10-Q 1 v326104_10q.htm FORM 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

FORM 10-Q

 

xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2012

 

¨Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from                                    to                                

 

Commission File Number: 000-52414

 

POW! Entertainment, Inc.

(Exact name of Registrant as specified in its charter)

 

Delaware   90-0139831
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification Number)

 

9440 Santa Monica Blvd #620

Beverly Hills, CA 90210

  310-275-9933
(Address of principal executive offices)   Registrant’s telephone number, including area code

 

N/A
(Former name, former address and former fiscal year, if changed since last report.)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes 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 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, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer  ¨ Accelerated filer  ¨
Non-accelerated filer  ¨ Smaller reporting company  x
(do not check if a smaller reporting company)  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

 Yes  ¨                           No  x

 

 The number of common shares outstanding on October 15, 2012 was 133,107,356.

 

 
 

 

POW! ENTERTAINMENT, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 

    Page
PART I. Financial Information  
     
Item 1. Financial Statements  
     
  Consolidated Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011 (Audited) 3
     
  Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2012 and  2011 4
     
  Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended  September 30, 2012 and 2011 5
     
  Notes to Consolidated Unaudited Financial Statements 6 – 11
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12 – 15
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
     
Item 4. Controls and Procedures 16
     
PART II. Other Information  
     
Item 1. Legal Proceedings 16-17
     
Item 1A. Risk Factors 18
     
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 18
     
Item 6. Exhibits 18
   
Signatures 19

 

2
 

 

PART I. ITEM 1. FINANCIAL STATEMENTS

POW! ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

September 30, 2012

  

   September 30   December 31, 
   2012   2011 
   (Unaudited)   (Audited) 
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $317,289   $340,305 
Letter of credit   32,544    32,544 
Marketable securities   631,643    771,177 
Accounts receivable, net of allowance for doubtful accounts   20,558    86,183 
Other receivables   68,214    67,964 
Prepaid expenses   23,129    19,005 
Inventory   13,513    13,513 
TOTAL CURRENT ASSETS   1,106,890    1,330,691 
Property and Equipment, net   10,123    8,638 
INTANGIBLE AND OTHER ASSETS          
Trademarks, net   19,522    18,747 
Development Fees   35,000    35,000 
Deposits   -    2,192 
TOTAL ASSETS  $1,171,535   $1,395,268 
           
LIABILITIES AND SHAREHOLDERS' DEFICIT          
CURRENT LIABILITIES          
Accounts payable and accrued expenses  $280,274   $233,652 
Advances payable   2,959,167    2,546,667 
Deferred compensation-current   300,000    300,000 
Deferred Rent   46,151    50,368 
Derivatives Liability   16,397    28,763 
TOTAL CURRENT LIABILITIES   3,601,989    3,159,450 
           
Deferred compensation-long term   1,677,917    1,827,917 
COMMITMENT AND CONTINGENCIES, note 8          
SHAREHOLDERS' DEFICIT          
Common shares, $0.001 par value. 199,000,000 common shares authorized, 1,000,000 preferred shares  authorized 133,107,356 and 132,607,356  common shares issued and outstanding at  September 30, 2012 and December 31, 2011, respectively   133,108    132,608 
Additional paid in capital   9,575,395    9,522,904 
Subscription receivable, net, note 3   (460,633)   (1,002,496)
Accumulated deficit   (13,359,518)   (12,200,174)
Accumulated other comprehensive income   3,277    (44,941)
TOTAL SHAREHOLDERS' DEFICIT   (4,108,371)   (3,592,099)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT  $1,171,535   $1,395,268 

 

See the accompanying notes to consolidated financial statements.

 

3
 

 

POW! ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

  

   Three  Months Ended   Nine Months Ended 
   September 30, 2012   September 30, 2011   September 30, 2012   September 30, 2011 
                 
REVENUES  $510,550   $568,568   $1,536,617   $2,236,953 
                     
OPERATING COSTS AND EXPENSES                    
Wages and benefits   367,396    382,845    1,217,150    1,335,744 
Commission   31,271    31,332    94,593    107,921 
Stock-based Compensation   9,330    18,661    52,991    24,881 
Professional fees   49,255    42,342    426,567    176,489 
Promotional and Marketing   28,228    250    59,172    86,870 
Rent and office   30,030    38,784    108,558    115,095 
Other general and administration   78,853    83,317    224,160    211,328 
                     
TOTAL OPERATING COSTS AND EXPENSES   594,363    597,531    2,183,191    2,058,328 
INCOME  (LOSS) FROM OPERATIONS   (83,813)   (28,963)   (646,574)   178,625 
OTHER INCOME AND (EXPENSES)                    
Interest and dividend income, net   6,132    5,523    19,072    7,614 
Income from legal settlement   -    -    -    50,000 
Write-off subscription receivable   -    -    (533,408)     
Gain on change of derivative value   -    (15,046)   12,366    24,010 
INCOME (LOSS) BEFORE TAXES   (77,681)   (38,486)   (1,148,544)   260,249 
Income taxes   -    (710)   (10,800)   (14,454)
NET INCOME (LOSS)  $(77,681)  $(39,196)  $(1,159,344)  $245,795 
                     
Net Income (loss) per share                    
Basic and diluted  $(0.00)  $(0.00)  $(0.01)  $0.00 
                     
Weighted average shares outstanding, basic   133,107,356    132,607,356    132,829,578    132,089,987 
Weighted average shares outstanding, diluted   133,107,356    132,607,356    132,829,578    132,132,684 
                     
Condensed Statement of Comprehensive Income                    
Net income (loss)  $(77,681)  $(39,196)  $(1,159,344)  $245,795 
Other comprehensive Income(Loss)                    
Unrealized gain on marketable securities   25,870    -    48,218    - 
Comprehensive income (loss)  $(51,811)  $(39,196)  $(1,111,126)  $245,795 

 

See the accompanying notes to consolidated financial statements.

 

4
 

 

POW! ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

  

   Nine Months Ended 
   September 30, 2012   September 30, 2011 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss)  $(1,159,344)  $245,795 
Adjustments to reconcile net income (loss) to net cash provided by (used) in operating activities:          
Depreciation and amortization   1,439    2,576 
Loss on disposal of fixed assets   564    - 
Loss on sale of marketable securities   10,681    - 
Write-off subscription receivables   533,408    - 
Stock based compensation   52,991    24,881 
Non-employee warrants and options   -    29,403 
Changes in valuation of derivatives liability   (12,366)   (24,010)
Deferred Rent   (4,217)   51,123 
Change in assets and liabilities:          
Accounts receivable   65,625    282,745 
Prepaid expenses   (4,124)   (14,904)
Inventory   -    330 
Other receivable   (250)   (66,113)
Deposits   2,192    - 
Development costs   -    (35,000)
Accounts payable and accrued expenses   46,622    (93,865)
Advances payable   412,500    258,334 
Deferred compensation   (150,000)   (125,000)
NET CASH PROVIDED BY (USED) IN OPERATING ACTIVITIES   (204,279)   536,295 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Payments for trademarks   (775)   (9,223)
Purchase of property and equipment   (3,488)   (5,146)
Sale of marketable securities   197,002    - 
Purchases of marketable securities   (19,931)   (803,922)
NET CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES   172,808    (818,291)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from subscriptions receivable   8,455    25,365 
NET CASH PROVIDED BY IN FINANCING ACTIVITIES   8,455    25,365 
           
NET DECREASE IN CASH   (23,017)   (256,631)
Cash and cash equivalents at beginning of year   340,305    578,808 
Cash and cash equivalents at end of the year  $317,289   $322,177 
           
Supplemental disclosures of cash flow information:          
Income taxes paid in cash  $10,800   $14,454 

 

See the accompanying notes to consolidated financial statements.

 

5
 

 

POW! ENTERTAINMENT, INC

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

 

1.The Company and Basis of Presentation

 

Business Activity and Organization—The Company is a Delaware corporation, incorporated on August 17, 1998. POW! Entertainment, Inc. ("POW", "Company", “we”) has the following subsidiaries: POW! Entertainment, LLC (the operating company); QED Productions, LLC; PFD, LLC; and an inactive Delaware corporation: Pharmelle, Inc.

 

We have prepared the Company’s accompanying consolidated unaudited financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial statements and with instructions to Form 10-Q pursuant to the rules and regulations of Securities Exchange Act of 1934, as amended (the Exchange Act) and Article 8-03 of Regulation S-X promulgated under the Exchange Act. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation. Operating results for the three and nine months ended September 30, 2012 and 2011 are not indicative of the results that may be expected for the fiscal year ending December 31, 2012. You should read these unaudited consolidated financial statements in conjunction with the audited financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2011.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of its liabilities in the normal course of conducting its business. The Company's ability to continue as a going concern is dependent upon various factors including, among others, its ability to increase revenues and reduce its operating losses and negative cash flows. Accordingly, the financial statements do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets and liabilities that may result should we not be able to continue as a going concern.

 

2.Summary of Significant Accounting Policies

 

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.

 

Revenue Recognition —As a creator of intellectual property, the majority of the Company’s business is derived from contracts with third parties providing for the development and use of intellectual property developed by the Company.

 

The Company records revenue from these sources: artist consulting, film rights, animated television and comic-book royalties. In accounting for these contracts, the Company recognizes revenue when services have been rendered or when contractual parameters have been satisfied and are measureable.

 

Our contract with Silver Creek Pictures (“Silver Creek”), an affiliate of The Walt Disney Company, calls for per annum payments of nonrecoupable overhead allowance of $700,000 and nonrecoupable consulting services for Stan Lee of $1,250,000. The contract expires in December 2014. The $1,250,000 per annum for Stan Lee’s consulting services cease in the event of his disability or incapacitation. Revenue from Silver Creek is recorded based on the guidance from ASC 605: revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues.

 

Advances Payable— The contract with Silver Creek also contains recoupable advance payments per annum of $550,000.

 

The Company recorded $412,500 for the nine months ended September 30, 2012 and 2011, respectively, as advances payable pursuant to the contractual clause in which the advances are recoupable by Silver Creek solely from any fixed and contingent compensation related to future developments, including box office bonuses and merchandising royalties. The Company has not met the performance measurement of the revenue and accordingly has not recorded the payments as revenue. In addition, any properties that Silver Creek rejects or accepts and subsequently abandons may be offered by the Company elsewhere subject to participation by Silver Creek.  Depending on the nature of the project so offered to a third party and the time when such project was originally offered to Silver Creek, Silver Creek is entitled to receive up to $100,000 per project, and the assignment of 50% or 25% of the Company’s compensation from the third-party producer.

 

Related Party— From time to time, Stan Lee has appeared and will continue to appear at certain events or projects for which both he and the Company receive payments. There were no payments to Mr. Lee during the nine months ended September 30, 2012.

 

6
 

 

Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the appropriate application of certain accounting policies, many of which require estimates and assumptions about future events and their impact on amounts reported in the financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the financial statements. We have identified the most significant areas of estimation and assumptions as being estimation of the allowance for doubtful accounts, estimation of stock-based compensation, estimation of derivatives liabilities, and estimation of the net deferred income tax asset valuation allowance.

 

Cash, Cash Equivalents and Marketable Securities—Cash, cash equivalents and marketable securities include cash, certificates of deposit, mutual funds and liquid investments with original maturities of three months or less.

 

Concentration of Credit Risk—The Company maintains cash at financial institutions which may, at times, exceed insured limits.

 

Accounts Receivable—The Company extends credit to its customers.  These customers have specific contracts that detail the payments expected under their contract terms.  Accounts receivable are customer obligations due under these contract terms.  Management reviews accounts receivable on a regular basis, based on contracted terms and how recently payments have been received, to determine if any such amounts will potentially be uncollected.  After all attempts to collect a receivable have failed, the receivable is written off.

 

Property and Equipment—Property and equipment are stated at cost.  Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the assets over five years. Depreciation expense recorded for the three months ended September 30, 2012 and 2011 were $536 and $1,600, respectively. Depreciation expense recorded for the nine months ended September 30, 2012 and 2011 were $1,439 and $2,576 respectively.

 

Inventory— Inventory consists of promotional items for sale, which are stated at the lower of cost or market using the first-in, first-out method.

 

Development Costs—The Company capitalizes costs directly related to the creation and development of intellectual properties that are incurred by non-employees, related to the development of scripts and stories. The Company periodically reviews the properties in development to determine whether they will ultimately be used in the production of a film. The costs capitalized are written off if the property has not been set for production within three years from the time of the first capitalized transaction.

 

Fair Value Measurements—The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e. inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:

 

1.Level I – Quoted prices in active markets for identical assets and liabilities.
2.Level II – Other significant observable inputs for assets or liabilities through corroboration with market data at measurement date,
3.Level III – Significant unobservable inputs that reflect management’s best estimate of what market participants would use to price assets or liabilities at the measurement date.

 

The following table summarizes fair value measurements by level at December 31, 2011 for assets and liabilities measured at fair value on a recurring basis:

 

7
 

 

   Level I   Level II   Level III   Total 
Cash  $340,305             $340,305 
Letter of credit  $32,544             $32,544 
Marketable securities  $771,177             $771,177 
Derivatives liability            $28,763   $28,763 

 

The following table summarizes fair value measurements by level at September 30, 2012 for assets and liabilities measured at fair value on a recurring basis:

 

   Level I   Level II   Level III   Total 
Cash  $317,289               $317,289 
Letter of credit  $32,544             $32,544 
Marketable securities  $631,643             $631,643 
Derivatives liability            $16,397   $16,397 

 

The table below sets forth a summary of changes in fair value of the Company’s Level III liabilities for the nine months ended September 30, 2012.

 

Balance as of December 31, 2011  $28,763 
Issuance of warrants     
Change in Value   (12,366)
Balance as of September 30, 2012  $16,397 

 

The Company’s management believes the carrying amounts of accounts receivable, accounts payable and accrued expense approximate fair value due to their short maturity.

 

Accounting for Stock-Based Compensation to Employees —The Company measures and recognizes compensation expense for all share-based payment awards to employees based on estimated fair values on the grant date. The Company recognizes the expense on a straight-line basis over the requisite service period, which is the vesting period.

 

Income Taxes—Income taxes are accounted for under an asset and liability approach that requires the recognition of deferred income tax assets and liabilities for the expected future consequences of events that have been recognized in the Company’s financial statements and income tax returns. The Company provides a valuation allowance for deferred income tax assets when it is considered more likely than not that all or a portion of such deferred income tax assets will not be realized.

 

Earnings Per Share—Basic earnings per share is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common share equivalents had been issued and if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. For the three and nine months ended September 30, 2012, the diluted earnings per share are the same as basic earnings per share as the 1,650,000 warrants outstanding would have an anti-dilutive effect.

 

8
 

 

   Nine Months Ended 
   September 30, 2011 
Numerator -     
Net income attributable to common     
Shareholders  $245,795 
Denominator -     
Weighted-average number of common     
Shares outstanding during the period   132,089,987 
Dilutive effect of stock options and warrants   42,697 
Common stock and common stock     
Equivalents used for diluted earnings per share   132,132,684 

 

Valuation of Derivative Instruments—ASC 815-40 (formerly SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities”)  requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 (formerly EITF 00-19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”) to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. At September 30, 2012, the Company adjusted its derivative liability to its fair value, and reflected the decrease of $12,366, which represents the gain on change in derivative.

 

Other Comprehensive Income—The Company’s other comprehensive income consists of unrealized losses on marketable securities categorized as available-for-sale, that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income.

 

Concentrations—The Company has one major customer that individually exceeded 10% of total revenue and accounted for 95% and 86% for the three months ended September 30, 2012 and 2011, respectively.

 

The Company has one major customer that individually exceeded 10% of total revenue and accounted for 95% for the nine months ended September 30, 2012 and two major customers that individually exceeded 10% of total revenue accounting for 88% for the nine months ended September 30, 2011.

 

As of September 30, 2012 and 2011, one and four customers, respectively, who are not major customers accounted for 100% of total accounts receivable.

 

3.Subscription Receivable

 

On July 22, 2005, a subscription for shares equal to the principal amount of $1,150,000 was entered into, fully amortized with monthly payments of interest only for 18 months starting August 30, 2005 and then principal and interest payments of $12,197 monthly for an additional 10 years with the interest rate of 5% per annum. The payments on the indebtedness related to the subscription have defaulted. An allowance of 50% was recorded in year 2007 to reduce the principal amount. During May 2012, the Company settled with the shareholders under a confidential agreement pursuant to which the Company wrote off the remaining principal balance of $533,408 and mutual releases were exchanged.

 

On November 15, 2005, another subscription for shares equal to the principal amount of $525,000 was entered into, fully amortized over thirty years with the interest rate of 5% per annum.  The subscription is payable in equal monthly payments of $2,818.  The payments on the subscription were defaulted during the years 2005 to August 2010. Three payments totaling $8,455 were received for the nine months ended September 30, 2012. The subscription is collateralized by a Deed of Trust granting rights to a residential property.

 

9
 

 

4.Deferred Compensation

 

Deferred compensation consists of accrued but unpaid salaries of executives, which will be paid as the Company increases its cash, over time, or by obtaining additional financing.   For the nine months ended September 30, 2012 there were payments to deferred compensation of $150,000.

 

5.Receivable—Related Party

 

During March 2011, the Company entered into an agreement with a minority shareholder, who is also a former employee, to loan the individual an amount totaling $66,667. The loan is non-interest bearing and collateralized by the stock of the Company already owned by such shareholder. The loan is due in full. At September 30, 2012, the balance of the receivable was $66,667.

 

6.Restricted Stock Grant

 

On June 1, 2011, the Company granted restricted stock to an employee. The agreement called for grants of common stock priced at $0.17 per share, which was the closing market price, equaling to 0.05% of the company outstanding shares or 658,608 shares to be vested equally each on December 1, 2011, 2012 and 2013. Future expenses related to this grant are expected to be approximately $35,000 per year for 2012 and 2013. For the nine months ended September 30, 2012, stock-based compensation for this grant was $27,990.

 

The Company granted additional restricted stock to the same employee during June 2012. The agreement calls for grants of 500,000 shares of common stock priced at $0.05 per share, which was the closing market price. The shares vest in full on date of grant. Stock-based compensation recognized by the Company related to this stock grant amounted to $25,000.

 

The Company adopted the guidance provided by ASC 718 to measure and records the expense over the requisite service period for the entire award. Stock-based compensation recognized by the Company for the nine months ended September 30, 2012 amounted to $52,990.

 

7.Warrants and Options for Non-Employees

 

On September 9, 2010, the Company granted options to purchase 800,000 shares of common stock to its investor relations advisor at strike price of $0.14 per share.  These options vest quarterly over a 12-month period beginning December 9, 2010, and mature in September 2015.  On November 18, 2010, the agreement was amended to increase the number of options to 830,000 shares at a strike price of $0.1905. The Company uses the guidance in FASB ASC 505-50 (formerly EITF 96-18) to scope and measure the stock options for non-employees.

 

Total expense related to the investor relations’ options during the nine months ended September 30, 2011 was $29,403.

 

On June 1, 2011, the Company terminated the contract with the investor relations advisor. Pursuant to the contract, the Company reserved the right to cancel one-third vesting of the options to purchase 830,000 shares. On July 13, 2011, the investor relations advisor exercised all vested shares or 622,500 shares on a cashless basis. The below illustrates the conversion of 622,500 shares on a cashless basis to derive the 227,214 shares issued:

 

a)Cash exercise price = 622,500 option shares x $0.1905 (exercise price) = $118,586
b)Shares needed to pay for exercise price = $118,586 cash exercise price/ $0.30 (closing market price on 7/13/11) = 395,286 shares
c)Shares to issue per option exercise = 622,500 shares - 395,286 shares = 227,214 shares

 

On December 2, 2010, the Company issued warrants to purchase 350,000 shares of common stock at $0.1905 per share in lieu of the remaining balance of an accrued commission of $125,000 to a consultant. The contract has an anti-dilutive clause, vests immediately and expires in December 2012. During April 2012, the Company agreed to extend the term of the warrants to December 2017. Accordingly, the Company uses the guidance in ASC 815-40-15 to scope and measure the warrants for non-employees as a derivative liability.

 

10
 

 

A gain on change in derivative liability was recorded to reflect a decrease of $0 and $12,366 for the three and nine months ended September 30, 2012, respectively.

 

The fair value of stock warrants and options at the date of grant and derivative liability were estimated using the Black-Scholes option-pricing model, based on the following assumptions for the nine months ended September 30, 2012:

 

Risk-free interest rate   0.31%
Expected life   5 years 
Expected Volatility   191.14%
Dividend yield   00.0%

 

8.Commitments and Contingencies

 

From time to time the Company may become involved in various legal proceedings in the normal conduct of its business. 

 

On February 14, 2011, the Company and its subsidiary, QED Productions, LLC, were named in a lawsuit citing, among other things, trademark infringement. The Company filed a motion to dismiss the lawsuit on March 15, 2011. On August 23, 2012, Judge Wilson of the U.S. District Court for the Central District of California dismissed the case. On September 23, 2012, the Plaintiffs filed an intention to appeal Judge Wilson’s dismissal.

  

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

FORWARD-LOOKING STATEMENTS

Some of the statements in the Form 10-Q are forward-looking statements about what may happen in the future. Forward-looking statements include statements regarding our current beliefs, goals, and expectations about matters such as our expected financial position and operating results, our business strategy, and our financing plans. The forward-looking statements in the Form 10-Q are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. The forward-looking statements generally can be identified by the use of terms such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements. We cannot guarantee that our forward-looking statements will turn out to be correct or that our beliefs and goals will not change. Our actual results could be very different from and worse than our expectations for various reasons. You should review carefully all information, including the discussion of risk factors under “Item 1A: Risk Factors” and “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Form 10-K for the year ended December 31, 2011. Any forward-looking statements in the Form 10-Q are made only as of the date hereof and, except as may be required by law, we do not have any obligation to publicly update any forward-looking statements contained in this Form 10-Q to reflect subsequent events or circumstances.

 

Overview

 

The Company is a multimedia development and licensing company that creates and licenses animated and live-action fantasy and superhero entertainment content and merchandise, leveraging the creative output and branded image of Stan Lee.  The Company develops originally created franchises for new media such as mobile, on-line, and videogames, where content is currently in high demand, and for traditional entertainment media such as feature length films in both live action and animation, DVD, television programming, merchandising and related ancillary markets. All of the Company’s intellectual property, which may include characters and stories, is vertically integrated in that each property is developed into as many products as possible, to create a branded franchise to accelerate global identity from the synergy created across various media.

 

Currently, the Company plans to focus on:

 

·creating project concepts, primarily in the form of story treatments,
·identifying select partners willing to participate in, and/or finance, the development of the Company’s projects,
·identifying talented and suitable writers to write scripts for the Company’s projects, and
·negotiating agreements for the production of the projects (i.e., the filming of a movie or television series, the creation of the video game, etc.).

 

Projects in Development

 

The Company begins with story ideas from Stan Lee and presents the ideas to Disney pursuant to the “first look” contract (See Transactions with Affiliates of The Walt Disney Company), then third parties (such as writers, directors, producers or studios) to develop the project at the third party’s expense. The Company considers a project to be “in development” once we have packaged the project and handed the project off to a third party. At that point, the project has left the control of the Company and is in the purview of the third party. Since the Company does not control the process once it is in the hands of others it is unable to indicate with much, if any, certainty when that project will be produced or the cost that such other party may incur to produce it.  We currently have over 20 projects “in development.” A majority of projects “in development” are never produced, or are produced only after lengthy delays.

 

We believe that the odds are against the typical project “in development” being produced because there are a very large number of people who come up with ideas for movies, television shows, and other forms of entertainment, but only a limited number of entities with the financial and personnel resources required to produce and distribute these projects. However, we believe that several factors improve the odds of the Company’s projects being produced and, if produced, being successful.

 

·First, Stan Lee’s has co-created a large number of very successful characters and projects.
·Second, through Stan Lee, we have established relationships with a variety of well-known writers, directors and producers.  

 

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·Third, Stan Lee’s natural inclination and focus are on superheroes, action characters and other characters that have potential to become “franchises” (i.e. that lend themselves to sequels, to licensing to other media, to merchandising and to other ancillary opportunities).  

 

Recent Events

 

During June 2011, the Company sold film rights to a third party for a superhero story targeting the Asian market. The script for the film was completed during 2012 by an A-list writer. During the Shanghai Film Festival during June 2012, it was announced by the third party that the project has a production finance commitment of up to the lesser of 40% and $40 million from another party. The project will continue to be developed by the third party affiliations. The expected revenue to the Company, if any, related to this project cannot be determined at this time.

 

The Company recently associated with other third parties to create digital worlds to develop our media platform. The associations will expand our storytelling into the digital realm more quickly and effectively to reach a global audience. An outlet for digital content is on the YouTube Channel entitled Stan Lee’s World of Heroes. The channel was launched during July 2012. The expected revenue to the Company, if any, related to this project cannot be determined at this time.

 

The Company recently announced that we have teamed with other third parties to launch mobile application games. One such game called Verticus is set to be launched by December 2012. The expected revenue to the Company, if any, related to this project cannot be determined at this time.

 

Transactions with Affiliates of The Walt Disney Company

 

Silver Creek Pictures, Inc. (“Silver Creek”), an affiliate of The Walt Disney Company (“Disney”), entered into an agreement with the Company in 2006 and subsequently amended (the “Silver Creek Agreement”) pursuant to which, among other things, the Company provides Silver Creek with a “first look” at all of the Company’s creative intellectual property and the right to acquire any such properties, in Silver Creek’s discretion under prescribed terms, and Silver Creek compensates the Company for all properties that are developed by Silver Creek into revenue producing works pursuant to complex terms, typical in the film and media industry. 

 

The Silver Creek Agreement provides for Silver Creek to pay the Company overhead allowance amounts equal to $700,000 per annum from 2010 through 2014, and an additional $550,000 per annum advance against certain future payments due from Silver Creek.  Silver Creek is entitled to recoup the $550,000 annual payments from proceeds of Company projects.

 

In addition to the foregoing $1,250,000 in annual payments, Silver Creek has agreed to pay us $1,250,000 in annual consideration for our lending Stan Lee’s services to consult on the exploitation of the assets of Marvel Entertainment, which was acquired by Disney in late 2009.  The payments of $1,250,000 per year relating to Stan Lee’s consulting services cease in the event of, and from the time of, Stan Lee's inability to perform such services due to disability or other incapacitation.

 

Furthermore, any properties that Silver Creek rejects or accepts and subsequently abandons may be offered by the Company elsewhere subject to participation by Silver Creek.  Depending on the nature of the project so offered to a third party and the time when such project was originally offered to Silver Creek, Silver Creek is entitled to either up to $100,000 per project, or the assignment of 50% or 25% of the Company’s compensation from the third-party producer.

 

At present, in a typical deal for feature films, we believe we would receive an executive producer fee ranging between $450,000 and $750,000 per feature film project produced, plus a share of potential “back-end” revenues or profits, as well as a share of licensing and merchandising revenues.  Although an amount in this range is payable to the Company by Silver Creek for any feature films produced, such amount would be subject to offsets to permit Silver Creek to recoup a portion of the advances and guaranteed payments that it is and has been paying the Company on a monthly basis.

 

The Silver Creek Agreement, including all amendments, are exhibits to the Form 10 filed with the Securities and Exchange Commission on December 10, 2010 and the foregoing summary is subject to the actual terms provided therein.

 

Additionally, Catalyst Investments, LLC (“Catalyst Investments”), another Disney affiliate, purchased on December 31, 2009 ten percent of the then-outstanding shares of common stock of the Company for $2,500,000 (the “Catalyst Investment”).

 

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Critical Accounting Policies and Estimates

 

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources.

 

We have identified the most significant areas of estimation and assumptions as being:

 

·estimation of the allowance for doubtful accounts;
·estimation on stock-based compensation;
·estimation of derivatives liabilities; and
·estimation of the net deferred income tax asset valuation allowance.

 

Results of Operations

 

We believe that, due to the complex nature and long term cycle of our business operations, period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied on as an indication of future performance. However, it is still important that you review the audited financial statements filed on the Form 10-K for the year ended December 31, 2011 and the related notes in addition to thoroughly reading our current plan of operations.

 

For Three Months Ended September 30, 2012 and 2011

 

The Company’s revenues for the three months ended September 30, 2012 decreased by $58,018 or 10.2% compared to the three months ended September 30, 2011.  

 

For the three months ended September 30, 2012, net loss was $77,681 compared to a net loss of $39,196 for the three months ended September 30, 2011.

 

Total operating costs and expenses for the three months ended September 30, 2012 decreased by $3,168 compared to the three months ended September 30, 2011. The decrease in total general and administrative expenses was primarily attributable to and was also offset by the following:

 

·Salaries and related employee benefits decreased by $15,449 primarily due to switching to a less expensive health insurance plan and the lack of salaries for the late Chief Operating Officer and Chief Legal Officer, Arthur Lieberman, who passed away during May 2012;

 

·Professional expenses increased by $6,913 in legal expenses related to indemnification payments and resolutions of certain legal disputes. Professional expense also reflect an increase for the replacement of services of in-house counsel aforementioned; and

 

·Promotion and marketing increased by $27, 978 reflecting press and public relations fees in project promotions.

 

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For Nine Months Ended September 30, 2012 and 2011

 

The Company’s revenues for the nine months ended September 30, 2012 decreased by $700,336 or 31.3% compared to the nine months ended September 30, 2011. Prior year revenue consists primarily of the revenue from a third party of $500,000 during the nine months ended September 30, 2011 for film rights.

 

For the nine months ended September 30, 2012, net loss was $1,159,344 compared to net income of $245,795 for the nine months ended September 30, 2011, primarily due to the non-cash write off of $533,408 from the remaining principal balance of the subscription receivable.

 

Total operating costs and expenses for the nine months ended September 30, 2012 increased by $124,863 compared to the nine months ended September 30, 2011. The increase in total general and administrative expenses was primarily attributable to and was also offset by the following:

 

·Salaries and related employee benefits decreased by $118,594 primarily due to switching to a less expensive health insurance plan and the absence of salary payments from May to September for the late Chief Operating Officer and Chief Legal Officer, Arthur Lieberman, who passed away on May 1, 2012;

 

·Stock-based compensation increased by $28, 110 due to restricted stock grant to an employee;

 

·Promotional expense decreased by $27,698 compared to the nine months ended September 30, 2011 from cancellation of investor relations contract; and

 

·Professional expenses increased by $250,078 in legal expenses related to indemnification payments and resolutions of certain legal disputes. Professional expenses also reflect an increase for the replacement of services of in-house counsel aforementioned.

 

Liquidity and Capital Resources

 

Our current liquidity and capital resources are provided principally through our current agreement with Silver Creek Pictures. We have a deficiency in working capital of $2,495,099 and $1,828,759 as of September 30, 2012 and December 31, 2011, respectively. That deficiency results from the classification as current liabilities of cumulative advances received from Silver Creek which were $2,959,167 and $2,546,667, as of September 30, 2012 and December 31, 2011 respectively. These amounts are recoupable by Silver Creek solely from any fixed and contingent compensation related to future developments, including box office bonuses and merchandising royalties. The Company has reclassified part of Deferred Compensation as long-term liabilities.

 

If Silver Creek stops paying installments of the $1,250,000 per annum for Stan Lee’s consulting services paid to the Company as part of the $2,500,000 obligation per annum as a result of any future death or disability of Stan Lee, the Company believes that revenues from various projects that it has “in development” with other parties or that may shortly go into development with other parties will make up all or a portion of the lost revenue. To the extent that it does not, and to the extent that the Company is unable to raise funds from investments to cover any shortfall, the Company will have to reduce its expenses, as it has done in the past, by such approaches as deferring portions of its executive officer’s salaries and reducing staff.

 

Deferred compensations due executives totaled $1,977,917 and $2,127,917 as of September 30, 2012 and December 31, 2011, respectively. For the nine months ended September 30, 2012, the Company paid down deferred compensation totaling $150,000.

 

Off Balance Sheet Arrangements

 

We are not party to any material off-balance sheet financing arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

None

 

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ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 

 

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Under the direction of our Chief Executive Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that our disclosure controls and procedures were not effective as of June 30, 2012. We have disclosed to our auditors and the Board of Directors such deficiencies. There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonable likely to materially affect the Company’s internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

  

From time to time the Company may become involved in various legal proceedings in the normal conduct of its business.  

 

Stan Lee Media, Inc. and Related Litigation 

 

Stan Lee Media, Inc. (“SLM”) was a publicly-traded entity listed on the NASDAQ during 1999.  SLM operated as a typical dot com company during the dot com bubble, in that it created and developed new properties and franchises for the internet, in this case under the Stan Lee signature, but without any sustainable revenue source other than new debt or equity financings.  While Stan Lee was the Chairman of the Board of Directors and Chief Creative Officer of SLM and Gill Champion was the Chief Operating Officer of SLM, the President and Chief Executive Officer of SLM was a party who is unrelated to the Company. Stan Lee terminated his employment agreement with SLM in January 2001 because, among other reasons, SLM had ceased paying him thereunder.

 

SLM filed for bankruptcy protection in February 2001 and ceased operations during July 2001. SLM does not have any working relationship, association or dealings with the Company, other than the Company having acquired the right to distribute some of SLM’s intellectual property, subject to an agreement to pay SLM a royalty out of any revenues received from such intellectual property.  This SLM intellectual property has only produced approximately $2,000 of revenues from December 2001 to December 2009 and the Company does not consider it material to its Company’s business.  SLM’s bankruptcy petition was eventually dismissed as a result of SLM’s failure to pay required court fees and its corporate charter was revoked by its state of incorporation, Colorado, for failure to pay franchise taxes. 

 

During 2006, the Company learned that certain individuals, purporting to be acting on behalf of SLM, were claiming that SLM owned various intellectual properties, including the SLM intellectual property which SLM had assigned to the Company.  To prevent confusion, in January 2007, the Company, along with QED Productions LLC, a subsidiary of the Company (“QED”), and Stan Lee filed a lawsuit in the United States District Court for the Central District of California entitled QED Productions LLC, et al v. Nesfield, et al (the “QED Suit”) .  This suit was filed against three individuals who purported to be acting on behalf of SLM, alleging claims for copyright infringement, violation of the Lanham Act, cyber squatting, interference with contractual relations and prospective business advantage, unfair business practices and seeking a declaration regarding certain rights to intellectual property.  After denying motions for summary judgment by both parties, in January 2009, the court stayed this action pending resolution of a suit in the state courts of Colorado, regarding the disputed election of a board of directors of SLM, which could determine whether the defendants legally represent SLM. 

 

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This Colorado action, captioned P.F.P. Family Holdings v. Stan Lee Media Inc. (the “PFP Suit”) was resolved in 2010 with the determination that certain individuals claiming to be the directors of SLM were validly elected. 

 

On July 9, 2007, SLM filed a lawsuit in the United States District Court for the Central District of California against Stan Lee, QED and the Company entitled Stan Lee Media, Inc. v. Lee, et al. (the “SLM Suit”).   In this suit, SLM sought declaratory relief and asserted claims for misappropriation of corporate opportunity, breach of contract, civil conspiracy, an accounting for profit, violation of the Lanham Act, copyright infringement, cyber squatting, and unfair business practices naming various defendants, including the Company.  Specifically, SLM petitioned the court for an order declaring that SLM is the rightful owner of certain intellectual property and, as such, is the only entity that can use and benefit from such property.  As in the QED Suit, the court stayed the case pending the outcome of the PFP Suit. In January 2011, the U.S. District Court for the Central District of California directed that SLM file a Consolidated Complaint in that Court, consolidating all the litigation pending in that Court. On February 14, 2011, SLM filed its Consolidated Complaint seeking substantially the same relief sought in the initial complaint described above and the complaints filed and dismissed in New York as described below. On March 15, 2011, the Company filed a motion to dismiss the newest complaint on the grounds that the claims are barred by res judicata and statutes of limitation, among other grounds, based in part on the New York decisions described below. In the alternative, the Company’s motion requested that the Court stay the proceedings pending resolution of SLM’s appeal of Judge Sweet’s decision to the U.S. Court of Appeals for the Second Circuit, described below. On May 6, 2011, the Court granted the Company’s alternative motion and stayed the action proceedings. On August 23, 2012, Judge Wilson dismissed the case. On September 23, 2012, SLM filed a notice of intention to appeal the dismissal.

 

In 2009 a $750,000,000 lawsuit was filed on behalf of SLM against Marvel Entertainment, the Company and other defendants in an action entitled Abadin v. Marvel Entertainment, Inc., et al. , in the U.S. District Court, Southern District of New York (the “Abadin Suit”), claiming, among other things, that SLM owned various intellectual property including the intellectual property at issue in the QED Suit and the SLM Suit, and including all the Marvel characters and the Marvel name.  The various causes of action alleged by plaintiffs in this case were all dismissed pursuant to an Order of the Court filed on March 31, 2010. The Abadin Court noted first that “the heart of the alleged wrongdoing is the transfer to Marvel by Stan Lee of what Stan Lee had previously conveyed to and thus belonged to SLMI.  That occurred in 1998 but Abadin and his co-plaintiff did not acquire their SLMI shares until 1999, more than a year after the purported illegal conduct. . . . [A]ccordingly they lack . . . standing.”  The Court then noted that the Plaintiffs were included in a prior class action that was settled.  Therefore the Court found that “Plaintiffs’ claims against Lee and Lieberman . . . are barred under . . . the Settlement”.  The Court then noted that with regard to Plaintiffs’ Count I, a copyright claim, that “California law limits personal service contracts to 7 years. . . . . Lee’s obligations were statutorily terminated in 2005.”  With respect to Plaintiffs’ Count II, Lanham Act Claims against Lee and Marvel, the Court held that “The pleading of Lanham Act violation is inadequate” and that any claim would be time barred since any alleged violation would have “occurred no later than October or November, 1998” and that “The Statute of Limitation is six years”. As to Plaintiffs’ Count III, Breach of Contract, the Court held “There is absolutely no doubt that Lee terminated the 1998 agreement in writing in 2001.  The statute of limitations began running at that time.  It is now expired”.  As to Plaintiffs’ Count IV, Tortious Interference with Contract, the Court held that “Plaintiffs’ claims . . . are insufficient.” The Court also held that “the three year statute of limitations . . . expired in 2001.” The Court fount Plaintiffs’ Count V, Breach of Fiduciary Duty to be “redundant to Plaintiffs other claims” which he had dismissed; that the “statute of limitations . . . is 3 years” which had passed; and that this count was “internally inconsistent with other allegations”.  The Court found that as to Plaintiffs Count VI, Aiding and Abetting Breach of Fiduciary Duty, “with respect to Lee, . . there is not a sufficient plausible allegation” and that with regard Lieberman “He owed no fiduciary duty to SLMI”.  And with respect to Plaintiff’s last Counts, Count VII and VIII, Constructive Trust and Accounting, that these are “remedies for wrongs; and not wrongs themselves.  Since Counts I-VI are dismissed, there is no basis for [such relief].  Further, substantially all of the alleged wrongs are barred by the statute of limitations.”  The plaintiffs in the Abadin case filed an appeal of the dismissal of its case, but failed to perfect the appeal, which as a result was dismissed.  Therefore, the dismissal of this case is now final and binding.

 

SLM sought to re-file almost identical claims to intellectual property created or co-created by Stan Lee by moving to become a party in another federal action in New York on July 26, 2010. On February 4, 2011, U. S. District Judge Robert W. Sweet of the Southern District of New York denied SLM’s application to file its proposed motion. Among numerous other reasons for denying SLM’s complaint, the court held that SLM’s “proposed Amended Complaint is barred” because SLM claims had already been dismissed based on the statute of limitations and other grounds, and that determination barred SLM from asserting the same claims in another action. SLM appealed Judge Sweet’s decision to the United States Court of Appeals for the Second Circuit. On March 21, 2012, the Court of Appeals for the Second Circuit found SLM’s arguments to be without merit and affirmed the decision by Judge Sweet.

 

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ITEM 1A—RISK FACTORS

 

There were no material changes from the risk factors set forth in the “Risk Factors” section of our Form 10-K filed with the SEC on March 23, 2012. However, as reported in its Form 8-K, dated May 4, 2012, Arthur Lieberman, the Company’s Chief Operating Officer, Chief Legal Officer and a director, passed away.

  

ITEM 2—UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On July 13, 2011, the Company issued 227,214 shares of common stock to a former investor relations advisor upon conversion of its options to purchase common stock. The Company received no cash proceeds, but cancelled options to purchase 395,286 shares of common stock. Refer to Note 7 in the notes to consolidated unaudited financial statements for further details therein. The issuance of the shares was made pursuant to Section 4(2) of Securities Act of 1933.

 

ITEM 6—EXHIBITS

 

Exhibit No.   Description
31.1   Certification by Chief Executive Officer
31.2   Certification by Chief Financial Officer
32.1   Section 1350 Certification by Principal Executive Officer
32.2   Section 1350 Certification by Principal Financial Officer

  

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SIGNATURES

 

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

 

  POW! Entertainment, Inc.
     
November 14, 2012 By: /s/ GILL CHAMPION
    Gill Champion
    President and Chief Executive Officer
    Principal Executive Officer
     
November 14, 2012 By: /s/ BICK LE
    Bick Le
    Chief Financial Officer
    Principal Financial Officer

  

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