10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1 

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2018
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to__________
	Commission File Number: 000-55370

Globe Photos, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-0746744
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
6445 South Tenaya Way, B-130 Las Vegas, Nevada 89113
(Address of principal executive offices)
702-722-6113
(Registrant’s telephone number)
_______________________________________________________
(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. 

[X] Yes [ ] No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company.

[  ] Large accelerated filer	[  ] Accelerated filer
[  ] Non-accelerated filer	[X] 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 [X] No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 325,218,584 common shares as of August 9, 2018

Explanatory Note

The purpose of this Amendment No. 1 to the registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, filed with the Securities and Exchange Commission on August 14, 2018 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q. Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (Extensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures made in the original Form 10-Q.

2

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 formatted in Extensible Business Reporting Language (XBRL).
	**Provided herewith

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on August 15, 2018 on its behalf by the undersigned thereunto duly authorized.

GLOBE PHOTOS, INC.

/s/Stuart Scheinman

Stuart Scheinman

Principal Executive Officer

/s/Scott C. Black

Scott C. Black

Principal Financial and Accounting Officer

4

EX-31.1

CERTIFICATIONS

I, Stuart Scheinman, certify that;

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2018 of Capital Art, Inc. (the “registrant”);

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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 control 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 during the period in which this 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; and

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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2018

/s/ Stuart Scheinman

By: Stuart Scheinman

Title: Chief Executive Officer

EX-31.2

CERTIFICATIONS

I, Scott C. Black, certify that;

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2018 of Capital Art, Inc. (the “registrant”);

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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 control 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 during the period in which this 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; and

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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2018

/s/ Scott C. Black

By: Scott C. Black

Title: Chief Financial Officer

EX-32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly Report of Capital Art, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2018 filed with the Securities and Exchange Commission (the “Report”), I, Stuart Scheinman, Chief Executive Office, and I, Scott C. Black, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.

By:	/s/ Stuart Scheinman
Name:	Stuart Scheinman
Title:	Principal Executive Officer
Date:	August 15, 2018
By:	/s/ Scott C. Black
Name:	Scott C. Black
Title:	Principal Financial Officer
Date:	August 15, 2018

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 09, 2018
Document And Entity Information
Entity Registrant Name	Globe Photos, Inc.
Entity Central Index Key	0001527844
Document Type	10-Q/A
Document Period End Date	Jun. 30, 2018
Amendment Flag	true
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		325,218,584
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018
Amendment Description	Include XBRL

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Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash	$ 25,317	$ 1,297
Accounts receivable, net	29,730	44,548
Inventory, net	56,500	56,500
Prepaid expenses	35,582	12,765
Total Current Assets	147,129	151,110
Property and equipment, net	2,299,455	2,493,224
Security deposit	6,356	6,356
Intangible Assets, net	304,500	326,250
Total Assets	2,757,440	2,940,940
Current Liabilities
Accounts payable and accrued liabilities	590,402	540,947
Payable to Globe Photo, Inc.	10,000	10,000
Due to related parties	294,455	147,113
Notes payable - related parties	643,755	456,235
Notes payable, net of debt discount	355,000	417,500
Deferred revenue	50,000	75,000
Derivative liability		9,195
Loans payable, net of unamortized discounts	564,418	738,805
Total Current Liabilities	2,508,030	2,394,795
Total Liabilities	2,508,030	2,394,795
Stockholders' Equity
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; none issued and outstanding at June 30, 2018 and December 31, 2017.
Common stock par value $0.0001: 450,000,000 shares authorized; 325,218,583 and 325,570,524 issued and outstanding as of June 30, 2018 and December 31, 2017	32,522	32,557
Additional paid in capital	4,331,766	4,124,243
Treasury stock; 0 and 258,823 shares as of June 30, 2018 and December 31, 2017.		88,000
Accumulated deficit	(4,114,878)	(3,522,655)
Stockholders' Equity	249,410	546,145
Total Liabilities and Stockholders' Equity	$ 2,757,440	$ 2,940,940

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Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	325,218,583	325,570,524
Common stock, shares outstanding	325,218,583	325,570,524
Treasury Stock	0	258,823

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Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
License revenue	$ 83,818	$ 55,065	$ 314,593	$ 101,542
Image revenue	120,614	250,414	439,660	356,502
Total revenue	204,432	305,479	754,253	458,044
Cost of revenue	190,329	148,892	486,472	294,565
Gross margin	14,103	156,587	267,781	163,479
Operating expenses
Product development, sales and marketing	108,632	51,521	113,164	93,359
General and administrative	208,252	134,242	365,699	300,553
Depreciation and amortization	11,221	7,968	17,935	15,546
Total operating expenses	328,105	193,731	496,798	409,458
Loss from operations	(314,002)	(37,144)	(229,017)	(245,979)
Other income (expenses)
Loss of settlement of accrued liabilities	208,322		208,322
Interest expense	(145,715)	(25,285)	(164,079)	(64,023)
Change in fair value of derivative liabilities	4,810	20,430	9,195	10,663
Other income (expenses)	(349,227)	(4,855)	(363,206)	(53,360)
Net loss	$ (663,229)	$ (41,999)	$ (592,223)	$ (299,339)
Per-share data
Basic and diluted loss per share	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average number of common shares outstanding	325,221,721	325,476,408	325,288,172	325,507,778

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Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (592,223)	$ (299,339)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	228,441	225,585
Amortization of debt discount	4,597	24,318
Options issued for services	14,999
Loss of settlement of accrued liability	208,322
Change in fair value of embedded derivative	(9,195)	(10,663)
Accounts receivable	14,818	(58,186)
Prepaid expenses	(22,817)	(44,976)
Inventory		(2,500)
Deferred revenue	(200,000)
Accounts payable and accrued liabilities	153,622	(68,278)
Net Cash Used In Operating Activities	(199,436)	(234,039)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash paid for minority investment in business
Purchase of archival images, property and equipment	(12,922)	(107,202)
Net Cash Provided By (Used In) Investing Activities	(12,922)	(107,202)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable	150,000	200,000
Repayment of loans payable	3,984	7,195
Proceeds from related party advances	147,342	164,725
Repayment of related party advances		19,725
Proceeds from notes payable		25,000
Repayment of note payable		35,000
Proceeds from note payable - related party		(7,569)
Repayment of note payable - related party	(24,980)
Purchase of treasury stock	32,000	32,000
Net Cash Provided By Financing Activities	236,378	288,236
Net Change in Cash	24,020	(53,005)
Cash - Beginning of Period	1,297	54,034
Cash - End of Period	25,317	1,029
Cash Paid During the Period for:
Interest	11,219	10,609
Purchase of third party notes by related party	$ 212,500
Options issued to settle accrued liabilites	104,167

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Organization and Business Operations

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Organization and Business Operations

1. ORGANIZATION AND BUSINESS OPERATIONS

Globe Photos, Inc. (“we”, “our”, the “Company”) sells and manages classic and contemporary, limited edition photographic images and reproductions, with a focus on iconic celebrity images. The Company also makes available its images for publications and merchandising. The Company aims to become a leading global photography marketing and distribution company by acquiring rights and ownership to collections of rare iconic negatives and photographs, and to establish worldwide wholesale and retail sales channels.

On June 6, 2018, we filed a Certificate of Merger with the Secretary of State of Delaware in order to effectuate a merger with our wholly-owned subsidiary, Globe Photos, Inc. Shareholder approval was not required pursuant to the Delaware General Corporation Law. As part of the merger, our board of directors authorized a change in our name to “Globe Photos, Inc.” and our Certificate of Incorporation has been amended to reflect this name change.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of June 30, 2018, the Company had $25,317 cash on hand. At June 30, 2018 the Company has an accumulated deficit of $4,114,878. For the six months ended June 30, 2018, the Company had a net loss of $592,223 and cash used in operations of $199,436.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company intends to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the six months ended June 30, 2018 should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended December 31, 2017 as filed with the SEC pursuant to Rule 12(b) under the Securities Act of 1934.

The consolidated balance sheet as of December 31, 2017, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ended December 31, 2018.

The accompanying unaudited consolidated financial statements represent the results of operations, financial position and cash flows of Globe Photos, Inc., and its 100% owned subsidiary Capital Art, LLC for the three and six months ended June 30, 2018 and 2017. All inter-company balances and transactions have been eliminated.

Use of Estimates 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Inventory

The Company’s inventory is comprised of rare photos of movie stars and other famous people, and is stated at the lower of cost or net realizable value. Direct labor and raw material costs associated with the process of making the photos available for sale are also included in inventory at cost. These costs are expensed to cost of sales pro-ratably as sold.

Revenue Recognition

The Company recognizes revenue related to product sales when (i) the seller’s price is substantially fixed, (ii) shipment has occurred causing the buyer to be obligated to pay for product, (iii) the buyer has economic substance apart from the seller, and (iv) there is no significant obligation for future performance to directly bring about the resale of the product by the buyer as required by ASC 605 – Revenue Recognition. Cost of sales, rebates and discounts are recorded at the time of revenue recognition or at each financial reporting date. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We did not have a cumulative impact as of January 1, 2018 due to the adoption of Topic 606 and there was not an impact to our consolidated statements of operations for the three and six months ended June 30, 2018 as a result of applying Topic 606.

The Company’s other revenue represent payments based on net sales from brand licensees for content reproduction rights. These license agreements are held in conjunction with third parties that are responsible for collecting fees due and remitting to the Company its share after expenses. Revenue from licensed products is recognized when realized or realizable based on royalty reporting received from licensees. Revenues from royalties as of June 30, 2018 and 2017 were insignificant.

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. Management evaluated ASU 2016-18 and determined that the adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

3. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s derivative liability measured at fair value on a recurring basis was determined using the following inputs:

	Fair Value Measurements at June 30, 2018
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Put option derivative liability	$	—	$	—	$	—	$	—

	Fair Value Measurements at December 31, 2017
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Put option derivative liability	$	9,195	$	—	$	—	$	9,195

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Embedded Derivative Liability
		June 30, 2018			December 31, 2017
Balance beginning of period	$	9,195		$	57,922
Change in fair market value of derivative liability		(9,195	)		(48,727)
Balance end of period	$	—		$	9,195

The Company’s derivative instruments were valued using the Black-Scholes option pricing model. Assumptions used in the valuation include the following: a) market value of stock on measurement date of $0.17; b) risk-free rate of 1.63%; c) volatility factor of 276%; d) dividend yield of 0% and e) remaining term of 0.14 years. During the six months ended June 30, 2018, all derivative instruments were settled by the Company.

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Globe Photo Asset Purchase Agreement

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Globe Photo Asset Purchase Agreement

4. GLOBE PHOTO ASSET PURCHASE AGREEMENT

On July 22, 2015, the Company entered into an Asset Purchase Agreement with Globe Photos, Inc. (“Globe”), a New York corporation, to purchase of substantially all of the assets of Globe, which principally comprises of photographer contracts granting the Company the right to exploit copyrights, digital and tangible photographs, and related copyrights and trademarks, of Globe Photo ( Globe Photo Assets) for total purchase price of $400,000 payable in $250,000 cash and $150,000 payable in the common stock of the Company.

Per the agreement, $180,000 in cash was held in reserve by the Company against Globe’s full performance and compliance with all terms of the agreement. This amount is to be released to Globe at the rate of $10,000 per month beginning August 22, 2015. As of December 31, 2017 and 2016, the total reserve payable to Globe Photos, Inc. is $10,000 .

The Agreement called for the Common stock to be transferred to Globe sixty (60) days after closing subject to satisfaction of successful termination of certain subagent agreements by Globe. Globe retained these certain subagent agreements, but was not able to successfully terminate these agreements. As such, the amount payable in common stock of the Company was reduced by $30,000, thereby reducing the total purchase price of the assets acquired from $400,000 to $370,000. Under the terms of the Agreement the Company issued 352,941 shares of its common stock based on the closing price of the Company’s common shares as traded on the OTC market on the measurement date July 22, 2015 of $0.34 per share for a total of $120,000.

The Company evaluated the Asset Purchase Agreement in accordance with ASC 805 – Business Combinations which notes the threshold requirements of a business combination that includes the expanded definition of a “business” and defines elements that are to be present to be determined whether an acquisition of a business occurred. No “activities” of Globe were acquired. Instead, the Company obtained control of a set of inputs (the acquired assets). Thus the Company determined agreement is an acquisition of assets, not an acquisition of a business in accordance with ASC 805. The total purchase price of $370,000 in connection with the assets acquired is included in archival images, and property and equipment, net, in the consolidated balance sheets.

As a form of liquidity protection, Globe shall have limited put options in connection with the common stock beginning eighteen (18) months after the closing date, whereas the Company shall have up to fifteen (15) successive monthly options, with no less than thirty (30) days’ notice for each, which requires the Company to repurchase from Globe up to 1/15th of the shares of common stock in Globe’s possession that were granted in connection with the agreement, at a price per share equity to the market price per share ($0.34) on the effective date of the original share transfer to Globe. The exercise of any put option is not conditioned upon exercise of any prior put option. Beginning in January 2017, Globe exercised its option and elected to sell 1/15th of the shares of common stock for $8,000 per month. As of June 30, 2018, the Company has repurchased 352,941 shares from Globe for cash payments of $120,000.

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Archival Images, and Property and Equipment

5. PROPERTY AND EQUIPMENT, NET

Property and equipment as of June 30, 2018 and December 31, 2017 comprise of the following:

	June 30,			December 31,			Estimated Useful
	2018			2017			Lives
Frank Worth Collection	$	2,770,000		$	2,770,000		10 years
Other archival images		952,265			939,343		10 years
Leasehold improvements		12,446			12,446		7 years
Computer and other equipment		72,687			72,687		3 – 5 years
Furniture and fixtures		83,666			83,666		7 years
		3,891,064			3,878,142
Less accumulated deprecation		(1,591,609	)		(1,384,918	)
Total archival images, property and equipment, net	$	2,299,455		$	2,493,224

Depreciation expense was $206,691, and $203,835 for the six months ended June 30, 2018 and 2017, respectively of which $210,507 and $210,039 are reported in cost of revenue, respectively.

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Intangible Assets, Net

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

6. INTANGIBLE ASSETS, NET

Identifiable intangible assets comprise of the following at June 30, 2018 and December 31, 2017:

	June 30, 2018						December 31, 2017
	Gross Carrying   Amount		Accumulated Amortization		Net book value		Gross Carrying   Amount		Accumulated Amortization		Net book value
Intangible assets with determinable lives:
Content provider and photographic agreements	$	400,000	$	120,000	$	280,000	$	400,000	$	100,000	$	300,000
Copyrights		35,000		10,500		24,500		35,000		8,750		26,250
Total	$	435,000	$	130,500	$	304,500	$	435,000	$	108,750	$	326,250

Amortization expense in connection with the photographic agreements and copyrights for the six months ended June 30, 2018 and 2017 was $21,750 and is included in cost of revenue in the consolidated statements of operations. Estimated amortization expense over the next five years is $43,500 per year.

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Notes Payable

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Note Payable

7. NOTES PAYABLE

On September 28, 2015, the Company entered into a promissory note agreement for working capital purposes with an unrelated party for total proceeds of $150,000. The note matured on September 28, 2016. Effective September 28, 2016, the note was extended to March 31, 2017 and is secured by approximately 240,000 vintage photographs. Interest accrues at the rate of 10% per annum and is payable monthly beginning October 28, 2015. Accrued interest payable due under the note agreement was $13,904 and $15,154 at June 30, 2018 and December 31, 2017, respectively. The note was further extended to July 31, 2017 and then to December 31, 2017. Effective March 30, 2018, the note was extended to June 30, 2018. Effective June 30, 2018 the note was extended to August 31, 2018.

On April 1, 2016, the Company entered into a unsecured promissory note agreements with unrelated parties for working capital purposes for total proceeds of $25,000. The promissory notes matured on December 1, 2017 and on March 30, 2018 was extended through June 30, 2018 and on June 30, 2018 was further extended to December 31, 2018 and bear interest at the rate of 6% per annum. Accrued interest payable due under the unsecured note agreement was $3,380 and $2,630 as of June 30, 2018 and December 31, 2017, respectively.

On April 7, 2016, an unrelated party advanced the Company $75,000 plus an original issue discount of $25,000 for the purchase of a Marilyn Monroe archive. The advance is secured by the archive for which it was used and is to be repaid on or before April 7, 2017. As of May 3, 2017, the note was extended to December 31, 2017, as of March 28, 2018, was extended to June 30, 2018, and on June 30, 2018 was further extended to September 30, 2018. The Company has agreed to pay 50% of the proceeds derived from the Marilyn Monroe archives up to a guaranteed total of $100,000. Once the $100,000 is paid, the Company has no further obligations. As of June 30, 2018 and December 31, 2017, a balance of $20,000 remains outstanding, respectively.

On December 20, 2017, the Company entered into a short-term unsecured note with an unrelated party for working capital purposes for total proceeds of $10,000. As of June 30, 2018, the note was still outstanding.

On April 13, 2018, the Company entered into an unsecured promissory note agreements with an unrelated party for total proceeds of $150,000. The note is due upon demand and carries an interest rate of 15% and is guaranteed by a shareholder and director of the Company. Accrued interest payable due under the unsecured note agreement was $22,500 and $0 as of June 30, 2018 and December 31, 2017, respectively.

The Company evaluated the modification of the notes resulting from the extensions in maturity dates under ASC 470-50 and determined that the modifications were not considered substantial and would not qualify for extinguishment accounting under such guidance.

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

8. RELATED PARTY TRANSACTIONS

Notes payable to related parties

In December 2015, the Company entered into a secured promissory note agreement with an unrelated party for working capital purposes for total proceeds of $120,000. The note bears interest at the rate of 10% per annum, and is payable on the 1st day of each month commencing in February 2016. On February 15, 2016, the Company entered into an additional promissory note agreement with the same unrelated party for additional proceeds of $62,500 and under the same terms as the first note. As of June 30, 2018 and December 31, 2017, the balance of $162,500 remains outstanding. Both notes are secured by certain inventory and archival images of the Company in the amount of up to $200,000. Accrued interest payable due under the unsecured note agreement was $42,537 and $34,412 as of June 30, 2018 and December 31, 2017, respectively. The notes matured on December 31, 2017; however, on January 22, 2018, the outstanding balance on the notes was purchased by a related party (ICONZ Art, LLC, beneficial interest shareholder) and the notes were extended to June 30, 2018 and on June 30, 2018 was extended indefinitely and will now be considered due on demand. All the accrued interest through the December 31, 2017, was still due to the original noteholder.

On April 5, 2016, the Company entered into a unsecured promissory note agreements with an unrelated party for working capital purposes for total proceeds of $50,000. The promissory notes matured in December 2017 and bear interest at the rate of 6% per annum. However, on January 22, 2018, the outstanding balance on the notes was purchased by a related party and the notes were extended to June 30, 2018 and on June 30, 2018 was extended indefinitely and will now be considered due on demand. Accrued interest payable due under the unsecured note agreement was $6,727 and $5,228 as of June 30, 2018 and December 31, 2017, respectively. All the accrued interest through the December 31, 2017, was still due to the original noteholder.

On August 1, 2013 the Company entered into an unsecured promissory note agreement with a related party Dino Satallante for $100,000. The loan bears interest at the rate of 5% per annum. During the six months ended June 30, 2018, the Company made payment of $7,480. As of June 30, 2018 and December 31, 2017, $53,655 and $61,355 was outstanding under the unsecured promissory note agreement, respectively. Interest expense for the six months ended June 30, 2018 and 2017 was $1,341 and $1,214 respectively. The loan matured on July 14, 2014 and was extended to July 31, 2016. Effective March 30, 2018, the note agreement was extended to June 30, 2018 and on June 30, 2018, the note was further extended to December 31, 2018.

Effective September 11, 2014 the Company entered into two separate unsecured promissory note agreements for $20,500 each with two related parties, Dreamstar an entity owned and controlled by Sam Battistone, a Company officer and director and a principal shareholder, and Dino Satallante, a beneficial interest shareholders of the Company, for working capital purposes. The loans bear interest at the rate of 6% per annum. The loans matured on September 10, 2015, and were extended to December 31, 2016. In December 2016, both loans were extended to December 31, 2017 and on March 30, 2018, the notes were extended to June 30, 2018 and on June 30, 2018, the note was further extended to December 31, 2018. As of June 30, 2018, $20,500 and $600 was outstanding to Dino Satallante and Dreamstar, respectively t December 31, 2017, $20,500 and $18,100 was outstanding to Dino Satallante and Dreamstar, respectively. Interest expense in connection with the two unsecured promissory note agreements for the six months ended June 30, 2018 and 2017 was $633 and 579, respectively.

Effective July 21, 2015, the Company entered into a promissory note agreement with a related party Dino Satallante, a beneficial interest shareholder of the Company, for total proceeds of $160,000. The Company utilized $80,000 of the proceeds for payments due in connection with the Globe Photo assets acquired. The remainder of the proceeds were used for working capital purposes. The note matured on July 20, 2016, with monthly interest only payments commencing July 22, 2015. Interest accrues at the rate of 12% per annum. The note is secured by the Globe Photo Assets. Total interest expense in connection with the secured promissory note agreement for the six months ended June 30, 2018 and 2017 was $9,600. Per the terms of the agreement the Company incurred loan fees totaling $8,000 which were fully amortized in 2016 Effective March 30, 2018 the note was extended to June 30, 2018, and on June 30, 2018, the note was further extended to December 31, 2018.

On April 4, 2016 the Company entered into a secured promissory note agreement with Premier Collectibles, a beneficial interest shareholder for total proceeds of $65,000 to be used for acquisition of archive agreement. The promissory note bears interest at the rate of 8% per annum, is secured by the archive collection which the proceeds were used and matured on April 1, 2017. On March 30, 2018, the note was extended to June 30, 2018 and on June 30, 2018 was extended indefinitely and will now be considered due on demand. Interest expense on the note was $2,600 for the six months ended June 30, 2018 and 2017. 

On April 15, 2016, the Company entered into an unsecured promissory note agreement with Sean Goodchild, a beneficial interest shareholder, for total proceeds of $50,000. The promissory note bears interest at the rate of 6% per annum and matured on December 15, 2017, However, on January 22, 2018, the outstanding balance on the notes was purchased by another related party (ICONZ Art, LLC, beneficial interest shareholder) and the notes were extended to June 30, 2018 and on June 30, 2018 was extended indefinitely and will now be considered due on demand.. Interest expense was $1,500 and $1,000 for the six months ended June 30, 2018 and 2017, respectively. All the accrued interest through the December 31, 2017, was still due to the original noteholder.

On October 3, 2016, the Company entered into an unsecured promissory note agreement with Sean Goodchild, a beneficial interest shareholder, for total proceeds of $50,000. The promissory note bears interest at the rate of 6% per annum and matured on December 31, 2017, However, on January 22, 2018, the outstanding balance on the notes was purchased by another related party (ICONZ Art, LLC, beneficial interest shareholder) and the notes were extended to June 30, 2018 and on June 30, 2018 was extended indefinitely and will now be considered due on demand. Interest expense was $1,500 for the six months ended June 30, 2018 and 2017. All the accrued interest through the December 31, 2017, was still due to the original noteholder.

On December 2, 2016, the Company entered into an unsecured promissory note agreement with Sean Goodchild, a beneficial interest shareholder, for total proceeds of $31,500. The promissory note bears interest at the rate of 6% per annum and matured on December 31, 2017, However, on January 22, 2018, the outstanding balance on the notes was purchased by another related party (ICONZ Art, LLC, beneficial interest shareholder) and the notes were extended to June 30, 2018 and on June 30, 2018 was extended indefinitely and will now be considered due on demand.. Interest expense was $945 for the six months ended June 30, 2018 and 2017, respectively. All the accrued interest through the December 31, 2017, was still due to the original noteholder.

The Company evaluated the modification of the notes resulting from the extensions in maturity dates under ASC 470-50 and determined that the modifications were not considered substantial and would not qualify for extinguishment accounting under such guidance.

Due To Related Parties

The following table summarizes amounts due to related parties for cash advances and expenses paid for on the behalf of the Company as of June 30, 2018 and December 31, 2017. The amounts due are non-interest bearing and due upon demand. These amounts have been included in the consolidated balance sheets as current assets due from related parties and current liabilities due to related parties, respectively.

	June 30, 2018		December 31, 2017
Due to related parties:
ICONZ Art, LLC, beneficial interest shareholder		266,423	$	119,081
MSN Holding Co., beneficial interest shareholder		12,947		12,947
Premier Collectibles, beneficial interest shareholder		15,085		15,085
Total due to related parties	$	294,455	$	147,113

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

Proceeds from Auctions of Royalty Rights

On March 8, 2016, the Company entered into a Listing Agreement with Royalty Network, LLC, doing business as Royalty Exchange for auction of a 50% ownership of photographic copyrights of certain celebrity archival images owned by the Company. In addition, the sale also assigns the winning bidder the right to receive 50% of the future share of income derived from the assigned images.

During 2016, the Company received gross proceeds of $396,000, less 12.5% auction broker fee, from five separate auctions of these rights. The Company retains all exclusive licensing authority over the images and may exercise a buyback option to buy back the 50% ownership of the rights for two times the original auction proceeds over a period ranging from 1 to 2 years.

The Company accounted for the 50% profit consideration for the above agreement in accordance with ASC 470-10-25 and 470-10-35 which requires amounts recorded as debt to be amortized under the interest method as described in ASC 835-30, Interest Method. The Company determined an effective interest rate based on future expected cash flows to be paid to the loan holders. This rate represents the discount rate that equates estimated cash flows with the initial proceeds received from the loan holders and is used to compute the amount of interest to be recognized each period. Estimating the future cash outflows under this agreement requires the Company to make certain estimates and assumptions about future revenues and such estimates are subject to significant variability. Therefore, the estimates are likely to change which may result in future adjustments to the accretion of the interest expense and the amortized cost based carrying value of the related loans.

Accordingly, the Company has estimated the cash flows associated with the images and determined a discount of $151,316 which is being accounted as interest expense over a 10-year estimated life of the asset based on expected future revenue streams. For the six months ended June 30, 2018 and 2017, interest expense related to these loans amounted to $14,597 and $11,153 respectively, which has been included in interest expense and a corresponding increase in loans payable. During the six months ended June 30, 2018 and 2017, the Company made payments of $3,984 and $7,195 to the loan holders, respectively. As of June 30, 2018, loan payable net of unamortized debt discount amounted $364,418.

Asset purchase agreements

On March 3, 2017, the Company entered into an agreement to sell 20% of its ownership in a certain photographic archive asset for $200,000. As part of the agreement the buyer received preferential distributions of their entire purchase price of the asset. If however the entire purchase price is not paid back after 24 months then all net revenues from the Company will be paid to the buyer until the full purchase price has been paid. On March 30, 2018, the Company entered into an addendum to the agreement to remove the preferential distributions clause from the agreement. Additionally, on May 1, 2018, the Company entered into a second addendum to the agreement whereby the Company agreed to repay the seller the total purchase price of $200,000 and 1,000,000 shares of common stock within 120 days of the effective date of the agreement. The Company valued the 1,000,000 shares at $100,000 as of the agreement date and recorded the value as interest expense during the six months ended June 30, 2018.

The Company accounted for the above transaction as debt and recognized the amount received as a loan payable. As of June 30, 2018, other debt, net of unamortized debt discount amounted to $200,000.

On July 21, 2017, the Company entered into an agreement to sell 25% of its ownership in a certain photographic archive asset for $175,000. As part of the agreement the buyer received preferential distributions of their entire purchase price of the asset plus a 30% return. If however the entire purchase price is not paid back after 24 months then all net revenues from the Company will be paid to the buyer until the full purchase price plus a 30% return has been paid. During the six months ended June 30, 2018, the Company entered into an addendum to the agreement to remove the preferential distributions clause from the agreement. As such, the Company has reclassified the debt to revenue for the six months ended June 30, 2018.

License Agreements

Effective June 1, 2016 the Company entered into three separate non-exclusive license agreements use of licensed images and trademarks through December 31, 2019. Under the terms of the agreements, the Company is required to pay royalties of 10% on net sales. The agreements call for combined annual guaranteed minimum royalties per year of $150,000 based on combined minimum sales of $1,500,000 per year. As of June 30, 2018, the Company has paid $25,000 toward the guaranteed royalties.

Operating Lease Agreements

On September 6, 2012 the Company entered into a 25-month operating lease agreement for approximately 4,606 square foot warehouse and office facilities located in Las Vegas, NV. Monthly base rent due under the agreement is $3,270, plus common area maintenance fees. The agreement calls for 3% annual increase in base rental payments. On October 10, 2014, the Company entered into a First Amendment to Lease agreement extending the lease term for 60-months, beginning November 1, 2014. All other terms of the agreement remain unchanged.

Future minimum lease payments are below:

2018	$	21,441
2019		36,807
Total	$	58,248

The Company leases various corporate housing from unrelated third parties for terms that range from month-to-month to one year. The Company also rents office space on a month-to-month basis in New York at rate of $850 per month.

Total rent expense for six months ended June 30, 2018 and 2017 was $27,442 and $26,791, respectively, in connection with the operating lease agreements.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Shareholders' Equity

10. SHAREHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue up to 50,000,000 shares of preferred stock authorized with a par value of $0.0001. The Board of Directors is authorized, subject to any limitations prescribed by law, without further vote or action by the Company’s stockholders, to issue from time to time shares of preferred stock in one or more series. Each series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by the board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, and conversion rights. As of June 30, 2018, there were no shares of Preferred Stock issued and outstanding.

Common Stock

The Company is authorized to issue up to 450,000,000 shares of common stock with a par value of $0.0001. As of June 30, 2018, and December 31, 2017, there were 325,218,583 and 325,570,524 shares of common stock issued and outstanding, respectively.

During the six months ended June 30, 2018, the Company repurchased 94,118 shares of common stock for $32,000 related to the Globe Photo Asset Purchase Agreement entered into on July 22, 2015. As of June 30, 2018, the Company has repurchased 352,941 shares from Globe for total cash payments of $120,000

STOCK OPTIONS

The following is a summary of stock option activity during six months ended June 30, 2018. 

On June 1, 2018, the Company granted 2,183,333, 10-year stock options of which 2,083,333 was in lieu of common stock with exercise prices of $0.01 valued at $327,488 for services and settlement of $104,167 in accrued liabilities. The difference between the fair value of the options and accrued liability was recorded as a loss on settlement of accrued liability in the amount of $208,322 during the six months ended June 30, 2018. The options were valued using the Black-Scholes option pricing model. Assumptions used in the valuation include the following: a) market value of stock on measurement date of $0.15; b) risk-free rate of 2.89%; c) volatility factor of 238%; d) dividend yield of 0%

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2017		100,000	$	$0.10
Options granted and assumed		2,183,333	$	$0.01
Options expired		—		—
Options canceled		—		—
Options exercised		—		—
Balance outstanding, June 30, 2018		2,283,333	$	$0.01
Balance exercisable, June 30, 2018		2,283,333	$	$0.01

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

11. SUBSEQUENT EVENTS

Subsequent to June 30, 2018, Company entered into various debt extension agreements with noteholders extending the payment terms of certain notes with term ranging from due on demand through December 31, 2018. (See Note 6 and Note 7)

Subsequent to June 30, 2018, the Company entered issued various convertible notes for total proceed of $1,505,000. The notes matured on April 30, 2019, bear interest at the rate of 10% per annum, and are convertible along with accrued interest at $0.10 per share at the option of the note holders.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the six months ended June 30, 2018 should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended December 31, 2017 as filed with the SEC pursuant to Rule 12(b) under the Securities Act of 1934.

The consolidated balance sheet as of December 31, 2017, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ended December 31, 2018.

The accompanying unaudited consolidated financial statements represent the results of operations, financial position and cash flows of Globe Photos, Inc., and its 100% owned subsidiary Capital Art, LLC for the three and six months ended June 30, 2018 and 2017. All inter-company balances and transactions have been eliminated.

Use of Estimates

Use of Estimates 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Inventory

Inventory

The Company’s inventory is comprised of rare photos of movie stars and other famous people, and is stated at the lower of cost or net realizable value. Direct labor and raw material costs associated with the process of making the photos available for sale are also included in inventory at cost. These costs are expensed to cost of sales pro-ratably as sold.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue related to product sales when (i) the seller’s price is substantially fixed, (ii) shipment has occurred causing the buyer to be obligated to pay for product, (iii) the buyer has economic substance apart from the seller, and (iv) there is no significant obligation for future performance to directly bring about the resale of the product by the buyer as required by ASC 605 – Revenue Recognition. Cost of sales, rebates and discounts are recorded at the time of revenue recognition or at each financial reporting date. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We did not have a cumulative impact as of January 1, 2018 due to the adoption of Topic 606 and there was not an impact to our consolidated statements of operations for the three and six months ended June 30, 2018 as a result of applying Topic 606.

The Company’s other revenue represent payments based on net sales from brand licensees for content reproduction rights. These license agreements are held in conjunction with third parties that are responsible for collecting fees due and remitting to the Company its share after expenses. Revenue from licensed products is recognized when realized or realizable based on royalty reporting received from licensees. Revenues from royalties as of June 30, 2018 and 2017 were insignificant.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. Management evaluated ASU 2016-18 and determined that the adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of derivative fair on recurring basis

	Fair Value Measurements at June 30, 2018
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Put option derivative liability	$	—	$	—	$	—	$	—

	Fair Value Measurements at December 31, 2017
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Put option derivative liability	$	9,195	$	—	$	—	$	9,195

Schedule of Level 3 Significant Inputs

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Embedded Derivative Liability
		June 30, 2018			December 31, 2017
Balance beginning of period	$	9,195		$	57,922
Change in fair market value of derivative liability		(9,195	)		(48,727)
Balance end of period	$	—		$	9,195

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of archival images, property and equipment

	June 30,			December 31,			Estimated Useful
	2018			2017			Lives
Frank Worth Collection	$	2,770,000		$	2,770,000		10 years
Other archival images		952,265			939,343		10 years
Leasehold improvements		12,446			12,446		7 years
Computer and other equipment		72,687			72,687		3 – 5 years
Furniture and fixtures		83,666			83,666		7 years
		3,891,064			3,878,142
Less accumulated deprecation		(1,591,609	)		(1,384,918	)
Total archival images, property and equipment, net	$	2,299,455		$	2,493,224

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	June 30, 2018						December 31, 2017
	Gross Carrying   Amount		Accumulated Amortization		Net book value		Gross Carrying   Amount		Accumulated Amortization		Net book value
Intangible assets with determinable lives:
Content provider and photographic agreements	$	400,000	$	120,000	$	280,000	$	400,000	$	100,000	$	300,000
Copyrights		35,000		10,500		24,500		35,000		8,750		26,250
Total	$	435,000	$	130,500	$	304,500	$	435,000	$	108,750	$	326,250

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Schedule of related party transactions

	June 30, 2018		December 31, 2017
Due to related parties:
ICONZ Art, LLC, beneficial interest shareholder		266,423	$	119,081
MSN Holding Co., beneficial interest shareholder		12,947		12,947
Premier Collectibles, beneficial interest shareholder		15,085		15,085
Total due to related parties	$	294,455	$	147,113

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum operatinng lease payments

2018	$	21,441
2019		36,807
Total	$	58,248

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Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of antilutive shares

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2017		100,000	$	$0.10
Options granted and assumed		2,183,333	$	$0.01
Options expired		—		—
Options canceled		—		—
Options exercised		—		—
Balance outstanding, June 30, 2018		2,283,333	$	$0.01
Balance exercisable, June 30, 2018		2,283,333	$	$0.01

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Organization and Business Operations (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash	$ 25,317		$ 25,317		$ 1,297	$ 54,034
Retained deficit	(4,114,878)		(4,114,878)		$ (3,522,655)
Working Capital Deficit
Net loss	$ (663,229)	$ (41,999)	(592,223)	$ (299,339)
Cash used in operations			$ 199,436
Movie Star News Organization Date			Aug. 29, 2012
Global Photo LLC Organization Date			Jan. 24, 2011
Capital Art LLC Organization Date			Jul. 24, 2015
Capital Art, Inc. Incorporation Date			Apr. 26, 2007
Filed Certificate of Merger			Jun. 06, 2018

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Fair Value of Financial Instruments (Details - fair value) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Derivative Financial Instruments	$ 4,810	$ 9,195
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative Financial Instruments		9,195
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative Financial Instruments
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative Financial Instruments

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Fair Value of Financial Instruments (Details - Level 3) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Ending balance		$ 9,195
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Beginning balance	9,195	57,922
Change in fair market value of derivative liability	(9,195)	(48,727)
Ending balance		$ 9,195

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Fair Value of Financial Instruments (Details Narrative)	6 Months Ended
	Jun. 30, 2018 $ / shares
Market value of stock	$ .17
Risk-free rate	163.00%
Volatility Factor	27600.00%
Dividend Yield	0.00%
Remaining Term in years	14.00%

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Globe Photo Asset Purchase Agreement (Details Narrative) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2016	Aug. 22, 2015	Jul. 22, 2015
Accounting Policies [Abstract]
Total Purchase Price of Globe Photos, Inc.						$ 400,000
Payable in Cash						250,000
Payable in Common Stock						150,000
Cash held in reserve						180,000
Release rate per month					$ 10,000
Reserve Payable to Globe Photos		$ 10,000		$ 10,000
Amount payable in common stock reduced						30,000
New total purchase price						$ 370,000
Common Stock Issued						352,941
Share price of Common Stock						$ 0.34
Total value of shares						$ 120,000
Common Stock Purchase price per month			$ 8,000
Shares repurchased	352,941
cahs payments for repurchased shares	$ 120,000

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Property and Equipment (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Property and equipment gross	$ 3,891,064	$ 3,878,142
Less accumulated deprecation	(1,591,609)	(1,384,918)
Total archival images, property and equipment, net	2,299,455	2,493,224
Leasehold Improvements [Member]
Property and equipment gross	$ 12,446	12,446
Estimated useful lives	7 years
Computer and other equipment [Member]
Property and equipment gross	$ 72,687	72,687
Estimated useful lives	3-5 years
Furniture and fixtures [Member]
Property and equipment gross	$ 83,666	83,666
Estimated useful lives	7 years
Other archival images[Member]
Property and equipment gross	$ 952,265	939,343
Estimated useful lives	10 years
Frank Worth Collection [Member]
Property and equipment gross	$ 2,770,000	$ 2,770,000
Estimated useful lives	10 years

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Property and Equipment (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Depreciation Expense	$ 206,691	$ 203,835
Cost of Revenue	$ 210,507	$ 210,039

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Intangible Assets (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Intangible assets, gross	$ 435,000	$ 435,000
Accumulated amortization	130,500	108,750
Net Book Value	304,500	326,250
Content provider and photographic agreements [Member]
Intangible assets, gross	400,000	400,000
Accumulated amortization	120,000	100,000
Net Book Value	290,000	300,000
Copyrights [Member]
Intangible assets, gross	35,000	35,000
Accumulated amortization	10,500	8,750
Net Book Value	$ 24,500	$ 26,250

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Intangible Assets (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Amortization expense	$ 21,750	$ 21,750
Amortization expense due current	43,500
Amortization expense year two	43,500
Amortization expense year three	43,500
Amortization expense year four	43,500
Amortization expense year five	$ 43,500

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Note Payable (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Apr. 13, 2018	Dec. 20, 2017	Feb. 24, 2017	Apr. 07, 2016	Apr. 01, 2016	Sep. 28, 2015
Unsecured Debt [Member]
Debt face amount								$ 150,000
Proceeds from note payable	$ 150,000
Debt maturity date	Jul. 31, 2017
Debt interest rate								10.00%
Accrued interest	$ 13,904	$ 15,154
Photographs securing note	240,000
Default Interest Rate								0.25
Secured Promissory Note Four [Member]
Debt face amount					$ 25,000
Secured Promissory Note Three [Member]
Accrued interest	3,380
Unsecured Promissory Note Three [Member]
Debt face amount							$ 25,000
Debt interest rate							6.00%
Accrued interest		2,630
Related Party Advances [Member]
Debt face amount						$ 75,000
Unsecured Promissory Note Four [Member]
Debt face amount				$ 10,000
Unsecured Promissory Note Five [Member]
Debt face amount			$ 150,000
Debt interest rate			15.00%
Accrued interest	$ 22,500	0
Secured Promissory Note Three [Member]
Debt maturity date	Dec. 31, 2018
Interest expense	$ 3,380	2,630
Related Party Advances [Member]
Proceeds from note payable	75,000
Interest expense	0
Payments Made	80,000
Advance from Related Party original discount	25,000
Net of Unamortized Discount	0
Gauranteed Total of Repayment	100,000
Outstanding Balnce of Related Party Advance	$ 20,000	$ 20,000

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Related Party Transactions (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Due to related parties	$ 294,455	$ 147,113
ICONZ Art, LLC [Member]
Due to related parties	266,423	119,081
MSN Holding Co. [Member]
Due to related parties	12,947	12,947
Premier Collectibles [Member]
Due to related parties	$ 15,085	$ 15,085

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Related Party Transactions (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 02, 2016	Oct. 03, 2016	Apr. 15, 2016	Apr. 05, 2016	Apr. 04, 2016	Feb. 15, 2016	Dec. 01, 2015	Aug. 01, 2013
Proceeds from related party	$ 147,342	$ 164,725
Repayment of related party debt		19,725
Unrelated Party [Member]
Proceeds from related party	$ 120,000
Debt maturity date	Dec. 31, 2017
Debt interest rate											10.00%
Interest expense	$ 42,537	34,412
Outstanding Debt Due	162,500
Secured by images	200,000
Unrelated Party 2[Member]
Proceeds from related party	$ 62,500
Debt maturity date	Dec. 31, 2017
Debt interest rate										10.00%
Outstanding Debt Due	$ 162,500
Secured by images	200,000
Unrelated Party 3[Member]
Proceeds from related party	$ 50,000
Debt maturity date	Dec. 31, 2017
Debt interest rate								6.00%
Interest expense	$ 6,727	5,228
Dino Satallante [Member]
Proceeds from related party	160,000
Utilazation of Debt	$ 80,000
Debt Effective Date	Jul. 21, 2015
Debt maturity date	Dec. 31, 2017
Debt interest rate				12.00%								5.00%
Interest expense	$ 9,600	9,600
Amortization of loan fees	0	0
Net of Unamortized loan fees	8,000	8,000
Debt loan fees			$ 8,000	$ 8,000
Premier Collectibles [Member]
Proceeds from related party	$ 65,000
Debt Effective Date	Apr. 04, 2016
Debt maturity date	Jun. 30, 2017
Interest expense	$ 2,600	2,600
Sean Goodchild [Member]
Proceeds from related party	$ 50,000
Debt Effective Date	Apr. 15, 2016
Debt maturity date	Dec. 15, 2017
Interest expense	$ 1,500	1,000
Sean Goodchild 2 [Member]
Proceeds from related party	$ 50,000
Debt Effective Date	Oct. 03, 2016
Debt maturity date	Dec. 31, 2017
Interest expense	$ 1,500	1,500
Sean Goodchild 3 [Member]
Proceeds from related party	$ 31,500
Debt Effective Date	Dec. 02, 2016
Debt maturity date	Dec. 31, 2017
Interest expense	$ 945	945
Unsecured Debt [Member] | Dino Satallante [Member]
Proceeds from related party	100,000
Repayment of related party debt	$ 7,480
Debt Effective Date	Aug. 01, 2013
Debt maturity date	Dec. 31, 2017
Interest expense	$ 1,341	1,214
Outstanding Debt Due	53,655		61,355
Unsecured Debt -2 [Member] | Dino Satallante [Member]
Proceeds from related party	$ 20,500
Debt Effective Date	Sep. 11, 2014
Debt maturity date	Dec. 31, 2017
Interest expense	$ 633	579
Outstanding Debt Due	20,500	$ 18,100
Unsecured Debt -2 [Member] | Dreamstar [Member]
Proceeds from related party	$ 20,500
Debt Effective Date	Sep. 11, 2014
Debt maturity date	Dec. 31, 2017
Interest expense	$ 633		579
Outstanding Debt Due	$ 600		18,100
Premier Collectibles [Member]
Debt interest rate									8.00%
Sean Goodchild [Member]
Debt interest rate							6.00%
Sean Goodchild 2 [Member]
Debt interest rate						6.00%
Sean Goodchild 3 [Member]
Debt interest rate					6.00%
UnsecuredDebtAllMember
Interest payable			$ 12,379	$ 9,332

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Commitments and Contingencies (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2015	Jul. 21, 2017	Mar. 03, 2017	Jun. 01, 2016	Mar. 08, 2016
Lease Agreement Rent	$ 3,270
Date of Agreement	Sep. 06, 2012
Term of Lease Agreement	25 months
Term of Extension of Lease	60 months
Date of Extension of Lease	Nov. 01, 2014
Square Footage	4,606
Annual Increase in base payments	3.00%
Rent expense	$ 27,442	$ 26,791
Previous Office Space Rent	$ 850
Date of Terminiation of Previous Office	Jun. 01, 2016
Fair Value of Common Stock per share	$ 0.05
Fair Value of Common Stock				$ 104,167
Royalties Paid to Winning Bidders	$ 9,489
Gross Proceeds	$ 396,000
Auction Broker Fee	12.50%
Auction buy back option	50.00%
Payments made to loan holders	$ 3,984	7,195
Loans Payable net of unamortized discount	363,408		$ 363,408		$ 375,000
Interest Expense	14,597	$ 11,153
Discount	$ 151,316		151,316
Photraphic Archive sold amount					$ 175,000	$ 200,000
Photgraphic Archive sold term	24 months
Percent of ownership sold					25.00%	20.00%
Balance of Loan	$ 197,626		197,626
Non-Exclusive License Agreements
Royalties to pay on net sales							10.00%
Miniumum Royalties per year							$ 150,000
Minimum Sales per year							$ 1,500,000
Advance Royalties Percentage							50.00%
Adavnce Royalties First Year							$ 75,000
Royalty Network, LLC
Percent ownership of images								50.00%
Royalties Paid to Winning Bidders			$ 11,128	$ 0

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Commitments and Contingencies (Details)	Jun. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Future minimum operating lease payment, 2018	$ 21,441
Future minimum operating lease payment, 2019	36,807
Future minimum operating lease payment, total	$ 58,248

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Shareholders' Equity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Antidilutive shares		100,000
Weighted Average Exercise Price		$ .10
Options Granted and Assumed	2,183,333
Options Granted and Assumed, Excercise Price	$ .01
Options Expired
Options Canceled
Options Exercised
Balance Outstanding Shares	2,283,333
Balance Outstanding Exercise Price	$ .01
Balance Exercisable	2,283.333
Balance Excerisable, Exercise Price	$ .01

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Stockholders' Equity (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 01, 2018	Dec. 31, 2017
Authorized Preferred Stock, Shares	50,000,000
Authorized Preferred Stock, Par Value	$ 0.0001
Preferred Stock Outstanding	0
Common Stock Authorized	450,000,000		450,000,000
Common Stock, Par Value	$ 0.0001		$ 0.0001
Common Stock Issued and outstanding	325,218,583		325,570,524
Common shares repurchased total, shares	352,941
Common shares repurchased total, value	$ 120,000
Common shares repurchased, shares	94,118
Common shares repurchased, value	$ 32,000
agreements to grant stock options	15,283,333
Stock Options Granted		2,183,333
Stock Options Granted in lieu of Common Stock		2,083,333
Exercise Price		1.00%
Value of Options Granted		$ 327,488
Accrued Liabilities		$ 104,167
Loss on settlemt of accrued liabilities	$ 208,322
Market Value of Stock	$ 0.15
Risk-free interest rate	289.00%
volatility factor	23800.00%
divident yield	0.00%