UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K/A



xANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31,
2012



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

For the transition
period from ___________ to ___________.



Commission file number 000-52414



POW! ENTERTAINMENT, INC.

(Exact name of registrant as specified in
its charter)



|Delaware                                                                         |  | 90-0139831                                          
|-------------------------------------------------------------------------------- |  | ----------------------------------------------------
|(State or Other Jurisdiction of Incorporation of Organization)                   |  | (I.R.S. Employer Identification No.)                
|                                                                                 |  |                                                     
|9440 Santa Monica Boulevard
        #620
        Beverly
        Hills, CA 90210 |  | 310-275-9933                                        
|(Address of principal executive offices) (ZIP Code)                              |  | (Registrant’s telephone number, including area code)



Securities registered pursuant to Section 12(b) of the Act: 
None

Securities registered pursuant to Section12 (g) of the Act:
Common Stock, $0.001 par value



Indicate
by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YesoNox



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YesoNox



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



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YesxNoo



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.x



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one):



Large
accelerated fileroAccelerated fileroNon-accelerated fileroSmaller reporting companyx



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



As of June 30, 2012 (the last business day of the registrant’s
second fiscal quarter), the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant
(computed by reference to the closing price of $0.05 per share as of the last business day of the most recently completed
second fiscal quarter) was $2,322,379:



Number of common shares outstanding at December 31, 2012
was 133,107,356.





1







POW! Entertainment, Inc.

2012 Form 10-K Annual Report



|PART I                                                                                                                 |   
|---------------------------------------------------------------------------------------------------------------------- | --
|                                                                                                                       |   
|ITEM 1. – BUSINESS                                                                                                     | 3 
|                                                                                                                       |   
|ITEM 1A. – RISK FACTORS                                                                                                | 7 
|                                                                                                                       |   
|ITEM 1B. – UNRESOLVED STAFF COMMENTS                                                                                   | 11
|                                                                                                                       |   
|ITEM 2. – PROPERTIES                                                                                                   | 11
|                                                                                                                       |   
|ITEM 3. – LEGAL PROCEEDINGS                                                                                            | 11
|                                                                                                                       |   
|ITEM 4. – [REMOVED AND RESERVED]                                                                                       | 12
|                                                                                                                       |   
|PART II                                                                                                                |   
|                                                                                                                       |   
|ITEM 5. – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 12
|                                                                                                                       |   
|ITEM 6. – SELECTED FINANCIAL DATA                                                                                      | 12
|                                                                                                                       |   
|ITEM 7. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        | 13
|                                                                                                                       |   
|ITEM 7A. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                  | 15
|                                                                                                                       |   
|ITEM 8. – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  | 16
|                                                                                                                       |   
|ITEM 9. –CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                          | 28
|                                                                                                                       |   
|ITEM 9A. – CONTROLS AND PROCEDURES                                                                                     | 28
|                                                                                                                       |   
|ITEM 9B. – OTHER INFORMATION                                                                                           | 29
|                                                                                                                       |   
|PART III                                                                                                               |   
|                                                                                                                       |   
|ITEM 10. – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                      | 30
|                                                                                                                       |   
|ITEM 11. – EXECUTIVE COMPENSATION                                                                                      | 31
|                                                                                                                       |   
|ITEM 12. – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS              | 32
|                                                                                                                       |   
|ITEM 13. – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                   | 33
|                                                                                                                       |   
|ITEM 14. – PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                      | 34
|                                                                                                                       |   
|PART IV                                                                                                                |   
|                                                                                                                       |   
|ITEM 15. – EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                                     | 34





2







EXPLANATION

This Amendment No. 1 to the Annual Report on Form 10-K/A for
POW! Entertainment, Inc. amends the Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March
29, 2013.  This Amendment No. 1 is being filed solely to revise Item 9A to address Item 308 of Regulation S-K in response
to comments issued by the SEC. This Amendment does not reflect events occurring after the filing of the Form 10-K or modify or
update those disclosures, accordingly, this Amendment No. 1 should be read in conjunction with our other filings with the SEC.



FORWARD-LOOKING STATEMENTS

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



Item 1 Business



Our Corporate History



POW! Entertainment, Inc. (the “Company”) was formed
as a Delaware corporation on August 17, 1998, under the name Megatek Legacy Systems, Inc., renamed Alta Pacific Minerals, Inc.,
in 1999, then Arturion Entertainment, Inc., in 2002, and finally POW! Entertainment, Inc. in 2004 in connection with the reorganization
referred to below.  The Company’s wholly-owned subsidiary, POW! Entertainment, LLC (“POW LLC”), was formed
in November 2001 as a limited liability company under the laws of the State of Delaware.  On May 5, 2004, POW LLC became a
wholly owned subsidiary of Arturion Entertainment, Inc. and the former members of POW LLC received shares of Arturion Common Stock
representing approximately 92% of the Common Stock outstanding and the Company’s name was changed to POW! Entertainment,
Inc. The Company’s Common Stock is quoted on the OTCQB Market with the ticker symbol POWN.



The Company’s executive offices are at 9440 Santa Monica
Boulevard, #620, Beverly Hills, California 90210. The Company’s phone number is 310-275-9933.



General



Overview



The Company is a multimedia production and licensing company
that creates and licenses animated and live-action fantasy and superhero entertainment content and merchandise, leveraging the
creative output and branded image of Stan Lee.  Prior to his association with the Company, Mr. Lee’s co-creations
include Spider-ManTM 1 , The Incredible Hulk TM 1 , X-MenTM 1 , The
Fantastic FourTM 1 , Iron Man TM 1 , Daredevil TM 1 , Silver
Surfer TM 1 and Dr. Strange TM 1 as well as hundreds of others.   The
Company does not receive any revenue in the form of royalties or otherwise from the foregoing creations. The Company develops
originally created franchises for new media such as on-line digital content and video games and for traditional entertainment media
such as feature length films in both live action and animation, DVD, live entertainment, television programming, merchandising
and related ancillary markets. All of the Company’s intellectual property, which may include characters and stories, are
vertically integrated in that each property is developed into as many products as possible, to create a branded franchise to accelerate
global identity from the synergy created across various media.



Currently, the Company is engaged in:



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



1These are the registered trademarks and characters of Marvel Characters, Inc.





3







The Company’s revenue for the year ended December 31,
2012 and 2011 was $2,064,784 and $2,791,862, respectively.  The Company had a net loss for the year ended December 31, 2012
of $1,847,806 and a net income for the year ended December 31, 2011 of $24,628. The net loss for the year ended December 31, 2012
includes the write off of $994,041 relating to amounts previously recorded as subscriptions receivable.



The Company’s Strategy



The Company’s strategy is to leverage the creative output
and branded image of Stan Lee and to outsource to, and work with, established production companies willing to finance and undertake
the resource and labor intensive aspects of producing entertainment projects.



The Company plans to achieve its goals by licensing its creations
to third party producers, or partnering with third parties to produce the Company’s projects (movies, television shows, video
games, comic books, merchandising and other ancillary opportunities) or to finance such productions.  Due to the Company’s
limited responsibility for any given project in this business model, the Company is able to create and manage a very large number
of projects with a small staff and relatively low overhead costs and project expenses.  The Company expects that it will
receive both up-front executive producer fees and back-end participation (revenues or profits from projects that are ultimately
produced, are considered “back-end participations”). Since most of the project expenditures will be borne by the Company’s
development partners, the Company believes that it can profit from projects that are ultimately produced, even if they are not
considered to be commercially successful.  For example, a movie that makes little or no profit in theaters will generate
revenues from executive producer fees and other fees and licensing. The Company intends to have a large number of projects produced,
increasing the probability that a number of these projects will be commercially successful, resulting in on-going revenues from
back-end participation.



Working with Established Partners



We believe that, with Stan Lee’s history of creating or
co-creating successful entertainment “franchises” and his branded image, the Company will be able to partner with studios
or production houses willing to finance and produce its projects.  To further enhance its business prospects, the Company
on occasion teams up with well-known directors and writers.



Several of our projects are in development with varying levels
of participation by established writers, directors, producers or studios.  As part of this strategy, we offer key participants
an equity interest in the project.



Projects in Development



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



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



| | · | First, Stan Lee’s has co-created a large number of very successful characters and projects.                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Second, through Stan Lee, we have established relationships with a variety of well-known writers, directors and producers.                                                                                                                                                       
| | · | Third, Stan Lee’s natural inclination and focus are on superheroes, action characters and other characters that have potential to become “franchises” (i.e. that lend themselves to sequels, to licensing to other media, to merchandising and to other ancillary opportunities).



Recent Events



The Company formed a joint venture called SL Power Concerts
with a third party during the fourth quarter of 2012 to bring live entertainment to military bases across the continental United
States. The joint venture will capitalize on the creative direction of Stan Lee to bring new military based superhero storylines
to the events and leverage the expertise of our third party partner to contract with military and government installations. The
first event will be held at Camp Pendleton in San Diego, California on April 5, 2013. The expected revenue to the Company, if any,
related to these events cannot be determined at this time.





4







During June 2011, the Company sold film rights to a third party
for an Asian superhero epic. The contract called for a purchase price of $500,000 upon transfer of copyrights filed with the US
copyright office, and an additional $375,000 upon commencement of principal photography. The Company would also be entitled to
additional payments if the project is made into sequels. There can be no assurance if or when such principal photography will commence,
or that the project will result in sequels.



(See “Risk Factors- Developing projects into commercially
successful programs may be difficult.”)



Transactions with Affiliates of The Walt Disney Company



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



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



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



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



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



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



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



Planned Brand Creation and Anticipated Revenue Sources



The Company’s revenue model revolves
around brand creation and management, and partnering with major live action and animation studios, distributors, and licensees
to achieve effective development and distribution of branded properties at a relatively low cost to the Company. The model contemplates
revenue and profit sharing arrangements with strategic partners who will fund all preliminary development and distribution for
varying degrees of continued interests in the properties after recouping their original investments.



The main sources of revenues are expected
to be:

| | · | theatrical and television distribution;       
| | - | ----------------------------------------------
| | · | live entertainment;                           
| | · | interactive games and on-line digital content;
| | · | merchandising and licensing;                  
| | · | comic and graphic novel publishing; and       
| | · | advertising and sponsorship.                  





5







Theatrical and Television Distribution



The development of traditional media franchises such as feature
film, basic television and cable television, is a lucrative market for the exploitation of the Company’s properties.  The
Company intends to develop properties into television and cable shows and feature films with the goal of creating “franchises”
that will enable it to maximize merchandising and licensing opportunities.  All of the projects will have fees payable
to the Company for both Stan Lee and Gill Champion acting as a producer or executive producer, as well as a participation fee.  We
expect that, in the future, the amount of fees payable to the Company for projects that  are produced will vary based
on the circumstances of each project, market conditions, and the Company’s and Stan Lee’s reputation based on successes
or failures of our projects.  At present, we believe that, in a typical deal for feature films, it would receive an executive
producer fee ranging between $450,000 and $750,000 per feature film project produced, plus a share of potential “back-end”
revenues or profits, as well as a share of licensing and merchandising revenues.  Although, under the Silver Creek Agreement
an amount in this range is payable to the Company by Silver Creek for any feature films produced, the amount is subject to offsets
to permit Silver Creek to recoup a portion of the advances and guaranteed payments it is and has been paying the Company on a monthly
basis.



Live Entertainment



The Company has plans to bring new characters and superhero
storylines to live theater and live concert events.



Interactive Games and On-Line Digital Content



Along with the vertical integration of traditional media franchises,
significant revenue can be generated from the on-line digital markets.  We believe that consumer demand for new and original
properties will fuel the market for distribution of both stand-alone retail and multi-player on-line interactive games and will
provide a viable platform for the Company’s created characters.



Merchandising and Licensing



The Company plans to engage in the worldwide exploitation of
its brands by pursuing advances and ongoing royalties from licensing Stan Lee brands. The Company intends to license its brands
to apparel manufacturers, toy manufacturers, and third party publishers, among others.



Comic and Graphic Novel Publishing



Stan Lee is a recognized figure in the comic-book publishing
industry, and print publication of his creations is a natural extension of these media brands. The Company plans to leverage off
Stan Lee’s structure and license character creations to third parties engaged in the publishing of both comic books and graphic
novels.



Advertising and Sponsorship



The Company plans to establish co-branding ventures in order
to add entertainment value to other party’s intellectual properties.



Intellectual Property



The Company’s primary assets are the intellectual property
created by Stan Lee, including our ownership of Stan Lee’s name, likeness, brand and signature slogans, “Stan Lee Presents”,
“Excelsior”, and “Stan’s Soap Box” by assignment from Stan Lee, as well as all new properties being
developed by the Company.  The Company holds the registered trademarks “Stan Lee Presents” and “Excelsior”
in the United States, and it believes it holds common law trademarks in the United States to “Stan Lee” and “Stan’s
Soapbox”, among others.  ( See “Projects in Development” above).



The Animated and Live-Action Fantasy Entertainment Industry



The animated and live-action fantasy entertainment industry
continues to enjoy high growth, with animated and live-action fantasy and superhero characters being exploited through network
and cable television and movies. The lucrative potential of entertainment media in this genre can be seen by the commercial success
of full-length motion pictures such as: Spider-Man, X-Men and Iron Man and their sequels. However, there can be no guarantee that
any of the Stan Lee’s projects for the Company will be produced at all or, if so produced will be a commercial success like
Spider Man, X-Men and Iron Man.





6







Competition



The entertainment industry is highly competitive, with many
companies vying for market share in specific industry segments.  The Company has a broad array of competitors in creating
and exploiting entertainment properties.  Many of our competitors are very large companies such as Disney, and Time Warner,
Inc., with vastly greater resources than the Company.  On the other end of the spectrum, we also compete with individuals
or small companies with ideas for entertainment projects.  Many of the large entertainment companies have financing and
distribution capabilities and production facilities constantly seeking creative content to license and exploit.  Thus,
these entities may also be the Company’s partners for collaboration on various projects.  While this approach allows
us to utilize the resources of these large companies, it makes us vulnerable to problems or business decisions at these companies
that may cause them to delay or terminate production of various Company projects without our consent or control.



Competitors of ours that are or may be our customers or partners
on various projects include:



| | · | Disney, which is a major force in the creation and exploitation of properties and has exceptional distribution capabilities in traditional media and licensing.  Disney also owns Marvel, which is one of the major comic book publishers in the world. Marvel has a library of superhero characters, the most famous of which were created or co-created by Stan Lee, that have formed the basis of many traditional media properties. Among these are Spider-ManTM, the X-MenTM, Iron-ManTM, the Incredible HulkTM, and DaredevilTM.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Time Warner, Inc, which is not only a leading authority in film and television, but also owns DC Comics, a major competitor of Marvel.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



Competitive Advantages and Challenges



Our competitive advantage in the entertainment industry is Stan
Lee’s ability to create new intellectual properties and the Company’s ability to promote projects with global appeal
both production third parties and consumers.  As a recognized figure in the comic book industry, Stan Lee created or
co-created franchises for Marvel Comics that has sold millions of comic books.  In addition, these franchises have enjoyed
decades of derivative exposure in the form of merchandising, licensing, animated and live action television, and motion pictures.  The
Company now owns the Stan Lee name and brand, signature slogans, and the new properties developed and being developed by Stan Lee
for the Company.



Additional advantages lie in the production, distribution, and
licensing partners that the Company has and continues to engage, the Hollywood talent that wants to collaborate with Stan Lee in
creating animated and live action properties, and Stan Lee’s ability to attract the well-known writers and artists to assist
in the development of his original creations. As noted above, the Company believes that its ability to operate by partnering with
major production, distribution, development and licensing companies for revenue participation is also a major advantage.



The competitive challenges lay in the inherent nature of the
entertainment industry with many intellectual companies vying for the limited opportunities of financial production to eventual
distribution to the public consumer. We reside within the inherent limitations of the industry.



See “Risk Factors – Developing
projects into commercially successful programs may be difficult”



Employees



The Company had 13 employees as of March 5, 2013.  We
may engage independent consultants in the future as needed to assist in the execution of our strategy.



Item 1A. Risk Factors



Risks relating to Our Business



We rely on one major partner. We are reliant on
the Silver Creek Agreement for the majority of our working capital (See Transactions with Affiliates of the Walt Disney Company
above).  Relying on the extended term and the increased payments to be made by Silver Creek on a monthly basis, the Company
eliminated the requirement that its key employees defer substantial portions of their salaries.   If the amount of payments
under the Silver Creek Agreement is scaled back due to our loss of Stan Lee’s services or Silver Creek fails to pay us pursuant
to the terms of the Silver Creek Agreement, we may not generate sufficient revenues in the future, not be able to implement our
business plan, and need to scale back operations.



Our future revenues are unpredictable. As
a result of the competitive nature of the markets in which the Company competes, the unpredictability of revenue flow in the entertainment
industry in general, and in the particular sector of the entertainment business that the Company intends to pursue, the Company
is unable to accurately forecast its revenues.  The Company’s strategy, to engage, or partner with, third parties
to implement the line production and provide the production costs of products based on the Company’s concepts, means that
the timing, and quality of the productions, and our resulting revenue have been and will continue to be affected by decisions and
actions of third parties and therefore, to some extent, will be out of the Company’s control.





7







Fluctuations in operating results. 
The Company is likely to experience significant fluctuations in its future quarterly and annual operating results due to a variety
of factors, many of which are outside the Company's control. Factors that may adversely affect the Company's operating results
include:



| | · | the Company's ability to accurately predict consumer demands and to maintain consumer satisfaction with the Company's productions;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| | · | the ability of entities that produce the Company’s projects to complete productions on time and on budget;
| | - | ----------------------------------------------------------------------------------------------------------



| | · | delays in revenue recognition at the end of a fiscal period as a result of logistical problems;
| | - | -----------------------------------------------------------------------------------------------



| | · | the impact of governmental regulations; and
| | - | -------------------------------------------



| | · | general economic conditions.
| | - | ----------------------------



Developing projects into commercially successful programs
may be difficult.   Although the Company has a number of projects in development, the term “in development”
in the entertainment industry embraces a wide variety of activities, including writing a script and identifying and negotiating
with potential actors, directors and/or producers willing to participate in the project. At any given time, there are hundreds
of projects in development by various parties, the majority of which may never be produced or may be produced only after lengthy
delays.  Although a project in development may not be produced at the time that it is originally proposed, it may succeed
in attracting sufficient interest in subsequent years when conditions change.  Failure to produce successful projects
will have a material adverse effect on our reputation and business prospects and condition.



Stan Lee’s creative output is important to our business
plan .   Although the Company has an inventory of Stan Lee’s treatments and holds the right and title to
the Stan Lee brand by assignment from Stan Lee, the Company’s success is still based on the future creative output and marketing
presence of Stan Lee, who is 90 years old.  The Company has a number of projects based on Stan Lee’s creations
in development at present and its goal is to develop a sufficient number of these projects in order to produce an ongoing revenue
stream well after the time that Stan Lee remains active to alleviate this risk.  The Company also intends to hire a number
of writers to supplement and complement Stan Lee’s output.  However, no assurances can be given that these plans
will be successful.  Additionally, the Silver Creek Agreement (see Working with Established Partners above), provides
that the Company’s annual payment from Silver Creek will be reduced from $2,500,000 to $1,250,000 per year upon Stan Lee‘s
disability.



We depend on our management; loss of key management may
be detrimental to the Company .  The Company's success is dependent to a large degree on the services and
presence of Stan Lee, its Chairman and Chief Creative Officer, and Gill Champion, its Chief Executive Officer. The loss of either
officer could have a material adverse effect on the Company's business or results of operations.  The Company has an
employment agreement with each of them that limits their right to compete with the Company.  Stan Lee has a lifetime
employment agreement with Marvel Comics, which currently requires Stan Lee to devote 10-15 hours per week to Marvel matters, and
in return for which Stan Lee currently receives an annual salary of $1,000,000.  As a result, Stan Lee is unable to devote
his full time and attention to the Company’s business. Currently we do not hold key-man insurance for Stan Lee. The Company
currently holds a key-man policy for Gill Champion with a death benefit of approximately $4 million.



Our success also depends in large part on our ability to attract
and retain highly skilled executive, technical, managerial, sales and marketing personnel and writing talent.  If we
lose the services of Stan Lee, Gill Champion or other personnel, we may not have the resources to implement our business plan,
and may not be able to replace any of these personnel with similarly experienced individuals.  Competition is intense
for skilled and talented personnel in the entertainment industry, and it may be difficult to attract or retain qualified key employees.
Without strong management and talented employees, business growth will be hindered and we are likely to experience a material adverse
effect on our business results and future prospects.



Our intellectual property rights may be violated or subject
to litigation.   We believe that the creative output of Stan Lee on which our content and products are based
is proprietary and is our intellectual property.  We believe we have ownership rights to Stan Lee’s name and likeness
by assignment from Stan Lee and have a common law trademark in the “Stan Lee” name.  We have filed for registration
the name “Stan Lee” as a trademark in the United States.  Our ability to develop our business and compete
effectively depends to a significant extent on our ability to protect our intellectual property. We will rely primarily upon confidentiality
procedures, trade secrets, and copyright, trademark and trade name laws to protect our intellectual property rights. We will generally
control access to our content, technology and other proprietary information.  Despite these precautions, however, it
may be possible for competitors to copy all or part of our ideas or to obtain information that we regard as proprietary.  Misappropriation
of our content or development by our competitors of content that are substantially equivalent or superior to our ideas would have
a material adverse effect on our operations and financial condition.  In addition, litigation may be necessary in the
future to enforce our intellectual property rights, to protect trade secrets, or to determine the validity and scope of the proprietary
rights of others.  Such litigation could result in substantial costs and diversion of our financial and personnel resources.  Additionally,
we may not have adequate financial resources to effectively police our intellectual property or to institute and sustain legal
action against infringers.  As a result, the integrity and value of our intellectual property could erode having a material
adverse effect on our business, financial condition and results of operations.





8







We may become subject to infringement claims .
  One of the risks of the entertainment business is the possibility of claims that the Company’s ideas infringe
the intellectual property rights of third parties with respect to previously developed films, stories, characters or other creative
content.  The Company has in the past and may in the future receive notice of claims of infringement of other parties'
proprietary rights.  Irrespective of the merits of such claims, the Company would be forced to incur significant costs
and diversion of resources to defend those claims which could have a material adverse effect on our business, financial condition
or results of operations. If any claims or actions are asserted against us, we may seek to obtain a license under a third party's
intellectual property rights to settle the matter.  The Company cannot provide any assurances, however, that under such
circumstances a license would be available on reasonable terms if at all.  If a license is not available to us in these
circumstances, we may be precluded from exploiting the intellectual property, forcing us to cancel projects at a substantial expense
and causing us to incur significant monetary damages.



The Company not being listed on a Securities Exchange
may make it difficult for the Company to Obtain Future Financing .  The absence of the Company’s listing
on a Securities Exchange may make it more difficult to obtain future equity financing because many investors are unwilling or unable
to invest in companies not so listed.



Risks Relating to Our Securities.



The Company’s Securities are quoted on the OTCQB
which leads to lack of liquidity, volatility and other problems.  The Company's Common Stock is quoted
on the OTCQB under the symbol POWN.  The quoted price of the Company’s Common Stock has ranged from approximately
$0.15 to $0.03 during the year daily volume has ranged from 100 shares to approximately 2,388,289 shares.  No assurance
can be given that an active trading market in the Company's securities will be sustained. Various factors, such as the Company's
operating results, changes in laws, rules or regulations, general market fluctuations, changes in financial estimates and other
factors may have a significant impact on the market price of the Company's securities. The market price for the securities of public
companies often experience wide fluctuations, which are not necessarily related to the operating performance of such public companies.  For
companies traded in the OTCQB, it is more difficult to obtain accurate quotes and obtain coverage for significant news events to
promote and gain exposure for companies. This may cause difficulty in conducting trades.



Penny stock regulations may impose certain restrictions
and limitations on the marketability of our securities . The Securities and Exchange Commission has adopted regulations
which generally define a “penny stock” to be any equity security that has a market price (as defined) of less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. As a result, our Common Stock
is subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other
than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received the purchaser’s written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery,
prior to the transaction, of a risk disclosure document mandated by the Commission relating to the penny stock market. The broker-dealer
must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s
presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may
restrict the ability of broker-dealers to sell our securities, may limit the number of broker-dealers willing to sell our securities,
and may affect the ability of investors to sell our securities in the secondary market and the price at which such purchasers can
sell any such securities.



We have no history of paying dividends. We have
never paid cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable
future. We plan to retain any future earnings to finance growth.



Shares eligible for future sale may adversely affect the
market.  From time to time, certain of the Company’s stockholders may be eligible to sell all or some of their
shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the
Securities Act, subject to certain limitations. In general, pursuant to Rule 144, a non-affiliate stockholder who has satisfied
a six-month holding period may, under certain circumstances, sell its shares, without limitation. Any substantial sale of the Company’s
Common Stock pursuant to Rule 144 or pursuant to any resale prospectus may have a material adverse effect on the market price of
the Common Stock.





9







Future sales of the Company’s
Common Stock could adversely affect its price and the Company’s future capital-raising activities could involve the issuance
of equity securities, which would dilute your investment and could result in a decline in the trading price of the Company’s
Common Stock. The Company may sell securities in the public or private equity markets if and when conditions are favorable,
even if it does not have an immediate need for additional capital at that time. Sales of substantial amounts of Common Stock, or
the perception that such sales could occur, could adversely affect the Company’s ability to raise capital and the prevailing
market price of the Company’s Common Stock. The Company may issue additional Common Stock and/or securities exercisable or
convertible into Common Stock in the future, in financing transactions or as incentive compensation for its executive management
and other key personnel, consultants and advisors. Issuing any equity securities would be dilutive to the equity interests represented
by the Company’s then-outstanding shares of Common Stock. The market price for the Company’s Common Stock could decrease
as the market takes into account the dilutive effect of any of these issuances. Furthermore, the Company may enter into financing
transactions at prices that represent a substantial discount to the market price of its Common Stock. A negative reaction by investors
and securities analysts to any discounted sale of the Company’s equity securities could result in a decline in the trading
price of the Company’s Common Stock.



The Company may be unable to remain in compliance with
the reporting requirements of the Exchange Act.  There can be no assurance that the Company will have the funding
and personnel resources to comply with the Exchange Act periodic reporting requirements to prepare and file current, quarterly
and annual reports on a timely basis or at all. Failure of the Company to maintain its reporting requirements could have a materially
adverse effect on the liquidity of the market for the Company’s Common Stock and the ability for an investor to sell the
Common Stock.



The Company’s stock price may be volatile.
 We expect that the market price of the Company’s Common Stock is likely to be highly volatile and could fluctuate widely
in price in response to various factors, many of which are beyond its control, including:



| | · | the loss of Stan Lee’s services;
| | - | --------------------------------



| | · | additions or departures of other key personnel;
| | - | -----------------------------------------------



| | · | sales of the Company’s Common Stock and securities exercisable or convertible into Common Stock;
| | - | ------------------------------------------------------------------------------------------------



| | · | the Company’s ability to implement its business plan;
| | - | -----------------------------------------------------



| | · | operating results below expectations;
| | - | -------------------------------------



| | · | loss of any strategic relationship;
| | - | -----------------------------------



| | · | industry developments;
| | - | ----------------------



| | · | economic and other external factors; and
| | - | ----------------------------------------



| | · | period-to-period fluctuations in the Company’s financial results.
| | - | -----------------------------------------------------------------



Because the Company has a limited operating history, any one
of these factors would be material. In addition, the securities markets have from time to time experienced significant price
and volume fluctuations that are unrelated to the operating performance of particular companies.  These market fluctuations
may also materially and adversely affect the market price of the Company’s Common Stock.



The Company has a concentration of stock ownership and
control, which may have the effect of delaying, preventing, or deterring a change of control. The Company’s Common
Stock ownership is highly concentrated.  The current officers and directors of the Company, including Stan Lee, Gill
Champion and Bick Le and their respective affiliates, beneficially own an aggregate of 50.8%, of the Company’s total outstanding
common stock.  ( See Item 12. Security Ownership of Certain Beneficial Owners and Management)  As a
result of the concentrated ownership of the Company’s stock, a relatively small number of shareholders, acting together,
will be able to control all matters requiring shareholder approval, including the election of directors and approval of mergers
and other significant corporate transactions.  This concentration of ownership may have the effect of delaying, preventing
or deterring a change in control of the Company.  It may affect the market price of the Company’s Common Stock.





10







Our corporate charter eliminates personal liability of
our directors, officers, employees and agents . As permitted by the Delaware General Corporation Law, our Certificate of
Incorporation eliminates the personal liability of the directors, officers, employees and agents to the Company and its stockholders
for monetary damages for breach of fiduciary duty except in certain circumstances.  Accordingly, except in such circumstances,
stockholders will have limited rights to recover money damages from our directors, officers, employees and agents for breach of
such duty.



Item 1B—Unresolved Staff Comments



None



Item 2 – Property



We lease 2,034 square feet of office space for our corporate
office located at 9440 Santa Monica Boulevard, Beverly Hills, California pursuant to a lease which expires on June 30, 2016. 
The minimum future rents totals approximately $103,000 per annum.



Item 3—Legal Proceedings



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



Stan Lee Media, Inc.



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



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



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



In 2009 a $750,000,000 lawsuit was filed on behalf of SLM against
Marvel Entertainment, the Company and other defendants in an action entitled Abadin v. Marvel Entertainment, Inc., et al.
, in the U.S. District Court, Southern District of New York (the “Abadin Suit”), claiming, among other things, that
SLM owned various intellectual property including the intellectual property at issue in the SLM Suit, and including all the Marvel
characters and the Marvel name.  The various causes of action alleged by plaintiffs in this case were all dismissed pursuant
to an Order of the Court filed on March 31, 2010. The plaintiffs in the Abadin case filed an appeal of the dismissal of its case,
but failed to perfect the appeal, which as a result was dismissed.  Therefore, the dismissal of this case is now final
and binding.





11







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



Item 4 – [Removed and Reserved]



PART II



Item 5.  Market Price of and Dividends on the Registrant’s
Common Equity and Related Stockholder Matters.



Our shares of Common Stock are quoted in the OTCQB under the
trading symbol “POWN”.



The following table sets forth the high and low bid price for
our Common Stock during 2012 and 2011. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission
and may not represent actual transactions.



|                                 |  | High |      |  | Low |  
|-------------------------------- |  | ---- | ---- |  | --- | -
|2011                             |  |      |      |  |     |  
|Quarter Ended March 31, 2011     |  | $    | 0.35 |  |     | $
|Quarter Ended June 30, 2011      |  | $    | 0.25 |  |     | $
|Quarter Ended September 30, 2011 |  | $    | 0.30 |  |     | $
|Quarter Ended December 31, 2011  |  | $    | 0.15 |  |     | $
|2012                             |  |      |      |  |     |  
|Quarter Ended March 31, 2012     |  | $    | 0.15 |  |     | $
|Quarter Ended June 30, 2012      |  | $    | 0.09 |  |     | $
|Quarter Ended September 30, 2012 |  | $    | 0.06 |  |     | $
|Quarter Ended December 31, 2012  |  | $    | 0.11 |  |     | $



On March 5, 2013 the closing sale price of our common stock
was $0.05.



Holders



As of March 5, 2013 there were 55 registered holders of our
Common Stock.  We believe that there are also a significant number of beneficial owners of our common stock whose shares
are held in “street name.”



Dividend Policy



We have not paid cash dividends on our common stock and do not
plan to pay such dividends in the foreseeable future.  Our Board of Directors will determine our future dividend policy
on the basis of many facts, including results of operations, capital requirements, and general business conditions.



Transfer Agent and Registrar



The transfer agent for the Common Stock is Broadridge Issuer
Solutions, Inc., whose address is 44 W. Lancaster Ave., Ardmore PA 19003.



Item 6 – Selected Financial Data



This item is not required to be completed by smaller reporting
companies.  Our consolidated financial statements appear elsewhere in this report in Item 8. – “Financial Statements
and Supplementary Data .”





12







Item 7 –Management’s Discussion and Analysis
of Financial Condition and Results of Operations



Overview



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



During fiscal year 2013 and 2014, the
Company plans to focus on

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



The Company’s strategy is to outsource to, and work with,
established production companies willing to finance and undertake the resource and labor intensive aspects of producing entertainment
projects. The Company plans to achieve its goals by licensing its creations to third party producers, or partnering with third
parties, to produce the Company’s products (movies, television shows, video games, comic books, merchandising and other ancillary
opportunities) or to finance such productions.  Due to the Company’s limited responsibility for any given project
in this business model, the Company expects, consistent with past practices, to be able to create and manage a very large number
of projects with a small staff and relatively low overhead costs and project expenses.  As a result, the Company expects
that it will profit from up-front fees from projects that are ultimately produced, even if they are not highly successful.  The
Company’s goal is to have a large number of projects produced, increasing the probability that a number of these projects
will be highly successful, resulting in on-going revenues from licensing, back-end participation, merchandising and other ancillary
opportunities.



Recent Transactions



The Company formed a joint venture called SL Power Concerts
with a third party during the fourth quarter of 2012 to bring live entertainment to military bases across the continental United
States. The joint venture will capitalize on the creative direction of Stan Lee to bring new military based superhero storylines
to the events and leverage the expertise of our third party partner to contract with military and government installations. The
first event will be held at Camp Pendleton in San Diego, California on April 5, 2013. The expected revenue to the Company, if any,
related to these events cannot be determined at this time.



During June 2011, the Company sold film rights to a third party
for an Asian superhero epic. The contract called for a purchase price of $500,000 upon transfer of copyrights filed with the US
copyright office, and an additional $375,000 upon commencement of principal photography. The Company would also be entitled to
additional payments if the project is made into sequels. There can be no assurance if or when such principal photography will commence,
or that the project will result in sequels.



Cash Requirements



With current financial arrangements, we should be able to satisfy
our operational cash requirements for fiscal years 2013 and 2014. The Company has an agreement with Silver Creek Pictures, Inc.
(“Silver Creek”), an affiliate of The Walt Disney Company, pursuant to which Silver Creek will pay the Company $2.5
million per year through the end of 2014. Of such $2,500,000 payment, $1,250,000 is made for making Stan Lee available to consult
on the exploitation of the assets of Marvel Entertainment acquired by Disney in late 2009, $700,000 is payment for the right to
have a “first look” at the Company’s development projects and the right to acquire any such properties, in Silver
Creek’s discretion and $550,000 is an advance against future development projects.  The Company is obligated to
pay a commission to an unrelated third party equal to 10% of all net amounts paid by Silver Creek pursuant to its agreement with
the Company.  The annual amount of $1,250,000 relating to Stan Lee’s consulting services is paid monthly and will
cease in the event of, and from the time of, Stan Lee's inability to perform such services due to disability or other incapacitation.  With
these payments made by Silver Creek on a monthly basis, the Company believes that it can continue its current operations and cover
all of its general and administrative costs.





13







Research and Development



The Company is the process of completing a number of concepts
that could be produced.  The costs of production of these concepts are currently borne by other parties and not by the
Company. During 2011, the Company incurred development fees $35,000 to contracted writers for various scripts developments.



Results of Operations



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



For Year Ended December 31, 2012 and
2011



The Company’s revenues for the year ended December 31,
2012 were $2,064,784 compared to $2,791,862 for the year ended December 31, 2011.  The decrease was primarily from the
sale of film rights totaling $500,000 to a third party during 2011. Other decreases in revenues stemmed from $227,078 from various
royalties earned during 2011 and not earned in 2012.



For the year ended December 31, 2012, net loss totaled $1,847,806
compared to a net income of $24,628 for the year ended December 31, 2011. Included in the net loss for the December 31, 2012 was
the write off of $994,041 relating to amounts previously recorded as subscriptions receivable and allowance for other receivable
of $66,668.



General and administrative expenses increased by $38,048 or
1.3% for the year ended December 31, 2012 compared to the year ended December 31, 2011. The increase was attributable to the following
and also offset by:



| | • | Decrease in wages and benefits by $152,713 from savings from new health insurance and benefit plans and the lack of salaries for the late Chief Operating and Chief Legal Officer, Arthur Lieberman;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Increase in stock-based compensation by $21,891 attributable to stock grants awarded to an employee for the year ended December 31, 2012;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | • | Professional fees increased by $213,560 in legal expenses due primarily to legal fees related to various litigation support and replacement of general legal services for the late Chief Legal Officer, Arthur Lieberman;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Decrease of $36,329 in change of derivative value of warrants issued to non-employee due to fluctuation of warrants’ value;
| | - | ---------------------------------------------------------------------------------------------------------------------------



| | • | Rent decrease of $16,224 due to the expiration of the corporate apartment lease and corporate apartment;
| | - | --------------------------------------------------------------------------------------------------------



| | • | Decrease in promotional fees of $25,225 due to reduced spending for public relations and investor relations compared to 2011; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| | • | Increase in other general and administration expenses by $14,229 due to travel and expenses related to the promotions of various projects.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



Liquidity and Capital Resources



Our current liquidity and capital resources are provided principally
through our current agreement with Silver Creek Pictures. We have a deficiency in working capital of $2,840,647 and $1,828,759
as of December 31, 2012 and 2011, respectively. The Company has reclassified part of Deferred Compensation as long-term liabilities.
A reduction in working capital at December 31, 2012 from December 31, 2011 is partly due to decrease in payments of deferred compensation
offset by increases in advances payable from Silver Creek. As of December 31, 2012 and 2011 cumulative advances received from Silver
Creek were $3,096,667and $2,546,667, respectively. These amounts are recoupable by Silver Creek solely from any fixed and contingent
compensation related to future developments, including box office bonuses and merchandising royalties.



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





14







Deferred compensations to executives totaled $1,927,917 and
$2,127,917 as of December 31, 2012 and 2011, respectively. During 2012, the Company paid down deferred compensation totaling $200,000.



Sources of Revenue



The Company’s revenue model revolves around brand creation
and management, and partnering with major live action and animation studios, distributors, and licensees to achieve effective development
and distribution of branded properties at a relatively low cost to the Company. The model contemplates revenue and profit sharing
arrangements with strategic partners who will fund all preliminary development and distribution for varying degrees of continued
interests in the properties after recouping their original investments.



The main sources of revenues are expected to be:

| | · | theatrical and television distribution;      
| | - | ---------------------------------------------
| | · | live entertainment;                          
| | · | interactive games and online digital content;
| | · | merchandising and licensing;                 
| | · | comic and graphic novel publishing; and      
| | · | advertising and sponsorship.                 



Off Balance Sheet Arrangements



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



Critical Accounting Policies and Estimates.



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



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



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

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



Item 7A-Quantitative and Qualitative Disclosure about Market
Risk



None





15







ITEM 8. – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA



|Item                                                                                                        |  | Page
|----------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                            |  |     
|Report of Independent Registered Public Accounting Firm                                                     |  | 17  
|                                                                                                            |  |     
|Consolidated Balance Sheets at December 31, 2012 and December 31, 2011                                      |  | 18  
|                                                                                                            |  |     
|Consolidated Statements of Operations for the years ended December 31, 2012 and December 31, 2011           |  | 19  
|                                                                                                            |  |     
|Consolidated Statements of Cash Flows for the years ended December 31, 2012 and December 31, 2011           |  | 20  
|                                                                                                            |  |     
|Consolidated Statements of Shareholders Deficit for the years ended December 31, 2012 and December 31, 2011 |  | 21  
|                                                                                                            |  |     
|Notes to Consolidated Financial Statements                                                                  |  | 22  



16







REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors and Stockholders
of

POW! Entertainment, Inc.



We have audited the accompanying consolidated
balance sheets of POW! Entertainment, Inc. (a Delaware corporation) and Subsidiaries (the “Company”) as of December
31, 2012 and 2011, and the related consolidated statements of operations, shareholders’ deficit, and cash flows for the years
then ended. POW! Entertainment, Inc.’s management is responsible for these consolidated financial statements. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of POW! Entertainment,
Inc. and Subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for
the years then ended, in conformity with accounting principles generally accepted in the United States of America.



Rose, Snyder & Jacobs LLP



Encino, California



March 29, 2013





17







POW! ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2012 and December 31, 2011



|                                                                                |  | December 31, |            
|------------------------------------------------------------------------------- |  | ------------ | -----------
|                                                                                |  | 2012         |            
|ASSETS                                                                          |  |              |            
|CURRENT ASSETS                                                                  |  |              |            
|Cash and cash equivalents                                                       |  | $            | 251,431    
|Letter of credit                                                                |  |              | 32,544     
|Marketable securities                                                           |  |              | 540,813    
|Accounts receivable, net of allowance for doubtful accounts of $0               |  |              | 27,699     
|Other receivables                                                               |  |              | 2,047      
|Prepaid expenses                                                                |  |              | 18,839     
|Inventory                                                                       |  |              | -          
|TOTAL CURRENT ASSETS                                                            |  |              | 873,373    
|Property and Equipment, net                                                     |  |              | 39,384     
|INTANGIBLE AND OTHER ASSETS                                                     |  |              |            
|Trademarks, net                                                                 |  |              | 18,204     
|Investment in SL Power Concerts                                                 |  |              | 50,000     
|Development Fees                                                                |  |              | 35,000     
|Deposits                                                                        |  |              | -          
|TOTAL ASSETS                                                                    |  | $            | 1,015,961  
|                                                                                |  |              |            
|LIABILITIES AND SHAREHOLDERS' DEFICIT                                           |  |              |            
|CURRENT LIABILITIES                                                             |  |              |            
|Accounts payable and accrued expenses                                           |  | $            | 241,413    
|Advances payable                                                                |  |              | 3,096,667  
|Deferred compensation-current                                                   |  |              | 300,000    
|Deferred Rent                                                                   |  |              | 44,908     
|Derivatives Liability                                                           |  |              | 31,032     
|TOTAL CURRENT LIABILITIES                                                       |  |              | 3,714,020  
|                                                                                |  |              |            
|Deferred compensation-long term                                                 |  |              | 1,627,917  
|COMMITMENT AND CONTINGENCIES, note 10                                           |  |              |            
|SHAREHOLDERS' DEFICIT                                                           |  |              |            
|Common shares, $0.001 par value.                                                |  |              |            
|199,000,000 common shares authorized, 1,000,000 preferred shares  authorized    |  |              |            
|133,107,356 and 132,607,356, respectively, common shares issued and outstanding |  |              |            
|at  December 31, 2012 and 2011, respectively                                    |  |              | 133,108    
|Additional paid in capital                                                      |  |              | 9,584,726  
|Subscription receivable, net, note 3                                            |  |              | -          
|Accumulated deficit                                                             |  |              | (14,047,980
|Accumulated other comprehensive income                                          |  |              | 4,170      
|TOTAL SHAREHOLDERS' DEFICIT                                                     |  |              | (4,325,976 
|TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                                     |  | $            | 1,015,961  



See Report of the Independent Registered Public Accounting Firm and the accompanying notes to consolidated financial statements.





18







POW! ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2012 and 2011



|                                                |  | December 31, |            
|----------------------------------------------- |  | ------------ | -----------
|                                                |  | 2012         |            
|                                                |  |              |            
|REVENUES                                        |  | $            | 2,064,784  
|                                                |  |              |            
|OPERATING COSTS AND EXPENSES                    |  |              |            
|Wages and benefits                              |  |              | 1,593,983  
|Commission                                      |  |              | 126,843    
|Stock-based Compensation                        |  |              | 62,322     
|Professional fees                               |  |              | 575,581    
|Promotional and Marketing                       |  |              | 79,250     
|Rent and office                                 |  |              | 138,832    
|Other general and administration                |  |              | 317,790    
|                                                |  |              |            
|TOTAL OPERATING COSTS AND EXPENSES              |  |              | 2,894,601  
|                                                |  |              |            
|LOSS FROM OPERATIONS                            |  |              | (829,817   
|                                                |  |              |            
|OTHER INCOME AND (EXPENSES)                     |  |              |            
|Dividend and Interest income (expense), net     |  |              | 30,789     
|Allowance for other receivable                  |  |              | (66,668    
|Write off subscription receivable               |  |              | (994,041   
|Income from legal settlement                    |  |              | 25,000     
|Gain (loss) on change of derivative value       |  |              | (2,269     
|                                                |  |              |            
|INCOME (LOSS) BEFORE TAXES                      |  |              | (1,837,006 
|                                                |  |              |            
|Income taxes                                    |  |              | (10,800    
|                                                |  |              |            
|NET INCOME (LOSS)                               |  | $            | (1,847,806 
|                                                |  |              |            
|Net Income (loss) per share                     |  |              |            
|Basic and diluted                               |  | $            | (0.01      
|                                                |  |              |            
|Weighted average shares outstanding, basic      |  |              | 132,899,023
|Weighted average shares outstanding, diluted    |  |              | 132,899,023
|                                                |  |              |            
|Condensed Statement of Comprehensive Income     |  |              |            
|Net Income (Loss)                               |  | $            | (1,847,806 
|Other comprehensive Income(Loss)                |  |              |            
|Unrealized gain (loss) on marketable securities |  |              | 49,111     
|Comprehensive Loss                              |  | $            | (1,798,695 



See Report of the Independent Registered Public Accounting Firm and the accompanying notes to consolidated financial statements.





19







POW! ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2012 and December 31, 2011



|                                                                                                   |  | December 31, |           
|-------------------------------------------------------------------------------------------------- |  | ------------ | ----------
|                                                                                                   |  | 2012         |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                              |  |              |           
|Net income (loss)                                                                                  |  | $            | (1,847,806
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |              |           
|Depreciation and amortization                                                                      |  |              | 3,497     
|Loss on disposal of property and equipment                                                         |  |              | 563       
|Loss on sale of marketable securities                                                              |  |              | 14,060    
|Write off subscription receivable                                                                  |  |              | 994,041   
|Allowance for other receivable                                                                     |  |              | 66,668    
|Stock based compensation                                                                           |  |              | 62,322    
|Non-employee warrants and options                                                                  |  |              | -         
|Changes in valuation of derivatives liability                                                      |  |              | 2,269     
|Deferred Rent                                                                                      |  |              | (5,460    
|Change in assets and liabilities:                                                                  |  |              |           
|Accounts receivable                                                                                |  |              | 58,484    
|Prepaid expenses                                                                                   |  |              | 166       
|Inventory                                                                                          |  |              | 13,513    
|Other receivable                                                                                   |  |              | (750      
|Deposits                                                                                           |  |              | 2,192     
|Accounts payable and accrued expenses                                                              |  |              | 7,761     
|Advances payable                                                                                   |  |              | 550,000   
|Deferred compensation                                                                              |  |              | (200,000  
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                |  |              | (278,480  
|                                                                                                   |  |              |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                              |  |              |           
|Payments for trademarks                                                                            |  |              | (775      
|Payments for development fees                                                                      |  |              | -         
|Purchase of property and equipment                                                                 |  |              | (33,489   
|Purchase of marketable securities                                                                  |  |              | (31,587   
|Sale of marketable securities                                                                      |  |              | 297,002   
|Investment in SL Power Concerts                                                                    |  |              | (50,000   
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                                |  |              | 181,151   
|                                                                                                   |  |              |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                              |  |              |           
|Repayment of loans payable                                                                         |  |              |           
|Proceeds from subscriptions receivable                                                             |  |              | 8,455     
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                          |  |              | 8,455     
|                                                                                                   |  |              |           
|NET DECREASE IN CASH                                                                               |  |              | (88,874   
|Cash and cash equivalents at beginning                                                             |  |              | 340,305   
|Cash and cash equivalents at end of the year                                                       |  | $            | 251,431   
|Supplemental disclosures of cash flow information:                                                 |  |              |           
|Income taxes paid in cash                                                                          |  | $            | 10,800    



See Report of the Independent Registered Public Accounting Firm and the accompanying notes to consolidated financial statements.



20







POW! ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT

Years Ended December 31, 2012 and December 31, 2011





|                                          |  |  | Common Stock |  |  |   | Accumulated Other Comprehensive Income |  |  |   | Additional Paid-in Capital |   |  |   | Subscription Receivable |   |  |   | Accumulated Deficit |   |  |   | Total       |  
|----------------------------------------- |  |  | ------------ |  |  | - | -------------------------------------- |  |  | - | -------------------------- | - |  | - | ----------------------- | - |  | - | ------------------- | - |  | - | ----------- | -
|                                          |  |  | Shares       |  |  |   | Amount                                 |  |  |   |                            |   |  |   |                         |   |  |   |                     |   |  |   |             |  
|                                          |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   |                         |   |  |   |                     |   |  |   |             |  
|Balance, December 31, 2010                |  |  | 131,721,534  |  |  | $ | 131,722                                |  |  | $ | -                          |   |  | $ | 9,453,956               |   |  | $ | (1,033,497          | ) |  | $ | (12,224,802 | )
|Proceeds from subscriptions receivable    |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   |                         |   |  |   | 31,001              |   |  |   |             |  
|Non-employee warrants and options         |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   | 29,403                  |   |  |   |                     |   |  |   |             |  
|Cashless conversion for options           |  |  | 227,214      |  |  |   | 227                                    |  |  |   |                            |   |  |   | (227                    | ) |  |   |                     |   |  |   |             |  
|Common Stock issuance for future services |  |  | 658,608      |  |  |   | 659                                    |  |  |   |                            |   |  |   | 39,772                  |   |  |   |                     |   |  |   |             |  
|Accumulated other comprehensive income    |  |  |              |  |  |   |                                        |  |  |   | (44,941                    | ) |  |   |                         |   |  |   |                     |   |  |   |             |  
|Net income                                |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   |                         |   |  |   |                     |   |  |   | 24,628      |  
|Balance, December 31, 2011                |  |  | 132,607,356  |  |  | $ | 132,608                                |  |  | $ | (44,941                    | ) |  | $ | 9,522,904               |   |  | $ | (1,002,496          | ) |  | $ | (12,200,174 | )
|Proceeds from subscriptions receivable    |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   |                         |   |  |   | 8,455               |   |  |   |             |  
|Write off subscription receivable         |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   |                         |   |  |   | 994,041             |   |  |   |             |  
|Common Stock issuance for future services |  |  | 500,000      |  |  |   | 500                                    |  |  |   |                            |   |  |   | 61,822                  |   |  |   |                     |   |  |   |             |  
|Accumulated other comprehensive income    |  |  |              |  |  |   |                                        |  |  |   | 49,111                     |   |  |   |                         |   |  |   |                     |   |  |   |             |  
|Net loss                                  |  |  |              |  |  |   |                                        |  |  |   |                            |   |  |   |                         |   |  |   |                     |   |  |   | (1,847,806  | )
|Balance, December 31, 2012                |  |  | 133,107,356  |  |  | $ | 133,108                                |  |  | $ | 4,170                      |   |  | $ | 9,584,726               |   |  | $ | -                   |   |  | $ | (14,047,980 | )



See Report of the Independent Registered Public Accounting Firm and the accompanying notes to consolidated financial statements.





21







POW! ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



| | 1. | The Company and Basis of Presentation
| | -- | -------------------------------------



Business Activity and Organization--The Company
is a Delaware corporation, incorporated on August 17, 1998.POW! Entertainment, Inc. ("POW", "Company",
“we”) has the following subsidiaries: POW! Entertainment, LLC (the operating company), QED Productions, LLC, PFD,
LLC, SL Power Concerts, LLC (50% equity interest) and an inactive Delaware corporation: Pharmelle, Inc.



QED Productions, LLC was formed in 2001 to acquire
rights to license intellectual properties and creative assets of Mr. Stan Lee stemming from the bankruptcy of Stan Lee Media (“SLM”).
The Company was not required to contribute any up-front consideration. The Company agreed with SLM that it would share revenue
generated from the licensing of these properties. From the fiscal years ended December 31, 2001 to December 31, 2010, approximately
$2,200 of revenue has been generated for SLM and approximately $14,000 of revenue has been generated for the Company. No revenues
from the intellectual properties acquired by QED were earned for the year ended December 31, 2012 and 2011, respectively. Given
the minimal revenues to date and the fact that none of the properties owned by QED are currently in development, the Company has
valued these assets at $0.



The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company's assets
and the satisfaction of its liabilities in the normal course of conducting its business. The Company's ability to continue as a
going concern is dependent upon various factors including, among others, its ability to generate income and positive cash flows
from operations. As described under Revenue Recognition below, the Company is expected to receive monthly payments totaling
$2,500,000 per year until year 2014. Although there is no assurance that we will be able to continue as a going concern, we believe
these payments will help generate positive cash flows, and with a combined balance of cash and marketable securities of approximately
$825,000, we will be able to sustain our operations for at least 12 months. Accordingly, the financial statements do not include
any adjustments to reflect the possible future effects on the recoverability or classification of assets and liabilities that may
result should we not be able to continue as a going concern.



| | 2. | Summary of Significant Accounting Policies
| | -- | ------------------------------------------



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



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



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



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



The Company also recognized revenues for the year
ended December 31, 2011 for film rights sold to a third party for $500,000. The Company established that revenue for the project
was earned after the copyright was filed with the US copyright office to be transferred to the third party pursuant to the purchase
contract. There was no such revenue in 2012.



Related Party— From time to time, Stan
Lee has appeared and will continue to appear at certain events or projects for which both he and the Company receive payments.
Payments related to 2011 to Mr. Lee amounted to approximately $31,000. There were no such payments during 2012.





22







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

The Company recorded the full $550,000 for the years
ended December 31, 2012 and 2011, respectively, as advances payable pursuant to the contractual clause in which the advances are
recoupable by Silver Creek solely from any fixed and contingent compensation related to future developments, including box office
bonuses and merchandising royalties. The Company has not met the performance measurement of the revenue and accordingly has not
recorded the payments as revenue. In addition, any properties that Silver Creek rejects or accepts and subsequently abandons may
be offered by the Company elsewhere subject to participation by Silver Creek.  Depending on the nature of the project
so offered to a third party and the time when such project was originally offered to Silver Creek, Silver Creek is entitled to
receive up to $100,000 per project, and the assignment of 50% or 25% of the Company’s compensation from the third-party producer.



For the year ended December 31, 2011, the Company
offset $50,000 against advances for professional services provided by Mr. Stan Lee related to a Silver Creek project considered
completed after Mr. Lee met his professional obligations to the project. The Company also remitted to Silver Creek $100,000 pursuant
to the advances payable referenced above for the film rights sold to a third party. There were no such offset for services during
2012.



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



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



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



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



Property and Equipment--Property and equipment
are stated at cost.  Depreciation is provided for using the straight-line method over the estimated useful lives of the
assets over five years.For the years ended December 31, 2012 and 2011, depreciation expenses were $2,178 and $3,329, respectively.



Investment in SL Power
Concerts—The Company formed a joint venture with a third party for 50% equity ownership with an investment of
$50,000. The investment was accounted for under the GAAP equity method. There were current assets of $100,000 with no
liabilities as of December 31, 2012. The joint venture did not have revenues or expenses for the year ended December 31,
2012.



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



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



Intellectual Property--Intellectual property
consisted of trademarks registered with the US Patent and Trademark Office. Trademarks are being amortized over 10 years to 20
years. Amortization expense was $1,319 and $10,983 for the year ended December 31, 2012 and 2011, respectively.





23







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



| | 1. | Level I – Quoted prices in active markets for identical assets and liabilities.
| | -- | -------------------------------------------------------------------------------

| | 2. | Level II – Other significant observable inputs for assets or liabilities through corroboration with market data at measurement
date,
| | -- | ------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Level III – Significant unobservable inputs that reflect management’s best estimate of what market participants
would use to price assets or liabilities at the measurement date.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



The following table summarizes fair value measurements
by level at December 31, 2012 for assets and liabilities measured at fair value on a recurring basis:



|                      |  | Level I |         |  | Level II |  |  | Level III |  |   | Total  | 
|--------------------- |  | ------- | ------- |  | -------- |  |  | --------- |  | - | ------ | 
|Cash                  |  | $       | 251,431 |  |          |  |  |           |  |   |        | 
|Letter of credit      |  | $       | 32,544  |  |          |  |  |           |  |   |        | 
|Marketable securities |  | $       | 540,813 |  |          |  |  |           |  |   |        | 
|Derivatives liability |  |         |         |  |          |  |  |           |  | $ | 31,032 | 



The table below sets forth a summary of changes in
fair value of the Company’s Level III liabilities for the year ended December 31, 2012.



|Balance as of December 31, 2011 |  |  | $ | 28,763 | 
|------------------------------- |  |  | - | ------ | 
|Change in Value                 |  |  |   | 2,269  | 
|Balance as of December 31, 2012 |  |  | $ | 31,032 | 



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



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



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





24







The Company adopted guidance issued by the FASB that
clarifies the accounting for uncertainties in income taxes recognized in an enterprise's financial statements and prescribes a
recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is
more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position
and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest
and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties totaled $0 for the years ended
December 31, 2012 and 2011.



Earnings Per Share-Basic earnings per share
is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding.
Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the potential common share equivalents had been issued
and if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is
anti-dilutive. For the year ended December 31, 2012, the diluted earnings per share are the same as basic earnings per share as
the 1,300,000 warrants outstanding would have an anti-dilutive effect. For year ended December 31, 2011, diluted earnings per share
is illustrated below:



|                                                |  | Year Ended        |            
|----------------------------------------------- |  | ----------------- | -----------
|                                                |  | December 31, 2011 |            
|Numerator -                                     |  |                   |            
|Net income attributable to common               |  |                   |            
|Shareholders                                    |  | $                 | 24,628     
|Denominator -                                   |  |                   |            
|Weighted-average number of common               |  |                   |            
|Shares outstanding during the period            |  |                   | 132,219,329
|Dilutive effect of stock options and warrants   |  |                   | 8,892      
|Common stock and common stock                   |  |                   |            
|Equivalents used for diluted earnings per share |  |                   | 132,228,221



Valuation of Derivative Instruments--ASC 815-40
(formerly SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities”)  requires that embedded
derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance
date and in accordance with ASC 815-40-15 (formerly EITF 00-19 “Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company’s Own Stock”) to determine whether they should be considered a derivative liability
and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes
option pricing formula. At December 31, 2012, the Company adjusted its derivative liability to its fair value, and reflected the
increase of $2,269, which represents the gain on change in derivative.



Loss on Sale of Marketable Securities—The
Company sold marketable securities for net proceeds of $297,002 during the year ended December 31, 2012. Loss on sale of marketable
securities totaled $14,060.



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



Concentrations—The Company has one major
customer that individually exceeded 10% of total revenue and accounted for 94% for the year ended December 31, 2012. The Company
has two major customers that individually exceeded 10% of total revenue and accounted for 88% for the year ended December 31, 2011.



One customer who is not a major customer accounted
for 91% of total accounts receivable as of December 31, 2012.

Two customers who are not major customers accounted
for 100% of total accounts receivable as of December 31, 2011.



Recently Issued or Newly Adopted Accounting Standards--In
December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments in this
update require enhanced disclosures around financial instruments and derivative instruments that are either (1) offset in
accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or
similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. An entity
should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The amendments
are effective during interim and annual periods beginning after December 31, 2012. The Company does not expect this guidance to
have a material impact on its consolidated financial position, results of operations or cash flows.





25







In July 2012, the FASB issued ASU 2012-02, Testing
Indefinite-Lived Intangible Assets for Impairment, which amended the guidance in ASU 2011-08 to simplify the testing of indefinite-lived
intangible assets other than goodwill for impairment. ASU 2012-02 becomes effective for annual and interim impairment tests performed
for fiscal years beginning on or after September 15, 2012 and earlier adoption is permitted. The Company does not expect this guidance
to have a material impact on its consolidated financial position, results of operations or cash flows.



| | 3. | Subscription Receivable
| | -- | -----------------------



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



On November 15, 2005, another subscription for
shares equal to the principal amount of $525,000 was entered into, fully amortized over thirty years with the interest rate
of 5% per annum.  The subscription is payable in equal monthly payments of $2,818.  The payments on the
subscription were defaulted during the years 2005 to August 2010. Three payments totaling $8,455 were received at the
beginning of 2012. On December 31, 2012, the Company determined that the subscription was again in default and wrote off the
remaining balance of the receivable.  An agreement was reached during the first quarter 2013 for the promissory note to be returned to the
shareholder and the common stock held by the shareholder would be returned to the Company.  The returned shares are treated by the Company as authorized but unissued shares during
the first quarter 2013.



| | 4. | Deferred Compensation
| | -- | ---------------------



Deferred compensation consists of accrued but unpaid
salaries of executives, which will be paid as the Company increases its cash, over time, or by obtaining additional financing.  The
balance at December 31, 2012 reflects a repayment of $200,000 during the year ended December 31, 2012.



| | 5. | Other Receivable—Related Party
| | -- | ------------------------------



During March 2011, the Company entered into an agreement
with a minority shareholder, who is also a former employee, to loan the individual an amount totaling $66,668. The loan is non-interest
bearing and is collateralized by the stock of the Company already owned by such shareholder. At December 31, 2012, the balance
of the receivable was $66,668. The receivable is considered to be in default and the Company recorded an allowance for the full
amount.



| | 6. | Share-based Compensation
| | -- | ------------------------



On March 15, 2010, the Company granted warrants to
purchase a total of 1,300,000 shares of common stock to two of its executives, 650,000 shares each. The warrants vested immediately
and are exercisable for five years from the date of issuance, at a strike price of $0.40 per share. The warrants were issued in
conjunction with Deferred Compensation Agreements entered into which limits payment of the outstanding deferred compensation to
the two executives. These warrants have an anti-dilution clause, whereby the exercise price can be adjusted downward in the event
equity is raised at a price lower than $0.40 per share. The outstanding number of warrants at December 31, 2012 was 1,300,000 shares.



| | 7. | Restricted Stock Grant
| | -- | ----------------------



On June 1, 2011, the Company granted restricted stock
to an employee. The agreement called for grants of common stock priced at $0.17 per share, which was the closing market price,
equal to 0.05% of the Company’s outstanding shares or 658,608 shares to be vested equally each on December 1, 2011, 2012
and 2013. Future expenses related to this grant are expected to be approximately $35,000 for the year 2013.



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



26







The Company adopted the guidance provided by ASC 718
to measure and to record the expense over the requisite service period for the entire award. Stock-based compensation recognized
by the Company for the year ended December 31, 2012 amounted to $62,322.



|Non-Vested Shares             |  | Shares |         
|----------------------------- |  | ------ | --------
|Non-vested shares at 12/31/11 |  |        | 439,072 
|Granted                       |  |        | 500,000 
|Vested                        |  |        | (719,536
|Non-vested shares at 12/31/12 |  |        | 219,536 



| | 8. | Warrants and Options for Non-Employees
| | -- | --------------------------------------



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



Total expense related to the investor relations’
options during the year ended December 31, 2011 was $29,403.



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



a)      
Cash exercise price = 622,500 option shares x $0.1905 (exercise price) = $118,586

b)      
Shares needed to pay for exercise price = $118,586 cash exercise price/ $0.30 (closing market price on 7/13/11) = 395,286 shares

c)      
Shares to issue per option exercise = 622,500 shares - 395,286 shares = 227,214 shares



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





A gain on change in derivative liability was recorded
to reflect an increase of $2,269 for the year ended December 31, 2012.



The fair value of stock warrants and options at the
date of grant and derivative liability were estimated using the Black-Scholes option-pricing model, based on the following assumptions
for the year ended December 31, 2012:



|Risk-free
    interest rate |  |  | 0.72                                                                                         | %
|--------------------------- |  |  | -------------------------------------------------------------------------------------------- | -
|Expected life               |  |  | 5
                                                                                      year |  
|Expected Volatility         |  |  | 192.0                                                                                        | %
|Dividend yield              |  |  | 00.0                                                                                         | %



| | 9. | Income taxes
| | -- | ------------



The Company files income tax returns with the Internal
Revenue Service (“IRS”) and various state jurisdictions. For jurisdictions in which tax filings are prepared, the
Company is subject to income tax examinations by state tax authorities and federal tax authorities for all tax years.



The deferred tax assets are mainly comprised of net
loss carryforwards and expenses not currently deductible. The Company has Federal net loss carryforwards of approximately $6.7
million that expires through 2032. The net loss carryforwards can be used to offset a certain amount of taxable income in future
years, therefore generating deferred income tax assets. The net loss carryforwards are subject to significant limitations by Section
382 of IRS code due to changes in ownership.





27







A reconciliation of the provision for income tax expense
with the expected income tax computed by applying the federal statutory income tax rate to income before provision for income taxes
was as follows for the years ended December 31, 2012 and 2011:



|                                                  |  |   | 2012     |   |  |   | 2011    |  
|------------------------------------------------- |  | - | -------- | - |  | - | ------- | -
|                                                  |  |   |          |   |  |   |         |  
|Income tax computed at federal statutory tax rate |  | $ | (624,582 | ) |  | $ | 13,247  |  
|Non-deductible expenses                           |  |   | 360,641  |   |  |   | 17,986  |  
|Change in valuation allowance                     |  |   | 312,905  |   |  |   | (34,677 | )
|State taxes, net of federal benefit               |  |   | (38,164  | ) |  |   | 17,778  |  
|Total expense                                     |  | $ | 10,800   |   |  | $ | 14,334  |  



At December 31, 2012, based on the weight of available
evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it
was more likely than not that its deferred tax assets of approximately $3.7 million would not be realized. Accordingly, the Company
has recorded a valuation allowance equal to 100% of its total deferred tax assets.



| | 10. | Commitments and Contingencies
| | --- | -----------------------------



Operating leases



The Company has an operating lease agreement for its
corporate office facility, which expires on June 30, 2016.  The lease contains a 6.5 month of rent abatement. Future minimum
rental payments are as follows:



|Year ended December 31 |  |   |        
|---------------------- |  | - | -------
|2013                   |  |   | 103,000
|2014                   |  |   | 106,000
|2015                   |  |   | 110,000
|2016                   |  |   | 57,000 
|Thereafter             |  |   | -      
|Total                  |  | $ | 376,000



Total lease expense was $114,137 and $134,716
for the years ended December 31, 2012 and 2011, respectively.



Legal Proceedings



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



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



Item 9-Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure



None



Item 9A-Controls and Procedures



Evaluation of Disclosure Controls and Procedures



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





28







As required by Rule 13a-15 under the Securities Exchange Act
of 1934, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures. Under the direction of our Chief Executive Officer, we evaluated our disclosure
controls and procedures and concluded that our disclosure controls and procedures were not effective as of December 31, 2012. We
have disclosed to our auditors and the Board of Directors the following material weakness of our internal controls which renders
our disclosure controls and procedures ineffective:



| | · | Lack of sufficient accounting staff to segregate duties necessary for an adequate framework of internal control and reporting; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| | · | Lack of independent Board of Directors.
| | - | ---------------------------------------



Management’s Report on Internal
Control over Financial Reporting

Management is responsible for establishing
and maintaining adequate internal control over our financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange
Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles
generally accepted in the United States of America.

The Company’s internal control
over financial reporting includes those policies and procedures that



| | · | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

The Company assessed the effectiveness
of its internal control over financial reporting as of December 31, 2012. In making this assessment, management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated
Framework.



Based upon management’s assessment
using the criteria contained in COSO, and for the reasons discussed below, management has concluded that, as of December 31, 2012,
our internal control over financial reporting was not effective.



Based on its evaluation, the Company's
President and Chief Financial Officer identified a major deficiency that existed in the design or operation of its internal control
over financial reporting that it considers to be a “material weakness”. The Public Company Accounting Oversight Board
has defined a material weakness as a “significant deficiency or combination of significant deficiencies that results in more
than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.”
The material weaknesses was first identified at the beginning of 2010 and remained unchanged through December 31, 2012 and is as
follows:



| | · | Lack of segregation of duties due to the size of the accounting department as a result of the Company’s limited resources; and
| | - | ------------------------------------------------------------------------------------------------------------------------------



| | · | Lack of independent Board of Directors.
| | - | ---------------------------------------



There were no changes in the Company’s internal controls
over financial reporting during the most recently completed fiscal year that have materially affected or are reasonable likely
to materially affect the Company’s internal control over financial reporting.



Item 9B- Other Information



None





29







PART III



Item 10-Directors, Executive Officers, and Corporate Governance



Our directors, executive officers and other significant employees,
their ages and positions are as follows:



|Name          |  | AGE |    |  | Position with the Company
|------------- |  | --- | -- |  | -------------------------
|Stan Lee      |  |     | 90 |  |                          
|Gill Champion |  |     | 71 |  |                          
|Bick Le       |  |     | 39 |  |                          



Stan Lee -- Chairman of the Board, Director
and Chief Creative Officer



Stan Lee has served as the Company’s Chairman of the Board
and Chief Creative Officer since 2004. Prior to that, in 2001, Mr. Lee co-founded POW! Entertainment, LLC with Mr. Champion and
the late Arthur Lieberman, which was acquired by the Company in 2004. Mr. Lee also has a non-exclusive, part-time employment agreement
with Marvel Entertainment, LLC and serves as its Chairman Emeritus. Mr. Lee was the Chairman of the Board of Directors and Chief
Creative Officer of Stan Lee Media, Inc. (“SLM”) from July 1999 until approximately January 2001.  SLM filed
for bankruptcy protection in February 2001 and terminated operations in July 2001. Mr. Lee was employed on a full time basis by
Marvel Comics or its predecessor entities for over 50 years.  Mr. Lee started in the comic book industry in 1940 when
he started with Timely Comics which eventually became Marvel Comics. Stan Lee's co-creations include Spider-ManTM 1
, The Incredible HulkTM 1 , X-MenTM 1 , The Fantastic FourTM 1
, Iron Man TM1 , DaredevilTM 1 , Silver SurferTM 1 and Dr.
StrangeTM 1 .



1 These are the registered trademarks and characters
of Marvel Characters, Inc.



Gill Champion -- President, Director and Chief Executive
Officer



Gill Champion is the President and, since January 26, 2011,
Chief Executive Officer and a director of the Company. Previously, he served as President and Chief Operating Officer of the Company
since 2004. Prior to 2001, Mr. Champion co-founded POW! Entertainment LLC with Mr. Lee and the late Arthur Lieberman, which was
acquired by the Company in 2004. He has been executive producer on all Company projects and continues to supervise their development.
Mr. Champion was Chief Operating Officer of SLM from July 1999 until June 2001. SLM filed for bankruptcy protection in February
2001. Mr. Champion has over 30 years of executive experience in global entertainment, marketing, retail and licensing industries.
 Prior to SLM, he was COO and Vice President of Mirage Holdings, Inc. and concurrently worked as a production executive on
the motion picture Jinnah. Mr. Champion was CEO and Chairman of American CinemaStores, Inc., a public company that operated approximately
150 location-based retailing outlets and an extensive apparel division that created designs and marketing strategies for Baywatch
and Forrest Gump.  Mr. Champion was executive in charge of Faerie Tale Theatre with Shelley Duvall while Vice President
of Gaylord Productions.  He was the Producer for Fort Apache the Bronx with Paul Newman and won the Producer of the Year
Award in 1981.  In addition, he was in charge of production for The Shining and The Boys from Brazil, while Vice President
of the Producers Circle Company.



Bick Le, Chief Financial Officer



Bick Le joined the Company in December
2010. Prior to joining the Company, Ms. Le served as Manager of Financial Reporting at the apparel company Frederick’s of
Hollywood for three years and spent five years at Fineman, West & Company, a boutique CPA firm located in Beverly Hills.



To the best of the Company’s knowledge, during the past
ten years, except as described herein and Item 3, none of the following occurred with respect to a present or former director or
executive officer of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general
partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in
a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Securities
and Exchange Commission or the commodities futures trading commission to have violated a Federal or state securities or commodities
law, and the judgment has not been reversed, suspended or vacated.



Committees of the Board of Directors



We presently do not have an audit committee, compensation committee,
or other committee or committees performing similar functions.





30







Family Relationships



There are no family relationships among our directors or officers.



Shareholder Communications



Although we do not have a formal policy regarding communications
with the Board, shareholders may communicate with the Board by writing to the POW! Entertainment, Inc., 9440 Santa Monica
Boulevard, #620, Beverly Hills California 90120, Attention Gill Champion.  Shareholders who would like their submission
directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16(a) of the Securities Exchange Act of 1934, as amended
(“Exchange Act”), requires our officers, directors and persons who beneficially own more than ten percent of our common
stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). These
reporting persons are also required to furnish us with copies of all Section 16(a) forms they file. The obligation to make such
filing commenced February 8, 2011.



Code of Ethics



The Company has not adopted a Code of Ethics.
Given the small size of the Company and the fact that the Board of Directors and senior executives are the same individuals, the
Company believes that the fiduciary duties imposed by Delaware General Corporation Law provides sufficient protection to the shareholders.



ITEM 11.  Executive Compensation



Summary Compensation Table



|Name and Principal Position      |  | Year |  | Salary ($) |         |  | Bonus 
($) |  |  | Stock 
Grant
$ (5) |  |   | Nonqualified Deferred 
Compensation 
Earnings ($)(1) |  |  | All
    other Compensation ($) |         |  | Total ($) |  
|-------------------------------- |  | ---- |  | ---------- | ------- |  | ---------- |  |  | ------------------ |  | - | ---------------------------------------------------- |  |  | ------------------------------ | ------- |  | --------- | -
|Stan Lee, Chairman of the Board, |  | 2012 |  | $          | 300,000 |  |            |  |  |                    |  |   |                                                      |  |  | $                              | 100,000 |  |           |  
|Chief Creative Officer           |  | 2011 |  | $          | 300,000 |  |            |  |  |                    |  |   |                                                      |  |  | $                              | 50,000  |  |           |  
|                                 |  |      |  |            |         |  |            |  |  |                    |  |   |                                                      |  |  |                                |         |  |           |  
|Gill Champion, President, Chief  |  | 2012 |  | $          | 475,000 |  |            |  |  |                    |  |   |                                                      |  |  |                                |         |  |           | $
|Executive Officer, Director      |  | 2011 |  | $          | 475,000 |  |            |  |  |                    |  |   |                                                      |  |  |                                |         |  |           | $
|                                 |  |      |  |            |         |  |            |  |  |                    |  |   |                                                      |  |  |                                |         |  |           |  
|Bick Le, Chief Financial Officer |  | 2012 |  | $          | 175,000 |  |            |  |  |                    |  | $ | 62,322                                               |  |  |                                |         |  |           |  
|                                 |  | 2011 |  | $          | 141,667 |  |            |  |  |                    |  | $ | 40,431                                               |  |  |                                |         |  |           |  



| | (1) | Includes payments for compensation previously deferred during the period from 2001 through 2008. No interest was paid on any of the deferred compensation.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Included in this amount is $100,000 of deferred compensation pursuant to the employment contract referenced above.
| | --- | ------------------------------------------------------------------------------------------------------------------



| | (3) | Payment for accrued vacation for prior years but never taken.
| | --- | -------------------------------------------------------------



| | (4) | Payments for monthly automobile expenses.
| | --- | -----------------------------------------



| | (5) | Restricted stock grants in June 2011 and June 2012.
| | --- | ---------------------------------------------------



In 2010 under his employment agreement, Mr. Lee’s salary
was increased to $300,000 per annum, he was no longer required to defer any part of his ongoing salary and the Company began paying
his accrued deferred salary at the rate of $50,000 per year.  In consideration for Stan Lee and Arthur Lieberman agreeing
to restrict payment of their deferred compensation as provided for in the Deferred Compensation Agreement, each received a warrant
to purchase 650,000 shares of Common Stock, which is exercisable for five years at a price of $0.40 per share.  In additional
to his compensation from the Company, Stan Lee has a lifetime employment agreement with Marvel, which currently requires Stan Lee
to devote 10-15 hours per week to Marvel matters, and in return for which Stan Lee currently receives a salary. At the end of 2011,
the employment agreement was amended to pay deferred compensation at the rate of $100,000 per year commencing in 2012. The Amendment
to the employment agreement was filed as an exhibit to the Company’s Form 10-K.





31







In 2010 under his employment agreement, Mr. Champion’s
salary was increased to $475,000 per annum, but he is required to defer $100,000 yearly until the Company obtains $2,000,000 of
additional investment. During 2011, an amended agreement no longer required the deferral of $100,000 per annum. The deferred compensation
balance at December 31, 2012 was $100,000. The Amendment to the employment agreement was filed as an exhibit to the Company’s
Form 10-K.



Outstanding Equity Awards at Fiscal Year-End



The following table summarizes the outstanding equity awards
as of December 31, 2012 for each of the named executive officers:



|         |  | Warrants Awards                                                     |         |  | Stock Awards                          | 
|-------- |  | ------------------------------------------------------------------- | ------- |  | ------------------------------------- | 
|Name     |  | Number of Securities Underlying Unexercised Exercisable warrant (#) |         |  | Warrants Exercise Price Per Share ($) | 
|         |  |                                                                     |         |  |                                       | 
|Stan Lee |  |                                                                     | 650,000 |  |                                       | 
|         |  |                                                                     |         |  |                                       | 
|Bick Le  |  |                                                                     |         |  |                                       | 



The warrants vest immediately on grant date of March 15, 2010.
All warrants are still outstanding as of December 31, 2012.



Director Compensation .



None of the Company’s Directors is
paid for serving on its Board of Directors.



Item 12. Security Ownership of Certain
Beneficial Owners and Management



Security Ownership of Certain Beneficial Owners .



The following tables set forth information as of March 5, 2013,
with respect to the beneficial ownership of the outstanding shares of the Company’s Common Stock by: (i) each person known
by the Company to beneficially own five percent or more of the outstanding shares; (ii) executive officers and directors; and (iii)
all executive officers and directors as a group.  A person is deemed to be a beneficial owner of any securities of which
that person has the right to acquire beneficial ownership within sixty (60) days.





|Name and Address of Owner                                                                         |  | Amount and Natureof  Beneficial Owner |            |  | Percentage (%)Of Class | 
|------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ---------- |  | ---------------------- | 
|                                                                                                  |  |                                       |            |  |                        | 
|Directors and Executive Officers                                                                  |  |                                       |            |  |                        | 
|Stan Lee (1) (2)(3)9440 Santa Monica Blvd, #620Beverly Hills, CA 90210                            |  |                                       | 33,353,273 |  |                        | 
|                                                                                                  |  |                                       |            |  |                        | 
|Gill Champion (1)(2)(9)9440 Santa Monica Blvd, #620Beverly Hills, CA 90210                        |  |                                       | 24,739,998 |  |                        | 
|                                                                                                  |  |                                       |            |  |                        | 
|Bick Le (1)9440 Santa Monica Blvd, #620Beverly Hills, CA 90210                                    |  |                                       | 939,072    |  |                        | 
|                                                                                                  |  |                                       |            |  |                        | 
|Total shares owned by Executive Officers and Directors (5) (9)                                    |  |                                       | 59,032,343 |  |                        | 
|                                                                                                  |  |                                       |            |  |                        | 
|5% Shareholders                                                                                   |  |                                       |            |  |                        | 
|The POW! Entertainment Trust (6)9440 Santa Monica Blvd, #620Beverly Hills, CA 90210               |  |                                       | 8,796,353  |  |                        | 
|                                                                                                  |  |                                       |            |  |                        | 
|The Estate of Arthur Lieberman (4)(8)9440 Santa Monica Blvd,#620Beverly Hills, CA 90210           |  |                                       | 18,911,538 |  |                        | 
|                                                                                                  |  |                                       |            |  |                        | 
|Catalyst Investments, LLC(7)c/o The Walt Disney Company500 South Buena Vista StBurbank, CA, 91521 |  |                                       | 13,172,153 |  |                        | 





32







| | (1) | Executive Officer of the Company.
| | --- | ---------------------------------



| | (2) | Director of the Company.
| | --- | ------------------------



| | (3) | Includes 32,703,273 shares held by the Joan B. Lee Gift Trust that may be deemed to be beneficially owned by Stan Lee as trustee.  Includes in shares deemed held by Stan Lee, and the total deemed outstanding for the purposes of calculating Stan Lee’s percentage, 650,000 shares which Stan Lee has the right to purchase at $0.40 per share pursuant to a warrant issued to him in connection with a Deferred Compensation Agreement dated March 15, 2010.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Includes in shares deemed held by Arthur Lieberman, and the total deemed outstanding for the purposes of calculating Arthur Lieberman’s percentage, 650,000 share which Arthur Lieberman has the right to purchase at $0.40 per share pursuant to a warrant issued to him in connection with a Deferred Compensation Agreement dated March 15, 2010.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Includes shares held by the Joan B. Lee Gift Trust that may be deemed to be beneficially owned by Stan Lee as trustee.  Includes in shares deemed outstanding and for the purposes of calculating the percentage owned by all Executive Officers and Directors the shares that Stan Lee has the right to purchase pursuant to the Warrants described in footnote (3) above.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Shares held in trust by third party trustee, Paul G. Sessler.
| | --- | -------------------------------------------------------------



| | (7) | Catalyst Investments, LLC is affiliated with The Walt Disney Company.
| | --- | ---------------------------------------------------------------------



| | (8) | Arthur Lieberman was the late Chief Operating Officer and Chief Legal Officer. He passed away on May 1, 2012.
| | --- | -------------------------------------------------------------------------------------------------------------



| | (9) | Includes shares held by his wife, Claudia Adelman, that may be deemed to be beneficially owned by Gill Champion. Gill Champion disclaims beneficial ownership of the shares owned by Claudia Adelman.  Includes shares deemed outstanding and for the purposes of calculating the percentage owned by all Executive Officers and Directors.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 13. Certain Relationships and Related
Transactions, and Director Independence



Certain Relationships and Related Transactions .



At December 31, 2012, the Company owed Messrs Lee and Champion
$932,500 and $100,000 for compensation which had been deferred without interest during prior periods dating back to 2001.



The employment agreements for Messrs Lee and Champion are described
in Item 11 above. Copies of such agreements have been filed as exhibits to the Company’s Form 10-K.



From time to time, Stan Lee has appeared and will continue to
appear at certain events or projects for which both he and the Company receive payments. Payments related to 2011 to Mr. Lee amounted
to approximately $31,000. There were no such payments during 2012. The Company believes that his ability to appear at these events
enhances the Company’s brand without additional costs to the Company.





33







Director Independence



Our Board has determined that none of our directors are independent
under the NASDAQ Stock Market listing rules.



Item 14. Principal Accountant Fees and
Services.



Rose, Snyder & Jacobs LLP serve as
our independent registered public accounting firm and their report on the Company’s audited financial statements is included
in Item 8 above for the years ended December 31, 2012 and 2011. The aggregate fees billed by the Rose, Snyder & Jacobs LLP
for professional services rendered for the audited financial statements and other services are as follows for the years ended December
31, 2012 and 2011:



|           |  | 2012 |        |  | 2011 |  
|---------- |  | ---- | ------ |  | ---- | -
|           |  |      |        |  |      |  
|Audit fees |  | $    | 50,000 |  |      | $
|Tax fees   |  |      | 8,200  |  |      |  
|Total      |  | $    | 58,200 |  |      | $



The Company currently does not have an
audit committee. All audit and non-audit services are approved by the Board of Directors.



PART IV



ITEM 15. Exhibits and Financial Statement Schedules.



The following documents are filed as a part of this report or
incorporated herein by reference:

| | 1) | Our Consolidated Financial Statements are contained found in response to Item 8 of this Form 10-K.                                 
| | -- | -----------------------------------------------------------------------------------------------------------------------------------
| | 2) | Financial Statement Schedules, none                                                                                                
| | 3) | See Exhibit Index included as the last part of this report on this Form 10-K, which index is incorporated herein by this reference.





34







SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



|October 1, 2013 | POW! Entertainment, Inc.
|--------------- | ------------------------
|                |                         
|                | By:                     
|                |                         
|                |                         



Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.



|/s/ GILL CHAMPION | President, Director, Chief Executive Officer | October 1, 2013
|----------------- | -------------------------------------------- | ---------------
|Gill Champion     | (Principal Executive Officer)                |                
|                  |                                              |                
|/s/ STAN LEE      | Chairman and Chief Creative Officer          | October 1, 2013
|Stan Lee          |                                              |                
|                  |                                              |                
|/s/ BICK LE       | Chief Financial Officer                      | October 1, 2013
|Bick Le           | (Principal Financial Officer)                |                





35







|Exhibit No. |  | Exhibit Index                                                                                                                                                     | Method of Filing                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------
|            |  |                                                                                                                                                                   |                                                                                
|3.1         |  | Restated Certificate of Incorporation of POW! Entertainment, Inc., dated December 6, 2010                                                                         | Incorporated by reference as Exhibit 3.1 to Form 10 filed December 10, 2010    
|            |  |                                                                                                                                                                   |                                                                                
|3.2         |  | By-Laws of POW! Entertainment Inc., as amended and restated effective June 11, 2012                                                                               | Incorporated by reference as Exhibit 3.3 to Form 8-K filed June 14, 2012       
|            |  |                                                                                                                                                                   |                                                                                
|4.1         |  | Form of Warrant granted to the Stanley L. Compton, Trustee of the Compton Family Trust dated April 11, 1988                                                       | Incorporated by reference as Exhibit 4.1 to Form 10 filed December 10, 2010    
|            |  |                                                                                                                                                                   |                                                                                
|4.2         |  | Form of Warrant Agreement granting warrants to Arthur Lieberman and Stan Lee                                                                                      | Incorporated by reference as Exhibit
4.2 to Form 10 filed December 10, 2010    
|            |  |                                                                                                                                                                   |                                                                                
|4.3         |  | Amendment to Form of Warrant granted to The Stanley L. Compton, Trustee of the Compton Family Trust dated April 11, 1988                                          | Incorporated by reference as Exhibit 4.3 to Form 10-K filed March 29, 2013.    
|            |  |                                                                                                                                                                   |                                                                                
|10.1        |  | Overall Agreement Dated as of March 20, 2006 Between Silver Creek Pictures, Inc. and POW! Entertainment, Inc. For Services of Stan Lee (“Silver Creek Agreement”) | Incorporated by reference as Exhibit 10.1 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.2        |  | Amendment Letter to Silver Creek Agreement, dated March 20, 2006                                                                                                  | Incorporated by reference as Exhibit 10.2 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.3        |  | Amendment Letter to Silver Creek Agreement, dated September 12, 2006                                                                                              | Incorporated by reference as Exhibit 10.3 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.4        |  | Amendment Letter to Silver Creek Agreement, dated March 13, 2007 (“Second Amendment”)                                                                             | Incorporated by reference as Exhibit 10.4 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.5        |  | Amendment Letter to Silver Creek Agreement, dated September 10, 2007 (“Third Amendment”)                                                                          | Incorporated by reference as Exhibit 10.5 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.6        |  | Amendment Letter to Silver Creek Agreement, dated May 2, 2008 (“Fourth Amendment”)                                                                                | Incorporated by reference as Exhibit 10.6 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.7        |  | Amendment Letter to Silver Creek Agreement, dated December 18, 2009 (“Fifth Amendment”)                                                                           | Incorporated by reference as Exhibit 10.7 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.8        |  | Stock Purchase Agreement, dated December 31, 2009 by and between POW! Entertainment, Inc. and Catalyst Investments, LLC                                           | Incorporated by reference as Exhibit 10.8 to Form 10 filed December 10, 2010   
|            |  |                                                                                                                                                                   |                                                                                
|10.09       |  | Letter Agreement between Catalyst and the Company dated December 31, 2009                                                                                         | Incorporated by reference as   Exhibit 10.09 to Form 10 filed December 10, 2010
|            |  |                                                                                                                                                                   |                                                                                
|10.10       |  | Employment Agreement-Stan Lee, dated as of January 1, 2010 between POW! Entertainment, Inc. and Stan Lee                                                          | Incorporated by reference as Exhibit 10.10 to Form 10 filed December 10, 2010  





36









|10.11 |  | Employment Agreement-Champion, dated as of January 1, 2010 between POW! Entertainment, Inc. and Gill Champion                                                   | Incorporated by reference as Exhibit 10.11 to Form 10 filed December 10, 201  
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------
|      |  |                                                                                                                                                                 |                                                                               
|10.12 |  | Employment Agreement-Lieberman, dated as of January 1, 2010 between POW! Entertainment, Inc. and Arthur Lieberman                                               | Incorporated by reference as Exhibit 10.12 to Form 10 filed December 10, 2010 
|      |  |                                                                                                                                                                 |                                                                               
|10.13 |  | Amended and Restated Deferred Compensation Payment Agreement dated as of November 22, 2010 by and among POW! Entertainment, Inc., Stan Lee and Arthur Lieberman | Incorporated by reference as Exhibit 10.13 to Form 10 filed December 10, 2010 
|      |  |                                                                                                                                                                 |                                                                               
|10.14 |  | Agreement, dated as of June 8, 2005 between Stanley L. Compton and POW! Entertainment, Inc.                                                                     | Incorporated by reference as Exhibit 10.14 to Form 10 filed December 10, 2010 
|      |  |                                                                                                                                                                 |                                                                               
|10.15 |  | Agreement, dated as of September 9, 2010 between Cooper Global Communications and POW! Entertainment, Inc.                                                      | Incorporated by reference as Exhibit 10.15 to Form 10-K  filed March 28, 2011 
|      |  |                                                                                                                                                                 |                                                                               
|10.16 |  | Amendment to Employment  Agreements-Stan Lee, Dated December 1, 2011 and referred to in Exhibit 10.10                                                           | Incorporated by reference as Exhibit 10.16 to Form 10-K Filed March 23, 2012  
|      |  |                                                                                                                                                                 |                                                                               
|10.17 |  | Agreement, dated June 1, 2011 between POW! Entertainment and Bick Le                                                                                            | Incorporated by reference as Exhibit 10.17 to Form 10-Q  filed August 4, 2011 
|      |  |                                                                                                                                                                 |                                                                               
|10.18 |  | Amendment to Employment Agreements-Gill Champion, dated December 1, 2011 and referred to in Exhibit 10.11                                                       | Incorporated by reference as Exhibit 10.18 to Form 10-K filed March 23, 2012  
|      |  |                                                                                                                                                                 |                                                                               
|10.19 |  | Amendment to Employment Agreements-Arthur Lieberman, dated December 1, 2011 and  referred to in Exhibit 10.12                                                   | Incorporated by reference as Exhibit 10.19 to Form 10-K filed March 23, 2012  
|      |  |                                                                                                                                                                 |                                                                               
|10.20 |  | Indemnity Agreements dated December 2004                                                                                                                        | Incorporated by reference as Exhibit 10.20 to Form 10-K  filed March 23, 2012 
|      |  |                                                                                                                                                                 |                                                                               
|10.21 |  | Agreement, dated June 11, 2012 between POW! Entertainment and Bick Le                                                                                           | Incorporated by reference as Exhibit 10.21 to Form 10-Q  filed August 14, 2012
|      |  |                                                                                                                                                                 |                                                                               
|21    |  | Subsidiaries of Registrant                                                                                                                                      | Incorporated by reference as Exhibit 21 to Form 10 filed December 10, 2010    



|Exhibit No. |  | Exhibit Index                                             | Method of Filing
|----------- |  | --------------------------------------------------------- | ----------------
|31.1        |  | Certification by Chief Executive Officer                  | Filed herewith  
|31.2        |  | Certification by Chief Financial Officer                  | Filed herewith  
|32.1        |  | Section 1350 Certification by Principal Executive Officer | Filed herewith  
|32.2        |  | Section 1350 Certification by Principal Financial Officer | Filed herewith  





37