10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2018

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 000-33383

WIZARD ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware	98-0357690
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

662 N. Sepulveda Blvd., Suite 300

Los Angeles, CA 90049

(Address of principal executive offices)

(310) 648-8410

(Registrant’s telephone number, including area code)

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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] 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 (Sec. 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. Yes [X] No [  ]

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

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer (Do not check if a smaller reporting company)	[  ]	Smaller reporting company	[X]
Emerging Growth Company	[  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

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

As of November 14, 2018, there were 68,535,036 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4.	Controls and Procedures	8
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	9
Item 1A.	Risk Factors	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Mine Safety Disclosures	9
Item 5.	Other Information	9
Item 6.	Exhibits	9
Signatures		10

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Wizard Entertainment, Inc.

September 30, 2018

Index to the Condensed Consolidated Financial Statements

Contents	Page(s)
Condensed Consolidated Balance Sheets at September 30, 2018 (unaudited) and December 31, 2017	F-2
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	F-3
Condensed Consolidated Statements of Stockholders’ Deficit for the Nine Months Ended September 30, 2018 (unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (unaudited)	F-5
Notes to the Condensed Consolidated Financial Statements (unaudited)	F-6

F-1

Wizard Entertainment, Inc.

Condensed Consolidated Balance Sheets

	September 30, 2018			December 31, 2017
	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	1,245,296		$	1,769,550
Accounts receivable, net		200,091			336,030
Inventory		-			1,204
Prepaid convention expenses		630,365			461,986
Prepaid insurance		133,254			87,987
Prepaid rent - related party		-			76,006
Prepaid taxes		13,984			14,398
Other prepaid expenses		49,494			18,117
Deferred offering costs		73,174			-
Total Current Assets		2,345,658			2,765,278
Property and equipment, net		113,246			165,403
Security deposits		9,408			9,408
Total Assets	$	2,468,312		$	2,940,089
Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable and accrued expenses	$	4,170,306		$	2,800,118
Unearned revenue		463,294			2,164,972
Convertible promissory note – related party, net		1,765,702			1,116,979
Due to CONtv joint venture		224,241			224,241
Total Current Liabilities		6,623,543			6,306,310
Total Liabilities		6,623,543			6,306,310
Commitments and contingencies
Stockholders’ Deficit
Preferred stock par value $0.0001: 20,000,000 shares authorized; 50,000 shares designated Series A convertible preferred stock par value $0.0001: 50,000 shares designated; 39,101 shares issued and converted, respectively					-
Common stock par value $0.0001: 80,000,000 shares authorized; 68,535,036 and 68,535,036 shares issued and outstanding, respectively		6,855			6,855
Additional paid-in capital		20,010,279			19,960,893
Accumulated deficit		(24,159,867	)		(23,321,471	)
Non-controlling interest		(12,498	)		(12,498	)
Total Stockholders’ Deficit		(4,155,231	)		(3,366,221	)
Total Liabilities and Stockholders’ Deficit	$	2,468,312		$	2,940,089

See accompanying notes to the condensed consolidated financial statements

F-2

Wizard Entertainment, Inc.

Condensed Consolidated Statements of Operations

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
				As Restated (Note 3)						As Restated (Note 3)
Revenues
Convention	$	4,468,776		$	5,233,283		$	13,571,809		$	13,617,324
ConBox		-			-			-			84,580
Total revenues		4,468,776			5,233,283			13,571,809			13,701,904
Cost of revenues
Cost of revenue		3,469,061			5,238,258			10,844,897			13,670,274
Total cost of revenues		3,469,061			5,238,258			10,844,897			13,670,274
Gross margin		999,715			(4,975	)		2,726,912			31,630
Operating expenses
Compensation		425,138			690,640			1,346,719			2,628,161
Consulting fees		130,092			209,859			354,109			537,095
General and administrative		448,688			371,427			991,282			1,321,231
Total operating expenses		1,003,918			1,271,926			2,692,110			4,486,487
(Loss) income from operations		(4,203	)		(1,276,901	)		34,802			(4,454,857	)
Other expenses
Interest expense		(443,304	)		(112,068	)		(873,198	)		(288,742	)
Loss on disposal of equipment		-			-			-			(785	)
Total other expenses		(443,304	)		(112,068	)		(873,198	)		(289,527	)
Loss before income tax provision		(447,507	)		(1,388,969	)		(838,396	)		(4,744,384	)
Income tax provision		-			-			-			-
Net loss		(447,507	)		(1,388,969	)		(838,396	)		(4,744,384	)
Net loss attributable to non-controlling interests		-			-			-			(643	)
Net loss attributable to common stockholders	$	(447,507	)	$	(1,388,969	)	$	(838,396	)	$	(4,743,741	)
Loss per share – basic	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.07	)
Loss per share – diluted	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.07	)
Weighted average common shares outstanding - basic		68,535,036			68,535,036			68,535,036			68,535,036
Weighted average common shares outstanding - diluted		68,535,036			68,535,036			68,535,036			68,535,036

See accompanying notes to the condensed consolidated financial statements

F-3

Wizard Entertainment, Inc.

Condensed Consolidated Statement of Stockholders’ Deficit

For the Nine Months Ended September 30, 2018

(Unaudited)

	Preferred Stock Par Value $0.0001				Common Stock Par Value $0.0001				Additional Paid-in		Accumulated			Non- controlling			Total Stockholders’ Deficit)
	Shares		Amount		Shares		Amount		Capital		Deficit			Interest			Equity
Balance - December 31, 2017		-	$	-		68,535,036	$	6,855	$	19,960,893	$	(23,321,471	)	$	(12,498	)	$	(3,366,221	)
Share-based compensation		-		-		-		-		49,386		-			-			49,386
Net loss		-		-		-		-		-		(838,396	)		-			(838,395	)
Balance – September 30, 2018		-	$	-		68,535,036	$	6,855	$	20,010,279	$	(24,159,867	)	$	(12,498	)	$	(4,155,231	)

See accompanying notes to the condensed consolidated financial statements

F-4

Wizard Entertainment, Inc.

Condensed Consolidated Statements of Cash Flows

	For the Nine Months Ended
	September 30, 2018			September 30, 2017
	(Unaudited)			(Unaudited)
				As Restated (Note 3)
Cash Flows From Operating Activities:
Net loss	$	(838,396	)	$	(4,744,384	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		63,578			119,511
Loss on disposal of equipment		-			785
Accretion of debt discount		648,723			59,766
Share-based compensation		49,386			274,499
Changes in operating assets and liabilities:
Accounts receivable		135,939			(286,367	)
Inventory		1,204			(12,368	)
Prepaid convention expenses		(168,379	)		390,732
Prepaid rent - related party		76,006			80,705
Prepaid insurance		(45,267	)		(5,490	)
Prepaid taxes		414			(621	)
Other prepaid expenses		(31,377	)		(7,042	)
Security deposits		-			10,504
Accounts payable and accrued expenses		1,297,014			1,827,916
Unearned revenue		(1,701,678	)		(836,149	)
Net Cash Used In Operating Activities		(512,833	)		(3,128,003	)
Cash Flows from Investing Activities:
Purchase of property and equipment		(11,421	)		(97,180	)
Net Cash Used In Investing Activities		(11,421	)		(97,180	)
Net change in cash and cash equivalents		(524,254	)		(3,225,183	)
Cash and cash equivalents at beginning of reporting period		1,769,550			4,401,217
Cash and cash equivalents at end of reporting period	$	1,245,296			1,176,034
Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-
Income tax paid	$	-		$	-
Supplemental disclosure of non-cash financing activities:
Deferred offering costs included in accounts payable	$	73,174		$	-

See accompanying notes to the condensed consolidated financial statements

F-5

Wizard Entertainment, Inc.

September 30, 2018

Notes to the Condensed Consolidated Unaudited Financial Statements

Note 1 – Organization and Operations

Wizard Entertainment, Inc.

Wizard Entertainment, Inc., formerly GoEnergy, Inc. and Wizard World, Inc. (“Wizard Entertainment” or the “Company”) was incorporated on May 2, 2001, under the laws of the State of Delaware. The Company, through its operating subsidiary, is a producer of pop culture and live multimedia conventions across North America. Effective October 5, 2018, the Company changed its name to Wizard Entertainment, Inc.

Note 2 – Going Concern Analysis

Going Concern Analysis

The Company had loss from operations of $838,396 and $4,744,384 for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, we had cash and working capital deficit $1,245,296 and $4,277,885, respectively. We have evaluated the significance of these conditions in relation to our ability to meet our obligations, which had previously raised doubts about the Company’s ability to continue as a going concern through September 2019. However, the Company believes that the effects of its cost savings efforts with regard to corporate overhead and show production expenses commenced in 2017 and should be evident in 2018.

In addition to its cost containment strategies, the Company has announced three agreements to expand its future revenues: 1) An alignment with Sony Pictures Entertainment to explore a number of strategic initiatives; 2) An agreement to program a linear advertising Supported channel and an SVOD Channel in China on the CN Live platform; and, 3) A programming agreement with Associated Television International to launch the Chinese networks.

Additionally, if necessary, management believes that both related parties (management and members of the Board of Directors of the Company) and potential external sources of debt and/or equity financing may be obtained based on management’s history of being able to raise capital from both internal and external sources coupled with current favorable market conditions. Therefore, the accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein. While the Company believes in the viability of management’s strategy to generate sufficient revenue, control costs and the ability to raise additional funds if necessary, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon the ability to further implement the business plan, generate sufficient revenues and to control operating expenses. However, based on the results of the nine months operating results where operating costs decreased by 38% and gross profit increased from 0.2% for the 9 months ended in 2017 to a gross profit of 20.1% for the nine months ended in 2018 management’s strategies on a directional basis appear to be positive and impactful.

Note 3 – Significant and Critical Accounting Policies and Practices

The management of the Company is responsible for the selection and use of appropriate accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

F-6

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on April 2, 2018.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s).

All inter-company balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest.

As of September 30, 2018 and December 31, 2017, the aggregate non-controlling interest in ButtaFyngas was ($12,498). The non-controlling interest is separately disclosed on the Condensed Consolidated Balance Sheet.

Cash and Cash Equivalents

The Company considers investments with original maturities of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

Fair Value of Financial Instruments

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of September 30, 2018 and December 31, 2017, the allowance for doubtful accounts was $0 and $0, respectively.

F-7

Inventories

Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following:

	September 30, 2018		December 31, 2017
Finished goods	$	-	$	1,204

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

	Estimated Useful Life (Years)
Computer equipment		3
Equipment		2-5
Furniture and fixture		7
Leasehold improvements		*

(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

Investments - Cost Method, Equity Method and Joint Venture

In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock.

Method of Accounting

Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee.

Investment in CONtv

On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement for CON TV LLC (“CONtv”) with Cinedigm Entertainment Corp. (“Cinedigm”), ROAR, LLC (which at the time was a related party which had been partially owned by a member of the Board. The subject Board Member is no longer affiliated with ROAR, LLC.) (“ROAR”) and Bristol Capital, LLC (a related party controlled by a member of the Board) (“Bristol Capital”). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting.

On November 16, 2015, pursuant to that certain Amended and Restated Operating Agreement for CONtv by and among the aforementioned parties (the “A&R Operating Agreement”), the Company’s ownership interest in CONtv was reduced to 10%. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

F-8

For the three months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively.

As of September 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241.

Fair Value of Financial Instruments

The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments.

In connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. During the year ended December 31, 2017, the Company early adopted ASU 2017-11 on a retrospective basis (see below).

Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. However, in the case of the convertible promissory note discussed in Note 6, the Company obtained a fairness opinion from an independent third party which supports that the transaction was carried out at an arm’s length basis.

Revenue Recognition and Cost of Revenues

The Company follows Paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

F-9

Convention revenue is generally earned upon completion of the convention. Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements.

Unearned ConBox revenue is non-refundable up-front payments for products. These payments are initially deferred and subsequently recognized over the subscription period, typically three months, and upon shipment of the product. The Company ceased ConBox operations during 2017.

The Company recognizes cost of revenues in the period in which the revenues was earned. In the event the Company incurs cost of revenues for conventions that are yet to occur, the Company records such amounts as prepaid expenses and such prepaid expenses are expensed during the period the convention takes place.

Shipping and Handling Costs

The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of revenue as incurred.

Shipping and handling costs were $0 and $0 for the three months ended September 30, 2018 and 2017, respectively. Shipping and handling costs were $0 and $21,479 for the nine months ended September 31, 2018 and 2017, respectively.

Equity–based compensation

The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a four-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date.

The fair value of option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are input into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s Common stock over the expected option life and other appropriate factors. The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on the Common stock of the Company and does not intend to pay dividends on the Common stock in the foreseeable future. The expected forfeiture rate is estimated based on historical experience.

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the actual forfeiture rate is materially different from the Company’s estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

F-10

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

The Company is no longer subject to tax examinations by tax authorities for years prior to 2015.

Earnings per Share

Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

F-11

The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive:

	Contingent shares issuance arrangement, stock options or warrants
	For the Nine Months Ended September 30, 2018		For the Nine Months Ended September 30, 2017
Convertible note		16,666,667		16,666,667
Common stock options		3,743,000		4,643,000
Common stock warrants		16,666,667		16,666,667
Total contingent shares issuance arrangement, stock options or warrants		37,076,334		37,976,334

Reclassification

Certain prior period amounts have been reclassified to conform to current period presentation.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its consolidated financial statements and disclosures.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition and is effective during the same period as ASU 2014-09. The Company is currently evaluating the standard and does not expect the adoption will have a material effect on its consolidated financial statements and disclosures.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the three months ending December 31, 2017. See below.

F-12

Adoption of ASU 2017-11

As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance.

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Three Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(2,306,470	)	$	2,306,470	$	-
Net loss	$	(3,695,439	)	$	2,306,470	$	(1,388,969	)
Net loss per common share:
Basic	$	(0.05	)	$	0.03	$	(0.02	)
Diluted	$	(0.05	)	$	0.03	$	(0.02	)

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Nine Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(661,098	)	$	661,098	$	-
Net loss	$	(5,404,839	)	$	661,098	$	(4,744,384	)
Net loss per common share:
Basic	$	(0.08	)	$	0.01	$	(0.07	)
Diluted	$	(0.08	)	$	0.01	$	(0.07	)

F-13

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

Note 4 – Property and Equipment

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

	September 30, 2018			December 31, 2017
Computer Equipment	$	43,087		$	43,087
Equipment		472,348			460,927
Furniture and Fixtures		62,321			62,321
Leasehold Improvements		22,498			22,495
		600,251			588,830
Less: Accumulated depreciation		(487,005	)		(423,427	)
	$	113,246		$	165,403

Depreciation expense was $63,578 and $119,511 for the nine months ended September 30, 2018 and 2017, respectively.

Note 5 – Investment in CONtv Joint Venture

On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement with Cinedigm, ROAR (which at the time was a related party co-founded by one of the Company’s directors, with said Director no longer having any affiliation with ROAR) and Bristol Capital (a related party founded by the Company’s Chairman of the Board). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting.

On November 16, 2015, the Company entered that certain A&R Operating Agreement by and among, the Company, Cinedigm, ROAR and Bristol Capital, pursuant to which the Company’s interest in CONtv was reduced to a non-dilutable 10% membership interest. Such agreement was deemed effective on the execution date; however, Cinedigm agreed to the Company recognizing only 10% of the losses from the period July 1, 2015 through December 31, 2015. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

For the nine months ended September 30, 2018 and 2017, the Company recognized $0 in losses from this venture, respectively.

As of September 30, 2018 and December 31, 2017, the investment in CONtv was $0.

As of September 30, 2018 and December 31, 2017, the Company has a balance due to CONtv of $224,241.

Note 6 – Related Party Transactions

Consulting Agreement

On December 29, 2016, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Bristol Capital, LLC, a Delaware limited liability company (“Bristol”) managed by Paul L. Kessler, the Chairman of the Company. Pursuant to the Consulting Agreement, Mr. Kessler will serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017 (the “Initial Term”). The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Bristol gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current Term.

F-14

During the Term, the Company will pay Bristol a monthly fee (the “Monthly Fee”) of Eighteen Thousand Seven Hundred Fifty and No/100 Dollars ($18,750).

In addition, the Company will grant to Bristol options to purchase up to an aggregate of 600,000 shares of the Company’s common stock.

During the three months ended September 30, 2018 and 2017, the Company incurred total expenses of $56,250 and $56,250, respectively, for services provided by Bristol.

During the nine months ended September 30, 2018 and 2017, the Company incurred total expenses of $168,750 and $168,750, respectively, for services provided by Bristol.

At September 30, 2018 and December 31, 2017, the Company accrued $410,504 and $283,106, respectively, of net monthly fees due to Bristol.

Operating Sublease

On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease (“Sublease”) with Bristol Capital Advisors, LLC (“Bristol Capital Advisors”), an entity controlled by the Company’s Chairman of the Board. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months beginning on July 1, 2016 with monthly payments of $8,118. Upon execution of the Sublease, the Company paid a security deposit of $9,137 and $199,238 for prepaid rent of which $0 and $76,006 remain at September 30, 2018 and December 31, 2017, respectively. During the nine months ended September 30, 2018 and 2017, the Company incurred total rent expense of $57,806 and $108,353, respectively, under the Sublease. See Note 7 for future minimum rent payments due.

Securities Purchase Agreement

Effective December 1, 2016, the Company entered into the Purchase Agreement with Bristol Investment Fund, Ltd. (the “Purchaser”), an entity controlled by the Chairman of the Company’s Board of Directors, pursuant to which the Company sold to the Purchaser, for a cash purchase price of $2,500,000, securities comprising: (i) the Debenture, (ii) Series A Warrants, and (iii) Series B Warrants. Pursuant to the Purchase Agreement, the Company paid $25,000 to the Purchaser and issued to the Purchaser 500,000 shares of Common Stock with a grant date fair value of $85,000 to cover the Purchaser’s legal fees. The Company recorded as a debt discount of $25,791 related to the cash paid and the relative fair value of the shares issued to Purchaser for legal fees.

(i) Debenture

The Debenture with an initial principal balance of $2,500,000, due December 30, 2018 (the “Maturity Date”), will accrue interest on the aggregate unconverted and then outstanding principal amount of the Debenture at the rate of 12% per annum. Interest is payable quarterly on (i) January 1, April 1, July 1 and October 1, beginning on January 1, 2017, (ii) on each date the Purchaser converts, in whole or in part, the Debenture into Common Stock (as to that principal amount then being converted), and (iii) on the day that is 20 days following the Company’s notice to redeem some or all of the of the outstanding principal of the Debenture (only as to that principal amount then being redeemed) and on the Maturity Date. The Debenture is convertible into shares of the Company’s Common Stock at any time at the option of the holder, at an initial conversion price of $0.15 per share, subject to adjustment. In the event of default occurs, the conversion price shall be the lesser of (i) the initial conversion price of $0.15 and (ii) 50% of the average of the 3 lowest trading prices during the 20 trading days immediately prior to the applicable conversion date.

(ii) Series A Warrants

The Series A Warrants to acquire up to 16,666,667 shares of Common Stock at the Series A Initial Exercise Price of $0.15 and expiring on December 1, 2021. The Warrants may be exercised immediately upon the issuance date, upon the option of the holder.

F-15

(iii) Series B Warrants

The Series B Warrants to acquire up to 16,666,650 shares of Common Stock at the Series B Initial Exercise Price of $0.15 and expiring on December 1, 2021. The Series B Warrants were exercised immediately upon the issuance date. The Company received gross proceeds of $1,667 upon exercise of the warrants.

Upon issuance of the note, the Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it using the relative fair value of $1,448,293 as debt discount on the consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method which approximates the interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $734,298 and $1,383,021 as of September 30, 2018 and December 31, 2017, respectively, which includes the debt discount recorded upon execution of the Securities Purchase Agreement discussed above.

Note 7 – Commitments and Contingencies

Appointment of President and Chief Executive Officer

On April 22, 2016, the Board approved the appointment of Mr. John D. Maatta as the Company’s President and Chief Executive Officer, effective as of May 3, 2016. Mr. Maatta will continue to serve as a member of the Board. In addition, the Board granted Mr. Maatta options to purchase up to an aggregate of 1,100,000 shares of the Company’s common stock, subject to the terms and conditions of the Third Amended and Restated 2011 Stock Incentive and Award Plan. Mr. Maatta formally entered into his Employment Agreement with the Company on July 17, 2016. Effective January 1, 2018, Mr. Maatta has elected to receive 50% of the compensation provided for his employment contract and is currently receiving $125,000 per year with the remainder of the balance deferred which amount is included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Consulting Agreement

As discussed in Note 6, on December 29, 2016, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Bristol managed by Paul L. Kessler, the Chairman of the Company. Pursuant to the Consulting Agreement, Mr. Kessler will serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017 (the “Initial Term”). The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Bristol gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current Term.

During the Term, the Company will pay Bristol a monthly fee (the “Monthly Fee”) of Eighteen Thousand Seven Hundred Fifty and No/100 Dollars ($18,750). For services rendered by Bristol prior to entering into the Consulting Agreement, the Company will pay Bristol the Monthly Fee, pro-rated, for the time between September 1, 2016 and December 29, 2016. Bristol may also receive an annual bonus as determined by the Compensation Committee of the Company’s Board of Directors (the “Board”) and approved by the Board. Bristol has deferred payment of the monthly fees due from the Company as defined under the Consulting Agreement. At September 30, 2018 and December 31, 2017, the Company accrued $451,856 and $283,106, respectively, of monthly fees due to Bristol.

In addition, the Company granted to Bristol options to purchase up to an aggregate of 600,000 shares of the Company’s common stock.

Operating Lease

On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease (“Sublease”) with Bristol Capital Advisors, an entity controlled by the Company’s Chairman of the Board. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months beginning on July 1, 2016 with monthly payments of $8,118. Upon execution of the Sublease, the Company paid a security deposit of $9,137 and $199,238 for prepaid rent of which $0 and $76,006 remain at September 30, 2018 and December 31, 2017, respectively. During the nine months ended September 30, 2018 and 2017, the Company incurred total rent expense of $57,806 and $108,353, respectively, under the Sublease.

See below for future minimum rent payments due.

F-16

Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows:

Fiscal year ending December 31:
2018 (remainder of year)	$	26,820
2019		107,279
2020		107,279
2021		80,459
	$	321,836

Obligation to Fund CONtv

As discussed in Note 3, on November 16, 2015, pursuant to that certain A&R Operating Agreement for CONtv, the Company’s ownership interest in CONtv was reduced to 10%. In addition, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

For the three and nine months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. As of September 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241.

Malinoff Dispute

Randall Malinoff, the Company’s former Chief Operating Officer, who departed from on the Company as of July 5, 2017, is currently engaged in a dispute with the Company. A complaint for breach of contract and various disability discrimination claims was filed after the Company terminated him for cause. Following said termination, the Company entered into a subsequent agreement with Malinoff which he breached by abandoning his position. The Company believes that the matter, which is set for trial in 2019, is wrongful and is without merit. The Company currently intends to proceed to trial on this matter. The Company paid an insurance deductible of $25,000, concerning this matter.

Other Legal Matters

The Company settled a claim relating to the alleged conduct of a third-party during a live event produced by the Company. Although the Company disputed any liability the matter was concluded for the sum of $45,000, which was below the insurance retention of $50,000.

The Company also settled a small claims action in the amount of $5,000; as well as a commercial contract claim in the amount of $11,000.

The Company has also initiated an action against a vendor with regard to fees charged for services provided by the vendor at certain shows produced by the Company. The action filed by the Company is in at an early procedural stage.

With the exception of the foregoing disputes, the Company is not involved in any disputes and does not have any litigation matters pending which the Company believes could have a materially adverse effect on the Company’s financial condition or results of operations.

Note 8 – Stockholders’ Equity (Deficit)

The Company’s authorized capital stock consists of 100,000,000 shares, of which 80,000,000 are for shares of common stock, par value $0.0001 per share, and 20,000,000 are for shares of preferred stock, par value $0.0001 per share, of which 50,000 have been designated as Series A Cumulative Convertible Preferred Stock.

As of September 30, 2018 and December 31, 2017, there were 68,535,036 shares of common stock issued and outstanding. Each share of the common stock entitles its holder to one vote on each matter submitted to the shareholders.

Stock Options

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

	Options			Weighted Average Exercise Price
Outstanding – December 31, 2017		4,043,000		$	0.58
Exercisable – December 31, 2017		3,328,000		$	0.57
Granted		-		$	-
Exercised		-		$	-
Forfeited/Cancelled		(300,000	)	$	-
Outstanding – September 30, 2018		3,743,000		$	0.59
Exercisable – September 30, 2018		3,278,000		$	0.59

F-17

Options Outstanding								Options Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.40 – 1.50		3,743,000		1.51 years	$	0.59		3,278,000	$	0.59

At September 30, 2018, the total intrinsic value of options outstanding and exercisable was $0 and $0, respectively.

The Company recognized an aggregate of $49,386 and $274,500 in compensation expense during the nine months ended September 30, 2018 and 2017, respectively, related to option awards. At September 30, 2018, unrecognized stock-based compensation was $55,670.

Stock Warrants

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

	Warrants		Weighted Average Exercise Price
Outstanding – December 31, 2017		16,666,667	$	0.15
Exercisable – December 31, 2017		16,666,667	$	0.15
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding – September 30, 2018		16,666,667	$	0.15
Exercisable – September 30, 2018		16,666,667	$	0.15

Warrants Outstanding								Warrants Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.15		16,666,667		3.17 years	$	0.15		16,666,667	$	0.15

At September 30, 2018, the total intrinsic value of warrants outstanding and exercisable was $0.

F-18

There were no new options or warrants granted during the nine months ended September 30, 2018.

Note 8 – Segment Information

The Company maintained operating segments; Conventions and Conbox. The Company ceased Conbox operations in 2017, which is the principal reason for the decrease in operating results compared to 2017. The Company evaluated performance of its operating segments based on revenue and operating profit (loss). Segment information for the three and nine months ended September 30, 2018 and 2017 and as of September 30, 2018 and December 31, 2017, are as follows:

	Conventions			ConBox			Total
Three Months ended September 30, 2018
Revenue	$	4,468,776		$	-		$	4,468,776
Cost of revenue		(3,469,061	)		-			(3,469,061	)
Gross margin		999,715			-			999,715
Operating expenses		(1,033,918	)		-			(1,033,918	)
Operating loss		(4,203	)		-			(4,203	)
Three Months ended September 30, 2017
Revenue	$	5,233,283		$	-		$	5,233,283
Cost of revenue		(5,238,258	)		-			(5,238,258	)
Gross margin		(4,975	)		-			(4,975	)
Operating expenses		(1,271,247	)		(679	)		(1,271,926	)
Operating loss		(1,276,222	)		(679	)		(1,276,901	)
Nine Months Ended September 30, 2018
Revenue	$	13,571,809		$	-		$	13,571,809
Cost of revenue		(10,844,897	)		-			(10,844,897	)
Gross margin		2,726,912			-			2,726,897
Operating expenses		(2,692,110	)		-			(2,692,110	)
Operating income		34,802			-			34,802
Nine Months Ended September 30, 2017
Revenue	$	13,617,324		$	84,580		$	13,701,904
Cost of revenue		(13,590,113	)		(80,161	)		(13,670,274	)
Gross margin		27,211			4,419			31,630
Operating expenses		(4,456,953	)		(29,534	)		(4,486,487	)
Operating loss		(4,429,742	)		(25,115	)		(4,454,857	)
September 30, 2018
Accounts receivable, net	$	200,091		$	-		$	200,091
Total assets		2,468,312			-			2,468,312
Unearned revenue		463,294			-			463,294
December 31, 2017
Accounts receivable, net	$	336,030		$	-		$	336,030
Total assets		2,940,089			-			2,940,089
Unearned revenue		2,164,972			-			2,164,972

F-19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

Overview

We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. This discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto for the three and nine month periods ended September 30, 2018 and 2017, included elsewhere in this report and in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on April 2, 2018.

We are currently a producer of Comic Conventions across the United States that celebrate movies, television shows, video games, technology, toys, social networking/gaming platforms, comic books and graphic novels. Our Comic Conventions provide entertainment for fans of the pop culture genre, as well as sales, marketing, promotions, public relations, advertising and sponsorship opportunities for entertainment companies, toy companies, gaming companies, publishing companies, marketers, corporate sponsors, and retailers which wish to reach our audience.

During the nine months ended September 30, 2018, the Company was able to utilize the internal controls and operating procedures and techniques employed by the Company’s new management during 2017 in order to grow the business, by increasing revenues and controlling costs. With the recently reformed internal controls in place, management continued to carefully analyze new markets for the Company’s Comic Conventions. The Company continues to implement the policies put in place by management during 2017.

Plan of Operation

At present, the Company is engaged primarily in the live event business and derives income mainly from: (i) the production of Comic Conventions, which involves the sales of admissions and exhibitor booth space, and (ii) sale of sponsorships and advertising. The Company, while taking steps to enhance its live events operations, is steadily moving into the space of being a hyphenate live-event/media company.

We plan on continuing to enhance our Comic Conventions by featuring new exhibitors and high-profile celebrities, and generally enhancing the entertainment value provided by the Conventions. Further, we continue to identify new geographic markets for our Comic Convention. During the second half of 2017, we embarked on an aggressive review of the costs expended at each of our Conventions. As the result of this review, we identified many operating efficiencies which enabled us to operate our Conventions at a production cost (aside from talent) that is materially lower than previous operations. The savings on logistics and production have enabled us to consistently produce shows that are favorably contributing to the net operating margin. In this regard, the operating results for the first nine months of 2018 disclosed that the Total Operating Expenses incurred during the first nine months of 2018 were $2,692,110 versus $4,486,487 in the nine months of 2017. Despite the dramatic decrease in operating expenses, gross revenue held fairly steady at $13,571,809 for the first nine months of 2018, when compared to $13,701,904 for the same period one year ago.

In December 2017, the Company embarked on a cost containment strategy. The implementation of that strategy, which has been in place since January 2018, has significantly reduced corporate overhead. The efficiencies in Convention production in addition to the savings achieved in corporate overhead had a materially positive impact on the financial results for the nine months of 2018 and should have a likewise positive impact going forward. The reduction in convention costs together with our cost containment strategy concerning corporate overhead in addition to other strategies employed by management, allowed the Company to sustain income from operations of $34,802 in the first nine months of 2018 compared to a loss from operations of $4,454,857 in the first nine months of 2017.

3

Concurrently with the Company’s efforts in the Comic Convention business, the Company is selectively producing and branding compelling content and reaching consumers via social media outlets such as Facebook, Twitter and Instagram, as well as the Company’s website, www.wizardworld.com. The Company hopes to utilize its digital offerings to bolster its Comic Convention business.

We currently expect to produce 13 live events during 2018, although that number of conventions may change as we evaluate locations and venues. Among the shows being produced in 2018 are shows in new markets, including Boise and Winston-Salem.

The Company has announced an alignment with Sony Pictures Entertainment. Pursuant to that alignment, the Company is exploring a number of initiatives, which may include: (i) the development of intellectual property for the creation of motion picture and television content. The first session for the reception of such content took place in Portland in April 2018 and similar sessions took place in Columbus during the Second Quarter, (ii) the production of an exclusive event on the Sony Pictures lot in June of 2019 (iii) the entry into the immersive entertainment space, (iv) the launch of a touring event in Asia. It is contemplated that these activities, in addition to other activities, will broaden the scope of the Company’s portfolio of revenue generating activities.

Additionally, the Company has entered into an agreement to program two channels in China on the CN Live platform. The Company has entered into a programming agreement with Associated Television International and is proceeding with its plans to launch the Chinese networks. In addition to the agreement with Associated Television International, the Company is discussing the acquisition of content with other third-party suppliers. The Company has aggregated the initial programming and Associated Television International is currently working to compile feeds for the initial programming.

Results of Operations

Summary of Statements of Operations for the Three Months Ended September 30, 2018 and 2017:

	Three Months Ended
	September 30, 2018			September 30, 2017
Convention revenue	$	4,468,776		$	5,233,283
ConBox revenue	$	-		$	-
Gross margin	$	999,715		$	(4,975	)
Operating expenses	$	(1,003,918	)	$	(1,271,926	)
Loss from operations	$	(4,203	)	$	(1,276,901	)
Other income (expenses)	$	(443,304	)	$	(112,068	)
Loss income attributable to common shareholder	$	(447,507	)	$	(1,388,969	)
Loss per common share – basic	$	(0.01	)	$	(0.02	)
Loss per common share – diluted	$	(0.01	)	$	(0.02	)

Convention Revenue

Convention revenue was $4,468,776 for the three months ended September 30, 2018, as compared to $5,233,283 for the comparable period ended September 30, 2017, a decrease of $764,507. The Company ran five events during the three months ended September 30, 2018, as compared to four events during the comparable three months ended September 30, 2017. Average revenue generated per event in 2018 was $893,755 as compared to $1,308,321 during 2017.  The average revenue per event during the third quarter of 2018 was less than that of the comparable period in 2017 because two of the five 2018 events were smaller market shows which generate substantially less revenue than our established shows in larger markets.

4

Gross Profit

Gross profit percentage for the convention segment increased from a gross profit percentage of negative (0.1%) during the three months ended September 30, 2017, to a gross profit percentage of 22.4% during the three months ended September 30, 2018. The gross profit percentage increase was attributable to enhanced marketing and show production techniques which allowed the Company to generate more revenue at the Conventions while decreasing the costs of producing the Conventions.

Operating Expenses

Operating expenses for the three months ended September 30, 2018, were $1,003,918, as compared to $1,271,926 for the three months ended September 30, 2017. The change is attributable to a decrease in staffing and a correlating decrease in employee compensation, general and administrative expenses and consulting expenses. The $265,502 decrease in compensation is primarily attributable to a decline in both headcount and officer compensation. General and administrative expenses increased by $77,261 from the prior year comparative period primarily due to an increase in legal fees largely attributable to new initiatives undertaken by the company.

Loss from Operations

Loss from operations for the three months ended September 30, 2018, was $4,203 as compared to a loss from operations of $1,276,901 for the three months ended September 30, 2017. The positive variance was primarily attributable to the introduction of strategies by Management which increased gross revenue while containing Convention production costs which were excessive in addition to our cost containment strategy concerning corporate overhead. The Company has addressed both issues. Additionally, the Company has augmented its marketing and talent departments to increase attendance at its conventions. During the 4^th Quarter of 2017 the Company dramatically reduced its corporate overhead expenses, reducing the projected Corporate Operating budget in 2018 to $2,700,000 compared with $4,900,000 in 2017. This reduction combined with the operating efficiency in producing the Conventions is materially improving the operating results in 2018.

Other Expenses

Other expenses for the three months ended September 30, 2018 was $443,304, as compared to $112,068 for the three months ended September 30, 2017. In each case, the expense was interest expense related to the convertible note and corresponding debt discount.

Net Loss Attributable to Common Stockholder

Net loss attributable to common stockholders for the three months ended September 30, 2018, was $447,507 or loss per basic share of $0.01, compared to a net loss of $1,388,969 or loss per basic share of $0.02 for the three months ended September 30, 2017.

Inflation did not have a material impact on the Company’s operations for the applicable period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company’s results of operations.

Summary of Statements of Operations for the Nine Months Ended September 30, 2018 and 2017:

	Nine Months Ended
	September 30, 2018			September 30, 2017
Convention revenue	$	13,571,809		$	13,617,324
ConBox revenue	$	-		$	84,580
Gross margin	$	2,726,912		$	31,630
Operating expenses	$	(2,692,110	)	$	(4,486,487	)
Income (loss) from operations	$	34,802		$	(4,454,857	)
Other expenses	$	(873,198	)	$	(289,527	)
Net loss attributable to common shareholder	$	(838,396	)	$	(4,743,741	)
Loss per common share – basic	$	(0.01	)	$	(0.07	)
Loss per common share – diluted	$	(0.01	)	$	(0.07	)

5

Convention Revenue

Convention revenue was $13,571,809 for the nine months ended September 30, 2018, as compared to $13,617,324 for the comparable period ended September 30, 2017, a non-material decrease of $45,515. The Company ran 12 events during the nine months ended September 30, 2018, which was equal to the twelve events during the comparable nine months ended September 30, 2017. Average revenue generated per event in the first nine months of 2018 was $1,130,984 which is similar to the $1,134,777 average revenue per event during the same period in 2017. 

Gross Profit

Gross profit percentage for the convention segment increased from 0.2% during the nine months ended September 30, 2017, to a positive gross profit of 20.1% during the nine months ended September 30, 2018. As was the case for the three-month period ended September 30, 2018, the gross profit percentage increase was attributable to enhanced marketing and show production techniques which allowed the Company to generate more revenue at the Conventions while decreasing the costs of producing the Conventions.

Operating Expenses

Operating expenses for the nine months ended September 30, 2018, were $2,692,110, as compared to $4,486,487 for the nine months ended September 30, 2017. As mentioned earlier, the change is attributable to a decrease in staffing and a correlating decrease in employee compensation, general and administrative expenses and consulting expenses. The $1,281,442 decrease in compensation is primarily attributable to a decline in both headcount and officer compensation. General and administrative expenses decreased by $329,949 from the prior year comparative period primarily due to a decrease in service fees and web development.

Income (Loss) from Operations

Income from operations for the nine months ended September 30, 2018, was $34,802 as compared to a loss from operations of $4,454,857 for the nine months ended September 30, 2017. As with the three-month period ended September 30, 2018, positive variance was primarily attributable to the introduction of strategies by Management which increased gross revenue while containing Convention production costs which were excessive in addition to our cost containment strategy concerning corporate overhead.

Other Expenses

Other expenses for the nine months ended September 30, 2018 was $873,198, as compared to $289,527 for the nine months ended September 30, 2017. In each case, the expense was interest expense related to the convertible note and corresponding debt discount.

Net Loss Attributable to Common Stockholder

Net loss attributable to common stockholders for the nine months ended September 30, 2018, was $838,396 or loss per basic share of $0.01, compared to a net loss of $4,743,741 or loss per basic share of $0.07, for the nine months ended September 30, 2017.

6

Inflation did not have a material impact on the Company’s operations for the applicable period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company’s results of operations.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at September 30, 2018 compared to December 31, 2017:

	September 30, 2018			December 31, 2017			Increase/(Decrease)
Current Assets	$	2,345,658		$	2,765,278		$	(419,620	)
Current Liabilities	$	6,623,543		$	6,306,310		$	317,233
Working Capital (Deficit)	$	(4,277,885	)	$	(3,541,032	)	$	736,853

At September 30, 2018, we had a working capital deficit of $4,277,885 as compared to working capital deficit of $3,541,032, at December 31, 2017, an increase of $736,853. The change in working capital is primarily attributable to a decrease in cash and cash equivalents and accounts receivable. These changes in current assets were offset by an overall increase in current liabilities.

Net Cash

Net cash used in operating activities for the nine months ended September 30, 2018 and 2017 was $512,833 and $3,128,003, respectively. The net loss for the nine months ended September 30, 2018 and 2017, was $838,396 and $4,744,384, respectively.

Going Concern Analysis

The Company had income from operations of $34,802 and a loss of $4,454,857 for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, we had cash and working capital deficit of $1,245,296 and $4,277,885 respectively. We have evaluated the significance of these conditions in relation to our ability to meet our obligations, which had previously raised doubts about the Company’s ability to continue as a going concern through September 2019. However, the Company believes that the effects of its cost savings efforts with regard to corporate overhead and show production expenses, which commenced in 2017, are being made manifest in 2018.

In addition to its cost containment strategies, the Company has announced three agreements to expand its future revenues: 1) alignment with Sony Pictures Entertainment to explore a number of strategic initiatives; 2) agreement to program a linear advertising Supported channel and an SVOD Channel in China on the CN Live platform; and 3) programming agreement with Associated Television International to launch the Chinese networks.

Additionally, if necessary, additional debt and/or equity financing may be obtained through related parties (management and members of the Board of Directors of the Company) based on management’s history of being able to raise capital from both internal and external sources coupled with current favorable market conditions. Therefore, the accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein. While the Company believes in the viability of management’s strategy to generate sufficient revenue, control costs and the ability to raise additional funds if necessary, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon the ability to further implement the business plan, generate sufficient revenues and to control operating expenses. However, based on the results of the nine months operating results where operating costs decreased by 38% and gross profit increased from a gross profit of 0.2% for the 9 months ended in 2017 to a gross profit of 20.1% for the nine months ended in 2018 management’s strategies on a directional basis appear to be positive and impactful.

7

Off-Balance Sheet Arrangements

As of September 30, 2018, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2017 Annual Report filed with the SEC on April 2, 2018.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

Pursuant to Rule 13a- 15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company is committed to improving financial organization. As part of this commitment, management and the Board are currently performing an extensive review of the Company’s policies and procedures as it relates to financial reporting in an effort to mitigate future risks of potential misstatements. The Company will continue to focus on developing and documenting internal controls and procedures surrounding the financial reporting process, primarily through the use of account reconciliations, and supervision.

8

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Malinoff Dispute

Randall Malinoff, the Company’s former Chief Operating Officer, who departed from on the Company as of July 5, 2017, is currently engaged in a dispute with the Company. A complaint for breach of contract and various disability discrimination claims was filed after the Company terminated him for cause. Following said termination, the Company entered into a subsequent agreement with Malinoff which he breached by abandoning his position. The Company believes that the matter, which is set for trial in 2019, is wrongful and is without merit. The Company currently intends to proceed to trial on this matter. The Company paid an insurance deductible of $25,000, concerning this matter.

Other Legal Matters

The Company settled a claim relating to the alleged conduct of a third-party during a live event produced by the Company. Although the Company denied and disputed any liability the matter was concluded for the sum of $45,000, which was below the insurance coverage retention of $50,000.

The Company also settled a small claims action in the amount of $5,000; as well as a commercial contract claim in the amount of $11,000.

With the exception of the foregoing disputes, the Company is not involved in any disputes and does not have any litigation matters pending which the Company believes could have a materially adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K, filed with the SEC on April 2, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of the Company’s equity securities during the quarter ended September 30, 2018 that were not otherwise disclosed in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which was not previously disclosed.

Item 6. Exhibits.

Exhibit No.	Description
31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
31.2	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
101.DEF	XBRL Taxonomy Extension Definition Linkbase *
101.LAB	XBRL Taxonomy Extension Label Linkbase *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *

* Filed herewith.

9

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	WIZARD ENTERTAINMENT, INC.
Date: November 14, 2018	By:	/s/ John D. Maatta
	Name:	John D. Maatta
	Title:	Chief Executive Officer and President
		(Principal Executive Officer)
		(Principal Financial Officer)
		(Principal Accounting Officer)

10

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, John D. Maatta, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wizard Entertainment, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 14, 2018	By:	/s/ John D. Maatta
		John D. Maatta Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, John D. Maatta, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wizard Entertainment, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 14, 2018	By:	/s/ John D. Maatta
		John D. Maatta Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Wizard Word, Inc. (the “Company”), on Form 10-Q for the period ended September 30, 2018, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, John D. Maatta, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended September 30, 2018, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2018, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2018	By:	/s/ John D. Maatta
		John D. Maatta
		Principal Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Wizard Entertainment, Inc. (the “Company”), on Form 10-Q for the period ended September 30, 2018, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, John D. Maatta, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended September 30, 2018, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2018, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2018	By:	/s/ John D. Maatta
		John D. Maatta
		Principal Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 14, 2018
Document And Entity Information
Entity Registrant Name	WIZARD ENTERTAINMENT, INC.
Entity Central Index Key	0001162896
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		68,535,036
Trading Symbol	WIZD
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 1,245,296	$ 1,769,550
Accounts receivable, net	200,091	336,030
Inventory		1,204
Prepaid convention expenses	630,365	461,986
Prepaid insurance	133,254	87,987
Prepaid rent - related party		76,006
Prepaid taxes	13,984	14,398
Other prepaid expenses	49,494	18,117
Deferred offering costs	73,174
Total Current Assets	2,345,658	2,765,278
Property and equipment, net	113,246	165,403
Security deposits	9,408	9,408
Total Assets	2,468,312	2,940,089
Current Liabilities
Accounts payable and accrued expenses	4,170,306	2,800,118
Unearned revenue	463,294	2,164,972
Convertible promissory note - related party, net	1,765,702	1,116,979
Due to CONtv joint venture	224,241	224,241
Total Current Liabilities	6,623,543	6,306,310
Total Liabilities	6,623,543	6,306,310
Commitments and contingencies
Stockholders' Deficit
Preferred stock par value $0.0001: 20,000,000 shares authorized; 50,000 shares designated Series A convertible preferred stock par value $0.0001: 50,000 shares designated; 39,101 shares issued and converted, respectively
Common stock par value $0.0001: 80,000,000 shares authorized; 68,535,036 and 68,535,036 shares issued and outstanding, respectively	6,855	6,855
Additional paid-in capital	20,010,279	19,960,893
Accumulated deficit	(24,159,867)	(23,321,471)
Non-controlling interest	(12,498)	(12,498)
Total Stockholders' Deficit	(4,155,231)	(3,366,221)
Total Liabilities and Stockholders' Deficit	$ 2,468,312	$ 2,940,089

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	68,535,036	68,535,036
Common stock, shares outstanding	68,535,036	68,535,036
Series A Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares issued	39,101	39,101
Preferred stock, shares converted	39,101	39,101
Preferred stock, shares designated	50,000	50,000

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Convention	$ 4,468,776	$ 5,233,283	$ 13,571,809	$ 13,617,324
ConBox				84,580
Total revenues	4,468,776	5,233,283	13,571,809	13,701,904
Cost of revenues
Cost of revenue	3,469,061	5,238,258	10,844,897	13,670,274
Total cost of revenues	3,469,061	5,238,258	10,844,897	13,670,274
Gross margin	999,715	(4,975)	2,726,897	31,630
Operating expenses
Compensation	425,138	690,640	1,346,719	2,628,161
Consulting fees	130,092	209,859	354,109	537,095
General and administrative	448,688	371,427	991,282	1,321,231
Total operating expenses	1,003,918	1,271,926	2,692,110	4,486,487
(Loss) income from operations	(4,203)	(1,276,901)	(34,802)	(4,454,857)
Other expenses
Interest expense	(443,304)	(112,068)	(873,198)	(288,742)
Loss on disposal of equipment				(785)
Total other expenses	(443,304)	(112,068)	(873,198)	(289,527)
Loss before income tax provision	(447,507)	(1,388,969)	(838,396)	(4,744,384)
Income tax provision
Net loss	(447,507)	(1,388,969)	(838,396)	(4,744,384)
Net loss attributable to non-controlling interests				(643)
Net loss attributable to common stockholders	$ (447,507)	$ (1,388,969)	$ (838,396)	$ (4,743,741)
Loss per share - basic	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.07)
Loss per share - diluted	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.07)
Weighted average common shares outstanding - basic	68,535,036	68,535,036	68,535,036	68,535,036
Weighted average common shares outstanding - diluted	68,535,036	68,535,036	68,535,036	68,535,036

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Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($)	Preferred Stock Par Value $0.0001 [Member]	Common Stock Par Value $0.0001 [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-controlling Interest [Member]	Total
Balance at Dec. 31, 2017		$ 6,855	$ 19,960,893	$ (23,321,471)	$ (12,498)	$ (3,366,221)
Balance, shares at Dec. 31, 2017		68,535,036
Share-based compensation			49,386			49,386
Net loss				(838,396)		(838,396)
Balance at Sep. 30, 2018		$ 6,855	$ 20,010,279	$ (24,159,867)	$ (12,498)	$ (4,155,231)
Balance, shares at Sep. 30, 2018		68,535,036

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash Flows From Operating Activities:
Net loss	$ (838,396)	$ (4,744,384)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	63,578	119,511
Loss on disposal of equipment		785
Accretion of debt discount	648,723	59,766
Share-based compensation	49,386	274,499
Changes in operating assets and liabilities:
Accounts receivable	135,939	(286,367)
Inventory	1,204	(12,368)
Prepaid convention expenses	(168,379)	390,732
Prepaid rent - related party	76,006	80,705
Prepaid insurance	(45,267)	(5,490)
Prepaid taxes	414	(621)
Other prepaid expenses	(31,377)	(7,042)
Security deposits		10,504
Accounts payable and accrued expenses	1,297,014	1,827,916
Unearned revenue	(1,701,678)	(836,149)
Net Cash Used In Operating Activities	(512,833)	(3,128,003)
Cash Flows from Investing Activities:
Purchase of property and equipment	(11,421)	(97,180)
Net Cash Used In Investing Activities	(11,421)	(97,180)
Net change in cash and cash equivalents	(524,254)	(3,225,183)
Cash and cash equivalents at beginning of reporting period	1,769,550	4,401,217
Cash and cash equivalents at end of reporting period	1,245,296	1,176,034
Supplemental disclosures of cash flow information:
Interest paid
Income tax paid
Supplemental disclosure of non-cash financing activities:
Deferred offering costs included in accounts payable	$ 73,174

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Organization and Operations

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Operations

Note 1 – Organization and Operations

Wizard Entertainment, Inc.

Wizard Entertainment, Inc., formerly GoEnergy, Inc. and Wizard World, Inc. (“Wizard Entertainment” or the “Company”) was incorporated on May 2, 2001, under the laws of the State of Delaware. The Company, through its operating subsidiary, is a producer of pop culture and live multimedia conventions across North America. Effective October 5, 2018, the Company changed its name to Wizard Entertainment, Inc.

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Going Concern Analysis

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern Analysis

Note 2 – Going Concern Analysis

Going Concern Analysis

The Company had loss from operations of $838,396 and $4,744,384 for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, we had cash and working capital deficit $1,245,296 and $4,277,885, respectively. We have evaluated the significance of these conditions in relation to our ability to meet our obligations, which had previously raised doubts about the Company’s ability to continue as a going concern through September 2019. However, the Company believes that the effects of its cost savings efforts with regard to corporate overhead and show production expenses commenced in 2017 and should be evident in 2018.

In addition to its cost containment strategies, the Company has announced three agreements to expand its future revenues: 1) An alignment with Sony Pictures Entertainment to explore a number of strategic initiatives; 2) An agreement to program a linear advertising Supported channel and an SVOD Channel in China on the CN Live platform; and, 3) A programming agreement with Associated Television International to launch the Chinese networks.

Additionally, if necessary, management believes that both related parties (management and members of the Board of Directors of the Company) and potential external sources of debt and/or equity financing may be obtained based on management’s history of being able to raise capital from both internal and external sources coupled with current favorable market conditions. Therefore, the accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein. While the Company believes in the viability of management’s strategy to generate sufficient revenue, control costs and the ability to raise additional funds if necessary, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon the ability to further implement the business plan, generate sufficient revenues and to control operating expenses. However, based on the results of the nine months operating results where operating costs decreased by 38% and gross profit increased from 0.2% for the 9 months ended in 2017 to a gross profit of 20.1% for the nine months ended in 2018 management’s strategies on a directional basis appear to be positive and impactful.

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Significant and Critical Accounting Policies and Practices

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Significant and Critical Accounting Policies and Practices

Note 3 – Significant and Critical Accounting Policies and Practices

The management of the Company is responsible for the selection and use of appropriate accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on April 2, 2018.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s).

All inter-company balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest.

As of September 30, 2018 and December 31, 2017, the aggregate non-controlling interest in ButtaFyngas was ($12,498). The non-controlling interest is separately disclosed on the Condensed Consolidated Balance Sheet.

Cash and Cash Equivalents

The Company considers investments with original maturities of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

Fair Value of Financial Instruments

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of September 30, 2018 and December 31, 2017, the allowance for doubtful accounts was $0 and $0, respectively.

Inventories

Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following:

	September 30, 2018		December 31, 2017
Finished goods	$	-	$	1,204

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

	Estimated Useful Life (Years)
Computer equipment		3
Equipment		2-5
Furniture and fixture		7
Leasehold improvements		*

(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

Investments - Cost Method, Equity Method and Joint Venture

In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock.

Method of Accounting

Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee.

Investment in CONtv

On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement for CON TV LLC (“CONtv”) with Cinedigm Entertainment Corp. (“Cinedigm”), ROAR, LLC (which at the time was a related party which had been partially owned by a member of the Board. The subject Board Member is no longer affiliated with ROAR, LLC.) (“ROAR”) and Bristol Capital, LLC (a related party controlled by a member of the Board) (“Bristol Capital”). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting.

On November 16, 2015, pursuant to that certain Amended and Restated Operating Agreement for CONtv by and among the aforementioned parties (the “A&R Operating Agreement”), the Company’s ownership interest in CONtv was reduced to 10%. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

For the three months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively.

As of September 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241.

Fair Value of Financial Instruments

The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments.

In connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. During the year ended December 31, 2017, the Company early adopted ASU 2017-11 on a retrospective basis (see below).

Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. However, in the case of the convertible promissory note discussed in Note 6, the Company obtained a fairness opinion from an independent third party which supports that the transaction was carried out at an arm’s length basis.

Revenue Recognition and Cost of Revenues

The Company follows Paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Convention revenue is generally earned upon completion of the convention. Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements.

Unearned ConBox revenue is non-refundable up-front payments for products. These payments are initially deferred and subsequently recognized over the subscription period, typically three months, and upon shipment of the product. The Company ceased ConBox operations during 2017.

The Company recognizes cost of revenues in the period in which the revenues was earned. In the event the Company incurs cost of revenues for conventions that are yet to occur, the Company records such amounts as prepaid expenses and such prepaid expenses are expensed during the period the convention takes place.

Shipping and Handling Costs

The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of revenue as incurred.

Shipping and handling costs were $0 and $0 for the three months ended September 30, 2018 and 2017, respectively. Shipping and handling costs were $0 and $21,479 for the nine months ended September 31, 2018 and 2017, respectively.

Equity–based compensation

The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a four-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date.

The fair value of option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are input into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s Common stock over the expected option life and other appropriate factors. The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on the Common stock of the Company and does not intend to pay dividends on the Common stock in the foreseeable future. The expected forfeiture rate is estimated based on historical experience.

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the actual forfeiture rate is materially different from the Company’s estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

The Company is no longer subject to tax examinations by tax authorities for years prior to 2015.

Earnings per Share

Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive:

	Contingent shares issuance arrangement, stock options or warrants
	For the Nine Months Ended September 30, 2018		For the Nine Months Ended September 30, 2017
Convertible note		16,666,667		16,666,667
Common stock options		3,743,000		4,643,000
Common stock warrants		16,666,667		16,666,667
Total contingent shares issuance arrangement, stock options or warrants		37,076,334		37,976,334

Reclassification

Certain prior period amounts have been reclassified to conform to current period presentation.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its consolidated financial statements and disclosures.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition and is effective during the same period as ASU 2014-09. The Company is currently evaluating the standard and does not expect the adoption will have a material effect on its consolidated financial statements and disclosures.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the three months ending December 31, 2017. See below.

Adoption of ASU 2017-11

As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance.

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Three Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(2,306,470	)	$	2,306,470	$	-
Net loss	$	(3,695,439	)	$	2,306,470	$	(1,388,969	)
Net loss per common share:
Basic	$	(0.05	)	$	0.03	$	(0.02	)
Diluted	$	(0.05	)	$	0.03	$	(0.02	)

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Nine Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(661,098	)	$	661,098	$	-
Net loss	$	(5,404,839	)	$	661,098	$	(4,744,384	)
Net loss per common share:
Basic	$	(0.08	)	$	0.01	$	(0.07	)
Diluted	$	(0.08	)	$	0.01	$	(0.07	)

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

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Property and Equipment

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 4 – Property and Equipment

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

	September 30, 2018			December 31, 2017
Computer Equipment	$	43,087		$	43,087
Equipment		472,348			460,927
Furniture and Fixtures		62,321			62,321
Leasehold Improvements		22,498			22,495
		600,251			588,830
Less: Accumulated depreciation		(487,005	)		(423,427	)
	$	113,246		$	165,403

Depreciation expense was $63,578 and $119,511 for the nine months ended September 30, 2018 and 2017, respectively.

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Investment in CONtv Joint Venture

9 Months Ended

Sep. 30, 2018

Investment In Contv Joint Venture

Investment in CONtv Joint Venture

Note 5 – Investment in CONtv Joint Venture

On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement with Cinedigm, ROAR (which at the time was a related party co-founded by one of the Company’s directors, with said Director no longer having any affiliation with ROAR) and Bristol Capital (a related party founded by the Company’s Chairman of the Board). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting.

On November 16, 2015, the Company entered that certain A&R Operating Agreement by and among, the Company, Cinedigm, ROAR and Bristol Capital, pursuant to which the Company’s interest in CONtv was reduced to a non-dilutable 10% membership interest. Such agreement was deemed effective on the execution date; however, Cinedigm agreed to the Company recognizing only 10% of the losses from the period July 1, 2015 through December 31, 2015. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

For the nine months ended September 30, 2018 and 2017, the Company recognized $0 in losses from this venture, respectively.

As of September 30, 2018 and December 31, 2017, the investment in CONtv was $0.

As of September 30, 2018 and December 31, 2017, the Company has a balance due to CONtv of $224,241.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 6 – Related Party Transactions

Consulting Agreement

On December 29, 2016, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Bristol Capital, LLC, a Delaware limited liability company (“Bristol”) managed by Paul L. Kessler, the Chairman of the Company. Pursuant to the Consulting Agreement, Mr. Kessler will serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017 (the “Initial Term”). The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Bristol gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current Term.

During the Term, the Company will pay Bristol a monthly fee (the “Monthly Fee”) of Eighteen Thousand Seven Hundred Fifty and No/100 Dollars ($18,750).

In addition, the Company will grant to Bristol options to purchase up to an aggregate of 600,000 shares of the Company’s common stock.

During the three months ended September 30, 2018 and 2017, the Company incurred total expenses of $56,250 and $56,250, respectively, for services provided by Bristol.

During the nine months ended September 30, 2018 and 2017, the Company incurred total expenses of $168,750 and $168,750, respectively, for services provided by Bristol.

At September 30, 2018 and December 31, 2017, the Company accrued $410,504 and $283,106, respectively, of net monthly fees due to Bristol.

Operating Sublease

On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease (“Sublease”) with Bristol Capital Advisors, LLC (“Bristol Capital Advisors”), an entity controlled by the Company’s Chairman of the Board. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months beginning on July 1, 2016 with monthly payments of $8,118. Upon execution of the Sublease, the Company paid a security deposit of $9,137 and $199,238 for prepaid rent of which $0 and $76,006 remain at September 30, 2018 and December 31, 2017, respectively. During the nine months ended September 30, 2018 and 2017, the Company incurred total rent expense of $57,806 and $108,353, respectively, under the Sublease. See Note 7 for future minimum rent payments due.

Securities Purchase Agreement

Effective December 1, 2016, the Company entered into the Purchase Agreement with Bristol Investment Fund, Ltd. (the “Purchaser”), an entity controlled by the Chairman of the Company’s Board of Directors, pursuant to which the Company sold to the Purchaser, for a cash purchase price of $2,500,000, securities comprising: (i) the Debenture, (ii) Series A Warrants, and (iii) Series B Warrants. Pursuant to the Purchase Agreement, the Company paid $25,000 to the Purchaser and issued to the Purchaser 500,000 shares of Common Stock with a grant date fair value of $85,000 to cover the Purchaser’s legal fees. The Company recorded as a debt discount of $25,791 related to the cash paid and the relative fair value of the shares issued to Purchaser for legal fees.

(i) Debenture

The Debenture with an initial principal balance of $2,500,000, due December 30, 2018 (the “Maturity Date”), will accrue interest on the aggregate unconverted and then outstanding principal amount of the Debenture at the rate of 12% per annum. Interest is payable quarterly on (i) January 1, April 1, July 1 and October 1, beginning on January 1, 2017, (ii) on each date the Purchaser converts, in whole or in part, the Debenture into Common Stock (as to that principal amount then being converted), and (iii) on the day that is 20 days following the Company’s notice to redeem some or all of the of the outstanding principal of the Debenture (only as to that principal amount then being redeemed) and on the Maturity Date. The Debenture is convertible into shares of the Company’s Common Stock at any time at the option of the holder, at an initial conversion price of $0.15 per share, subject to adjustment. In the event of default occurs, the conversion price shall be the lesser of (i) the initial conversion price of $0.15 and (ii) 50% of the average of the 3 lowest trading prices during the 20 trading days immediately prior to the applicable conversion date.

(ii) Series A Warrants

The Series A Warrants to acquire up to 16,666,667 shares of Common Stock at the Series A Initial Exercise Price of $0.15 and expiring on December 1, 2021. The Warrants may be exercised immediately upon the issuance date, upon the option of the holder.

(iii) Series B Warrants

The Series B Warrants to acquire up to 16,666,650 shares of Common Stock at the Series B Initial Exercise Price of $0.15 and expiring on December 1, 2021. The Series B Warrants were exercised immediately upon the issuance date. The Company received gross proceeds of $1,667 upon exercise of the warrants.

Upon issuance of the note, the Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it using the relative fair value of $1,448,293 as debt discount on the consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method which approximates the interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $734,298 and $1,383,021 as of September 30, 2018 and December 31, 2017, respectively, which includes the debt discount recorded upon execution of the Securities Purchase Agreement discussed above.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 7 – Commitments and Contingencies

Appointment of President and Chief Executive Officer

On April 22, 2016, the Board approved the appointment of Mr. John D. Maatta as the Company’s President and Chief Executive Officer, effective as of May 3, 2016. Mr. Maatta will continue to serve as a member of the Board. In addition, the Board granted Mr. Maatta options to purchase up to an aggregate of 1,100,000 shares of the Company’s common stock, subject to the terms and conditions of the Third Amended and Restated 2011 Stock Incentive and Award Plan. Mr. Maatta formally entered into his Employment Agreement with the Company on July 17, 2016. Effective January 1, 2018, Mr. Maatta has elected to receive 50% of the compensation provided for his employment contract and is currently receiving $125,000 per year with the remainder of the balance deferred which amount is included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Consulting Agreement

As discussed in Note 6, on December 29, 2016, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Bristol managed by Paul L. Kessler, the Chairman of the Company. Pursuant to the Consulting Agreement, Mr. Kessler will serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017 (the “Initial Term”). The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Bristol gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current Term.

During the Term, the Company will pay Bristol a monthly fee (the “Monthly Fee”) of Eighteen Thousand Seven Hundred Fifty and No/100 Dollars ($18,750). For services rendered by Bristol prior to entering into the Consulting Agreement, the Company will pay Bristol the Monthly Fee, pro-rated, for the time between September 1, 2016 and December 29, 2016. Bristol may also receive an annual bonus as determined by the Compensation Committee of the Company’s Board of Directors (the “Board”) and approved by the Board. Bristol has deferred payment of the monthly fees due from the Company as defined under the Consulting Agreement. At September 30, 2018 and December 31, 2017, the Company accrued $451,856 and $283,106, respectively, of monthly fees due to Bristol.

In addition, the Company granted to Bristol options to purchase up to an aggregate of 600,000 shares of the Company’s common stock.

Operating Lease

On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease (“Sublease”) with Bristol Capital Advisors, an entity controlled by the Company’s Chairman of the Board. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months beginning on July 1, 2016 with monthly payments of $8,118. Upon execution of the Sublease, the Company paid a security deposit of $9,137 and $199,238 for prepaid rent of which $0 and $76,006 remain at September 30, 2018 and December 31, 2017, respectively. During the nine months ended September 30, 2018 and 2017, the Company incurred total rent expense of $57,806 and $108,353, respectively, under the Sublease.

See below for future minimum rent payments due.

Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows:

Fiscal year ending December 31:
2018 (remainder of year)	$	26,820
2019		107,279
2020		107,279
2021		80,459
	$	321,836

Obligation to Fund CONtv

As discussed in Note 3, on November 16, 2015, pursuant to that certain A&R Operating Agreement for CONtv, the Company’s ownership interest in CONtv was reduced to 10%. In addition, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

For the three and nine months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. As of September 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241.

Malinoff Dispute

Randall Malinoff, the Company’s former Chief Operating Officer, who departed from on the Company as of July 5, 2017, is currently engaged in a dispute with the Company. A complaint for breach of contract and various disability discrimination claims was filed after the Company terminated him for cause. Following said termination, the Company entered into a subsequent agreement with Malinoff which he breached by abandoning his position. The Company believes that the matter, which is set for trial in 2019, is wrongful and is without merit. The Company currently intends to proceed to trial on this matter. The Company paid an insurance deductible of $25,000, concerning this matter.

Other Legal Matters

The Company settled a claim relating to the alleged conduct of a third-party during a live event produced by the Company. Although the Company disputed any liability the matter was concluded for the sum of $45,000, which was below the insurance retention of $50,000.

The Company also settled a small claims action in the amount of $5,000; as well as a commercial contract claim in the amount of $11,000.

The Company has also initiated an action against a vendor with regard to fees charged for services provided by the vendor at certain shows produced by the Company. The action filed by the Company is in at an early procedural stage.

With the exception of the foregoing disputes, the Company is not involved in any disputes and does not have any litigation matters pending which the Company believes could have a materially adverse effect on the Company’s financial condition or results of operations.

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Stockholders' Equity (Deficit)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity (Deficit)

Note 8 – Stockholders’ Equity (Deficit)

The Company’s authorized capital stock consists of 100,000,000 shares, of which 80,000,000 are for shares of common stock, par value $0.0001 per share, and 20,000,000 are for shares of preferred stock, par value $0.0001 per share, of which 50,000 have been designated as Series A Cumulative Convertible Preferred Stock.

As of September 30, 2018 and December 31, 2017, there were 68,535,036 shares of common stock issued and outstanding. Each share of the common stock entitles its holder to one vote on each matter submitted to the shareholders.

Stock Options

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

	Options			Weighted Average Exercise Price
Outstanding – December 31, 2017		4,043,000		$	0.58
Exercisable – December 31, 2017		3,328,000		$	0.57
Granted		-		$	-
Exercised		-		$	-
Forfeited/Cancelled		(300,000	)	$	-
Outstanding – September 30, 2018		3,743,000		$	0.59
Exercisable – September 30, 2018		3,278,000		$	0.59

Options Outstanding								Options Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.40 – 1.50		3,743,000		1.51 years	$	0.59		3,278,000	$	0.59

At September 30, 2018, the total intrinsic value of options outstanding and exercisable was $0 and $0, respectively.

The Company recognized an aggregate of $49,386 and $274,500 in compensation expense during the nine months ended September 30, 2018 and 2017, respectively, related to option awards. At September 30, 2018, unrecognized stock-based compensation was $55,670.

Stock Warrants

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

	Warrants		Weighted Average Exercise Price
Outstanding – December 31, 2017		16,666,667	$	0.15
Exercisable – December 31, 2017		16,666,667	$	0.15
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding – September 30, 2018		16,666,667	$	0.15
Exercisable – September 30, 2018		16,666,667	$	0.15

Warrants Outstanding								Warrants Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.15		16,666,667		3.17 years	$	0.15		16,666,667	$	0.15

At September 30, 2018, the total intrinsic value of warrants outstanding and exercisable was $0.

There were no new options or warrants granted during the nine months ended September 30, 2018.

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Segment Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Information

Note 8 – Segment Information

The Company maintained operating segments; Conventions and Conbox. The Company ceased Conbox operations in 2017, which is the principal reason for the decrease in operating results compared to 2017. The Company evaluated performance of its operating segments based on revenue and operating profit (loss). Segment information for the three and nine months ended September 30, 2018 and 2017 and as of September 30, 2018 and December 31, 2017, are as follows:

	Conventions			ConBox			Total
Three Months ended September 30, 2018
Revenue	$	4,468,776		$	-		$	4,468,776
Cost of revenue		(3,469,061	)		-			(3,469,061	)
Gross margin		999,715			-			999,715
Operating expenses		(1,033,918	)		-			(1,033,918	)
Operating loss		(4,203	)		-			(4,203	)
Three Months ended September 30, 2017
Revenue	$	5,233,283		$	-		$	5,233,283
Cost of revenue		(5,238,258	)		-			(5,238,258	)
Gross margin		(4,975	)		-			(4,975	)
Operating expenses		(1,271,247	)		(679	)		(1,271,926	)
Operating loss		(1,276,222	)		(679	)		(1,276,901	)
Nine Months Ended September 30, 2018
Revenue	$	13,571,809		$	-		$	13,571,809
Cost of revenue		(10,844,897	)		-			(10,844,897	)
Gross margin		2,726,912			-			2,726,897
Operating expenses		(2,692,110	)		-			(2,692,110	)
Operating income		34,802			-			34,802
Nine Months Ended September 30, 2017
Revenue	$	13,617,324		$	84,580		$	13,701,904
Cost of revenue		(13,590,113	)		(80,161	)		(13,670,274	)
Gross margin		27,211			4,419			31,630
Operating expenses		(4,456,953	)		(29,534	)		(4,486,487	)
Operating loss		(4,429,742	)		(25,115	)		(4,454,857	)
September 30, 2018
Accounts receivable, net	$	200,091		$	-		$	200,091
Total assets		2,468,312			-			2,468,312
Unearned revenue		463,294			-			463,294
December 31, 2017
Accounts receivable, net	$	336,030		$	-		$	336,030
Total assets		2,940,089			-			2,940,089
Unearned revenue		2,164,972			-			2,164,972

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Significant and Critical Accounting Policies and Practices (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation - Unaudited Interim Financial Information

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on April 2, 2018.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s).

All inter-company balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest.

As of September 30, 2018 and December 31, 2017, the aggregate non-controlling interest in ButtaFyngas was ($12,498). The non-controlling interest is separately disclosed on the Condensed Consolidated Balance Sheet.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers investments with original maturities of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of September 30, 2018 and December 31, 2017, the allowance for doubtful accounts was $0 and $0, respectively.

Inventories

Inventories

Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following:

	September 30, 2018		December 31, 2017
Finished goods	$	-	$	1,204

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

	Estimated Useful Life (Years)
Computer equipment		3
Equipment		2-5
Furniture and fixture		7
Leasehold improvements		*

(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

Investments - Cost Method, Equity Method and Joint Venture

Investments - Cost Method, Equity Method and Joint Venture

In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock.

Method of Accounting

Method of Accounting

Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee.

Investment in CONtv

Investment in CONtv

On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement for CON TV LLC (“CONtv”) with Cinedigm Entertainment Corp. (“Cinedigm”), ROAR, LLC (which at the time was a related party which had been partially owned by a member of the Board. The subject Board Member is no longer affiliated with ROAR, LLC.) (“ROAR”) and Bristol Capital, LLC (a related party controlled by a member of the Board) (“Bristol Capital”). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting.

On November 16, 2015, pursuant to that certain Amended and Restated Operating Agreement for CONtv by and among the aforementioned parties (the “A&R Operating Agreement”), the Company’s ownership interest in CONtv was reduced to 10%. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date.

For the three months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively.

As of September 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments.

In connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. During the year ended December 31, 2017, the Company early adopted ASU 2017-11 on a retrospective basis (see below).

Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. However, in the case of the convertible promissory note discussed in Note 6, the Company obtained a fairness opinion from an independent third party which supports that the transaction was carried out at an arm’s length basis.

Revenue Recognition and Cost of Revenues

Revenue Recognition and Cost of Revenues

The Company follows Paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Convention revenue is generally earned upon completion of the convention. Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements.

Unearned ConBox revenue is non-refundable up-front payments for products. These payments are initially deferred and subsequently recognized over the subscription period, typically three months, and upon shipment of the product. The Company ceased ConBox operations during 2017.

The Company recognizes cost of revenues in the period in which the revenues was earned. In the event the Company incurs cost of revenues for conventions that are yet to occur, the Company records such amounts as prepaid expenses and such prepaid expenses are expensed during the period the convention takes place.

Shipping and Handling Costs

Shipping and Handling Costs

The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of revenue as incurred.

Shipping and handling costs were $0 and $0 for the three months ended September 30, 2018 and 2017, respectively. Shipping and handling costs were $0 and $21,479 for the nine months ended September 31, 2018 and 2017, respectively.

Equity-based Compensation

Equity–based compensation

The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a four-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date.

The fair value of option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are input into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s Common stock over the expected option life and other appropriate factors. The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on the Common stock of the Company and does not intend to pay dividends on the Common stock in the foreseeable future. The expected forfeiture rate is estimated based on historical experience.

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the actual forfeiture rate is materially different from the Company’s estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

Income Taxes

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

The Company is no longer subject to tax examinations by tax authorities for years prior to 2015.

Earnings Per Share

Earnings per Share

Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive:

	Contingent shares issuance arrangement, stock options or warrants
	For the Nine Months Ended September 30, 2018		For the Nine Months Ended September 30, 2017
Convertible note		16,666,667		16,666,667
Common stock options		3,743,000		4,643,000
Common stock warrants		16,666,667		16,666,667
Total contingent shares issuance arrangement, stock options or warrants		37,076,334		37,976,334

Reclassification

Reclassification

Certain prior period amounts have been reclassified to conform to current period presentation.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its consolidated financial statements and disclosures.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition and is effective during the same period as ASU 2014-09. The Company is currently evaluating the standard and does not expect the adoption will have a material effect on its consolidated financial statements and disclosures.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the three months ending December 31, 2017. See below.

Adoption of ASU 2017-11

As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance.

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Three Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(2,306,470	)	$	2,306,470	$	-
Net loss	$	(3,695,439	)	$	2,306,470	$	(1,388,969	)
Net loss per common share:
Basic	$	(0.05	)	$	0.03	$	(0.02	)
Diluted	$	(0.05	)	$	0.03	$	(0.02	)

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Nine Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(661,098	)	$	661,098	$	-
Net loss	$	(5,404,839	)	$	661,098	$	(4,744,384	)
Net loss per common share:
Basic	$	(0.08	)	$	0.01	$	(0.07	)
Diluted	$	(0.08	)	$	0.01	$	(0.07	)

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

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Significant and Critical Accounting Policies and Practices (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of Inventories

Inventory was comprised of the following:

	September 30, 2018		December 31, 2017
Finished goods	$	-	$	1,204

Schedule of Estimated Useful Life

Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

	Estimated Useful Life (Years)
Computer equipment		3
Equipment		2-5
Furniture and fixture		7
Leasehold improvements		*

(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

Schedule of Contingent Share Issuance Arrangements, Stock Options and Warrants

The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive:

	Contingent shares issuance arrangement, stock options or warrants
	For the Nine Months Ended September 30, 2018		For the Nine Months Ended September 30, 2017
Convertible note		16,666,667		16,666,667
Common stock options		3,743,000		4,643,000
Common stock warrants		16,666,667		16,666,667
Total contingent shares issuance arrangement, stock options or warrants		37,076,334		37,976,334

Schedule of Revisions and Corresponding Effects On Consolidated Statement of Operations

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Three Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(2,306,470	)	$	2,306,470	$	-
Net loss	$	(3,695,439	)	$	2,306,470	$	(1,388,969	)
Net loss per common share:
Basic	$	(0.05	)	$	0.03	$	(0.02	)
Diluted	$	(0.05	)	$	0.03	$	(0.02	)

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the nine months ended September 30, 2017 are presented below:

	Consolidated Statement of Operations Nine Months Ended September 30, 2017
	Previously Reported			Revisions		Revised Reported
Change in fair value of derivative liabilities	$	(661,098	)	$	661,098	$	-
Net loss	$	(5,404,839	)	$	661,098	$	(4,744,384	)
Net loss per common share:
Basic	$	(0.08	)	$	0.01	$	(0.07	)
Diluted	$	(0.08	)	$	0.01	$	(0.07	)

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

	September 30, 2018			December 31, 2017
Computer Equipment	$	43,087		$	43,087
Equipment		472,348			460,927
Furniture and Fixtures		62,321			62,321
Leasehold Improvements		22,498			22,495
		600,251			588,830
Less: Accumulated depreciation		(487,005	)		(423,427	)
	$	113,246		$	165,403

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Non-Cancelable Operating Lease

Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows:

Fiscal year ending December 31:
2018 (remainder of year)	$	26,820
2019		107,279
2020		107,279
2021		80,459
	$	321,836

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Stockholders' Equity (Deficit) (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Summary of Stock Option Activity

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

	Options			Weighted Average Exercise Price
Outstanding – December 31, 2017		4,043,000		$	0.58
Exercisable – December 31, 2017		3,328,000		$	0.57
Granted		-		$	-
Exercised		-		$	-
Forfeited/Cancelled		(300,000	)	$	-
Outstanding – September 30, 2018		3,743,000		$	0.59
Exercisable – September 30, 2018		3,278,000		$	0.59

Schedule of Information Regarding Stock Options Outstanding

Options Outstanding								Options Exercisable
Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
	3,743,000		1.51 years	$	0.59		3,278,000	$	0.59

Summary of Stock Warrants Activity

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

	Warrants		Weighted Average Exercise Price
Outstanding – December 31, 2017		16,666,667	$	0.15
Exercisable – December 31, 2017		16,666,667	$	0.15
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding – September 30, 2018		16,666,667	$	0.15
Exercisable – September 30, 2018		16,666,667	$	0.15

Schedule of Information Regarding Stock Warrants Outstanding

Warrants Outstanding									Warrants Exercisable
	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable			Weighted Average Exercise Price
		16,666,667		3.17 years	$	0.15		16,666,667		$	0.15

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of Revenue from Segment Information

Segment information for the three and nine months ended September 30, 2018 and 2017 and as of September 30, 2018 and December 31, 2017, are as follows:

	Conventions			ConBox			Total
Three Months ended September 30, 2018
Revenue	$	4,468,776		$	-		$	4,468,776
Cost of revenue		(3,469,061	)		-			(3,469,061	)
Gross margin		999,715			-			999,715
Operating expenses		(1,033,918	)		-			(1,033,918	)
Operating loss		(4,203	)		-			(4,203	)
Three Months ended September 30, 2017
Revenue	$	5,233,283		$	-		$	5,233,283
Cost of revenue		(5,238,258	)		-			(5,238,258	)
Gross margin		(4,975	)		-			(4,975	)
Operating expenses		(1,271,247	)		(679	)		(1,271,926	)
Operating loss		(1,276,222	)		(679	)		(1,276,901	)
Nine Months Ended September 30, 2018
Revenue	$	13,571,809		$	-		$	13,571,809
Cost of revenue		(10,844,897	)		-			(10,844,897	)
Gross margin		2,726,912			-			2,726,897
Operating expenses		(2,692,110	)		-			(2,692,110	)
Operating income		34,802			-			34,802
Nine Months Ended September 30, 2017
Revenue	$	13,617,324		$	84,580		$	13,701,904
Cost of revenue		(13,590,113	)		(80,161	)		(13,670,274	)
Gross margin		27,211			4,419			31,630
Operating expenses		(4,456,953	)		(29,534	)		(4,486,487	)
Operating loss		(4,429,742	)		(25,115	)		(4,454,857	)
September 30, 2018
Accounts receivable, net	$	200,091		$	-		$	200,091
Total assets		2,468,312			-			2,468,312
Unearned revenue		463,294			-			463,294
December 31, 2017
Accounts receivable, net	$	336,030		$	-		$	336,030
Total assets		2,940,089			-			2,940,089
Unearned revenue		2,164,972			-			2,164,972

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Going Concern Analysis (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ 447,507	$ 1,388,969	$ 838,396	$ 4,743,741
Cash	1,245,296	$ 1,176,034	1,245,296	$ 1,176,034	$ 1,769,550	$ 4,401,217
Working capital	$ 4,277,885		$ 4,277,885
Decrease in operating costs percentage	38.00%		38.00%
Gross profit percentage			2.10%	0.20%

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Significant and Critical Accounting Policies and Practices (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 16, 2015	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2016	Dec. 31, 2017	Aug. 27, 2014
Non-controlling interest		$ (12,498)		$ (12,498)			$ (12,498)
Allowance for doubtful accounts		$ 0		$ 0			0
Percentage of shares in another entity		50.00%		50.00%
Fund on-going costs					$ 84,580
Recognized losses from the venture				0	0
Due to CONtv joint venture		$ 224,241		$ 224,241			$ 224,241
Class of warrant exercise price		$ 0.15		$ 0.15		$ 0.15
Warrants term						5 years
Shipping and Handling [Member]
Shipping and handling costs		$ 0	0	$ 0	21,479
A&R Operating Agreement [Member]
Percentage of shares in another entity	10.00%
Fund on-going costs	$ 25,000
Operating Agreement [Member]
Recognized losses from the venture		$ 0	$ 0	$ 0	$ 0
Con Tv LLC [Member]
Percentage of shares in another entity								47.50%

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Significant and Critical Accounting Policies and Practices - Schedule of Inventories (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Finished goods		$ 1,204

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Significant and Critical Accounting Policies and Practices - Schedule of Estimated Useful Life (Details)	9 Months Ended
	Sep. 30, 2018
Computer Equipment [Member]
Estimated useful lives of property plant, equipment	3 years
Equipment [Member] | Minimum [Member]
Estimated useful lives of property plant, equipment	2 years
Equipment [Member] | Maximum [Member]
Estimated useful lives of property plant, equipment	5 years
Furniture And Fixture [Member]
Estimated useful lives of property plant, equipment	7 years
Leasehold Improvements [Member]
Estimated useful lives of property plant, equipment	0 years	[1]

[1] Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

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Significant and Critical Accounting Policies and Practices - Schedule of Contingent Share Issuance Arrangements, Stock Options and Warrants (Details) - shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Total contingent share issuance arrangements, stock options and warrants	37,076,334	37,976,334
Convertible Note [Member]
Total contingent share issuance arrangements, stock options and warrants	16,666,667	16,666,667
Common Stock Options [Member]
Total contingent share issuance arrangements, stock options and warrants	3,743,000	4,643,000
Common Stock Warrants [Member]
Total contingent share issuance arrangements, stock options and warrants	16,666,667	16,666,667

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Significant and Critical Accounting Policies and Practices - Schedule of Revisions and the Corresponding Effects On Consolidated Statement of Operations (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net loss	$ (447,507)	$ (1,388,969)	$ (838,396)	$ (4,743,741)
Basic	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.07)
Diluted	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.07)
Previously Reported [Member]
Change in fair value of derivative liabilities		$ (2,306,470)		$ (661,098)
Net loss		$ (3,695,439)		$ (5,404,839)
Basic		$ (0.05)		$ (0.08)
Diluted		$ (0.05)		$ (0.08)
Revisions [Member]
Change in fair value of derivative liabilities		$ 2,306,470		$ 661,098
Net loss		$ 2,306,470		$ 661,098
Basic		$ 0.03		$ 0.01
Diluted		$ 0.03		$ 0.01
Revised Reported [Member]
Change in fair value of derivative liabilities
Net loss		$ (1,388,969)		$ (4,744,384)
Basic		$ (0.02)		$ (0.07)
Diluted		$ (0.02)		$ (0.07)

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Property and Equipment (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 63,578	$ 119,511

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Computer Equipment	$ 43,087	$ 43,087
Equipment	472,348	460,927
Furniture and Fixtures	62,321	62,321
Leasehold Improvements	22,498	22,495
Total	600,251	588,830
Less: Accumulated depreciation	(487,005)	(423,427)
Property and equipment, net	$ 113,246	$ 165,403

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Investment in CONtv Joint Venture (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended	9 Months Ended
	Nov. 16, 2015	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2015	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Aug. 27, 2014
Equity method investment ownership percentage		50.00%			50.00%
Percentage of loss on investment during period				10.00%
Fund on-going costs						$ 84,580
Recognized losses from the venture					0	$ 0
Investment net		0			0		$ 0
Due to CONtv joint venture - net		$ 224,241			$ 224,241		$ 224,241
A&R Operating Agreement [Member]
Equity method investment ownership percentage	10.00%
Fund on-going costs	$ 25,000
Con Tv LLC [Member]
Equity method investment ownership percentage								47.50%

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Related Party Transactions (Details Narrative) - USD ($)				3 Months Ended		9 Months Ended
	Dec. 29, 2016	Dec. 02, 2016	Jul. 02, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Stock options granted to purchase of common stock
Consulting expense				$ 130,092	$ 209,859	$ 354,109	$ 537,095
Security deposit				9,408		9,408		$ 9,408
Prepaid rent								76,006
Debt discount				$ 734,298		$ 734,298		1,383,021
Warrant exercise price per share				$ 0.15		$ 0.15			$ 0.15
Fair value for warrant and debt discount						$ 1,448,293
Series A Warrants [Member]
Warrant to purchase shares of common stock				16,666,667		16,666,667
Warrant exercise price per share				$ 0.15		$ 0.15
Warrant expiring date						Dec. 01, 2021
Series B Warrants [Member]
Warrant to purchase shares of common stock				16,666,650		16,666,650
Warrant exercise price per share				$ 0.15		$ 0.15
Warrant expiring date						Dec. 01, 2021
Gross proceeds from exercise of warrants						$ 1,667
Debenture [Member]
Debt principal amount				$ 2,500,000		$ 2,500,000
Debt instruments maturity date						Dec. 30, 2018
Debt conversion price per share				$ 0.15		$ 0.15
Average trading price percentage						50.00%
Debenture [Member] | Common Stock [Member]
Debt instrument interest rate per annum				12.00%		12.00%
Debt conversion price per share				$ 0.15		$ 0.15
Bristol Capital Advisors, LLC [Member]
Lease term			5 years 3 months
Monthly lease payment			$ 8,118
Security deposit			9,137
Prepaid rent			$ 199,238
Rent expense under sublease						$ 57,806	108,353
Bristol Investment Fund, Ltd [Member] | Securities Purchase Agreement [Member] | Board of Directors [Member]
Cash purchase price of securities		$ 2,500,000
Cash paid		$ 25,000
Number of common stock shares issued		500,000
Common stock grant fair value to cover legal fees		$ 85,000
Debt discount		$ 25,791
Bristol Capital, LLC [Member]
Rent expense under sublease						57,806	108,353
Bristol Capital, LLC [Member] | Consulting Services Agreement [Member]
Debt monthly fee	$ 18,750
Stock options granted to purchase of common stock	600,000
Consulting expense				$ 56,250	$ 56,250	168,750	$ 168,750
Accrued consulting expense				$ 410,504		$ 410,504		$ 283,106

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Commitments and Contingencies (Details Narrative) - USD ($)				3 Months Ended			9 Months Ended
	Dec. 29, 2016	Jul. 02, 2016	Nov. 16, 2015	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Apr. 22, 2016
Number of options purchase to common stock shares				3,743,000	3,743,000		3,743,000		4,043,000
Number of option granted
Security deposit				$ 9,408	$ 9,408		$ 9,408		$ 9,408
Prepaid rent									76,006
Fund on-going costs								$ 84,580
Loss on CONtv joint venture							0	0
Due to CONtv joint venture				224,241	224,241		224,241		224,241
Insurance amount							50,000
Other liability				45,000	45,000		45,000
Claims settled amount							5,000
Amended and Restated Operating Agreement [Member}
Ownership interest in contv			10.00%
Fund on-going costs			$ 25,000
Bristol Capital Advisors, LLC [Member]
Lease term		5 years 3 months
Monthly lease payment		$ 8,118
Security deposit		9,137
Prepaid rent		$ 199,238
Rent expense under sublease							57,806	108,353
Bristol Capital, LLC [Member]
Rent expense under sublease							57,806	$ 108,353
Consulting Services Agreement [Member] | Bristol Capital, LLC [Member]
Monthly fee	$ 18,750
Accrued consulting expense				$ 410,504	$ 410,504		410,504		$ 283,106
Number of option granted	600,000
Commercial Contract [Member]
Claims settled amount							11,000
Mr.Maatta [Member]
Number of options purchase to common stock shares										1,100,000
Percentage of compensation provided by employment contract					50.00%
Annual base salary					$ 125,000
Randall Malinoff [Member]
Insurance amount							$ 25,000

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Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Non-Cancelable Operating Lease (Details)	Dec. 31, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018 (remainder of year)	$ 26,820
2019	107,279
2020	107,279
2021	80,459
Future minimum lease payments	$ 321,836

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Stockholders' Equity (Deficit) (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Authorized capital stock	100,000,000
Number of common stock authorized	80,000,000		80,000,000
Common stock par value	$ 0.0001		$ 0.0001
Number of preferred stock authorized	20,000,000		20,000,000
Preferred stock par value	$ 0.0001		$ 0.0001
Common stock issued	68,535,036		68,535,036
Common stock outstanding	68,535,036		68,535,036
Intrinsic value of option outstanding	$ 0
Intrinsic value of option exercisable	0
Share based compensation expense	49,386	$ 274,500
Unrecognized stock based compensation	55,670
Intrinsic value of warrant outstanding	0
Intrinsic value of warrant exercisable	$ 0
Series A Convertible Preferred Stock [Member]
Preferred stock par value	$ 0.0001		$ 0.0001
Preferred stock, shares designated	50,000		50,000

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Stockholders' Equity (Deficit) - Summary of Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Equity [Abstract]
Number of options Outstanding at the beginning of the period | shares	4,043,000
Number of options Exercisable at beginning of the period | shares	3,328,000
Number of options Granted | shares
Number of options Exercised | shares
Number of options Forfeited/Cancelled | shares	(300,000)
Number of options Outstanding at the end of the period | shares	3,743,000
Number of options Exercisable at end of the period | shares	3,278,000
Weighted Average Exercise Price Outstanding at the beginning of the period | $ / shares	$ 0.58
Weighted Average Exercise Price Exercisable at beginning of the period | $ / shares	0.57
Weighted Average Exercise Price Granted | $ / shares
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price Forfeited/Cancelled | $ / shares
Weighted Average Exercise Price Outstanding at the end of the period | $ / shares	0.59
Weighted Average Exercise Price Exercisable at end of the period | $ / shares	$ 0.59

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Stockholders' Equity (Deficit) - Schedule of Information Regarding Stock Options Outstanding (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Equity [Abstract]
Range of Exercise Price Lower Limit	$ 0.40
Range of Exercise Price Upper limit	$ 1.50
Number of Shares Outstanding | shares	3,743,000
Weighted Average Remaining Contractual Life (years)	1 year 6 months 3 days
Weighted Average Exercise Price	$ 0.59
Number of Shares Exercisable | shares	3,278,000
Weighted Average Exercise Price	$ 0.59

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Stockholders' Equity (Deficit) - Summary of Stock Warrants Activity (Details) - Warrant [Member]	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Number of warrants Outstanding at the beginning of the period | shares	16,666,667
Number of warrants Exercisable at beginning | shares	16,666,667
Number of warrants Granted | shares
Number of warrants Exercised | shares
Number of warrants Forfeited/Cancelled | shares
Number of warrants Outstanding at the end of the period | shares	16,666,667
Number of warrants Exercisable at end of the period | shares	16,666,667
Weighted Average Exercise Price Outstanding at the beginning of the period | $ / shares	$ 0.15
Weighted Average Exercise Price Exercisable at the beginning of the period | $ / shares	0.15
Weighted Average Exercise Price Granted | $ / shares
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price Forfeited/Cancelled | $ / shares
Weighted Average Exercise Price Outstanding at the end of the period | $ / shares	0.15
Weighted Average Exercise Price Exercisable at end of the period | $ / shares	$ 0.15

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Stockholders' Equity (Deficit) - Schedule of Information Regarding Stock Warrants Outstanding (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Number of Shares Outstanding | shares	3,743,000
Weighted Average Remaining Contractual Life (years)	1 year 6 months 3 days
Weighted Average Exercise Price	$ 0.59
Number of Shares Exercisable | shares	3,278,000
Weighted Average Exercise Price	$ 0.59
Warrant [Member]
Range of Exercise Price	$ 0.15
Number of Shares Outstanding | shares	16,666,667
Weighted Average Remaining Contractual Life (years)	3 years 2 months 1 day
Weighted Average Exercise Price	$ 0.15
Number of Shares Exercisable | shares	16,666,667
Weighted Average Exercise Price	$ 0.15

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Segment Information - Schedule of Revenue from Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Revenue	$ 4,468,776	$ 5,233,283	$ 13,571,809	$ 13,701,904
Cost of revenue	(3,469,061)	(5,238,258)	(10,844,897)	(13,670,274)
Gross margin	999,715	(4,975)	2,726,897	31,630
Operating expenses	(1,003,918)	(1,271,926)	(2,692,110)	(4,486,487)
Operating loss/ income	(4,203)	(1,276,901)	(34,802)	(4,454,857)
Accounts receivable, net	200,091		200,091		$ 336,030
Total assets	2,468,312		2,468,312		2,940,089
Unearned revenue	463,294		463,294		2,164,972
Conventions [Member]
Revenue	4,468,776	5,233,283	13,571,809	13,617,324
Cost of revenue	(3,469,061)	(5,238,258)	(10,844,897)	(13,590,113)
Gross margin	999,715	(4,975)	2,726,912	27,211
Operating expenses	(1,033,918)	(1,271,247)	(2,692,110)	(4,456,953)
Operating loss/ income	(4,203)	(1,276,222)	34,802	(4,429,742)
Accounts receivable, net	200,091		200,091		336,030
Total assets	2,468,312		2,468,312		2,940,089
Unearned revenue	463,294		463,294		2,164,972
ConBox [Member]
Revenue				84,580
Cost of revenue				(80,161)
Gross margin				4,419
Operating expenses		(679)		(29,534)
Operating loss/ income		$ (679)		$ (25,115)
Accounts receivable, net
Total assets
Unearned revenue