together with our principal executive officer and principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of ~~September~~December 3031, 2015. Based on their evaluation, the principal executive officer and principal financial officer concluded that, due to material weaknesses in our internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of ~~September~~December 3031, 2015.

Material Weaknesses

As previously reported in our Annual Report on Form 10-K for the year ended June 30, 2015, we identified the following material weaknesses in our internal control over financial reporting: (1) lack of sufficient resources to ensure compliance with U.S. generally accepted accounting principles and the rules and regulations of the SEC, especially with regards to equity-based transactions and tax accounting expertise; and (2) lack of sufficient resources to ensure that information required to be disclosed by the Company in the reports that the Company files or submits to the SEC are recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. The control deficiencies noted did not result in any audit adjustments to the Company’s 2015 financial statements.

Management, together with our principal executive officer and principal financial officer, has identified the following additional material weaknesses in our internal control over financial reporting, in addition to those described above: (1) lack of segregation of duties; and (2) inadequate security over information technology.

In light of these material weaknesses in internal control over financial reporting, we completed substantive procedures, including the inspection of support for transactions and balances and tests of the mechanical accuracy of balances, prior to filing this Quarterly Report on Form 10-Q. These additional procedures have allowed management to conclude that, notwithstanding the material weaknesses in our internal control over financial reporting, the consolidated financial statements included in this report fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

In response to the material weaknesses, we have begun to explore and develop a remediation plan for implementing new internal controls over financial reporting and disclosure controls and procedures. Once finalized and placed in operation for a sufficient period of time, we will subject these controls and procedures to appropriate tests in order to determine whether they are operating effectively. Management, with oversight from the Board of Directors, is committed to the remediation of known material weaknesses as expeditiously as possible.

Changes in Internal Control over Financial Reporting

With the oversight of management and our Board of Directors, we have continued to evaluate the underlying causes of the material weaknesses. Other than with respect to the development of an ongoing plan for remediation of the material weaknesses, there has been no change to our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2015, which could materially affect our business, financial condition and future results. Except as set forth below, there have been no material changes to these risk factors as described in the Annual Report.

We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective. The lack of effective internal controls could materially adversely affect our financial condition and ability to carry out our business plan.

For the ~~year~~six months ended ~~June~~December 3031, 2015, our management team, under the supervision and with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of the design and operation of our internal controls and determined that our internal control over financial reporting was not effective. At ~~September~~December 3031, 2015, we concluded that our disclosure controls and procedures were not effective at a reasonable assurance level because of the material weaknesses in our internal control over financial reporting that continue to exist. Until we have been able to complete and test the effectiveness of the remediation of our internal controls and ensure the effectiveness of our disclosure controls and procedures, any material weaknesses may materially adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner. In addition, although we continually review and evaluate internal control systems to allow management to report on the sufficiency of our internal controls, we cannot assure you that we will not discover additional weaknesses in our internal control over financial reporting. Any such additional weakness or failure to remediate the existing weakness could materially adversely affect our financial condition or ability to comply with applicable financial reporting requirements and the requirements.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company issued no shares of its common stock during the ~~quarter~~six months ended ~~September~~December 3031, 2015 in unregistered transactions.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.

OTHER INFORMATION.

(a) OnThere ~~July~~have ~~21,~~been ~~2015,~~no ~~the~~material ~~Company~~changes ~~entered into a Video Production Agreement with Coolfire Studios, LLC (“Coolfire”)~~ to ~~produce 3,500 academic instruction videos at a cost of $530 per video, with various payments scheduled over a one-year period. The Company had~~ the ~~option~~procedures toby ~~opt-out of this agreement until September 25, 2015, at~~ which ~~time~~security itholders ~~became~~may arecommend ~~definitive~~nominees ~~agreement,~~to ~~obligating~~ the Company’s toBoard ~~pay a total~~ of ~~$1.86~~Directors ~~million~~since ~~over~~ the ~~course~~filing of ~~one year. Pursuant to~~ the ~~terms~~Company’s ofAnnual ~~the~~Report ~~agreement,~~on ~~Coolfire~~Form is10-K ~~responsible~~ for ~~obtaining all necessary licenses and production materials and staff necessary to produce~~ the ~~videos.~~year ~~The~~ended ~~Agreement~~June ~~will terminate on July 31~~30, ~~2016, unless earlier terminated by either party as a result of the other party’s breach, as provided in the agreement~~2015.

(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the filing of the Company’s Annual Report on Form 10-K for the year ended June 30, 2015.

ITEM 6.

EXHIBITS

Exhibit No.		Description of Exhibit
10.1		Settlement Agreement and Mutual Release, effective as of September 24, 2015, by and among V3 Capital Partners, LLC, Scot Cohen, Oakway International Ltd., North Haven Equities, LLC, Gaurav Malhotra, Richard Abbe, Jonathan Rudney, Matthew Hull and Kyle Pollack and Sibling Group Holdings, Inc. (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2015).
10.2		Addendum to Settlement Agreement and Mutual Release, effective as of September 24, 2015, executed by Sibling Group Holdings, Inc., Scot Cohen, Oakway International Ltd. and Oakway International (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2015).
10.3		Offer Letter between Sibling Group Holdings, Inc. and Julie Young (Incorporated herein by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed with the SEC on October 23, 2015).
10.4*		Video Production Agreement, dated as of July 21, 2015, between Sibling Group Holdings, Inc. and Coolfire Studios, LLC.
31.1*		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document.
101.SCH*		XBRL Taxonomy Extension Schema Document.
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

———————

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Sibling Group Holdings, Inc.
Dated: November 9, 2015	By:	/s/ Julie Young
Dated: February 22, 2016	By:	/s/ Julie Young
		Julie Young
		Chief Executive Officer
		(Principal Executive Officer)
Dated: November 9, 2015	By:	/s/ Angelle Judice
Dated: February 22, 2016	By:	/s/ Angelle Judice
		Angelle Judice
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Filing Compare · Sibling Group Holdings, Inc.