Stockholders' Deficit

3 Months Ended

Mar. 31, 2012

Equity [Abstract]

Stockholders' Deficit

Note 7 – Stockholders’ Deficit

Series A Cumulative Convertible Preferred Stock

On March 30, 2012, the Company closed on a first round of financing related to an offering of up to $2,000,000 of the Company’s Series A Cumulative Convertible Preferred Stock, by entering into subscription agreements with ten (10) accredited investors for the issuance and sale of (i) an aggregate of $825,000 in Series A Preferred and (ii) common stock purchase warrants, on the basis of one warrant for every $2.00 of investment.

In connection with the closing, and pursuant to mandatory conversion features of those certain Senior Convertible Debentures in the aggregate amount of $325,000, issued on December 6, 2011, the debentures were mandatorily converted (into shares of Series A Preferred and warrants upon the same terms of the Offering. A total of 3,250 shares of Series A Preferred and 162,500 warrants were issued by the Company to the debenture investors pursuant to the mandatory conversion feature

The Company paid $125,500 in stock issuance costs to complete the convertible preferred stock and warrant raise.

Immediately after the Share Exchange, the Company entered into subscription agreements with certain subscribers for the issuance and sale of (i) of $975,928 in Series A Cumulative Convertible Preferred Stock with the rights and preferences set forth in the Company’s series A Certificate of Designation, as amended, convertible into shares of common stock at $0.40 per share; and (ii) warrants to purchase shares of the Company’s common stock.

The Company paid $142,250 in stock issuance costs to complete the convertible preferred stock and warrant raise.  In addition, the Company issued 206,250 warrants to the placement agent. The warrants were recorded as stock issuance costs.

On April 18, 2011, the Company entered into subscription agreements with certain subscribers for the issuance and sale of (i) $575,000 in Series A Cumulative Convertible Preferred Stock with the rights and preferences set forth in the Certificate of Designation, convertible into shares of common stock at $0.40 at per share; and (ii) Warrants to purchase shares of the Company’s common stock.

The Company paid $30,000 in stock issuance costs to complete the convertible preferred stock and warrant raise.

Common Stock

On December 17, 2010, the Company entered into a financial reporting services agreement with Brio Financial Group (“Brio”).  Pursuant to the agreement, the Company is required to pay the firm $4,500 per month. In addition, a retainer of $8,000 is included in prepaid expenses as of December 31, 2010 and was expensed during the year ended December 31, 2011. The Company also agreed to issue Brio 30,000 shares of restricted common stock per quarter payable at the end of each quarter. Through March 31, 2012, Brio has accrued into 180,000 shares of common stock which were valued at $0.40 - $0.60 per share, or $84,000 in the aggregate, and recorded as a consulting expense. The common stock has not yet been issued and the liability is included in accounts payable and accrued liabilities.

On January 14, 2011, the directors of the Company approved by unanimous written consent and the stockholders of the Company holding a majority in interest of the Company’s voting equity approved by written consent the appointment of Mr. Vadim Mats as a member of the Board of Directors of the Company, effective as of January 14, 2011. Mr. Mats earns 10,000 shares of the company’s common stock quarterly. As of March 31, 2012, the Company is yet to issue Mr. Mats 50,000 shares of common stock. The Company has valued the issuance and has recorded and accrual of $24,000.

On February 1, 2011, the Company entered into an engagement letter with Lucosky Brookman LLP (“Lucbro”) to provide legal services with respect to certain securities work. Pursuant to the agreement, the Company is required to pay the firm $4,000 per month along with 5,000 shares of the Company’s common stock. The Company also agreed to issue Lucbro 150,000 shares of restricted common upon execution of the agreement. As of March 31, 2012, Lucbro has accrued into 220,000 shares of the Company’s common stock which were valued at $0.40 - $0.60 per share, or $94,000 in the aggregate, and recorded as consulting. The common stock has not yet been issued and the liability is included in accounts payable and accrued liabilities.

On March 23, 2011, the Company entered into a director agreement with Michael Mathews, pursuant to which Mr. Mathews was appointed Chairman of the Company’s board of directors.  The term of the director agreement is from March 23, 2011 through the Company’s next annual stockholders’ meeting.  The director agreement may, at the option of the Board, be automatically renewed on such date that Mr. Mathews is re-elected to the Board.  Under the director agreement, Mr. Mathews shall be paid a quarterly stipend of twenty thousand dollars ($20,000). Mr. Mathews has waived this stipend through March 31, 2012.

On March 23, 2011, the Company entered into a consulting agreement with Mr. Mathews, pursuant to which Mr. Mathews will, among other things, develop a digital platform for the Company and establish digital planning systems that will include all forms of digital media and social, search, content, and video applications. The term of the consulting agreement is for a four (4) year period. As compensation for his services, Mr. Mathews shall receive, with the first issuance of 250,000 shares occurring on March 23, 2011, and the second issuance of 250,000 on March 31, 2012, one million (1,000,000) restricted shares of the Company’s common stock, issuable in four yearly installments. As of March 31, 2012, the Company is yet to issue Mr. Mathews 500,000 shares of common stock per the vesting arrangement. The Company has valued the issuance and has recorded and accrual of $225,000.

On March 23, 2011, the Company entered into a consulting agreement with Brad Powers pursuant to which Mr. Powers will, among other things, develop a digital platform for the Company and establish digital planning systems that will include all forms of digital media and social, search, content, and video applications. The term of the consulting agreement is for a four (4) year period. As compensation for his services, Mr. Powers shall receive 62,500 shares of the Company’s common stock upon execution of the agreement and an additional 62,500 restricted shares of the Company’s common stock, issuable in annual installments on the anniversary of the execution of the agreement. The 125,000 shares vested as of March 31, 2012, were valued at $0.40 - $0.60 per share, or $56,250 in the aggregate, and recorded as consulting expense. The common stock has not yet been issued and the liability is included in accounts payable and accrued liabilities.

On December 21, 2011, Wizard World, entered into a stock subscription agreement with one investor, the Michael Mathews 2011 Children’s GRAT (the “Trust”).  Michael Mathews is the Company’s Executive Chairman.  Pursuant to the terms of the agreement, the Company issued 357,143 shares of the Company’s common stock, par value $0.001 per share, at $0.70 per share, for a total subscription price of $250,000.

Warrants

On January 3, 2011, the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the Company reasonably requests that consultant provide to the Company. The term is for six months and the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance. On March 19, 2012, the consultant agreed to cancel these 1,000,000 warrants. The Company recorded a recovery in the amount of $222,761 during the three months ended March 31, 2012.

On January 3, 2011, the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the Company reasonably requests that consultant provide to the Company. The term is for six months and the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance. On March 19, 2012, the consultant agreed to cancel these 250,000 warrants. The Company recorded a recovery in the amount of $55,690 during the three months ended March 31, 2012.

On March 3, 2011, the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the Company reasonably requests that consultant provide to the Company. The term is for six months and the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance. On March 19, 2012, the consultant agreed to cancel these 250,000 warrants. The Company recorded a recovery in the amount of $55,690 during the three months ended March 31, 2012.

The following is a summary of the Company’s warrant activity:

				Weighted Average
	Warrants			Exercise Price
Outstanding – December 31, 2011		6,956,024		$	0.40
Exercisable – December 31, 2011		6,956,024		$	0.40
Granted		1,781,250		$	0.60
Exercised		-		$	-
Forfeited/Cancelled		(1,500,000	)	$	0.40
Outstanding – March 31, 2012		7,237,274		$	0.40
Exercisable –  March 31, 2012		7,237,724		$	0.45

Warrants Outstanding							Warrants Exercisable
					Weighted				Weighted
Range of		Number		Weighted Average Remaining	Average Exercise		Number		Average Exercise
exercise price		Outstanding		Contractual Life (in years)	Price		Exercisable		Price
$	0.40 – 0.60		7,237,724	4.0	$	0.45		7,237,274	$	0.45

At March 31, 2012 and 2011, the total intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.

Equity Incentive Plan

On May 9, 2011, and subsequently amended on September 14, 2011, and April 11, 2012, the Board approved, authorized and adopted (subject to stockholder approval) the 2011 Incentive Stock and Award Plan (the “Plan”).  The Plan provides for the issuance of up to 35000,000 shares of common stock, par value $.0001 per share, of the Company through the grant of non-qualified options (the “Non-qualified Options”), incentive options (the “Incentive Options” and together with the Non-qualified Options, the “Options”) and restricted stock (the “Restricted Stock”) to directors, officers, consultants, attorneys, advisors and employees.

The Plan shall be administered by a committee consisting of two or more independent, non-employee and outside directors (the “Committee”). In the absence of such a Committee, the Board of the Company shall administer the Plan.

Each Option shall contain the following material terms:

(i) the exercise price, which shall be determined by the Committee at the time of grant, shall not be less than 100% of the Fair Market Value (defined as the closing price on the final trading day immediately prior to the grant on the principal exchange or quotation system on which the common stock is listed or quoted, as applicable) of the common stock of the Company, provided that if the recipient of the Option owns more than ten percent (10%) of the total combined voting power of the Company, the exercise price shall be at least 110% of the fair market value;

(ii) the term of each Option shall be fixed by the Committee, provided that such Option shall not be exercisable more than five (5) years after the date such Option is granted, and provided further that with respect to an Incentive Option, if the recipient owns more than ten percent (10%) of the total combined voting power of the Company, the Incentive Option shall not be exercisable more than five (5) years after the date such Incentive Option is granted;

(iii) subject to acceleration in the event of a change of control of the Company (as further described in the Plan), the period during which the Options vest shall be designated by the Committee or, in the absence of any Option vesting periods designated by the Committee at the time of grant, shall vest and become exercisable in equal amounts on each fiscal quarter of the Company through the four (4) year anniversary of the date on which the Option was granted;

(iv) no Option is transferable and each is exercisable only by the recipient of such Option except in the event of the death of the recipient; and

(v) with respect to Incentive Options, the aggregate fair market value of common stock exercisable for the first time during any calendar year shall not exceed $100,000.

Each award of restricted stock is subject to the following material terms:

(i)      no rights to an award of restricted stock is granted to the intended recipient of restricted stock unless and until the grant of restricted stock is accepted within the period prescribed by the Committee;

(ii)      restricted stock shall not be delivered until they are free of any restrictions specified by the Committee at the time of grant;

(iii)recipients of restricted stock have the rights of a stockholder of the Company as of the date of the grant of the restricted stock;

(iv)shares of restricted stock are forfeitable until the terms of the restricted stock grant have been satisfied or the employment with the Company is terminated; and

(v)the restricted stock is not transferable until the date on which the Committee has specified such restrictions have lapsed.