Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 09, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Wizard World, Inc. | |
Entity Central Index Key | 1,162,896 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 68,535,036 | |
Trading Symbol | WIZD | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 1,457,735 | $ 1,769,550 |
Accounts receivable, net | 272,691 | 336,030 |
Inventory | 1,204 | |
Prepaid convention expenses | 274,003 | 461,986 |
Prepaid insurance | 68,035 | 87,987 |
Prepaid rent - related party | 25,837 | 76,006 |
Prepaid taxes | 13,984 | 14,398 |
Other prepaid expenses | 37,020 | 18,117 |
Total Current Assets | 2,149,305 | 2,765,278 |
Property and equipment, net | 125,057 | 165,403 |
Security deposits | 9,408 | 9,408 |
Total Assets | 2,238,770 | 2,940,089 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,643,593 | 2,800,118 |
Unearned revenue | 1,737,545 | 2,164,972 |
Convertible promissory note - related party, net | 1,397,221 | 1,116,979 |
Due to CONtv joint venture | 224,241 | 224,241 |
Total Current Liabilities | 6,002,600 | 6,306,310 |
Total Liabilities | 6,002,600 | 6,306,310 |
Commitments and contingencies | ||
Stockholders' Deficit | ||
Preferred stock par value $0.0001: 20,000,000 shares authorized; 50,000 shares designated Series A convertible preferred stock par value $0.0001: 50,000 shares designated; 39,101 shares issued and converted, respectively | ||
Common stock par value $0.0001: 80,000,000 shares authorized; 68,535,036 and 68,535,036 shares issued and outstanding, respectively | 6,855 | 6,855 |
Additional paid-in capital | 19,999,173 | 19,960,893 |
Accumulated deficit | (23,712,360) | (23,321,471) |
Non-controlling interest | (12,498) | (12,498) |
Total Stockholders' Deficit | (3,718,830) | (3,366,221) |
Total Liabilities and Stockholders' Deficit | $ 2,238,770 | $ 2,940,089 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 68,535,036 | 68,535,036 |
Common stock, shares outstanding | 68,535,036 | 68,535,036 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 39,101 | 39,101 |
Preferred stock, shares converted | 39,101 | 39,101 |
Preferred stock, shares designated | 50,000 | 50,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Convention | $ 5,111,867 | $ 4,936,084 | $ 9,103,033 | $ 8,384,041 |
ConBox | 10,461 | 84,580 | ||
Total revenues | 5,111,867 | 4,946,545 | 9,103,033 | 8,468,621 |
Cost of revenues | ||||
Cost of revenue | 4,489,502 | 5,291,686 | 7,375,836 | 8,432,016 |
Total cost of revenues | 4,489,502 | 5,291,686 | 7,375,836 | 8,432,016 |
Gross margin | 622,365 | (345,141) | 1,727,197 | 36,605 |
Operating expenses | ||||
Compensation | 464,296 | 932,191 | 921,581 | 1,937,521 |
Consulting fees | 107,931 | 197,983 | 224,017 | 327,236 |
General and administrative | 294,409 | 420,563 | 542,594 | 949,804 |
Total operating expenses | 866,636 | 1,550,737 | 1,688,192 | 3,214,561 |
(Loss) income from operations | (244,271) | (1,895,878) | 39,005 | (3,177,956) |
Other expenses | ||||
Interest expense | (261,001) | (92,776) | (429,894) | (176,674) |
Loss on disposal of equipment | (785) | |||
Total other expenses | (261,001) | (92,776) | (429,894) | (177,459) |
Loss before income tax provision | (505,272) | (1,988,654) | (390,889) | (3,355,415) |
Income tax provision | ||||
Net loss | (505,272) | (1,988,654) | (390,889) | (3,355,415) |
Net loss attributable to non-controlling interests | (150) | (643) | ||
Net loss attributable to common stockholders | $ (505,272) | $ (1,988,504) | $ (390,889) | $ (3,354,772) |
Loss per share - basic | $ (0.01) | $ (0.03) | $ (0.01) | $ (0.05) |
Loss per share - diluted | $ (0.01) | $ (0.03) | $ (0.01) | $ (0.05) |
Weighted average common shares outstanding - basic | 68,535,036 | 68,535,036 | 68,535,036 | 68,535,036 |
Weighted average common shares outstanding - diluted | 68,535,036 | 68,535,036 | 68,535,036 | 68,535,036 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders’ Deficit (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Preferred Stock Par Value $0.0001 [Member] | Common Stock Par Value $0.0001 [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Non-controlling Interest [Member] | Total |
Balance at Dec. 31, 2017 | $ 6,855 | $ 19,960,893 | $ (23,321,471) | $ (12,498) | $ (3,366,221) | |
Balance, shares at Dec. 31, 2017 | 68,535,036 | |||||
Share-based compensation | 38,280 | 38,280 | ||||
Net income | (390,889) | (390,889) | ||||
Balance at Jun. 30, 2018 | $ 6,855 | $ 19,999,173 | $ (23,712,360) | $ (12,498) | $ (3,718,830) | |
Balance, shares at Jun. 30, 2018 | 68,535,036 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (390,889) | $ (3,355,415) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 48,274 | 85,538 |
Loss on disposal of equipment | 785 | |
Accretion of debt discount | 280,242 | 24,022 |
Share-based compensation | 38,280 | 276,106 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 63,339 | (12,776) |
Inventory | 1,204 | (20,789) |
Prepaid convention expenses | 187,983 | (41,298) |
Prepaid rent - related party | 50,169 | 55,620 |
Prepaid insurance | 19,952 | 40,159 |
Prepaid taxes | 414 | (828) |
Other prepaid expenses | (18,903) | (9,060) |
Security deposits | 10,504 | |
Accounts payable and accrued expenses | (156,525) | 1,598,412 |
Unearned revenue | (427,427) | (40,434) |
Net Cash Used In Operating Activities | (303,887) | (1,389,454) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (7,928) | (92,985) |
Net Cash Used In Investing Activities | (7,928) | (92,985) |
Net change in cash and cash equivalents | (311,815) | (1,482,439) |
Cash and cash equivalents at beginning of reporting period | 1,769,550 | 4,401,217 |
Cash and cash equivalents at end of reporting period | 1,457,735 | 2,918,778 |
Supplemental disclosures of cash flow information: | ||
Interest paid | ||
Income tax paid |
Organization and Operations
Organization and Operations | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Note 1 – Organization and Operations Wizard World, Inc. Wizard World, Inc., formerly GoEnergy, Inc. (“Wizard World” or the “Company”) was incorporated on May 2, 2001, under the laws of the State of Delaware. The Company, through its operating subsidiary, is a producer of pop culture and live multimedia conventions across North America. |
Going Concern Analysis
Going Concern Analysis | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Analysis | Note 2 – Going Concern Analysis Going Concern Analysis The Company had income (loss) from operations of $39,005 and $(3,177,956) for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, we had cash and working capital deficit $1,457,735 and $3,853,295, respectively. We have evaluated the significance of these conditions in relation to our ability to meet our obligations, which had previously raised doubts about the Company’s ability to continue as a going concern through June 2019. However, the Company believes that the effects of its cost savings efforts with regard to corporate overhead and show production expenses commenced in 2017 and should be evident in 2018. In addition to its cost containment strategies, the Company has announced three agreements to expand its future revenues: 1) An alignment with Sony Pictures Entertainment to explore a number of strategic initiatives; 2) An agreement to program a linear advertising Supported channel and an SVOD Channel in China on the CN Live platform; and, 3) A programming agreement with Associated Television International to launch the Chinese networks. Additionally, if necessary, management believes that both related parties (management and members of the Board of Directors of the Company) and potential external sources of debt and/or equity financing may be obtained based on management’s history of being able to raise capital from both internal and external sources coupled with current favorable market conditions. Therefore, the accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein. While the Company believes in the viability of management’s strategy to generate sufficient revenue, control costs and the ability to raise additional funds if necessary, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon the ability to further implement the business plan, generate sufficient revenues and to control operating expenses. However, based on the results of the six months ended June 30, 2018 where operating costs decreased by 47% as compared to the same period last year, Management’s strategies on a directional basis appear to be positive and impactful. |
Significant and Critical Accoun
Significant and Critical Accounting Policies and Practices | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant and Critical Accounting Policies and Practices | Note 3 – Significant and Critical Accounting Policies and Practices The management of the Company is responsible for the selection and use of appropriate accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of Presentation - Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on April 2, 2018. Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest. As of June 30, 2018 and December 31, 2017, the aggregate non-controlling interest in ButtaFyngas was ($12,498). The non-controlling interest is separately disclosed on the Condensed Consolidated Balance Sheet. Cash and Cash Equivalents The Company considers investments with original maturities of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of June 30, 2018 and December 31, 2017, the allowance for doubtful accounts was $0 and $0, respectively. Inventories Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following: June 30, 2018 December 31, 2017 Finished goods $ - $ 1,204 Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Life (Years) Computer equipment 3 Equipment 2-5 Furniture and fixture 7 Leasehold improvements * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Investments - Cost Method, Equity Method and Joint Venture In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock. Method of Accounting Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee. Investment in CONtv On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement for CON TV LLC (“CONtv”) with Cinedigm Entertainment Corp. (“Cinedigm”), ROAR, LLC (which at the time was a related party which had been partially owned by a member of the Board. The subject Board Member is no longer affiliated with ROAR, LLC.) (“ROAR”) and Bristol Capital, LLC (a related party controlled by a member of the Board) (“Bristol Capital”). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting. On November 16, 2015, pursuant to that certain Amended and Restated Operating Agreement for CONtv by and among the aforementioned parties (the “A&R Operating Agreement”), the Company’s ownership interest in CONtv was reduced to 10%. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date. For the three months ended June 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. For the six months ended June 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. As of June 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241. Fair Value of Financial Instruments The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments. In connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. During the year ended December 31, 2017, the Company early adopted ASU 2017-11 on a retrospective basis (see below). Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. However, in the case of the convertible promissory note discussed in Note 6, the Company obtained a fairness opinion from an independent third party which supports that the transaction was carried out at an arm’s length basis. Revenue Recognition and Cost of Revenues The Company follows Paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Convention revenue is generally earned upon completion of the convention. Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements. Unearned ConBox revenue is non-refundable up-front payments for products. These payments are initially deferred and subsequently recognized over the subscription period, typically three months, and upon shipment of the product. The Company ceased ConBox operations during 2017. The Company recognizes cost of revenues in the period in which the revenues was earned. In the event the Company incurs cost of revenues for conventions that are yet to occur, the Company records such amounts as prepaid expenses and such prepaid expenses are expensed during the period the convention takes place. Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of revenue as incurred. Shipping and handling costs were $0 and $4,654 for the three months ended June 30, 2018 and 2017, respectively. Shipping and handling costs were $0 and $21,479 for the six months ended March 31, 2018 and 2017, respectively. Equity–based compensation The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “ Compensation – Stock Compensation Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a four-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. The fair value of option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are input into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s Common stock over the expected option life and other appropriate factors. The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on the Common stock of the Company and does not intend to pay dividends on the Common stock in the foreseeable future. The expected forfeiture rate is estimated based on historical experience. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the actual forfeiture rate is materially different from the Company’s estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “ Equity Based Payments to Non–Employees Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “ Income Taxes FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at June 30, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2015. Earnings per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: Contingent shares issuance arrangement, stock options or warrants For the Six Months Ended June 30, 2018 For the Six Months Ended June 30, 2017 Convertible note 16,666,667 16,666,667 Common stock options 3,743,000 4,645,000 Common stock warrants 16,666,667 16,666,667 Total contingent shares issuance arrangement, stock options or warrants 37,076,334 37,978,334 Reclassification Certain prior period amounts have been reclassified to conform to current period presentation. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” In May 2016, the FASB issued ASU No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In July 2017, the FASB issued ASU 2017-11, “ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” Distinguishing Liabilities from Equity Adoption of ASU 2017-11 As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance. Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and six months ended June 30, 2017 are presented below: Consolidated Statement of Operations Three Months Ended June 30, 2017 Previously Reported Revisions Revised Reported Change in fair value of derivative liabilities $ (238,069 ) $ 238,069 $ - Net loss $ (2,226,573 ) $ 238,069 $ (1,988,654 ) Net loss per common share: Basic $ (0.03 ) $ (0.00 ) $ (0.02 ) Diluted $ (0.03 ) $ (0.00 ) $ (0.02 ) Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the six months ended June 30, 2017 are presented below: Consolidated Statement of Operations Six Months Ended June 30, 2017 Previously Reported Revisions Revised Reported Change in fair value of derivative liabilities $ 1,645,372 $ (1,645,372 ) $ - Net loss $ (1,710,043 ) $ (1,645,372 ) $ (3,355,415 ) Net loss per common share: Basic $ (0.03 ) $ (0.02 ) $ (0.05 ) Diluted $ (0.03 ) $ (0.02 ) $ (0.05 ) Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: June 30, 2018 December 31, 2017 Computer Equipment $ 43,087 $ 43,087 Equipment 468,822 460,927 Furniture and Fixtures 62,321 62,321 Leasehold Improvements 22,495 22,495 596,758 588,830 Less: Accumulated depreciation (471,701 ) (423,427 ) $ 125,057 $ 165,403 Depreciation expense was $48,274 and $85,538 for the six months ended June 30, 2018 and 2017, respectively. |
Investment in CONtv Joint Ventu
Investment in CONtv Joint Venture | 6 Months Ended |
Jun. 30, 2018 | |
Investment In Contv Joint Venture | |
Investment in CONtv Joint Venture | Note 5 – Investment in CONtv Joint Venture On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement with Cinedigm, ROAR (which at the time was a related party co-founded by one of the Company’s directors, with said Director no longer having any affiliation with ROAR) and Bristol Capital (a related party founded by the Company’s Chairman of the Board). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting. On November 16, 2015, the Company entered that certain A&R Operating Agreement by and among, the Company, Cinedigm, ROAR and Bristol Capital, pursuant to which the Company’s interest in CONtv was reduced to a non-dilutable 10% membership interest. Such agreement was deemed effective on the execution date; however, Cinedigm agreed to the Company recognizing only 10% of the losses from the period July 1, 2015 through December 31, 2015. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date. For the six months ended June 30, 2018 and 2017, the Company recognized $0 in losses from this venture, respectively. As of June 30, 2018 and December 31, 2017, the investment in CONtv was $0. As of June 30, 2018 and December 31, 2017, the Company has a balance due to CONtv of $224,241. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 – Related Party Transactions Consulting Agreement On December 29, 2016, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Bristol Capital, LLC, a Delaware limited liability company (“Bristol”) managed by Paul L. Kessler, the Chairman of the Company. Pursuant to the Consulting Agreement, Mr. Kessler will serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017 (the “Initial Term”). The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Bristol gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current Term. During the Term, the Company will pay Bristol a monthly fee (the “Monthly Fee”) of Eighteen Thousand Seven Hundred Fifty and No/100 Dollars ($18,750). In addition, the Company will grant to Bristol options to purchase up to an aggregate of 600,000 shares of the Company’s common stock. During the three months ended June 30, 2018 and 2017, the Company incurred total expenses of $40,608 and $56,250, respectively, for services provided by Bristol. During the six months ended June 30, 2018 and 2017, the Company incurred total expenses of $84,313 and $112,500, respectively, for services provided by Bristol. At June 30, 2018 and December 31, 2017, the Company accrued $367,419 and $283,106, respectively, of monthly fees due to Bristol. Operating Sublease On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease (“Sublease”) with Bristol Capital Advisors, LLC (“Bristol Capital Advisors”), an entity controlled by the Company’s Chairman of the Board. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months beginning on July 1, 2016 with monthly payments of $8,118. Upon execution of the Sublease, the Company paid a security deposit of $9,137 and $199,238 for prepaid rent of which $25,837 and $76,006 remain at June 30, 2018 and December 31, 2017, respectively. During the six months ended June 30, 2018 and 2017, the Company incurred total rent expense of $40,969 and $83,268, respectively, under the Sublease. See Note 7 for future minimum rent payments due. Securities Purchase Agreement Effective December 1, 2016, the Company entered into the Purchase Agreement with Bristol Investment Fund, Ltd. (the “ Purchaser (i) Debenture The Debenture with an initial principal balance of $2,500,000, due December 30, 2018 (the “Maturity Date”), will accrue interest on the aggregate unconverted and then outstanding principal amount of the Debenture at the rate of 12% per annum. Interest is payable quarterly on (i) January 1, April 1, July 1 and October 1, beginning on January 1, 2017, (ii) on each date the Purchaser converts, in whole or in part, the Debenture into Common Stock (as to that principal amount then being converted), and (iii) on the day that is 20 days following the Company’s notice to redeem some or all of the of the outstanding principal of the Debenture (only as to that principal amount then being redeemed) and on the Maturity Date. The Debenture is convertible into shares of the Company’s Common Stock at any time at the option of the holder, at an initial conversion price of $0.15 per share, subject to adjustment. In the event of default occurs, the conversion price shall be the lesser of (i) the initial conversion price of $0.15 and (ii) 50% of the average of the 3 lowest trading prices during the 20 trading days immediately prior to the applicable conversion date. (ii) Series A Warrants The Series A Warrants to acquire up to 16,666,667 shares of Common Stock at the Series A Initial Exercise Price of $0.15 and expiring on December 1, 2021. The Warrants may be exercised immediately upon the issuance date, upon the option of the holder. (iii) Series B Warrants The Series B Warrants to acquire up to 16,666,650 shares of Common Stock at the Series B Initial Exercise Price of $0.15 and expiring on December 1, 2021. The Series B Warrants were exercised immediately upon the issuance date. The Company received gross proceeds of $1,667 upon exercise of the warrants. Upon issuance of the note, the Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it using the relative fair value of $1,448,293 as debt discount on the consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method which approximates the interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $1,102,779 and $1,383,021 as of June 30, 2018 and December 31, 2017, respectively, which includes the debt discount recorded upon execution of the Securities Purchase Agreement discussed above. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies Appointment of President and Chief Executive Officer On April 22, 2016, the Board approved the appointment of Mr. John D. Maatta as the Company’s President and Chief Executive Officer, effective as of May 3, 2016. Mr. Maatta will continue to serve as a member of the Board. In addition, the Board granted Mr. Maatta options to purchase up to an aggregate of 1,100,000 shares of the Company’s common stock, subject to the terms and conditions of the Third Amended and Restated 2011 Stock Incentive and Award Plan. Mr. Maatta formally entered into his Employment Agreement with the Company on July 17, 2016. Effective January 1, 2018, Mr. Maatta has elected to receive 50% of the compensation provided for his employment contract and is currently receiving $125,000 per year with the remainder of the balance deferred which amount is included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. Consulting Agreement As discussed in Note 6, on December 29, 2016, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Bristol managed by Paul L. Kessler, the Chairman of the Company. Pursuant to the Consulting Agreement, Mr. Kessler will serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017 (the “Initial Term”). The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Bristol gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current Term. During the Term, the Company will pay Bristol a monthly fee (the “Monthly Fee”) of Eighteen Thousand Seven Hundred Fifty and No/100 Dollars ($18,750). For services rendered by Bristol prior to entering into the Consulting Agreement, the Company will pay Bristol the Monthly Fee, pro-rated, for the time between September 1, 2016 and December 29, 2016. Bristol may also receive an annual bonus as determined by the Compensation Committee of the Company’s Board of Directors (the “Board”) and approved by the Board. Bristol has deferred payment of the monthly fees due from the Company as defined under the Consulting Agreement. At June 30, 2018 and December 31, 2017, the Company accrued $367,419 and $283,106, respectively, of monthly fees due to Bristol. In addition, the Company granted to Bristol options to purchase up to an aggregate of 600,000 shares of the Company’s common stock. Operating Lease On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease (“Sublease”) with Bristol Capital Advisors, an entity controlled by the Company’s Chairman of the Board. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months beginning on July 1, 2016 with monthly payments of $8,118. Upon execution of the Sublease, the Company paid a security deposit of $9,137 and $199,238 for prepaid rent of which $25,837 and $76,006 remain at June 30, 2018 and December 31, 2017, respectively. During the six months ended June 30, 2018 and 2017, the Company incurred total rent expense of $40,969 and $83,268, respectively, under the Sublease. See below for future minimum rent payments due. Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows: Fiscal year ending December 31: 2018 (remainder of year) $ 51,674 2019 104,899 2020 108,046 2021 83,054 $ 347,673 Obligation to Fund CONtv As discussed in Note 3, on November 16, 2015, pursuant to that certain A&R Operating Agreement for CONtv, the Company’s ownership interest in CONtv was reduced to 10%. In addition, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date. For the three and six months ended June 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. As of June 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241. Malinoff Dispute Randall Malinoff, the Company’s former Chief Operating Officer, who departed from on the Company as of July 5, 2017, is currently engaged in a dispute with the Company. A complaint for breach of contract and various disability discrimination claims was filed after the Company terminated him for cause. The Company believes that the matter, which is set for trial in 2019, is wrongful and is without merit. The Company currently intends to proceed to trial on this matter. With the exception of the foregoing dispute, the Company is not involved in any disputes and does not have any litigation matters pending which the Company believes could have a materially adverse effect on the Company’s financial condition or results of operations. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Note 8 – Stockholders’ Equity (Deficit) The Company’s authorized capital stock consists of 100,000,000 shares, of which 80,000,000 are for shares of common stock, par value $0.0001 per share, and 20,000,000 are for shares of preferred stock, par value $0.0001 per share, of which 50,000 have been designated as Series A Cumulative Convertible Preferred Stock. As of June 30, 2018 and December 31, 2017, there were 68,535,036 shares of common stock issued and outstanding. Each share of the common stock entitles its holder to one vote on each matter submitted to the shareholders. Stock Options The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2017 4,043,000 $ 0.58 Exercisable – December 31, 2017 3,328,000 $ 0.57 Granted - $ - Exercised - $ - Forfeited/Cancelled (300,000 ) $ - Outstanding – June 30, 2018 3,743,000 $ 0.59 Exercisable – June 30, 2018 3,278,000 $ 0.59 Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 – 1.50 3,743,000 1.76 years $ 0.59 3,278,000 $ 0.59 At June 30, 2018, the total intrinsic value of options outstanding and exercisable was $0 and $0, respectively. The Company recognized an aggregate of $38,280 and $276,106 in compensation expense during the six months ended June 30, 2018 and 2017, respectively, related to option awards. At June 30, 2018, unrecognized stock-based compensation was $66,776. Stock Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2017 16,666,667 $ 0.15 Exercisable – December 31, 2017 16,666,667 $ 0.15 Granted - $ - Exercised - $ - Forfeited/Cancelled - $ - Outstanding – June 30, 2018 16,666,667 $ 0.15 Exercisable – June 30, 2018 16,666,667 $ 0.15 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.15 16,666,667 3.42 years $ 0.15 16,666,667 $ 0.15 At June 30, 2018, the total intrinsic value of warrants outstanding and exercisable was $0. There were no new options or warrants granted during the six months ended June 30, 2018. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Note 8 – Segment Information The Company maintained operating segments; Conventions and Conbox. The Company ceased Conbox operations in 2017, which is the principal reason for the decrease in operating results compared to 2017. The Company evaluated performance of its operating segments based on revenue and operating profit (loss). Segment information for the three and six months ended June 30, 2018 and 2017 and as of June 30, 2018 and December 31, 2017, are as follows: Conventions ConBox Total Three Months ended June 30, 2018 Revenue $ 5,111,867 $ - $ 5,111,867 Cost of revenue (4,489,502 ) - (4,489,502 ) Gross margin 622,365 - 622,365 ) Operating expenses (866,636 ) - (866,636 ) Operating loss (244,271 ) - (244,271 ) Three Months ended June 30, 2017 Revenue $ 4,936,084 $ 10,461 $ 4,946,545 Cost of revenue (5,267,353 ) (24,333 ) (5,291,686 ) Gross margin (331,269 ) (13,872 ) (345,141 ) Operating expenses (1,550,096 ) (641 ) (1,550,737 ) Operating loss (1,881,365 ) (14,513 ) (1,895,878 ) Six Months Ended June 30, 2018 Revenue $ 9,103,033 $ - $ 9,103,033 Cost of revenue (7,375,836 ) - (7,375,836 ) Gross margin 1,727,197 - 1,727,197 ) Operating expenses (1,688,192 ) - (1,688,192 ) Operating income 39,005 - 39,005 Six Months Ended June 30, 2017 Revenue $ 8,384,041 $ 84,580 $ 8,468,621 Cost of revenue (8,351,855 ) (80,161 ) (8,432,016 ) Gross margin 32,186 4,419 36,605 Operating expenses (3,185,706 ) (28,855 ) (3,214,561 ) Operating loss (3,153,520 ) (24,436 ) (3,177,956 ) June 30, 2018 Accounts receivable, net $ 272,691 $ - $ 272,691 Total assets 2,283,770 - 2,283,770 Unearned revenue 1,737,545 - 1,737,545 December 31, 2017 Accounts receivable, net $ 336,030 $ - $ 336,030 Total assets 2,940,089 - 2,940,089 Unearned revenue 2,164,972 - 2,164,972 |
Significant and Critical Acco16
Significant and Critical Accounting Policies and Practices (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation - Unaudited Interim Financial Information | Basis of Presentation - Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on April 2, 2018. |
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest. As of June 30, 2018 and December 31, 2017, the aggregate non-controlling interest in ButtaFyngas was ($12,498). The non-controlling interest is separately disclosed on the Condensed Consolidated Balance Sheet. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers investments with original maturities of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of June 30, 2018 and December 31, 2017, the allowance for doubtful accounts was $0 and $0, respectively. |
Inventories | Inventories Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following: June 30, 2018 December 31, 2017 Finished goods $ - $ 1,204 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Life (Years) Computer equipment 3 Equipment 2-5 Furniture and fixture 7 Leasehold improvements * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. |
Investments - Cost Method, Equity Method and Joint Venture | Investments - Cost Method, Equity Method and Joint Venture In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock. |
Method of Accounting | Method of Accounting Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee. |
Investment in Contv | Investment in CONtv On August 27, 2014, the Company entered into a joint venture and executed an Operating Agreement for CON TV LLC (“CONtv”) with Cinedigm Entertainment Corp. (“Cinedigm”), ROAR, LLC (which at the time was a related party which had been partially owned by a member of the Board. The subject Board Member is no longer affiliated with ROAR, LLC.) (“ROAR”) and Bristol Capital, LLC (a related party controlled by a member of the Board) (“Bristol Capital”). The Company owned a 47.50% interest in the newly formed entity, CONtv. The Company was accounting for the interest in the joint venture utilizing the equity method of accounting. On November 16, 2015, pursuant to that certain Amended and Restated Operating Agreement for CONtv by and among the aforementioned parties (the “A&R Operating Agreement”), the Company’s ownership interest in CONtv was reduced to 10%. Pursuant to the A&R Operating Agreement, the Company is only obligated to fund on-going costs in the amount of $25,000 in cash on an on-going monthly basis for a period of 12 months following the effective date. For the three months ended June 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. For the six months ended June 30, 2018 and 2017, the Company recognized $0 losses from this venture, respectively. As of June 30, 2018 and December 31, 2017, the amount due to CONtv was $224,241. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments. In connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. During the year ended December 31, 2017, the Company early adopted ASU 2017-11 on a retrospective basis (see below). Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. However, in the case of the convertible promissory note discussed in Note 6, the Company obtained a fairness opinion from an independent third party which supports that the transaction was carried out at an arm’s length basis. |
Revenue Recognition and Cost of Revenues | Revenue Recognition and Cost of Revenues The Company follows Paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Convention revenue is generally earned upon completion of the convention. Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements. Unearned ConBox revenue is non-refundable up-front payments for products. These payments are initially deferred and subsequently recognized over the subscription period, typically three months, and upon shipment of the product. The Company ceased ConBox operations during 2017. The Company recognizes cost of revenues in the period in which the revenues was earned. In the event the Company incurs cost of revenues for conventions that are yet to occur, the Company records such amounts as prepaid expenses and such prepaid expenses are expensed during the period the convention takes place. |
Shipping and Handling Costs | Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of revenue as incurred. Shipping and handling costs were $0 and $4,654 for the three months ended June 30, 2018 and 2017, respectively. Shipping and handling costs were $0 and $21,479 for the six months ended March 31, 2018 and 2017, respectively. |
Equity-based Compensation | Equity–based compensation The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “ Compensation – Stock Compensation Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a four-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. The fair value of option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are input into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s Common stock over the expected option life and other appropriate factors. The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on the Common stock of the Company and does not intend to pay dividends on the Common stock in the foreseeable future. The expected forfeiture rate is estimated based on historical experience. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, the equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the actual forfeiture rate is materially different from the Company’s estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “ Equity Based Payments to Non–Employees |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “ Income Taxes FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at June 30, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2015. |
Earnings Per Share | Earnings per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: Contingent shares issuance arrangement, stock options or warrants For the Six Months Ended June 30, 2018 For the Six Months Ended June 30, 2017 Convertible note 16,666,667 16,666,667 Common stock options 3,743,000 4,645,000 Common stock warrants 16,666,667 16,666,667 Total contingent shares issuance arrangement, stock options or warrants 37,076,334 37,978,334 |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to current period presentation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” In May 2016, the FASB issued ASU No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In July 2017, the FASB issued ASU 2017-11, “ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” Distinguishing Liabilities from Equity Adoption of ASU 2017-11 As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2016, the Company issued warrants, to purchase common stock with an exercise price of $0.15 and a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance. Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and six months ended June 30, 2017 are presented below: Consolidated Statement of Operations Three Months Ended June 30, 2017 Previously Reported Revisions Revised Reported Change in fair value of derivative liabilities $ (238,069 ) $ 238,069 $ - Net loss $ (2,226,573 ) $ 238,069 $ (1,988,654 ) Net loss per common share: Basic $ (0.03 ) $ (0.00 ) $ (0.02 ) Diluted $ (0.03 ) $ (0.00 ) $ (0.02 ) Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the six months ended June 30, 2017 are presented below: Consolidated Statement of Operations Six Months Ended June 30, 2017 Previously Reported Revisions Revised Reported Change in fair value of derivative liabilities $ 1,645,372 $ (1,645,372 ) $ - Net loss $ (1,710,043 ) $ (1,645,372 ) $ (3,355,415 ) Net loss per common share: Basic $ (0.03 ) $ (0.02 ) $ (0.05 ) Diluted $ (0.03 ) $ (0.02 ) $ (0.05 ) Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Significant and Critical Acco17
Significant and Critical Accounting Policies and Practices (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | Inventory was comprised of the following: June 30, 2018 December 31, 2017 Finished goods $ - $ 1,204 |
Schedule of Estimated Useful Life | Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Life (Years) Computer equipment 3 Equipment 2-5 Furniture and fixture 7 Leasehold improvements * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. |
Schedule of Contingent Share Issuance Arrangements, Stock Options and Warrants | The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: Contingent shares issuance arrangement, stock options or warrants For the Six Months Ended June 30, 2018 For the Six Months Ended June 30, 2017 Convertible note 16,666,667 16,666,667 Common stock options 3,743,000 4,645,000 Common stock warrants 16,666,667 16,666,667 Total contingent shares issuance arrangement, stock options or warrants 37,076,334 37,978,334 |
Schedule of Revisions and Corresponding Effects On Consolidated Statement of Operations | Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the three and six months ended June 30, 2017 are presented below: Consolidated Statement of Operations Three Months Ended June 30, 2017 Previously Reported Revisions Revised Reported Change in fair value of derivative liabilities $ (238,069 ) $ 238,069 $ - Net loss $ (2,226,573 ) $ 238,069 $ (1,988,654 ) Net loss per common share: Basic $ (0.03 ) $ (0.00 ) $ (0.02 ) Diluted $ (0.03 ) $ (0.00 ) $ (0.02 ) Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the six months ended June 30, 2017 are presented below: Consolidated Statement of Operations Six Months Ended June 30, 2017 Previously Reported Revisions Revised Reported Change in fair value of derivative liabilities $ 1,645,372 $ (1,645,372 ) $ - Net loss $ (1,710,043 ) $ (1,645,372 ) $ (3,355,415 ) Net loss per common share: Basic $ (0.03 ) $ (0.02 ) $ (0.05 ) Diluted $ (0.03 ) $ (0.02 ) $ (0.05 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: June 30, 2018 December 31, 2017 Computer Equipment $ 43,087 $ 43,087 Equipment 468,822 460,927 Furniture and Fixtures 62,321 62,321 Leasehold Improvements 22,495 22,495 596,758 588,830 Less: Accumulated depreciation (471,701 ) (423,427 ) $ 125,057 $ 165,403 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Non-Cancelable Operating Lease | Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows: Fiscal year ending December 31: 2018 (remainder of year) $ 51,674 2019 104,899 2020 108,046 2021 83,054 $ 347,673 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Summary of Stock Option Activity | The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2017 4,043,000 $ 0.58 Exercisable – December 31, 2017 3,328,000 $ 0.57 Granted - $ - Exercised - $ - Forfeited/Cancelled (300,000 ) $ - Outstanding – June 30, 2018 3,743,000 $ 0.59 Exercisable – June 30, 2018 3,278,000 $ 0.59 |
Schedule of Information Regarding Stock Options Outstanding | Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 – 1.50 3,743,000 1.76 years $ 0.59 3,278,000 $ 0.59 |
Summary of Stock Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2017 16,666,667 $ 0.15 Exercisable – December 31, 2017 16,666,667 $ 0.15 Granted - $ - Exercised - $ - Forfeited/Cancelled - $ - Outstanding – June 30, 2018 16,666,667 $ 0.15 Exercisable – June 30, 2018 16,666,667 $ 0.15 |
Schedule of Information Regarding Stock Warrants Outstanding | Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.15 16,666,667 3.42 years $ 0.15 16,666,667 $ 0.15 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from Segment Information | Segment information for the three and six months ended June 30, 2018 and 2017 and as of June 30, 2018 and December 31, 2017, are as follows: Conventions ConBox Total Three Months ended June 30, 2018 Revenue $ 5,111,867 $ - $ 5,111,867 Cost of revenue (4,489,502 ) - (4,489,502 ) Gross margin 622,365 - 622,365 ) Operating expenses (866,636 ) - (866,636 ) Operating loss (244,271 ) - (244,271 ) Three Months ended June 30, 2017 Revenue $ 4,936,084 $ 10,461 $ 4,946,545 Cost of revenue (5,267,353 ) (24,333 ) (5,291,686 ) Gross margin (331,269 ) (13,872 ) (345,141 ) Operating expenses (1,550,096 ) (641 ) (1,550,737 ) Operating loss (1,881,365 ) (14,513 ) (1,895,878 ) Six Months Ended June 30, 2018 Revenue $ 9,103,033 $ - $ 9,103,033 Cost of revenue (7,375,836 ) - (7,375,836 ) Gross margin 1,727,197 - 1,727,197 ) Operating expenses (1,688,192 ) - (1,688,192 ) Operating income 39,005 - 39,005 Six Months Ended June 30, 2017 Revenue $ 8,384,041 $ 84,580 $ 8,468,621 Cost of revenue (8,351,855 ) (80,161 ) (8,432,016 ) Gross margin 32,186 4,419 36,605 Operating expenses (3,185,706 ) (28,855 ) (3,214,561 ) Operating loss (3,153,520 ) (24,436 ) (3,177,956 ) June 30, 2018 Accounts receivable, net $ 272,691 $ - $ 272,691 Total assets 2,283,770 - 2,283,770 Unearned revenue 1,737,545 - 1,737,545 December 31, 2017 Accounts receivable, net $ 336,030 $ - $ 336,030 Total assets 2,940,089 - 2,940,089 Unearned revenue 2,164,972 - 2,164,972 |
Going Concern Analysis (Details
Going Concern Analysis (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 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss from operations | $ (244,271) | $ (1,895,878) | $ 39,005 | $ (3,177,956) | ||
Cash | 1,457,735 | $ 2,918,778 | 1,457,735 | $ 2,918,778 | $ 1,769,550 | $ 4,401,217 |
Working capital | $ 3,853,295 | $ 3,853,295 | ||||
Decrease in operating costs percentage | 47.00% | 47.00% |
Significant and Critical Acco23
Significant and Critical Accounting Policies and Practices (Details Narrative) - USD ($) | Nov. 16, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Aug. 27, 2014 |
Non-controlling interest | $ (12,498) | $ (12,498) | $ (12,498) | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | 0 | |||||
Percentage of shares in another entity | 50.00% | 50.00% | ||||||
Fund on-going costs | $ 10,461 | $ 84,580 | ||||||
Recognized losses from the venture | 0 | 0 | ||||||
Due to CONtv joint venture | $ 224,241 | $ 224,241 | $ 224,241 | |||||
Class of warrant exercise price | $ 0.15 | $ 0.15 | $ 0.15 | |||||
Warrants term | 5 years | |||||||
Shipping and Handling [Member] | ||||||||
Shipping and handling costs | $ 0 | $ 4,654 | $ 0 | $ 21,479 | ||||
A&R Operating Agreement [Member] | ||||||||
Percentage of shares in another entity | 10.00% | |||||||
Fund on-going costs | $ 25,000 | |||||||
Con Tv LLC [Member] | ||||||||
Percentage of shares in another entity | 47.50% |
Significant and Critical Acco24
Significant and Critical Accounting Policies and Practices - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Finished goods | $ 1,204 |
Significant and Critical Acco25
Significant and Critical Accounting Policies and Practices - Schedule of Estimated Useful Life (Details) | 6 Months Ended | |
Jun. 30, 2018 | ||
Computer Equipment [Member] | ||
Estimated useful lives of property plant, equipment | 3 years | |
Equipment [Member] | Minimum [Member] | ||
Estimated useful lives of property plant, equipment | 2 years | |
Equipment [Member] | Maximum [Member] | ||
Estimated useful lives of property plant, equipment | 5 years | |
Furniture And Fixture [Member] | ||
Estimated useful lives of property plant, equipment | 7 years | |
Leasehold Improvements [Member] | ||
Estimated useful lives of property plant, equipment | 0 years | [1] |
[1] | Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. |
Significant and Critical Acco26
Significant and Critical Accounting Policies and Practices - Schedule of Contingent Share Issuance Arrangements, Stock Options and Warrants (Details) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Total contingent share issuance arrangements, stock options and warrants | 37,076,334 | 37,978,334 |
Convertible Note [Member] | ||
Total contingent share issuance arrangements, stock options and warrants | 16,666,667 | 16,666,667 |
Common Stock Options [Member] | ||
Total contingent share issuance arrangements, stock options and warrants | 3,743,000 | 4,645,000 |
Common Stock Warrants [Member] | ||
Total contingent share issuance arrangements, stock options and warrants | 16,666,667 | 16,666,667 |
Significant and Critical Acco27
Significant and Critical Accounting Policies and Practices - Schedule of Revisions and the Corresponding Effects On Consolidated Statement of Operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net loss | $ (505,272) | $ (1,988,504) | $ (390,889) | $ (3,354,772) |
Basic | $ (0.01) | $ (0.03) | $ (0.01) | $ (0.05) |
Diluted | $ (0.01) | $ (0.03) | $ (0.01) | $ (0.05) |
Previously Reported [Member] | ||||
Change in fair value of derivative liabilities | $ (238,069) | $ 1,645,372 | ||
Net loss | $ (2,226,573) | $ (1,710,043) | ||
Basic | $ (0.03) | $ (0.03) | ||
Diluted | $ (0.03) | $ (0.03) | ||
Revisions [Member] | ||||
Change in fair value of derivative liabilities | $ 238,069 | $ (1,645,372) | ||
Net loss | $ 238,069 | $ (1,645,372) | ||
Basic | $ 0 | $ (0.02) | ||
Diluted | $ 0 | $ (0.02) | ||
Revised Reported [Member] | ||||
Change in fair value of derivative liabilities | ||||
Net loss | $ (1,988,654) | $ (3,355,415) | ||
Basic | $ (0.02) | $ (0.05) | ||
Diluted | $ (0.02) | $ (0.05) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 48,274 | $ 85,538 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Computer Equipment | $ 43,087 | $ 43,087 |
Equipment | 468,822 | 460,927 |
Furniture and Fixtures | 62,321 | 62,321 |
Leasehold Improvements | 22,495 | 22,495 |
Total | 596,758 | 588,830 |
Less: Accumulated depreciation | (471,701) | (423,427) |
Property and equipment, net | $ 125,057 | $ 165,403 |
Investment in CONtv Joint Ven30
Investment in CONtv Joint Venture (Details Narrative) - USD ($) | Nov. 16, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Aug. 27, 2014 |
Equity method investment ownership percentage | 50.00% | 50.00% | ||||||
Percentage of loss on investment during period | 10.00% | |||||||
Fund on-going costs | $ 10,461 | $ 84,580 | ||||||
Recognized losses from the venture | 0 | $ 0 | ||||||
Investment net | 0 | 0 | $ 0 | |||||
Due to CONtv joint venture - net | $ 224,241 | $ 224,241 | $ 224,241 | |||||
A&R Operating Agreement [Member] | ||||||||
Equity method investment ownership percentage | 10.00% | |||||||
Fund on-going costs | $ 25,000 | |||||||
Con Tv LLC [Member] | ||||||||
Equity method investment ownership percentage | 47.50% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 29, 2016 | Dec. 02, 2016 | Jul. 02, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock options granted to purchase of common stock | |||||||||
Consulting expense | $ 107,931 | $ 197,983 | $ 224,017 | $ 327,236 | |||||
Security deposit | 9,408 | 9,408 | $ 9,408 | ||||||
Prepaid rent | 25,837 | 25,837 | 76,006 | ||||||
Debt discount | $ 1,102,779 | $ 1,102,779 | 1,383,021 | ||||||
Warrant exercise price per share | $ 0.15 | $ 0.15 | $ 0.15 | ||||||
Gross proceeds from exercise of warrants | |||||||||
Fair value for warrant and debt discount | $ 1,448,293 | ||||||||
Series A Warrants [Member] | |||||||||
Warrant to purchase shares of common stock | 16,666,667 | 16,666,667 | |||||||
Warrant exercise price per share | $ 0.15 | $ 0.15 | |||||||
Warrant expiring date | Dec. 1, 2021 | ||||||||
Series B Warrants [Member] | |||||||||
Warrant to purchase shares of common stock | 16,666,650 | 16,666,650 | |||||||
Warrant exercise price per share | $ 0.15 | $ 0.15 | |||||||
Warrant expiring date | Dec. 1, 2021 | ||||||||
Gross proceeds from exercise of warrants | $ 1,667 | ||||||||
Debenture [Member] | |||||||||
Debt principal amount | $ 2,500,000 | $ 2,500,000 | |||||||
Debt instruments maturity date | Dec. 30, 2018 | ||||||||
Debt conversion price per share | $ 0.15 | $ 0.15 | |||||||
Average trading price percentage | 50.00% | ||||||||
Debenture [Member] | Common Stock [Member] | |||||||||
Debt instrument interest rate per annum | 12.00% | 12.00% | |||||||
Debt conversion price per share | $ 0.15 | $ 0.15 | |||||||
Bristol Capital Advisors, LLC [Member] | |||||||||
Lease term | 5 years 3 months | ||||||||
Monthly lease payment | $ 8,118 | ||||||||
Security deposit | 9,137 | ||||||||
Prepaid rent | $ 199,238 | ||||||||
Rent expense under sublease | $ 40,969 | 83,268 | |||||||
Bristol Investment Fund, Ltd [Member] | Securities Purchase Agreement [Member] | Board of Directors [Member] | |||||||||
Cash purchase price of securities | $ 2,500,000 | ||||||||
Cash paid | $ 25,000 | ||||||||
Number of common stock shares issued | 500,000 | ||||||||
Common stock grant fair value to cover legal fees | $ 85,000 | ||||||||
Debt discount | $ 25,791 | ||||||||
Bristol Capital, LLC [Member] | |||||||||
Rent expense under sublease | 40,969 | 83,268 | |||||||
Bristol Capital, LLC [Member] | Consulting Services Agreement [Member] | |||||||||
Debt monthly fee | $ 18,750 | ||||||||
Stock options granted to purchase of common stock | 600,000 | ||||||||
Consulting expense | $ 40,608 | $ 56,250 | 84,313 | $ 112,500 | |||||
Accrued consulting expense | $ 367,419 | $ 367,419 | $ 283,106 |
Commitments and Contingencies32
Commitments and Contingencies (Details Narrative) - USD ($) | Dec. 29, 2016 | Jul. 02, 2016 | Nov. 16, 2015 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Apr. 22, 2016 |
Number of options purchase to common stock shares | 3,743,000 | 3,743,000 | 3,743,000 | 4,043,000 | ||||||
Number of option granted | ||||||||||
Security deposit | $ 9,408 | $ 9,408 | $ 9,408 | $ 9,408 | ||||||
Prepaid rent | 25,837 | 25,837 | 25,837 | 76,006 | ||||||
Fund on-going costs | $ 10,461 | $ 84,580 | ||||||||
Loss on CONtv joint venture | 0 | 0 | ||||||||
Due to CONtv joint venture | 224,241 | 224,241 | 224,241 | 224,241 | ||||||
Amended and Restated Operating Agreement [Member} | ||||||||||
Ownership interest in contv | 10.00% | |||||||||
Fund on-going costs | $ 25,000 | |||||||||
Bristol Capital Advisors, LLC [Member] | ||||||||||
Lease term | 5 years 3 months | |||||||||
Monthly lease payment | $ 8,118 | |||||||||
Security deposit | 9,137 | |||||||||
Prepaid rent | $ 199,238 | |||||||||
Rent expense under sublease | 40,969 | 83,268 | ||||||||
Bristol Capital, LLC [Member] | ||||||||||
Rent expense under sublease | 40,969 | $ 83,268 | ||||||||
Consulting Services Agreement [Member] | Bristol Capital, LLC [Member] | ||||||||||
Number of option granted | 600,000 | |||||||||
Monthly fee | $ 18,750 | |||||||||
Accrued consulting expense | $ 367,419 | $ 367,419 | $ 367,419 | $ 283,106 | ||||||
Mr.Maatta [Member] | ||||||||||
Number of options purchase to common stock shares | 1,100,000 | |||||||||
Percentage of compensation provided by employment contract | 50.00% | |||||||||
Annual base salary | $ 125,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Non-Cancelable Operating Lease (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2018 (remainder of year) | $ 51,674 |
2,019 | 104,899 |
2,020 | 108,046 |
2,021 | 83,054 |
Future minimum lease payments | $ 347,673 |
Stockholders' Equity (Deficit34
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Authorized capital stock | 100,000,000 | ||
Number of common stock authorized | 80,000,000 | 80,000,000 | |
Common stock par value | $ 0.0001 | $ 0.0001 | |
Number of preferred stock authorized | 20,000,000 | 20,000,000 | |
Preferred stock par value | $ 0.0001 | $ 0.0001 | |
Common stock issued | 68,535,036 | 68,535,036 | |
Common stock outstanding | 68,535,036 | 68,535,036 | |
Intrinsic value of option outstanding | $ 0 | ||
Intrinsic value of option exercisable | 0 | ||
Share based compensation expense | 38,280 | $ 276,106 | |
Unrecognized stock based compensation | 66,776 | ||
Intrinsic value of warrant outstanding | 0 | ||
Intrinsic value of warrant exercisable | $ 0 | ||
Series A Convertible Preferred Stock [Member] | |||
Preferred stock par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares designated | 50,000 | 50,000 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) - Summary of Stock Option Activity (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of options Outstanding at the beginning of the period | shares | 4,043,000 |
Number of options Exercisable at beginning of the period | shares | 3,328,000 |
Number of options Granted | shares | |
1 | shares | |
Number of options Forfeited/Cancelled | shares | (300,000) |
Number of options Outstanding at the end of the period | shares | 3,743,000 |
Number of options Exercisable at end of the period | shares | 3,278,000 |
Weighted Average Exercise Price Outstanding at the beginning of the period | $ / shares | $ 0.58 |
Weighted Average Exercise Price Exercisable at beginning of the period | $ / shares | 0.57 |
Weighted Average Exercise Price Granted | $ / shares | |
Weighted Average Exercise Price Exercised | $ / shares | |
Weighted Average Exercise Price Forfeited/Cancelled | $ / shares | |
Weighted Average Exercise Price Outstanding at the end of the period | $ / shares | 0.59 |
Weighted Average Exercise Price Exercisable at end of the period | $ / shares | $ 0.59 |
Stockholders_ Equity (Deficit36
Stockholders’ Equity (Deficit) - Schedule of Information Regarding Stock Options Outstanding (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Equity [Abstract] | |
Range of Exercise Price Lower Limit | $ 0.40 |
Range of Exercise Price Upper limit | $ 1.50 |
Number of Shares Outstanding | shares | 3,743,000 |
Weighted Average Remaining Contractual Life (years) | 1 year 9 months 3 days |
Weighted Average Exercise Price | $ 0.59 |
Number of Shares Exercisable | shares | 3,278,000 |
Weighted Average Exercise Price | $ 0.59 |
Stockholders_ Equity (Deficit37
Stockholders’ Equity (Deficit) - Summary of Stock Warrants Activity (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of warrants Outstanding at the beginning of the period | shares | 16,666,667 |
Number of warrants Exercisable at beginning | shares | 16,666,667 |
Number of warrants Granted | shares | |
Number of warrants Exercised | shares | |
Number of warrants Forfeited/Cancelled | shares | |
Number of warrants Outstanding at the end of the period | shares | 16,666,667 |
Number of warrants Exercisable at end of the period | shares | 16,666,667 |
Weighted Average Exercise Price Outstanding at the beginning of the period | $ / shares | $ 0.15 |
Weighted Average Exercise Price Exercisable at the beginning of the period | $ / shares | 0.15 |
Weighted Average Exercise Price Granted | $ / shares | |
Weighted Average Exercise Price Exercised | $ / shares | |
Weighted Average Exercise Price Forfeited/Cancelled | $ / shares | |
Weighted Average Exercise Price Outstanding at the end of the period | $ / shares | 0.15 |
Weighted Average Exercise Price Exercisable at end of the period | $ / shares | $ 0.15 |
Stockholders_ Equity (Deficit38
Stockholders’ Equity (Deficit) - Schedule of Information Regarding Stock Warrants Outstanding (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Shares Outstanding | shares | 3,743,000 |
Weighted Average Remaining Contractual Life (years) | 1 year 9 months 3 days |
Weighted Average Exercise Price | $ 0.59 |
Number of Shares Exercisable | shares | 3,278,000 |
Weighted Average Exercise Price | $ 0.59 |
Warrant [Member] | |
Range of Exercise Price | $ 0.15 |
Number of Shares Outstanding | shares | 16,666,667 |
Weighted Average Remaining Contractual Life (years) | 3 years 5 months 1 day |
Weighted Average Exercise Price | $ 0.15 |
Number of Shares Exercisable | shares | 16,666,667 |
Weighted Average Exercise Price | $ 0.15 |
Segment Information - Schedule
Segment Information - Schedule of Revenue from Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Revenue | $ 5,111,867 | $ 4,946,545 | $ 9,103,033 | $ 8,468,621 | |
Cost of revenue | (4,489,502) | (5,291,686) | (7,375,836) | (8,432,016) | |
Gross margin | 622,365 | (345,141) | 1,727,197 | 36,605 | |
Operating expenses | (866,636) | (1,550,737) | (1,688,192) | (3,214,561) | |
Operating loss | (244,271) | (1,895,878) | 39,005 | (3,177,956) | |
Accounts receivable, net | 272,691 | 272,691 | $ 336,030 | ||
Total assets | 2,238,770 | 2,238,770 | 2,940,089 | ||
Unearned revenue | 1,737,545 | 1,737,545 | 2,164,972 | ||
Conventions [Member] | |||||
Revenue | 5,111,867 | 4,936,084 | 9,103,033 | 8,384,041 | |
Cost of revenue | (4,489,502) | (5,267,353) | (7,375,836) | (8,351,855) | |
Gross margin | 622,365 | (331,269) | 1,727,197 | 32,186 | |
Operating expenses | (866,636) | (1,550,096) | (1,688,192) | (3,185,706) | |
Operating loss | (244,271) | (1,881,365) | 39,005 | (3,153,520) | |
Accounts receivable, net | 272,691 | 272,691 | 336,030 | ||
Total assets | 2,283,770 | 2,283,770 | 2,940,089 | ||
Unearned revenue | 1,737,545 | 1,737,545 | 2,164,972 | ||
ConBox [Member] | |||||
Revenue | 10,461 | 84,580 | |||
Cost of revenue | (24,333) | (80,161) | |||
Gross margin | (13,872) | 4,419 | |||
Operating expenses | (641) | (28,855) | |||
Operating loss | $ (14,513) | $ (24,436) | |||
Accounts receivable, net | |||||
Total assets | |||||
Unearned revenue |