UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



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



For the fiscal year ended:December 31,
2011



or



 ̈TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission file number:000-33383



WIZARD WORLD, INC.

(Exact name of registrant as specified in
its charter)



|Delaware                                                       |  | 98-0357690                                  
|-------------------------------------------------------------- |  | --------------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer
        Identification No.)



1350 Avenue of the Americas, 2nd Floor

New York, NY 10019

(Address of principal executive offices)



(646) 801-5572

(Registrant’s telephone number, including
area code)



Securities registered under Section 12(b)
of the Exchange Act: None



Securities registered under Section 12(g)
of the Exchange Act: Common Stock, par value $0.0001 per share



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ̈
No x



Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ̈
No x



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes  ̈ No x



Indicate by checkmark whether the registrant
has submitted electronically and posted on its corporate Website, 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). Yes  ̈ No
x



Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K 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.  ̈



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



|Large accelerated filer |  ̈ |  | Non-accelerated filer     |  ̈
|----------------------- | - |  | ------------------------- | -
|                        |   |  |                           |  
|Accelerated filer       |  ̈ |  | Smaller reporting company | x



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

Yes  ̈
No x



The aggregate market value of the voting
and non-voting common equity held by non-affiliates of the registrant on June 30, 2011, based on a closing price of $0.75 was $26,015,801.
As of April 13, 2012, the registrant had 35,044,878 shares of its common stock, par value $0.0001 per share, outstanding.











TABLE OF CONTENTS



|           | Page No.                                                                                                     
|---------- | -------------------------------------------------------------------------------------------------------------
|PART I     |                                                                                                              
|           |                                                                                                              
|Item 1.    | Business.                                                                                                    
|Item 1A.   | Risk Factors.                                                                                                
|Item 1B.   | Unresolved Staff Comments.                                                                                   
|Item 2.    | Properties.                                                                                                  
|Item 3.    | Legal Proceedings.                                                                                           
|Item 4.    | Mine Safety Disclosures.                                                                                     
|           |                                                                                                              
|PART II    |                                                                                                              
|           |                                                                                                              
|Item 5.    | Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|Item 6.    | Selected Financial Data.                                                                                     
|Item 7.    | Management’s Discussion and Analysis of Financial Condition and Results of Operation.                        
|Item 7A    | Quantitative and Qualitative Disclosures About Market Risk.                                                  
|Item 8.    | Financial Statements and Supplementary Data.                                                                 
|Item9.     | Changes In And Disagreements With Accountants on Accounting and Financial Disclosure.                        
|Item 9A.   | Controls And Procedures.                                                                                     
|Item 9B.   | Other Information.                                                                                           
|           |                                                                                                              
|PART III   |                                                                                                              
|           |                                                                                                              
|Item 10.   | Directors, Executive Officers and Corporate Governance.                                                      
|Item 11.   | Executive Compensation.                                                                                      
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.              
|Item 13.   | Certain Relationships and Related Transactions, and Director Independence.                                   
|Item 14.   | Principal Accounting Fees and Services.                                                                      
|           |                                                                                                              
|PART IV    |                                                                                                              
|           |                                                                                                              
|Item 15.   | Exhibits, Financial Statements Schedules.                                                                    
|           |                                                                                                              
|SIGNATURES | 50                                                                                                           



2







SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS



Included in this Annual Report on Form
10-K are “forward-looking” statements, as well as historical information. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot assure you that the expectations reflected in these forward-looking
statements will prove to be correct. Our actual results could differ materially from those anticipated in forward-looking statements
as a result of certain factors, including matters described in the section titled “Risk Factors.” Forward-looking statements
include those that use forward-looking terminology, such as the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,”
“should,” and similar expressions, including when used in the negative. Although we believe that the expectations reflected
in these forward-looking statements are reasonable and achievable, these statements involve risks and uncertainties and we cannot
assure you that actual results will be consistent with these forward-looking statements. Important factors that could cause our
actual results, performance or achievements to differ from these forward-looking statements include the following:



| | · | the availability and adequacy of our cash flow to meet our requirements;
| | - | ------------------------------------------------------------------------



| | · | economic, competitive, demographic, business and other conditions in our local and regional markets;
| | - | ----------------------------------------------------------------------------------------------------



| | · | changes in our business and growth strategy;
| | - | --------------------------------------------



| | · | changes or developments in laws, regulations or taxes in the entertainment industry;
| | - | ------------------------------------------------------------------------------------



| | · | actions taken or not taken by third-parties, including our contractors and competitors;
| | - | ---------------------------------------------------------------------------------------



| | · | the availability of additional capital; and
| | - | -------------------------------------------



| | · | other factors discussed under the section entitled “Risk Factors” or elsewhere in this
Annual Report.
| | - | -----------------------------------------------------------------------------------------------------



All forward-looking statements attributable
to us are expressly qualified in their entirety by these and other factors. We undertake no obligation to update or revise these
forward-looking statements, whether to reflect events or circumstances after the date initially filed or published, to reflect
the occurrence of unanticipated events or otherwise unless required by applicable law.



3







PART I



Item 1. Business.



As used in this Annual Report, “we,”
“us,” “our,” “Wizard,” “Company” or “our Company” refers to Wizard
World, Inc. and references to “Conventions” refer collectively to Kick the Can Corp. and its predecessors, Wizard Conventions,
Inc. and Kicking the Can, L.L.C.



Our Company



We, through our operating subsidiary Conventions,
are a producer of pop culture and live multimedia conventions across North America. These live multimedia conventions market and
provide a social networking and entertainment venue for popular fiction enthusiasts of movies, TV shows, video games, technology,
toys, social networking/gaming platforms, comic books and graphic novels.



Company History



Wizard World, Inc. (f/k/a GoEnergy, Inc.)
was incorporated in Delaware on May 2, 2001. The Company was initially involved in oil and gas exploration and considered various
oil and gas properties. None of the properties that the Company explored had commercial potential so operations ceased and the
Company abandoned any interests it had in such properties.



On December 7, 2010 (the “Closing
Date”), the Company acquired Conventions pursuant to a Share Purchase and Share Exchange Agreement (the “Exchange Agreement”),
by and among the Company, Strato Malamas, an individual and former majority stockholder of the Company, Conventions, and shareholders
of Conventions (the “Conventions Shareholders”), that are signatories thereto. On the Closing Date, pursuant to the
terms of the Exchange Agreement, the Conventions Shareholders transferred and contributed all of their shares (the “Conventions
Shares”) to the Company, resulting in our acquisition of all of the outstanding Conventions Shares.  In return,
we issued to the Conventions Shareholders, their designees or assigns (the “Share Exchange”), an aggregate of 32,927,576
shares of the Company’s common stock (the “Exchange Shares”), which constituted approximately 94.9% (on a fully
diluted basis) of the shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”),
issued and outstanding immediately after the consummation of the Share Exchange (the “Closing”). As the result of the
Share Exchange, Conventions became a wholly owned subsidiary of the Company.



Our executive offices are located at 1350
Avenue of the Americas, 2nd Floor, New York, NY 10019 and our telephone number at such office is (646) 801-5572.



Business Overview



Our Company produces pop culture and live
multimedia conventions (“Comic Cons”) across North America that provide a social networking and entertainment venue
for popular fiction enthusiasts of movies, TV shows, video games, technology, toys, social networking/gaming platforms, comic books
and graphic novels.  These Comic Cons provide entertainment companies, toy companies, gaming companies, publishing companies
and retailers venues for their sales, marketing, promotions, public relations, advertising and sponsorships efforts.



Conventions



Conventions has been producing comic conventions
since July 1997. In 2009, Conventions produced three Comic Cons, namely the Philadelphia Comic Con, Chicago Comic Con and New York
‘Big Apple’ Comic Con. In 2010, Conventions produced eight Comic Cons in the following North American cities: (i) Toronto,
Ontario; (ii) Anaheim, CA; (iii) Philadelphia, PA; (iv) Chicago, IL; (v) New York, NY; (vi) Boston, MA; (vii) Austin, TX; and (viii)
Atlanta, GA.



In 2011, Conventions produced nine Comic
Cons in the following North American cities: (i) Miami, FL; (ii) New Orleans, LA; (iii) Toronto, Ontario; (iv) Anaheim, CA; (v)
Philadelphia, PA; (vi) Chicago, IL; (vii) New York, NY; (viii) Columbus, OH; and (ix) Austin, TX.



4







Conventions currently holds the production
rights to the following 13 conventions: (i) Atlanta Comic Con (Atlanta, GA); (ii) Big Apple Comic Con (New York, NY); (iii) Cincinnati
Comic Con (Cincinnati, OH); (iv) Connecticut Comic Con (Hartford, CT); (v) Nashville Comic Con (Nashville, TN); (vi) New England
Comic Con (Boston, MA); (vii) North Coast Comic Con (Akron, OH); (viii) Toronto Comic Con (Toronto, Ontario); (ix) Nola Comic Con
(New Orleans, LA); (x) Central Canada Comic Con (Winnipeg, Manitoba); (xi) San Antonio Comic Con (San Antonio, TX); (xii) Houston
Comic Con (Houston, TX); and (xiii) Mid-Ohio Comic Con (Columbus, OH). We organically developed the Comic Cons in Miami, FL; Anaheim,
CA; Austin, TX; Philadelphia, PA; and Chicago, IL.



We receive revenue from our Comic Cons
in three (3) ways, namely from (i) consumer ticket sales; (ii) exhibitor booth sales; and (iii) national
and/or regional sponsorships. Each Comic Con varies in cost to produce. Production costs vary based on the size and scope of the
production. Generally, our production costs range from approximately $150,000 for a smaller scale production to over $670,000 for
a larger production.



The Company’s plan for 2012 is to
focus the Wizard World tour on the Company’s six most popular Super-Regional shows: (i) New Orleans, LA; (ii) Toronto, Ontario;
(iii) Philadelphia, PA; (iv) Rosemont, IL; (v) Columbus, OH; and (vi) Austin, TX. The Company is focusing on the shows that performed
well in 2011, and looks to build a foundation for more events based on revenue driven growth.



The majority of our target audience are
young adult males and are active consumers of many types of entertainment and media, such as movies, music, toys, video games,
apps, consumer electronics, computers, and lifestyle products (e.g. clothes, footwear, digital devices, mobile phones and men’s
personal items).



Digital Media



In late 2011, we began leveraging the popularity
of our Comic Cons as a springboard to enter the digital media market. We will use digital media (i) as a distribution channel for
the pop culture content that we showcase at our Comic Cons, (ii) to provide coverage of our Comic Con events, and (iii) to introduce
new and upcoming products and talent in the pop culture world. To that end, we formed a wholly owned subsidiary, Wizard World Digital,
Inc. (“Digital”), to communicate with our fan database, manage our website www.wizardworld.com and our social media
presence on, among others, Twitter and Facebook.



Further, in the fourth quarter of 2011,
we launched our new digital entertainment ad network called the “Wizard World Digital Entertainment Network,” which
is comprised of two websites located at www.wizardworld.com and www.toywiz.com, as well as the Wizard World electronic database.
The Wizard World Digital Entertainment Network will offer display advertising to brand advertisers, priced on a traditional cost-per-thousand
(CPM) ad impression basis. We plan to work with display advertising networks and third party representation firms, and to hire
four direct sales employees over the next 12 months to maximize the monetization of the Wizard World Digital Entertainment Network.



Strategy



Our objective is to use our Comic Cons
and Digital to become the voice for pop culture enthusiasts across multiple media platforms. Key elements of our strategy include:



| | · | producing high quality live multimedia events across North America for promotion of consumer products
and entertainment;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | · | leveraging the content created and generated at the live multimedia events to enter the media market
and distribute the content in digital media such as websites, apps, emails, newsletters, Facebook, Twitter, Flickr, Tumblr and
YouTube, among others; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | obtaining sponsorships and promotions from media and entertainment companies for the Comic Cons,
including:
| | - | -----------------------------------------------------------------------------------------------------------





5









| | o | expanding our relationships with entertainment and media companies; and
| | - | -----------------------------------------------------------------------



| | o | forming strategic relationships with new media and entertainment companies to promote their products.
| | - | -----------------------------------------------------------------------------------------------------



Sponsorships and Advertising



We sell sponsorship and advertising opportunities
to businesses seeking to reach our core target audience of active entertainment consumers, with a particular focus on young families.



Sponsorships



We provide sponsorship opportunities that
allow advertisers a wide range of promotional vehicles on-site and through our public relations efforts. For example, we offer
advertisers the ability to (i) display signage at the Comic Cons, (ii) include their desired logos on all direct mail that is sent
in connection with one or more Comic Cons, (iii) be included in press releases to the media, (iv) obtain sponsor tags on the radio
spots or in the print or online ads where we advertise, and (v) obtain advertising space in our digital media.  We also
provide the opportunity for advertisers to sponsor events at the Comic Cons like costume contests or gaming tournaments and the
ability to have “step-and-repeats” for photo opportunities, meet and greets with celebrities, VIP packages and “goody”
bag giveaways.  Sponsors pay a fee based upon the position of their advertising media and the exposure it will receive.
Specifically, the closer a sponsor is to the entrance of the Comic Con, the more exposure such sponsor will receive as a greater
number of Comic Con attendees will view the sponsor’s product and/or services. Therefore, the rental fee for space at our
Comic Cons is more expensive if the space is closer to the entrance.



Promotions



Promotional opportunities include product
placement and brand associations on-site at the Comic Cons. As our brand grows, we hope to earn revenues by co-promoting, for example,
a movie at one of our Comic Cons, with entertainment and media companies and brands seeking to benefit from the popularity of the
Comic Cons and the exposure received from appearing at them.



Digital Media



We produce a number of digital media properties,
including our website www.wizardworld.com, emails, newsletters, Facebook, YouTube, Twitter, Flickr and Tumblr to create awareness
of our Comic Cons and provide updates to our fans and consumers.  We also use our website www.wizardworld.com to a large
extent to provide a source for the latest Comic Con news and information.  Display advertising is offered to brand advertisers
across all our digital media properties, priced on a traditional CPM basis.



Marketing



Our Comic Cons are marketed through a variety
of media outlets, including social media, websites, public relations, television, radio, direct mail, email, flyers and postcards.  Our
Comic Cons usually obtain publicity through coverage of the events at our Comic Cons from local TV stations, radio stations, newspapers,
national press such as the Associated Press and Reuters, fan websites, blogs and social network channels such as Twitter, Facebook,
Flickr and Tumblr. In certain instances, we do not pay for advertising because we can provide desirable content to media outlets.
For example, we typically invite the local TV stations to our Comic Cons so that they can interview the celebrities featured at
our Comic Cons. As a result, we receive free TV coverage and the TV stations obtain content for their shows. In addition, we arrange
for celebrities to call into local radio stations.  As a result, we receive on-air promotion of our events and the radio
station reaches a larger audience who want to tune in to hear our celebrities. We also receive on-air promotion by exchanging air
time for ticket give-aways to our Comic Cons. With respect to the internet and online advertising, we advertise throughout our
website, www.wizardworld.com, about the upcoming Comic Cons. We also send out emails to our fans on a regular basis. In addition,
we send out direct mail postcards, print flyers and postcards in each city where we hold a Comic Con, which are handed out at local
events, retailers and public gatherings.  As a result, we believe that we are cost effective when it comes to how we
spend our advertising dollars.



6







Trademarks and Copyrights



We have a portfolio of trademarks and service
marks and maintain a catalog of copyrighted works.  Such marks include Wizard World, Pop FI, Where Pop FI Comes to Life
and Wizard World Girls.  We do not consider our service marks and trademarks to be significant to our business.



Regulation



Typically, we do not have to obtain permits
to operate the Comic Cons.  The convention centers at which such events occur obtain any required permits and cover fire
safety and occupancy matters as part of the rental agreement. Crowd control varies by location and are either provided by the convention
center’s personnel or by a third party security service recommended by the convention center.  The convention centers
do, however, require liability insurance, which Conventions has obtained and maintained.



Customers



Our client base is diverse. We have strong
relationships with what we consider to be the leading movie studios, video game producers, comic book publishers, television broadcasters
and toy manufacturers. These customers are potential exhibitors and sponsors of our Comic Con conferences. In addition, our digital
media business will provide sales opportunities across the Fortune 1000 corporate sector, as these brand advertisers look to leverage
our media properties to target our predominantly male, age 25-44 target audience.



No single advertiser, promoter or sponsor
comprises a significant portion of our revenues.



Competition; Competitive Strengths



In the live, regionally-based consumer
conventions market, the strength of a competitor is measured by the location and size of the region or city, the frequency of live
events per year, the guest and VIP list (e.g. celebrities and artists), the number of paying attendees, the physical size of the
convention, the extent of the public relations outreach (through traditional media, digital media and social media) and the quantity
and quality of exhibitors and dealers. We believe that we have a strong competitive position because our Comic Cons take place
in well-known major cities in North America throughout the year.  Our multiple conventions per year enable us to market
our events year round, create a large amount of content that can be distributed through our digital media outlets, and market in
not only the regional consumer areas, but nationally as well.  The multiple locations also allow us to work with more
celebrities, artists and writers and host them in multiple cities.



Most of our competitors produce local one-time
events and/or once a year events. For example, Reed Exhibitions Limited (“Reed Exhibitions”), our competitor in the
New York market, produces an annual comic con event in New York City. Reed Exhibitions also has a Chicago event. There is an event
in Toronto called Fan Expo produced by Hobby Star Marketing Inc., which is limited to the Toronto marketplace. Other than Reed
Exhibitions or Hobby Star Marketing Inc., we are not aware of any competitor that has successfully existed or entered a market
in which we have a foothold.



Unlike regional competitors such as Reed
Exhibitions and Hobby Star Marketing Inc., however, we are able to tap into many geographic pop culture markets as opposed to being
limited to the local pop culture market. Further, the number of Comic Cons we produce gives us a competitive advantage over these
local comic cons because they do not have the economies of scale and operating efficiencies that result from producing a multitude
of Comic Cons. For instance, despite the number of Comic Cons that we hold, production costs remain relatively consistent because,
for example, the number of personnel we employ or consult with does not significantly increase with the production of more Comic
Cons. Further, the size of the Comic Cons and the volume at which they are produced provide greater leverage to negotiate discounts
on such things as hotels, convention centers and other travel expenses. Therefore, it costs us less to produce a Comic Con than
a producer that holds only one convention a year.



7







There is a non-profit educational organization
called Comic-Con International, which produces the largest Comic-Con event in the United States, held annually in San Diego, CA,
during the month of July.  Comic-Con International also produces a show in San Francisco, CA, called WonderCon. Because
of the momentum of Comic-Con International in those markets, we do not intend to enter those markets because our view is that the
markets are saturated, and therefore could not support multiple shows in San Diego and San Francisco, which is what our shows would
provide if they were to be held in such cities. Further, the San Diego Comic-Con has an established history and presence in San
Diego, and draws a large audience to the well-publicized and popular event. Thus, there is a significant barrier to our Company
entering into the San Diego market. Despite our decision not to enter the San Diego Comic-Con market, the San Diego Comic-Con is
considered a competitor given that some fans may have to choose between attending either the San Diego Comic-Con or any one of
our Comic Cons, regardless of geographic region.



We believe, however, that we have an advantage
over other event producers because our Comic Cons are not limited to one city, but rather to several well-known cities across North
America. Therefore, rather than having to travel to San Diego, which for some fans may be a long distance; our fans are able to
attend a Wizard World Comic Con that is closer in proximity to them.



We also believe that we have an edge over
competitors because our Comic Cons are well known in the markets in which we hold our Comic Cons.  We have a reputation
among fans, exhibitors and celebrities that our shows will be high quality and well attended by popular fiction fans.



Our competitors in the digital business
include publishers of entertainment sites, particularly in the popular fiction category. As we grow our entertainment ad network,
we will compete with vertical entertainment ad networks such as Evolve Media.



Sales Channels and Pricing Policies



We have outsourced our ticket sales to
an online ticketing service, thereby eliminating the need to mail physical badges. Consumers can order online, print out their
barcode, come to the show, get scanned and get a wristband for entry. We still, however, sell tickets on-site at the live events
themselves. We offer a five dollar discount on the purchase price of our tickets to those who pre-purchase tickets online as compared
to those who purchase their tickets on-site at the Comic Con. Tickets typically range from $25 for a single day pass to $65 for
a weekend pass. Entry of children ten years old and under is free at all Comic Cons.



Across all our digital media properties,
display advertising is offered to brand advertisers, priced on a traditional CPM basis.



Sales and Marketing Strategy



We promote our Comic Cons through a wide
variety of media outlets, such as local radio and TV stations, newspapers, fan websites and blogs.  We also use online
social networks such as Facebook, Twitter, YouTube, Flickr and Tumblr, to reach our fans and provide updates.  Further,
we promote our Comic Cons on our website www.wizardworld.com and through our email database.  We currently sell to prospective
corporate sponsors and advertisers through our direct sales force.  In coming months, we plan to augment our direct sales
force through the utilization of third party representation firms and digital ad networks to help sell display advertising on our
digital properties.



Growth Strategy



Rather than acquiring or organically developing
new Comic Cons, we plan to grow our existing Comic Cons and increase the revenues of our existing Comic Cons by adding more dealers,
exhibitors, celebrities, panels, gaming tournaments and VIPs to our Comic Cons. Additionally, we are focused on increasing revenues
through increasing corporate sponsorships that allow advertisers a wide range of promotional vehicles on-site and through our public
relations efforts. We believe that we will be able to leverage our relationships with our existing dealers, exhibitors, celebrities
and VIPs to develop new relationships.



8







We use the digital
marketing outlets that we have developed, such as our website www.wizardworld.com which covers new and upcoming products and talents
in the pop culture world, to distribute the large amount of content we create from our live events.We also reach consumers
via e-mail and direct mail.  We recently launched the new www.wizardworld.com website and a mobile application that will
allow users of iPhone mobile devices to access our content from the live events. Through the distribution
of our content via digital media, we offer advertisers the ability to display their ads on our website located at www.wizardworld.com
and reach our large e-mail database of fans. Through sales of display advertising space on our digital media properties, we plan
to generate revenues and thus strengthen our financial condition.



Further, in the fourth quarter of 2011
we launched our new digital entertainment ad network called the “Wizard World Digital Entertainment Network,” which
will be comprised of two websites located at www.wizardworld.com and www.toywiz.com, as well as the Wizard World email database.
The Wizard World Digital Entertainment Network will offer display advertising to brand advertisers, priced on a traditional CPM
ad impression basis.  We plan to work with display advertising networks and third party representation firms, and to
hire four direct sales employees over the next 12 months to maximize the monetization of the Wizard World Digital Entertainment
Network. We have no signed agreements to date with third-party representation firms.  Third-party representation firms
represent several web publishers (such as Wizard World), selling their display advertising inventory to brand advertisers and/or
advertising agencies. These third-party representation firms obtain a revenue share from the web publisher for any revenue earned
through their sales efforts. Wizard World is currently working with interclick, inc. (ad network) to monetize Wizard World’s
display advertising inventory.



In 2011, we invested approximately $815,000
in technical development costs to launch the Wizard World Digital Entertainment Network.



To date, we
have been able to raise financing to implement our growth plans by issuing convertible notes, preferred stock and warrants through
private placements. We plan to continue to obtain financing, when needed, from private placements from time to time, and/or from
other traditional financing sources, including term notes. We utilized a major portion of the existing investment proceeds to fund
digital development, includingthe Wizard World Digital Entertainment Network. We plan to use the proceeds from any future
private placements for working capital and to expand our business including the sale of sponsorships of the Wizard World live events,
increasing and improving the guest pool and improving the fan experience, which should drive revenue growth.



Employees



We currentlyhave nine employees, of which eight are full-time and one is part-time. Additionally, we engage
four part-time freelance consultants.



Where You Can Find More Information



The public may read and copy any materials
the Company files with the U.S. Securities and Exchange Commission (the “SEC”) at the SEC’s Public Reference
Room at 100 F Street, NE, Washington, DC 20549.  The public may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0030.  The SEC maintains an Internet website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.



Item 1A. Risk Factors.



Risks Relating to our Company



We have a limited operating history
from which you can evaluate our performance.



Since we have a limited operating history,
it will be difficult for investors and securities analysts to evaluate our business and prospects and predict future revenue. Because
we have a limited operating history, we will encounter risks, expenses and difficulties of which we are unaware, and may be challenging
to overcome. There can be no assurance that our efforts will be successful or that we will reach profitability.



9







Our independent auditors have expressed
doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing and force us to
cease operations.



In their report dated April 16, 2012, our
independent auditors stated that our financial statements for the years ended December 31, 2011 and 2010 were prepared assuming
that we would continue as a going concern. Our ability to continue as a going concern is an issue because to date, we have incurred
net operating losses. We anticipate that we will continue to experience net operating losses.



Our net operating losses will require that
we finance our operations from outside sources, such as obtaining additional funding from the sale of our securities.  The
going concern explanatory paragraph included in our auditor’s report on our financial statements, however, could inhibit
our ability to raise additional financing.  If we are unable to obtain such additional capital, we will not be able to
sustain our operations and would be required to cease our operations. You should consider our independent registered public accountant's
comments when determining if an investment in our Company is suitable.



Even if we do raise sufficient capital
and generate revenues to support our operating expenses, there can be no assurance that the revenue will be sufficient to enable
us to develop our business to a level where it will generate profits and cash flows from operations, or provide a return on investment.
In addition, if we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership
of our stockholders could be significantly diluted, the newly-issued securities may have rights, preferences or privileges senior
to those of existing stockholders and the trading price of our common stock could be adversely affected. Further, if we obtain
additional debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest
on such indebtedness, and the terms of the debt securities issued could impose significant restrictions on our operations. If we
are unable to continue as a going concern, you may lose your entire investment.



If we need additional capital to
fund our growing operations, we may not be able to obtain sufficient capital and may be forced to limit the scope of our operations.



As we implement our growth strategies,
we may experience increased capital needs.  We may not, however, have sufficient capital to fund our future operations
without additional capital investments.  If adequate additional financing is not available on reasonable terms or at
all, we may not be able to carry out our corporate strategy and we would be forced to modify our business plans (e.g., limit our
expansion, limit our marketing efforts and/or decrease or eliminate capital expenditures), any of which may adversely affect our
financial condition, results of operations and cash flow. Such reduction could materially adversely affect our business and our
ability to compete.



Our capital needs will depend on numerous
factors, including, without limitation, (i) our profitability, (ii) our ability to respond to a release of competitive products
by our competitors, and (iii) the amount of our capital expenditures, including acquisitions.  Moreover, the costs involved
may exceed those originally contemplated.  Cost savings and other economic benefits expected may not materialize as a
result of any cost overruns or changes in market circumstances. Failure to obtain intended economic benefits could adversely affect
our business, financial condition and operating performances.



We need to manage growth in operations
to maximize our potential growth and achieve our expected revenues. Our failure to manage growth will cause a disruption of our
operations that may result in the failure to generate revenues at levels we expect.



In order to maximize potential growth in
our current markets, we may have to expand our operations. Such expansion will place a significant strain on our management and
our operational, accounting and information systems. We expect that we will need to continue to improve our financial controls,
operating procedures and management information systems. We will also need to effectively train, motivate and manage our employees.  Our
failure to manage our growth could disrupt our operations and ultimately prevent us from generating the revenues we expect.



10







Risks Related to our Business and Industry



We may not be able to prevent others
from using our intellectual property, and may be subject to claims by third parties that we infringe on their intellectual property.



We regard the
content that we plan to distribute via digital media to be important to our success.  We plan to rely on non-disclosure
and othercontractual provisions to protect our proprietary rights. We may also try to protect
our intellectual property rights by, among other things, searching the Internet to detect unauthorized use of our intellectual
property.



However, policing the unauthorized use
of our intellectual property is often difficult and any steps we take may not, in every case, prevent the infringement by unauthorized
third parties.  Further, there can be no assurance that our efforts to enforce our rights and protect our intellectual
property will be successful.  We may need to resort to litigation to enforce our intellectual property rights, which
may result in substantial costs and diversion of resources and management attention.



Further, although management does not believe
that our products and services infringe on the intellectual rights of others, there is no assurance that we will not be the target
of infringement or other claims.  Such claims, even if not true, could result in significant legal and other costs and
may be a distraction to our management or interrupt our business.



We encounter competition in our business,
and any failure to compete effectively could adversely affect our results of operations.



We anticipate that our competitors will
continue to expand and seek to obtain additional market share with competitive price and performance characteristics.  Aggressive
expansion of our competitors or the entrance of new competitors into our markets could have a material adverse effect on our business,
results of operations and financial condition.



If we do not compete successfully
against new and existing competitors, we may lose our market share, and our operating results may be adversely affected.



We compete with other advertising service
providers that may reach our target audience by means that are more effective than our Comic Cons and digital media. Further, if
such other providers of advertising have a long operating history, large product and service suites, more capital resources and
broad international or local recognition, our operating results may be adversely affected if we cannot successfully compete.



The loss of the services of our key
employees and directors, particularly the services rendered by John Macaluso, our Chief Executive Officer, could harm our business.



Our success depends to a significant degree
on the services rendered to us by our key employees and directors. In particular, we are heavily dependent on the continued services
of John Macaluso, our Chief Executive Officer. The loss of Mr. Macaluso and our inability to attract highly skilled personnel with
sufficient experience in our industry could harm our business.



Our future success depends upon,
in large part, our continuing ability to attract and retain qualified personnel.



Expansion of our business and operation
may require additional managers and employees with industry experience, in which case our success will be dependent on our ability
to attract and retain experienced management personnel and other employees. There can be no assurance that we will be able to attract
or retain qualified personnel. Competition may also make it more difficult and expensive to attract, hire and retain qualified
managers and employees. If we fail to attract, train and retain sufficient numbers of the qualified personnel, our prospects, business,
financial condition and results of operations will be materially and adversely affected.



11







If we do not maintain and develop
our Wizard World Comic Con brand and those of our strategic partners, we will not be able to attract an audience to the Comic Cons.



We attract audiences and advertisers partly
through brand name recognition.  We believe that establishing, maintaining and enhancing our portfolio of Comic Cons
and the brands of our strategic partners will enhance our growth prospects. The promotion of our Wizard World Comic Con brand and
those of our strategic partners will depend largely on our success in maintaining a sizable and loyal audience, providing high-quality
content and organizing effective marketing programs. If we fail to meet the standards to which our consumers are accustomed, our
reputation will be harmed and we may lose market share.



Our future success depends on attracting
sponsors and pop culture advertisers who will advertise at our Comic Cons.  If we fail to attract a sufficient number
of sponsors and pop culture advertisers, our operating results and revenues may not meet expectations.



One of our important strategies is to create
an integrated platform of tours on which sponsors and pop-culture advertisers wishing to reach our young male target audience may
advertise.  However, advertisers may find that our targeted demographic does not consist of their desired consumers or
a critical mass of consumers, decide to use a competitor’s services or decide not to use our services for other reasons.  If
the sponsors and pop-culture advertisers decide against advertising with us, we may not realize our growth potential or meet investor
expectations.  Our future operating results and business prospects could be adversely affected.



We may not be able to respond to
changing consumer preferences and our sales may decline.



We operate in markets that are subject
to change, including changes in customer preferences.  New fads, trends and shifts in pop culture could affect the type
of live events customers will attend or the products consumers will purchase.  Content in which we have invested significant
resources may fail to meet consumer demand at the time.  A decrease in the level of media exposure or popularity of the
pop culture market or a loss in sales could have a material adverse effect on our business, prospects and financial condition.



We rely on key contracts and business
relationships, and if our current or future business partners or contracting counterparties fail to perform or terminate any of
their contractual arrangements with us for any reason or cease operations, or should we fail to adequately identify key business
relationships, our business could be disrupted and our reputation may be harmed.



If any of our business partners or contracting
counterparties fails to perform or terminates their agreement(s) with us for any reason, or if our business partners or contracting
counterparties with which we have short-term agreements refuse to extend or renew the agreement or enter into a similar agreement,
our ability to carry on operations and cross-sell sales and marketing services among different platforms may be impaired. In addition,
we depend on the continued operation of our long-term business partners and contracting counterparties and on maintaining good
relations with them. If one of our long-term partners or counterparties is unable (including as a result of bankruptcy or a liquidation
proceeding) or unwilling to continue operating in the line of business that is the subject of our contract, we may not be able
to obtain similar relationships and agreements on terms acceptable to us or at all. If a partner or counterparty fails to perform
or terminates any of the agreements with us or discontinues operations, and we are unable to obtain similar relationships or agreements,
such events could have an adverse effect on our operating results and financial condition.  Further, if we are unable
to timely produce our Comic Cons or produce the same quality of Comic Cons to which our target demographic has been accustomed,
the consequences could be far-reaching and harmful to our reputation, existing business relationships and future growth potential.



We may also need to form new strategic
partnerships or joint ventures to access appropriate assets and industry know-how. Failing to identify, execute and integrate such
future partnerships or joint ventures may have an adverse effect on our business, growth, financial condition, and cash flow from
operations.



Insiders have substantial control
over us, and they could delay or prevent a change in our corporate control even if our other stockholders want it to occur.



As of the date of this filing, our executive
officers, directors and principal stockholders who beneficially own 5% or more of our outstanding common stock, own in the aggregate,
approximately 86.05% of our outstanding common stock. These stockholders are able to exercise
significant control over all matters requiring stockholder approval, including the election of directors and approval of significant
corporate transactions. This could delay or prevent an outside party from acquiring or merging with our Company even if our other
stockholders want it to occur.



12







Our Certificate of Incorporation
provides for indemnification of officers and directors at our expense and limits their liability, which may result in a major cost
to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers and/or
directors.



Our certificate of incorporation and applicable
Delaware law provide for the indemnification of our directors and officers against attorney’s fees and other expenses incurred
by them in any action to which they become a party arising from their association with or activities on our behalf.  This
indemnification policy could result in substantial expenditures by us that we will be unable to recoup.



We have been advised that, in the opinion
of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the
Securities Act of 1933, as amended (the “Securities Act”), and is, therefore, unenforceable.  In the event
that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses
incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted
by a director, officer or controlling person in connection with the securities being registered, we will (unless in the opinion
of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question
whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue. The legal process relating to this matter, if it were to occur, is likely to be very costly and may result in us
receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares if such
a market ever develops.



We could face a variety of risks
of expanding into a new business.



Risks of our entry into the new business
line of digital media, include, without limitation: (i) potential diversion of management’s attention and other resources,
including available cash, from our existing businesses; (ii) unanticipated liabilities or contingencies; (iii) the need for additional
capital and other resources to expand into this new line of business; and (iv) inefficient combination or integration of operational
and management systems and controls. Entry into a new line of business may also subject us to new laws and regulations with which
we are not familiar, and may lead to increased litigation and regulatory risk.  Further, our business model and strategy
are still evolving and are continually being reviewed and revised, and we may not be able to successfully implement our business
model and strategy. We may not be able to attract a sufficiently large number of audience or customers, or recover costs incurred
for developing and marketing these products or services.  If we are unable to successfully implement our growth strategies,
our revenue and profitability may not grow as we expect, our competitiveness may be materially and adversely affected, and our
reputation and business may be harmed.



In developing and marketing the new business
of digital media, we may invest significant time and resources.  Initial timetables for the introduction and development
of our digital media business may not be achieved and price and profitability targets may not prove feasible. Furthermore, any
new line of business could have a significant impact on the effectiveness of our system of internal controls.  Failure
to successfully manage these risks in the development and implementation of our new digital media business could have a material
adverse effect on our business, results of operations and financial condition.



We will face significant competition
in the digital media business. If we fail to compete effectively, we may lose users to competitors, which could materially and
adversely affect our ability to generate revenues from online advertising.



We will face significant competition for
online advertising revenues with other websites that sell online advertising services. In addition, we indirectly compete for advertising
budgets with traditional advertising media, such as television and radio stations, newspapers and magazines, and major out-of-home
media. Some of our competitors may have longer operating histories and significantly greater financial, technical and marketing
resources than we do, and in turn may have an advantage in attracting and retaining users and advertisers.



13







We will incur significant costs to
ensure compliance with United States corporate governance and accounting requirements.



We will incur significant costs associated
with our public company reporting requirements and costs associated with corporate governance requirements, including requirements
under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC. We expect all of these applicable rules and regulations
to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.  We
also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director
and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher
costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals
to serve on the Company’s board of directors (the “Board”) or as executive officers.  We may be wrong
in our prediction or estimate of the amount of additional costs we may incur or the timing of such costs.



If we fail to maintain an effective
system of internal control over financial reporting, our ability to accurately and timely report our financial results or prevent
fraud may be adversely affected and investor confidence may be adversely impacted.



As directed by Section 404 of the Sarbanes-Oxley
Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report of management on the Company’s
internal controls over financial reporting in their annual reports. Under current SEC rules, our management may conclude that our
internal controls over our financial reporting are not effective.  Even if our management concludes that our internal
controls over financial reporting are effective, our independent registered public accounting firm may issue a report that is qualified
if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or
if it interprets the relevant requirements differently from us.  In the event that we are unable to have effective internal
controls, investors and others may lose confidence in the reliability of our financial statements and our ability to obtain equity
or debt financing as needed could suffer.



A continued decline in general economic
conditions and disruption of financial markets may, among other things, reduce the discretionary income of consumers or further
erode advertising markets, which could adversely affect our business.



Our operations are affected by general
economic conditions, which affect consumers’ disposable income.  The demand for entertainment and leisure activities
tends to be highly sensitive to the level of consumers’ disposable income. Declines in general economic conditions could
reduce the level of discretionary income that our fans and potential fans have to spend on consumer products and entertainment,
which could adversely affect our revenues. Volatility and disruption of financial markets could limit our advertisers,’ sponsors’
and/or promoters’ ability to obtain adequate financing to maintain operations, and result in a decrease in sales volume that
could have a negative impact on our business, financial condition and results of operations.  Continued softness in the
market could adversely affect our revenues or the financial viability of our distributors.



The advertising market is particularly
volatile and we may not be able to effectively adjust to such volatility.



Advertising spending is volatile and sensitive
to changes in the economy.  Our advertising customers may reduce the amount they spend on our media for a number of reasons,
including, without limitation:



| | · | a downturn in economic conditions;
| | - | ----------------------------------



| | · | a deterioration of the ratings of their programs; or
| | - | ----------------------------------------------------



| | · | a decline in advertising spending in general.
| | - | ---------------------------------------------



We may be unable to maintain or increase
our advertising fees and sales, which could negatively affect our ability to generate revenues in the future. A decrease in demand
for advertising in general, and for our advertising services in particular, could materially and adversely affect our operating
results.



14







Risks Related To Our Securities



Our common stock is quoted on the
OTC Markets, which may have an unfavorable impact on our stock price and liquidity.



Our common stock is quoted on the OTC Markets.
The quotation of our shares on the Pink Sheets may result in a less liquid market available for existing and potential stockholders
to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact
on our ability to raise capital in the future.



There is limited liquidity on the
OTC Markets, which enhances the volatile nature of our equity.



When fewer shares of a security are being
traded on the Pink Sheets, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote
information. Due to lower trading volumes in shares of our common stock, there may be a lower likelihood that orders for shares
of our common stock will be executed, and current prices may differ significantly from the price that was quoted at the time of
entry of the order.



Our stock price is likely to be highly
volatile because of our limited public float.



The market price of our common stock is
likely to be highly volatile because there has been a relatively thin trading market for our stock, which causes trades of small
blocks of stock to have a significant impact on our stock price. You may not be able to resell shares of our common stock following
periods of volatility because of the market’s adverse reaction to volatility. Other factors that could cause such volatility
may include, among other things: actual or anticipated fluctuations in our operating results; the absence of securities analysts
covering us and distributing research and recommendations about us; overall stock market fluctuations; economic conditions generally;
announcements concerning our business or those of our competitors; our ability to raise capital when we require it, and to raise
such capital on favorable terms; conditions or trends in the industry; litigation; changes in market valuations of other similar
companies; announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships or joint ventures;
future sales of common stock; actions initiated by the SEC or other regulatory bodies; and general market conditions. Any of these
factors could have a significant and adverse impact on the market price of our common stock. These broad market fluctuations may
adversely affect the trading price of our common stock, regardless of our actual operating performance.



In order to raise sufficient funds
to expand our operations, we may have to issue additional securities at prices which may result in substantial dilution to our
shareholders.



If we raise additional funds through the
sale of equity or convertible debt, our current stockholders’ percentage ownership will be reduced. In addition, these transactions
may dilute the value of our common shares outstanding. We may also have to issue securities that may have rights, preferences and
privileges senior to our common stock.



We do not currently have a broker
or dealer creating or maintaining a market in our stock.



There is currently no broker or dealer
acting as a marketmaker for our securities. The lack of a marketmaker for our securities could adversely influence the market for,
and price of, our securities, as well as your ability to dispose of, or to obtain accurate information about, and/or quotations
as to the price of, our securities.  If an active public trading market for our securities does not develop, the market
price and liquidity of such securities may be adversely affected.



If a market were to develop, future trading
prices could depend upon many factors, such as prevailing interest rates, our operating results, and the markets for similar securities.  Historically,
the market for non-investment grade securities has been subject to disruptions that have caused substantial volatility in the prices
of securities similar to our common stock. There can be no assurance that if a market for our common stock was to develop, such
a market would not be subject to similar disruptions.



15







Our stock is thinly traded, so you
may be unable to sell at or near ask prices or at all.



The shares of our common stock are traded
on the Pink Sheets and are thinly traded, meaning that the number of persons interested in purchasing our common stock at or near
ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including
the fact that we are a smaller reporting company that is relatively unknown to stock analysts, stock brokers, institutional investors
and others in the investment community who generate or influence sales volume.  Even in the event that we come to the
attention of such persons, they would likely be reluctant to follow an unproven company such as ours or purchase or recommend the
purchase of our shares until such time as we become more seasoned and viable.  As a consequence, our stock price may
not reflect an actual or perceived value.  Also, there may be periods of several days or more when trading activity in
our shares is minimal or non-existent, as is currently the case, as compared to a seasoned issuer that has a large and steady volume
of trading activity that will generally support continuous sales without an adverse effect on share price. A broader or more active
public trading market for our common shares may not develop or if developed, may not be sustained. Due to these conditions, you
may not be able to sell your shares at or near ask prices or at all if you need money or otherwise desire to liquidate your shares.



Currently, there is a limited public
market for our securities, and there can be no assurances that any public market will ever develop and, even if developed, it is
likely to be subject to significant price fluctuations.



We have a trading symbol for our common
stock, namely ‘WIZD’.  However, our stock has been thinly traded, if at all. Consequently, there can be no
assurances as to whether:



| | · | any market for our shares will develop;
| | - | ---------------------------------------



| | · | the prices at which our common stock will trade; or
| | - | ---------------------------------------------------



| | · | the extent to which investor interest in us will lead to the development
of an active, liquid trading market.  Active trading markets generally result in lower price volatility and more efficient
execution of buy and sell orders for investors.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Until our common stock is fully distributed
and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly.  Prices
for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity
of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred
to elsewhere in these risk factors, investor perception of our Company and general economic and market conditions.  No
assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.



We are subject to the penny stock
rules which will make our securities more difficult to sell.



We are subject to the SEC’s “penny
stock” rules because our securities sell below $5.00 per share.  The penny stock rules require broker-dealers to
deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature
and level of risks in the penny stock market.  The broker-dealer must also provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements
showing the market value of each penny stock held in the customer’s account.  In addition, the bid and offer quotations,
and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing
the transaction and must be given to the customer in writing before or with the customer’s confirmation.



Furthermore, the penny stock rules require
that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser’s written agreement to the transaction.  The penny stock rules are
burdensome and may reduce purchases of any offerings and reduce the trading activity for our securities.  As long as
our securities are subject to the penny stock rules, the holders of such securities will find it more difficult to sell their securities.



We are not likely to pay cash dividends
in the foreseeable future.



We currently intend to retain any future
earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the
foreseeable future, but will review this policy as circumstances dictate.



16







Item 1B. Unresolved Staff Comments.



By letter dated February 21, 2012, the
Company received (i) 19 comments related to its Current Report on Form 8-K/A, filed on December 7, 2010, as amended by Amendment
No. 1 filed on February 18, 2011, Amendment No. 2 filed on July 1, 2011, Amendment No. 3 filed on September 13, 2011, Amendment
No. 4 filed on November 17, 2011, and Amendment No. 5 filed on February 1, 2012, and (ii) 11 comments related to its Annual Report
on Form 10-K for the year ended December 31, 2010. As of April 13, 2012, these comments remain outstanding.



Item 2. Properties.



Conventions, through a service agreement
with an office service provider, occupies offices at 1350 Avenue of the Americas, 2nd floor, New York, NY 10019. The term of the
lease agreement commenced on January 22, 2011, and it was to expire on January 31, 2012. The Company exercised a one year renewal
option, extending the expiration date of the lease to January 31, 2013. The office space covers approximately 800 square feet and
our monthly rent is $6,850.00. In addition, effective January 1, 2012, the Company subleased one office of approximately 224 square
feet at 10960 Wilshire Blvd, Suite 1050, Los Angeles, CA 90024, on a month-to-month basis for $1,000.00 per month. We do not own
any real estate.



Item 3. Legal Proceedings.



We are not currently involved in any litigation
that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action,
suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or
affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’
officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.



Item 4. Mine Safety Disclosures.



Not applicable.



17







PART II



Item 5. Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.



(a) Market Information



Our shares of common stock are currently
quoted on the OTC Markets under the symbol “WIZD”.



The following table sets forth the high
and low bid price for our common stock for each quarter during the past three fiscal years. The prices reflect inter-dealer quotations,
do not include retail mark-ups, markdowns or commissions and do not necessarily reflect actual transactions.



|Quarter ended      |  | Low Price |       |  | High Price |  
|------------------ |  | --------- | ----- |  | ---------- | -
|                   |  |           |       |  |            |  
|March 31, 2009     |  | $         | 0.075 |  |            | $
|June 30, 2009      |  | $         | ̶     |  |            | $
|September 30, 2009 |  | $         | 0.333 |  |            | $
|December 31, 2009  |  | $         | 0.400 |  |            | $
|March 31, 2010     |  | $         | ̶     |  |            | $
|June 30, 2010      |  | $         | 0.030 |  |            | $
|September 30, 2010 |  | $         | ̶     |  |            | $
|December 31, 2010  |  | $         | 0.150 |  |            | $
|March 31, 2011     |  | $         | 0.650 |  |            | $
|June 30, 2011      |  | $         | 0.750 |  |            | $
|September 30, 2011 |  | $         | ̶     |  |            | $
|December 31, 2011  |  | $         | 0.750 |  |            | $



(b) Holders



As of April 13, 2012, a total of 35,044,878
shares of the Company’s common stock are currently outstanding held by 18 shareholders of record. This figure does not take
into account those shareholders whose certificates are held in the name of broker-dealers or other nominees.



(c) Dividends



We have not declared or paid any dividends
on our common stock and intend to retain any future earnings to fund the development and growth of our business. Therefore, we
do not anticipate paying dividends on our common stock for the foreseeable future. There are no restrictions on our present ability
to pay dividends to stockholders of our common stock, other than those prescribed by Delaware law.



(d) Securities Authorized for Issuance
under Equity Compensation Plans



Below is a description of the Company’s
compensation plan adopted in 2011.



2011 Incentive Stock Award Plan, as Amended



On May 9, 2011, the Board approved, authorized
and adopted (subject to stockholder approval) the 2011 Incentive Stock and Award Plan (the “Plan”). The Plan was amended
on September 14, 2011, and April 11, 2012. The Plan provides for the issuance of up to 5,000,000 shares of our common stock through
the grant of non-qualified options, incentive options and restricted stock to our directors, officers, consultants, attorneys,
advisors and employees. Until a committee consisting of two or more independent, non-employee and outside directors is constituted,
our Board administers the Plan.



18







Under the Plan:



| | 1. | Each option will contain the following terms:
| | -- | ---------------------------------------------



| | (i) | the exercise price, which shall be determined at the time of grant,
shall not be less than 100% of the Fair Market Value (defined as the closing price on the final trading day immediately prior to
the grant on the principal exchange or quotation system on which the common stock is listed or quoted, as applicable) of the common
stock of the Company,provided that if the recipient of the option owns more than ten percent (10%) of the total combined
voting power of the Company, the exercise price shall be at least 110% of the Fair Market Value;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | the term of each option shall be fixed by the Board,provided
that such option shall not be exercisable more than five (5) years after the date such option is granted, andprovided further
that with respect to an incentive option, if the recipient owns more than ten percent (10%) of the total combined voting power
of the Company, the incentive option shall not be exercisable more than five (5) years after the date such incentive option is
granted;
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | subject to acceleration in the event of a change of control of the Company
(as further described in the Plan), the period during which the options vest shall be designated by the Board or, in the absence
of any option vesting periods designated by the Board at the time of grant, shall vest and become exercisable in equal amounts
on each fiscal quarter of the Company through the four (4) year anniversary of the date on which the option was granted;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | no option is transferable and each is exercisable only by the recipient
of such option except in the event of the death of the recipient (if such recipient is a natural person); and
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | with respect to incentive options, the aggregate Fair Market Value of
common stock exercisable for the first time during any calendar year shall not exceed $100,000.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Each award of restricted stock will be subject to the following terms:
| | -- | ----------------------------------------------------------------------



| | (i) | no rights to an award of restricted stock is granted to the intended
recipient of restricted stock unless and until the grant of restricted stock is accepted within the period prescribed by the Board;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | restricted stock shall not be delivered until they are free of any restrictions
specified by the Board at the time of grant;
| | ---- | ----------------------------------------------------------------------------------------------------------------------------



| | (iii) | recipients of restricted stock have the rights of a stockholder of the
Company as of the date of the grant of the restricted stock;
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------



| | (iv) | shares of restricted stock are forfeitable until the terms of the restricted
stock grant have been satisfied or the employment with the Company is terminated; and
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | the restricted stock is not transferable until the date on which the
Board has specified such restrictions have lapsed.
| | --- | -----------------------------------------------------------------------------------------------------------------------



As of December 31, 2011, the Company issued
the following stock options and grants under the Plan:



19









Equity Compensation Plan Information





|Plan category                                                   |  | Number of securities to be issued upon exercise of outstanding options, warrants and rights and number of shares of restricted stock |         |  | Weighted average exercise price of outstanding options, warrants and rights (1) |   |      | Number of securities remaining available for
 future issuance | 
|--------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------ | ------- |  | ------------------------------------------------------------------------------- | - | ---- | ------------------------------------------------------------- | 
|Equity compensation approved by security holders under the Plan |  |                                                                                                                                      | -       |  |                                                                                 | $ | -    |                                                               | 
|                                                                |  |                                                                                                                                      |         |  |                                                                                 |   |      |                                                               | 
|Equity compensation plans not approved by security holders      |  |                                                                                                                                      | 600,000 |  |                                                                                 | $ | 0.44 |                                                               | 
|                                                                |  |                                                                                                                                      |         |  |                                                                                 |   |      |                                                               | 
|Total                                                           |  |                                                                                                                                      | 600,000 |  |                                                                                 | $ | 0.44 |                                                               | 





| | (1) | Excludes shares of restricted stock issued under the Plan.
| | --- | ----------------------------------------------------------



As of April 13, 2012, we have issued the
following stock options and grants under the Plan:



Equity Compensation Plan Information



|Plan category                                                   |  | Number of securities to be issued upon exercise of outstanding options, warrants and rights and number of shares of restricted stock |           |  | Weighted average exercise price of outstanding options, warrants and rights (1) |   |      | Number of securities remaining available for future issuance | 
|--------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------ | --------- |  | ------------------------------------------------------------------------------- | - | ---- | ------------------------------------------------------------ | 
|Equity compensation approved by security holders under the Plan |  |                                                                                                                                      | -         |  |                                                                                 | $ | -    |                                                              | 
|                                                                |  |                                                                                                                                      |           |  |                                                                                 |   |      |                                                              | 
|Equity compensation plans not approved by security holders      |  |                                                                                                                                      | 3,350,000 |  |                                                                                 | $ | 0.44 |                                                              | 
|                                                                |  |                                                                                                                                      |           |  |                                                                                 |   |      |                                                              | 
|Total                                                           |  |                                                                                                                                      | 3,350,000 |  |                                                                                 | $ | 0.44 |                                                              | 



| | (1) | Excludes shares of restricted stock issued under the Plan.
| | --- | ----------------------------------------------------------



Rule 10B-18 Transactions



During the years ended December 31, 2011,
there were no repurchases of the Company’s common stock by the Company.



Recent Sales of Unregistered Securities



The following contains information regarding
our sales of unregistered securities during the year ended December 31, 2011. All of the securities sold during these periods were
sales of our securities to accredited investors and were deemed to be exempt under Rule 506 of Regulation D of the Securities Act
of 1933, as amended (the “Securities Act”), and Section 4(2) of the Securities Act. No advertising or general solicitation
was employed in offering these securities. The offerings and sales were made to a limited number of persons, all of whom were accredited
investors, and, unless otherwise stated below, the shares were restricted in accordance with the requirements of the Securities
Act.



20







On April 18, 2011,
the Company entered into subscription agreements with certain accredited investor subscribers for the issuance and sale of (i)
$575,000 in shares of the Company’s Series A Preferred Stock (the “Series A Preferred”) and (ii) 287,500 warrants
to purchase shares of the Company’s common stock (the “Warrants”). The Preferred Stock is convertible into shares
of the Company’s common stock, at a per share conversion price of $0.40, and the Warrants are exercisable to purchase shares
of the Company’s Common Stock at a per share exercise price of $0.60. On December 6, 2011, the Warrants were re-priced at
$0.40 per share.



On August 19,
2011, the Companyentered into subscription agreements with certain investors in connection with an offering of up to $455,000
principal amount of convertible promissory notes (the “August Notes”). The August Notes accrue interest at an annual
rate of 14% and are due four months from the issuance date. The Notes were originally convertible at a per share price of $0.60.In conjunction with the August Notes, each investor was granted a Warrant, exercisable for one share of common stock of
the Company for each $2.00 of investment. The Warrants have a five year term and were originally exercisable at $0.60 per share,
which may be paid via a cashless exercise. OnDecember 6, 2011, the August Notes and Warrants were re-priced
at $0.40 per share.



On December 6,
2011, the Company entered into subscription agreements with accredited investors for the issuance and sale of an aggregate of $325,000
in Senior Convertible Debentures (the “Debentures”). The Debentures bear interest at a rate of six percent (6%) per
annum and have a maturity date of February 28, 2011. The Company, at its option, shall have the right to prepay a portion or all
outstanding principal of the Debentures prior to the maturity date without penalty. The Debentures are mandatorily convertible
into shares of the Company’s Series A Preferred, upon a private placement of the Company of a minimum of $500,000 of Series
A Preferred (the “Qualified Offering”). Additionally, at the option of the subscribers, the Debentures are convertible
into shares of Series A Preferred, in whole or in part, at any time between the original issue date of the Debentures and the maturity
date, unless previously repaid by the Company or mandatorily converted into Series A Preferred. The Debentures contain customary
events of default, the occurrence of which would entitle Subscribers to accelerate the amounts outstanding.



On December 21,
2011, the Company entered into a subscription agreement with one investor, the Michael Mathews 2011 Children’s GRAT (the
“Trust”). Michael Mathews is the Company’s Chairman of the Board. Pursuant to the terms of the Agreement, the
Company issued 357,143 shares of the Company’s common stock, at a per share subscription price of $0.70 per share, for a
total subscription price of $250,000.00.



Item 6. Selected Financial Data.



Not applicable.



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



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



Overview



We intend for this discussion to provide
information that will assist in understanding our financial statements, the changes in certain key items in those financial statements,
and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements.
This discussion should be read in conjunction with our financial statements and accompanying notes for the years ended December
31, 2010 and 2009, included elsewhere in this report.



21







We are a producer of pop culture and multimedia
conventions (“Comic Cons”) across North America that markets movies, TV shows, video games, technology, toys, social
networking/gaming platforms, comic books and graphic novels. These Comic Cons provide sales, marketing, promotions, public relations,
advertising and sponsorship opportunities for entertainment companies, toy companies, gaming companies, publishing companies, marketers,
corporate sponsors and retailers.



Plan of Operation



Our Company has two lines of business:
(i) live multimedia events, which involves ticket sales and exhibitor booth space, and (ii) sponsorships and advertising. Our current
focus is on growing our existing Comic Cons by obtaining new exhibitors and dealers and attracting more high profile celebrities
and VIPs. We also plan to expose our database of fans and our target market of young adult males to our content through digital
media such as facebook, Twitter, YouTube, Flickr, and Tumblr, and draw higher traffic to our website www.wizardworld.com by creating
content from our live multimedia events and promoting such events through emails and newsletters.



Further, in the fourth quarter of 2011,
we launched our new digital entertainment ad network called the “Wizard World Digital Entertainment Network,” which
will be comprised of two websites located at www.wizardworld.com and www.toywiz.com, and the Wizard World email database. The Wizard
World Digital Entertainment Network will offer display advertising to brand advertisers, priced on a traditional CPM ad impression
basis. We plan to work with display advertising networks and third party representation firms, and to hire four direct sales employees
over the next 12 months to maximize the monetization of the Wizard World Digital Entertainment Network.



We expect to produce six (6) live events
during the year ended December 31, 2012. We run the risk that we will not be profitable in the live event business. To date, we
have operated profitable live events in both the Philadelphia and Chicago markets, but we have operated at a deficit in other events.
In order for us to operate a successful event, we must produce an event that is relevant to the public in order drive ticket sales,
booth sales, sponsorship and advertising. In order for the Company to grow the digital business, we must attract unique users and
drive traffic to our online site. To date, we have exhausted considerable resources developing our media platform, but we have
yet to earn a profit from the platform.



Currently, our digital media business has
been funded on capital raised from outside investors.  We are currently earning revenue from the site and from the newly
launched digital entertainment ad network, but not enough to maintain the costs to operate. We must continue to fund the digital
media business from outside investors and from cash flow from the live event business until the media platform generates enough
revenue to support its own operation.



Results of Operations



For the Year Ended December 31, 2011 Compared to the Year
Ended December 31, 2010



|                                                   |  | Year Ended        |           
|-------------------------------------------------- |  | ----------------- | ----------
|                                                   |  | December 31, 2011 |           
|Convention revenue                                 |  | $                 | 3,782,124 
|Gross profit (loss)                                |  | $                 | 950,913   
|Operating expenses                                 |  | $                 | (4,108,215
|Loss from operations                               |  | $                 | (3,157,302
|Other income (expenses)                            |  | $                 | 1,148,064 
|Net loss                                           |  | $                 | (2,009,238
|Income (loss) per common share – basic and diluted |  | $                 | (0.06     



Convention Revenue



Convention revenue was $3,782,124 for the
year ended December 31, 2011, as compared to $3,000,814 for the comparable year ended December 31, 2010, an increase of $781,310.
The significant increase in convention revenue is primarily attributable to running larger events in 2011, as compared to 2010.
The Company ran nine events during the year ended December 31, 2011, as compared to eight during the comparable year ended December
31, 2010. Average revenue generated per event in 2011 was $420,236, as compared to $375,102 during 2010.



22







Gross Profit



Gross profit percentage decreased from
28% for the year ended December 31, 2010, as compared to 25% during the year ended December 31, 2011. The slight decrease in margin
is primarily attributable to increased expenses in the company’s digital platform for content providers and revenue share.



Operating Expenses



Operating expenses for the year ended December
31, 2011, was $4,108,215, as compared to $1,183,010 for the year ended December 31, 2010. The $2,925,205 increase is primarily
attributable to an increase in compensation of $411,413, an increase in professional fees associated with being a public company,
and increase in web development fees of $815,039, and an increase in non-cash stock based compensation to key consultants and professionals
in the amount of $700,090.



Income (Loss) from Operations



Loss from operations for the year ended
December 31, 2011, was $(3,157,302), as compared to $(340,809) for the year ended December 31, 2010. The increase is primarily
attributable to an increase in compensation of $411,413, an increase in professional fees associated with being a public company,
an increase in web development fees of $815,039, and an increase in non-cash stock based compensation to key consultants and professionals
in the amount of $700,090, offset by a slight increase in gross profit of $108,712.



Other income (expenses)



Other income (expense) for the year ended
December 31, 2011, was $1,148,064, as compared to $(1,287,381) for the year ended December 31, 2010. The increase is attributable
to a gain in fair market value of derivative liabilities of $1,278,848, as compared to incurring a loss on the same account of
$1,284,643. This increase was offset by increased interest expense associated with accreting debt discount recorded on the Company’s
note offerings.



Net Income (Loss)



Net loss for year ended December 31, 2011,
was $(2,009,238) or loss per share of $(0.06), as compared to $(1,628,190) or loss per share of $(0.08), for the comparable year
ended December 31, 2010.



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



Liquidity and Capital Resources



The following table summarizes total current
assets, liabilities and working capital at December 31, 2011, compared to December 31, 2010:



|                          |  | December 31,
 2011 |            |   | December 31,
 2010 |   |            | Increase/Decrease | 
|------------------------- |  | ------------------ | ---------- | - | ------------------ | - | ---------- | ----------------- | 
|Current Assets            |  | $                  | 669,972    |   |                    | $ | 656,997    |                   | 
|Current Liabilities       |  | $                  | 4,080,466  |   |                    | $ | 2,925,407  |                   | 
|Working Capital (Deficit) |  | $                  | (3,410,494 | ) |                    | $ | (2,268,410 | )                 | 



At December 31, 2011, we had a working
capital deficit of $3,410,494, as compared to a working capital deficit of $2,268,410, at December 31, 2010, an increase of $1,472,084.
The increase is primarily attributable to an increase in accounts payables and accrued liabilities and an increase in convertible
promissory notes.



23







Net cash used in operating activities for
the year ended December 31, 2011 and 2010 was $(1,572,555) and $(350,537), respectively. The net loss for the years ended December
31, 2011 and 2010 was $(2,009,238) and $(1,628,190), respectively. The Company’s cash used in operations increased significantly
due to running an additional events during the quarter and the costs associated and increased professional fees associated with
running a public company, as well as cash spent in web development fees.



Net cash obtained through all financing
activities for the years ended December 31, 2011 was $1,456,117, as compared to $894,314 for the year ended December 31, 2010.
The company raised $575,000 through the sale and issuance of convertible preferred stock and through the sales and issuance of
convertible promissory notes in the amount of $778,100.



Going Concern



As reflected in the accompanying consolidated financial statements, the Company had a net loss and net cash used in operations for the year ended December 31, 2011,
and a working capital deficit and stockholders’ deficit, respectively, at December 31, 2011. These factors raise substantial
doubt about the Company’s ability to continue as a going concern.



The ability of the Company to continue
its operations is dependent on management’s plans, which include the raising of capital through debt and/or equity markets
with some additional funding from other traditional financing sources, including term notes.



The Company will require additional funding
to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company
believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future.
There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all.



In response to these problems, management has taken the following
actions:



| | · | seek additional third party debt and/or equity financing;
| | - | ---------------------------------------------------------



| | · | continue with the implementation of the business plan;
| | - | ------------------------------------------------------



| | · | increase product prices and reduce discounts;
| | - | ---------------------------------------------



| | · | increase revenue from existing live events; and
| | - | -----------------------------------------------



| | · | increase revenue through sponsorship and advertising deals.
| | - | -----------------------------------------------------------



Off-Balance Sheet Arrangements



As of December 31, 2011, the Company had
no off-balance sheet arrangements.



Critical Accounting Policies



We believe that the following accounting
policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis
of Financial Condition and Results of Operations.”



Use of Estimates



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



24











The Company’s significant estimates
and assumptions include the fair value of financial instruments; the carrying value, recoverability and impairment, if any, of
long-lived assets, including the values assigned to deposits and construction in progress, income tax rate, income tax provision,
allowance of deferred tax assets and the assumption that the Company will continue as a going concern. Those significant accounting
estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions,
and certain estimates or assumptions are difficult to measure or value.



Management bases its estimates on historical
experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.



Management regularly reviews its estimates
utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions.
After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those
estimates.



Property and Equipment



Property and equipment is stated at historical
cost less accumulated depreciation and amortization. Depreciation and amortization is computed on a straight-line basis over the
estimated useful lives of the assets, varying from 3 to 5 years or, when applicable, the life of the lease, whichever is shorter.



Carrying Value, Recoverability and Impairment
of long-lived assets



The Company has adopted paragraph 360-10-35-17
of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property
and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.



The Company assesses the recoverability
of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or
group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if
any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using
the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined
to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book
values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.



The Company considers the following to
be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of
assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of
assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s
overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures;
and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and
more frequently upon the occurrence of such events.



The impairment charges, if any, are included
in operating expenses in the accompanying statements of operations.



Derivative Instruments



The Company evaluates its convertible debt,
warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to
be separately accounted for in accordance with Paragraph 810-10-05-4 of the Codification and Paragraph 815-40-25 of the Codification.
The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet
date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded
in the consolidated statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument,
the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.



In circumstances where the embedded conversion
option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the
convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single,
compound derivative instrument.



25







The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting
period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to
liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified
in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected
within 12 months of the balance sheet date.



Income Taxes



We comply with SFAS No. 109, Accounting
for Income Taxes, which requires an asset and liability approach to financial reporting for income taxes. Deferred income tax
assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income
tax assets to the amount expected to be realized.



Revenue Recognition



In accordance with the provisions of Staff
Accounting Bulletin (“SAB”) No. 101, Revenue Recognition, as amended by SAB 104, revenues are generally recognized
when products are shipped or as services are performed. However, due to the nature of our business, there are additional steps
in the revenue recognition process, as described below:



| | · | Sponsorships: We follow the guidance of Emerging Issues Task Force (“EITF”) Issue 00-21
Revenue Arrangements with Multiple Deliverables, and assign the total of sponsorship revenues to the various elements contained
within a sponsorship package based on their relative fair values.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Fair Value of Financial Instruments



We follow paragraph 825-10-50-10 of the
FASB Accounting Standards Codification for disclosures about fair value of our financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of our financial
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted
in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and
comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy
gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority
to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:



| | · | Level 1 – Quoted market prices available in active markets for identical assets or liabilities
as of the reporting date;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | · | Level 2 – Pricing inputs other than quoted prices in active markets included in Level 1,
which are either directly or indirectly observable as of the reporting date; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Level 3 – Pricing inputs that are generally observable inputs and not corroborated by market
data.
| | - | --------------------------------------------------------------------------------------------------



The carrying
amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate
their fair value because of the short maturity of those instruments.The Company’s convertible preferred stock and
warrantsapproximate the fair value of such instruments based upon management’s best estimate
of interest rates that would be available to the Company for similar financial arrangements at December 31, 2011 and December 31,
2010.



The Company uses Level 3 of the fair value
hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liability at every reporting
period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable
to the change in the fair value of the derivative warrant liability.



26







Financial assets and liabilities measured
at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets:



|                                                       |  |                |           |  | Fair Value Measurement Using |  
|------------------------------------------------------ |  | -------------- | --------- |  | ---------------------------- | -
|                                                       |  | Carrying Value |           |  | Level 1                      |  
|                                                       |  |                |           |  |                              |  
|Derivative conversion features and warrant liabilities |  | $              | 1,946,669 |  |                              | $



The table below provides a summary of the
changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on
a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2011:



27







|                                                                 |  | Fair Value Measurement Using Level 3 Inputs |           
|---------------------------------------------------------------- |  | ------------------------------------------- | ----------
|                                                                 |  | Derivative Liabilities                      |           
|                                                                 |  |                                             |           
|Balance, December 31, 2010                                       |  | $                                           | 2,260,571 
|Total gains or losses (realized/unrealized) included in net loss |  |                                             | (1,278,848
|Purchases, issuances and settlements                             |  |                                             | 964,946   
|Transfers in and/or out of Level 3                               |  |                                             | -         
|Balance, December 31, 2011                                       |  | $                                           | 1,946,669 



Recent Accounting Pronouncements



In May 2011, the FASB issued the FASB Accounting
Standards Update No. 2011-04 “Fair Value Measurement” (“ASU 2011-04”). This amendment and guidance
are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing
information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards (IFRSs).



This update does not modify the requirements
for when fair value measurements apply; rather, it generally represent clarifications on how to measure and disclose fair value
under ASC 820, Fair Value Measurement,including the following revisions:



| | · | An entity that holds a group of financial assets and financial liabilities whose market risk (that
is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net
risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows
such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those
risks.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market
participants would do so when pricing the asset or liability consistent with the unit of account.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Additional disclosures about fair value measurements.
| | - | -----------------------------------------------------



The amendments in this Update are to be
applied prospectively and are effective for public entity during interim and annual periods beginning after December 15, 2011.



In June 2011, the FASB issued the FASB
Accounting Standards Update No. 2011-05 “Comprehensive Income” (“ASU 2011-05”),whichwas the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income,by
eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity.
Instead, the new guidance now gives entities the option to present all non-owner changes in stockholders’ equity either as
a single continuous statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity
chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments
require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive
income.



The amendments in this Update should be
applied retrospectively and are effective for public entity for fiscal years, and interim periods within those years, beginning
after December 15, 2011.



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



28







Item 7A.  Quantitative and
Qualitative Disclosures About Market Risk.



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



Item 8. Financial Statements.



Our consolidated financial statements are
contained in pages F-1 through F-21 which appear at the end of this Annual
Report.



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



There are no reportable events under this
item for the year ended December 31, 2011.



Item 9A. Controls and Procedures.



(a) EVALUATION OF DISCLOSURE CONTROLS AND
PROCEDURES



Based on their evaluation as of the end
of the period covered by this Annual Report on Form 10-K, our principal executive officer and principal financial officer have
concluded that our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act) are
not effective to ensure that information required to be disclosed by us in report that we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s
rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange
Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate
to allow timely decisions regarding required disclosure.



(b) MANAGEMENT’S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING



This Company’s management is responsible
for establishing and maintaining internal controls over financial reporting and disclosure controls. Internal Control Over Financial
Reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial
officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:



| | (1) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the issuer;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
issuer are being made only in accordance with authorizations of management and directors of the registrant; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the issuer’s assets that could have a material effect on the financial statements.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Disclosure controls and procedures are
designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended,
is appropriately recorded, processed, summarized and reported within the specified time periods.



Management has conducted an evaluation
of the effectiveness of our internal control over financial reporting as of December 31, 2011, based on the framework established
in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).



29







Based on this assessment, management concluded
that as of December 31, 2011, it had material weaknesses in its internal control procedures.



A material weakness
is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is
a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected
on a timely basis. As of December 31, 2011, we have concluded that our internal control over
financial reporting was ineffective. The Company’s assessment identified certain material
weaknesses which are set forth below:



Functional Controls and Segregation of Duties



Because of the company’s limited
resources, there are limited controls over information processing, and no internal controls over the accuracy, completeness and
authorization of transactions.



There is an inadequate segregation of duties
consistent with control objectives. Our Company’s management is composed of a small number of individuals resulting in a
situation where limitations on segregation of duties exist. In order to remedy this situation we would need to hire additional
staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation
of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is
feasible.



There is a lack of top level reviews in
place to review targets, product development, joint ventures or financing. All major business decisions are carried out by the
officers with board of director approval when needed.



Accordingly, as the result of identifying
the above material weaknesses we have concluded that these control deficiencies resulted in a reasonable possibility that a material
misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s
internal controls.



Management believes that the material weaknesses
set forth above were the result of the scale of our operations and are intrinsic to our small size. Management believes these weaknesses
did not have a material effect on our financial results and intends to take remedial actions upon receiving funding for the Company’s
business operations.



This annual report does not include an
attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit
the Company to provide only management’s report herein.



(c) CHANGES IN INTERNAL CONTROLS OVER FINANCIAL
REPORTING



We are committed to improving our financial
organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within the accounting function when funds are available
to us by preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and
financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.



Management believes that preparing and
implementing sufficient written policies and checklists will remedy the material weaknesses pertaining to insufficient written
policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and
SEC disclosure requirements. We intend to take appropriate and reasonable steps to make the necessary improvements to remediate
these deficiencies, including:



| | (1) | We will document a formal code of ethics.
| | --- | -----------------------------------------



| | (2) | We will revise processes to provide for a greater role of independent board members in the oversight
and review until such time that we are adequately capitalized to permit hiring additional personnel to address segregation of duties
issues, ineffective controls over the revenue cycle and insufficient supervision and review by our corporate management.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30







| | (3) | We will continue to update the documentation of our internal control processes, including formal
risk assessment of our financial reporting processes.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



We intend to consider the results of our
remediation efforts and related testing as part of our year-end 2011 assessment of the effectiveness of our internal control over
financial reporting.



Subsequent to December 31 2011, we have
undertaken the following steps to address the deficiencies stated above:



| | · | Continued the development and documentation of internal controls and procedures surrounding the
financial reporting process, primarily through the use of account reconciliations, and supervision.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 9B. Other Information.



On August 25, 2011, pursuant to a meeting
of the board of directors on July 24, 2011, the Company changed its fiscal year end from July 31 to December 31.



On April 11, 2012, the board of directors
approved an amendment to the Company’s 2011 Incentive Stock and Award Plan. The amendment increased the authorized shares
under the Plan to 5,000,000. A copy of the amended and restated Plan is filed as an exhibit hereto.



31







PART III



Item 10. Directors, Executive Officers
and Corporate Governance.



Directors and Executive Officers



The following table discloses our directors
and executive officers as of April 13, 2012. There are no familial relationships between or among the directors or executive officers
of the Company.



|Name            |  | Age |  | Title                            
|--------------- |  | --- |  | ---------------------------------
|                |  |     |  |                                  
|John Macaluso   |  | 55  |  | Chief Executive Officer, Director
|                |  |     |  |                                  
|Michael Mathews |  | 50  |  | Chairman                         
|                |  |     |  |                                  
|John Maatta     |  | 59  |  | Director                         
|                |  |     |  |                                  
|Greg Suess      |  | 39  |  | Director                         
|                |  |     |  |                                  
|Vadim Mats      |  | 27  |  | Director                         



John Macaluso, age 55, Chief Executive
Officer, Director



John Macaluso has served as a member of
our Board since May 13, 2011. Mr. Macaluso is the founder, sole owner and Chief Executive Officer of California Concepts, a domestic
manufacturer of domestic and imported women’s and girls’ clothing, which operated as such from 1987 through 2007. In
2007, Mr. Macaluso exited the clothing business and transitioned California Concepts into a real estate development business, managing
projects in Los Angeles, Las Vegas and Big Sky, Montana at the Yellowstone Club, among others.



The Board believes that Mr. Macaluso’s
business experience with managing gross profit margins, markdown allowances, budgets and negotiating effective costs of goods purchased
will be a significant asset to the Company with respect to, among other things, its operating budget as a growing public company.



Michael Mathews, age 50, Chairman of
the Board



Michael Mathews
has been our Company’s Chairman of the Board since March 23, 2011, and from the period from December 1, 2011 to March 19,
2012, he served as our Executive Chairman. In May 2011, Mr. Mathews was appointed Chief Executive Officer and Director of Aspen
Group, Inc., a for-profit nationally accredited, exclusively online university. From August 2007 until January 31, 2011, Mr. Mathews
was the Chief Executive Officer of interclick, inc. (formerly Customer Acquisition Network Holdings, Inc.), a provider of data
driven campaign strategies for digital agencies and marketers (“interclick”).From May 2008 until June 2008,
Mr. Mathews served as the interim Chief Financial Officer of interclick.Interclick, was acquired by
Yahoo! in December, 2011. From 2004 to 2007, Mr. Mathews served as the Senior Vice-President of Marketing and Publisher Services
of World Avenue U.S.A., LLC, an Internet promotional marketing company. Mr. Mathews graduated from San Francisco State University
with a degree in Marketing and holds a Masters in Business Administration from Golden Gate University.



The Board believes that Mr. Mathews’
extensive experience and background in the internet marketing industry will be a significant asset to the Company’s development
of its digital platform, and his leadership roles in public companies will aid in the operation of our Company as a public company.



32







Mr. John Maatta, age 59, Director



John Maatta has been a member of our Board
since May 25, 2011.  Since 2006, Mr. Maatta has been the Chief Operating Officer of The CW Network, which is America’s
fifth broadcast network and a network that focuses substantially on targeting young adults between the ages of 18 and 34.  From
September 2005 through September 2006, Mr. Maatta served as the Chief Operating Officer of The WB, a Warner Bros. television network
(“The WB”), where he had direct oversight of all business and operations departments, such as business affairs, finance,
network distribution (which included The WB 100+ station group), technology, legal, research, network operations, broadcast standards
and human resources.  While Chief Operating Officer at The WB, Mr. Maatta also served as The WB’s General Counsel.
Mr. Maatta is currently a director of Trader Vics, Inc., a Polynesian-style restaurant chain, a position he has held since 1998.
Mr. Maatta received a Bachelor of Arts in Government from the University of San Francisco in 1974, and a Juris Doctorate from the
University of California, Hastings College of the Law, in 1977.



The Board believes that Mr. Maatta’s
experience with operating companies in the entertainment industry and his contacts in the industry will be an important factor
in the Company’s growth as a digital entertainment and event company.



Greg Suess, age 39, Director



Greg Suess has been a director of our Company
since May 9, 2011.  In 2000, he founded ROAR, a Beverly Hills-based management and consulting company that focuses on
media and entertainment and provides comprehensive management services for its clients, including talent and brand management,
managing partnerships, strategic alliances and marketing strategies that engage consumers through entertainment, music and lifestyle
experiences. Mr. Suess is, and has been since inception, a partner at ROAR.  Since 1997, Greg has been with the law firm
of Glaser, Weil, Fink, Jacobs, Howard, Avchen & Shapiro, LLP, where he is currently Of Counsel and focuses on general corporate
law and media and entertainment.  Mr. Suess also serves on the board of directors of TicTock Studios and Derycz Scientific,
Inc.  Mr. Suess holds a Bachelor of Science from the University of Southern California (Lloyd Greif Center for Entrepreneurial
Studies), and holds a JD/MBA from Pepperdine University. He is a member of the State Bar of California.



The Board believes that Mr. Suess’
extensive experience and background in the media and entertainment industry complements the Company’s events business, its
new digital initiatives and its new online media Wizard World Digital, which covers new and upcoming products and talents in the
pop culture world.



Vadim Mats, age 27, Director



Vadim Mats has been a director of our Company
since January 14, 2011. Mr. Mats is also, and has been since June 28, 2010, the Chief Financial Officer of FWS Capital Ltd. Prior
to joining FWS Capital Ltd., Mr. Mats served as an accounting consultant to various companies from December 2009 until June 2010.
Mr. Mats was also previously the assistant controller at Eton Park Capital Management, a multi-strategy fund, from July 16, 2007
to December 1, 2009. From June 2006 to July 2007, Mr. Mats was a senior fund accountant at The Bank of New York Mellon, where he
was responsible for over fifteen funds. Mr. Mats graduatedcum laude from the Zicklin School of Business at Bernard Baruch
College with a Bachelor’s degree in Business Administration, specializing in finance and investments.



Mr. Mats’ extensive experience and
background in finance, accounting and investment funds will be a significant asset to the Company’s operation as a public
company.



Family Relationships



There are no family relationships among
our directors, executive officers, or persons nominated or chosen by the Company to become directors or executive officers. None
of our directors or executive officers or their respective immediate family members or affiliates are indebted to us.



Committees of the Board of Directors



We have not established any committees,
including an audit committee, a compensation committee or a nominating committee.The
Board currently acts as our audit committee. At the present time, we believe that our Board is capable of analyzing and evaluating
our financial statements and understanding internal controls and procedures for financial reporting.



33







We do not have a policy regarding the consideration
of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates,
nor has our board of directors established a process for identifying and evaluating director nominees, nor do we have a policy
regarding director diversity. We have not adopted a policy regarding the handling of any potential recommendation of director candidates
by our shareholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as
we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors.



Given our relative size, we do not anticipate
that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional
directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director
nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background
of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.



None of our directors is an “audit
committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial
expert” is an individual member of the audit committee or Board who:



| | · | understands generally accepted accounting principles and financial statements;
| | - | ------------------------------------------------------------------------------



| | · | is able to assess the general application of such principles in connection with accounting for
estimates, accruals and reserves;
| | - | --------------------------------------------------------------------------------------------------------------------------------



| | · | has experience preparing, auditing, analyzing or evaluating financial statements comparable to
the breadth and complexity to our financial statements;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | understands internal controls over financial reporting, and
| | - | -----------------------------------------------------------



| | · | understands audit committee functions.
| | - | --------------------------------------



Our securities are not quoted on an exchange
that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law,
rule or regulation requiring that all or any portion of our Board include “independent” directors, nor are we required
to establish or maintain an audit committee or other committee of our board of directors.



Director Independence



The common stock of the Company is currently
quoted on the OTC Markets, a quotation system which currently does not have director independence requirements. On an annual basis,
each director and executive officer will be obligated to disclose any transactions with the Company in which a director or executive
officer, or any member of his or her immediate family, have a direct or indirect material interest in accordance with Item 407(a)
of Regulation S-K. Following completion of these disclosures, the Board will make an annual determination as to the independence
of each director using the current standards for “independence” that satisfy the criteria for the Nasdaq.



As of April 13, 2012, the Board determined
that the following directors are independent under these standards:



John Maatta; Vadim Mats; and Greg Suess.



Board Oversight in Risk Management



Risk is inherent with every business, and
how well a business manages risk can ultimately determine its success. We face a number of risks, including liquidity risk, operational
risk, strategic risk and reputation risk. Our Chief Executive Officer also serves as one of our directors. In the context of risk
oversight, at the present stage of our operations we believe that our selection of one person to serve in both positions provides
the Board with additional perspective which combines the operational experience of a member of management with the oversight focus
of a member of the Board. The business and operations of the Company are managed by our Board as a whole, including oversight of
various risks that the Company faces.



34







Compliance with Section 16(a) of the
Exchange Act



As of December 31, 2011, we were not subject
to Section 16(a) of the Exchange Act, which requires the Company’s directors, executive officers and persons who beneficially
own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership
and changes in beneficial ownership with the SEC.



On March 30, 2012, the Company filed a
registration statement on Form 8-A, registering the Company’s common stock, par value $0.0001 per share, under Section 12(g)
of the Exchange Act, and thus became subject to the reporting requirements of Section 16(a). To our knowledge, as of April, 13,
2012, all required Section 16(a) filings have been made.



Code of Ethics



We have not yet adopted a code of ethics
because we wanted to complete our constitution of the Board prior to adopting such code of ethics to allow the entire Board to
review and approve a code of ethics.



Legal Proceedings



There are no material proceedings to which
any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of
our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. No director or executive officer
has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed
against it during the past ten years. No director or executive officer has been convicted of a criminal offense or is the subject
of a pending criminal proceeding during the past ten years. No director or executive officer has been the subject of any order,
judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities during the past ten years. No director or officer has been found by a
court to have violated a federal or state securities or commodities law during the past ten years.



35







Item 11. Executive Compensation.



2011 SUMMARY COMPENSATION TABLE



|Name andPrincipal
    Position |  | Year |      |  | Salary  ($) |   |        | Bonus  ($) |  |   | Stock Awards  ($) |  |  | Option Awards  ($) |   |  | Non-Equity Incentive Plan Compensation
    (S) |   |   | Nonqualified Deferred Compensation
    Earnings ($) |  |   | All Other Compensation ($) |  |  | Total ($) |  
|------------------------------ |  | ---- | ---- |  | ----------- | - | ------ | ---------- |  | - | ----------------- |  |  | ------------------ | - |  | ---------------------------------------------- | - | - | --------------------------------------------------- |  | - | -------------------------- |  |  | --------- | -
|                               |  |      |      |  |             |   |        |            |  |   |                   |  |  |                    |   |  |                                                |   |   |                                                     |  |   |                            |  |  |           |  
|Gareb Shamus (1)               |  |      | 2011 |  |             | $ | 76,066 |            |  | $ | 0                 |  |  | $                  | 0 |  |                                                | $ | 0 |                                                     |  | $ | 0                          |  |  | $         | 0
|Former Chief Executive         |  |      | 2010 |  |             | $ | 76,800 |            |  | $ | 0                 |  |  | $                  | 0 |  |                                                | $ | 0 |                                                     |  | $ | 0                          |  |  | $         | 0
|Officer and President          |  |      |      |  |             |   |        |            |  |   |                   |  |  |                    |   |  |                                                |   |   |                                                     |  |   |                            |  |  |           |  
|                               |  |      |      |  |             |   |        |            |  |   |                   |  |  |                    |   |  |                                                |   |   |                                                     |  |   |                            |  |  |           |  
|Terry Fields (2)               |  |      | 2011 |  |             | $ | 0      |            |  | $ | 0                 |  |  | $                  | 0 |  |                                                | $ | 0 |                                                     |  | $ | 0                          |  |  | $         | 0
|Former Chief Financial         |  |      | 2010 |  |             | $ | 0      |            |  | $ | 0                 |  |  | $                  | 0 |  |                                                | $ | 0 |                                                     |  | $ | 0                          |  |  | $         | 0
|Officer                        |  |      | 2009 |  |             | $ | 0      |            |  | $ | 0                 |  |  | $                  | 0 |  |                                                | $ | 0 |                                                     |  | $ | 0                          |  |  | $         | 0
|                               |  |      |      |  |             |   |        |            |  |   |                   |  |  |                    |   |  |                                                |   |   |                                                     |  |   |                            |  |  |           |  
|Michael Mathews (3)            |  |      | 2011 |  |             | $ | 0      |            |  | $ | 0                 |  |  | $                  | 0 |  |                                                | $ | 0 |                                                     |  | $ | 0                          |  |  | $         | 0
|Former Executive               |  |      |      |  |             |   |        |            |  |   |                   |  |  |                    |   |  |                                                |   |   |                                                     |  |   |                            |  |  |           |  
|Chairman                       |  |      |      |  |             |   |        |            |  |   |                   |  |  |                    |   |  |                                                |   |   |                                                     |  |   |                            |  |  |           |  



| | (1) | Mr. Shamus was appointed on December 7, 2010, and therefore did not have any relevant compensation
to report for the fiscal year ended December 31, 2009. Mr. Shamus resigned from his respective executive officer and director positions
on December 1, 2011. On December 31, 2010, the Company determined that the outstanding loan and interest in the amount of $299,235
to Wizard Entertainment, was uncollectable. Because Wizard Entertainment is controlled by Gareb Shamus, the Company determined
that balance should be considered compensation. The Company recorded $299,235 to compensation expense.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Mr. Fields resigned from his position as Chief Financial Officer and
as a member of the Company’s board of directors on January 4, 2011.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Mr. Mathews assumed the role of the Company’s Executive Chairman on December 1, 2011. On
March 19, 2012, Mr. Mathews resigned as the Company’s Executive Chairman in order to return to his role as the Company’s
Chairman of the Board. Mr. Mathews was compensated through his consulting agreement as described below.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Employment Agreement with Gareb Shamus



The Company entered into an employment
agreement, effective May 25, 2011 (the “Employment Agreement”), with Mr. Gareb Shamus, pursuant to which he was to
serve as the Company’s Chief Executive Officer. The term of the employment was for a period of three (3) years and automatically
renewed for additional one (1) year periods unless either Mr. Shamus or the Company gave written notice of non-renewal to the other
party no later than sixty (60) days prior to the expiration of the then current term.



The Employment Agreement provided for an
annual base salary of $140,000 (the “Base Salary”), subject to an annual increase of at least ten percent (10%) per
annum, and may not be decreased. In addition to the Base Salary, Mr. Shamus was to receive an annual bonus of up to one hundred
percent (100%) of his then-current Base Salary (to be paid 50% in cash and 50% in restricted stock) based upon the achievement
of certain performance targets to be agreed upon by Mr. Shamus and a majority of the Board (the “Bonus Target”). Notwithstanding
the foregoing, in the event that the performance of the Company business for any fiscal year is greater than seventy-five percent
(75%), but less than one hundred percent (100%), of the applicable Bonus Target, Mr. Shamus was entitled to a percentage of the
annual bonus as determined in the Employment Agreement. In the event Mr. Shamus and the Board are unable to agree to a mutually
acceptable Bonus Target, Mr. Shamus was to receive an annual bonus of not less than fifteen percent (15%) of the Base Salary, all
of which could have been paid in restricted stock at Mr. Shamus’ sole discretion.



36







Pursuant to
a letter of resignation dated December 1, 2011, Mr. Gareb Shamus resigned his positions as President, Chief Executive Officer and
Director of the Company. Pursuant to the Employment Agreement, upon Mr. Shamus’ resignation, in addition to the reimbursement
of documented, unreimbursed expenses incurred prior to such date,Mr. Shamus was entitled to the following severance benefits:
accrued and unpaid Base Salary and vacation pay through the date of termination, less withholding of applicable taxes. Mr. Shamus
shall have any conversion rights available under the Corporation’s Benefit Plans and as otherwise provided by law, including
the Comprehensive Omnibus Budget Reconciliation Act. As of December 31, 2011, the Company owed Mr. Shamus a total of $61,840.23
in back due salary (the “Shamus Back Salary”). On or about January 15, 2012, the Company and Mr. Shamus verbally agreed
that the Shamus Back Salary would be repaid in cash at a rate of $10,000 per month until there is a zero balance. As of April 13,
2012, the outstanding Shamus Back Salary equals $31,381.19.



Consulting Agreements



Mike Mathews



On March 23, 2011, the Company entered
into a consulting agreement (the “Mathews Consulting Agreement”) with Mr. Mathews, the Company’s Chairman,
pursuant to which Mr. Mathews will, among other things, develop a digital platform for the Company and establish digital planning
systems that will include all forms of digital media and social, search, content, and video applications. The term of the Mathews
Consulting Agreement is for a four (4) year period. As compensation for his services, Mr. Mathews shall receive a total of 1,000,000
shares of the Company’s common stock, with the first 250,000 shares issued on March 23, 2011. As of April, 13, 2012, Mr.
Mathews has received 500,000 shares under the Mathews Consulting Agreement.



CA Concepts





On September 1, 2011, the Company entered
into a verbal agreement with California Concepts, Inc. (“Concepts”), to provide consulting services to the Company.
John Macaluso, the Company’s Chief Executive Officer, is the chief executive officer of Concepts. Pursuant to the terms of
the consulting agreement, Concepts was to receive $10,000 per month for the consulting services. On February 7, 2012, the Company
entered into a formal written agreement, documenting the terms of the previous verbal agreement. On March 19, 2012, in conjunction
with Mr. Macaluso’s appointment as the Company’s Chief Executive Officer, the consulting agreement with Concepts was
terminated. Concepts received $40,000 for services rendered during the fiscal year ended December 31, 2011. For the period from
January 1, 2012, until March 19, 2012, Concepts received a total of $25,384.79 for services rendered.



Outstanding Equity Awards



|2011 OUTSTANDING EQUITY AWARDS AT FISCAL
    YEAR-END           | 
|--------------------------------------------------------------- | 
|OPTION AWARDS                                                   | 
|Name (a)                                                        | 
|                                                                | 
|Gareb Shamus (1)Former
    Chief Executive Office and President | 
|                                                                | 
|Terry Fields (2) Former Chief Financial Officer                 | 
|                                                                | 
|Michael Mathews (3) Former Executive Chairman                   | 



37







(1)Mr.
Shamus resigned from his respective executive officer positions on December 1, 2011. None of Mr. Shamus’ equity awards had
vested at the time of his resignation and pursuant to the terms of his employment agreement, such awards were forfeited upon his
resignation.



(2)     Mr. Fields
resigned from his position as Chief Financial Officer on January 4, 2011.



(3)Mr.
Mathews assumed the role of the Company’s Executive Chairman on December 1, 2011. On March 19, 2012, Mr. Mathews resigned
as the Company’s Executive Chairman in order to return to his role as the Company’s Chairman of the Board.



(4)     These restricted
stock award shares were issued to Mr. Mathews for his services as the Chairman of the Board.



(5)     The Company
does not currently have a discernible market value for its common stock. This amount was calculated based on the Company’s
past fiscal performance and the price of the Company’s recent financing transactions.



Director Compensation



The following summary compensation table sets forth all compensation
awarded to, earned by, or paid to the named directors by us during the year ended December 31, 2011.



|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  | Non-Equity       |   |       |                  |  |   |           | 
|------------------- |  | ---- | ---- |  | ---------- | - |  | --------- |  | - | ---------- |  |  | ---------- | ------ |  | ---------------- | - | ----- | ---------------- |  | - | --------- | 
|Name                |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  | Incentive        |   |       |                  |  |   |           | 
|And                 |  |      |      |  |            |   |  |           |  |   | Stock      |  |  | Option     |        |  | Plan             |   |       | All Other        |  |   |           | 
|Principal Position  |  | Year |      |  | Salary ($) |   |  | Bonus ($) |  |   | Awards ($) |  |  | Awards ($) |        |  | Compensation ($) |   |       | Compensation ($) |  |   | Total ($) | 
|(a)                 |  | (b)  |      |  | (c)        |   |  | (d)       |  |   | (e)        |  |  | (f)        |        |  | (g)              |   |       | (h)              |  |   | (i)       | 
|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|Mike Mathews        |  |      | 2011 |  |            | $ |  |           |  | $ |            |  |  | $          |        |  |                  | $ |       |                  |  | $ |           | 
|Chairman            |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|John Macaluso       |  |      | 2011 |  |            | $ |  |           |  | $ |            |  |  | $          |        |  |                  | $ | 8,076 |                  |  | $ |           | 
|Director            |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|Greg Suess          |  |      | 2011 |  |            | $ |  |           |  | $ |            |  |  | $          |        |  |                  | $ | 8,147 |                  |  | $ |           | 
|Director            |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|John Maatta         |  |      | 2011 |  |            | $ |  |           |  | $ |            |  |  | $          |        |  |                  | $ | 7,651 |                  |  | $ |           | 
|Director            |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|Vadim Mats          |  |      | 2011 |  |            | $ |  |           |  | $ |            |  |  | $          | 20,000 |  |                  | $ | 8,147 |                  |  | $ |           | 
|Director            |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|                    |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 
|Gareb Shamus        |  |      | 2011 |  |            | $ |  |           |  | $ |            |  |  | $          |        |  |                  | $ |       |                  |  | $ |           | 
|Former Director (1) |  |      |      |  |            |   |  |           |  |   |            |  |  |            |        |  |                  |   |       |                  |  |   |           | 



(1) Mr. Shamus resigned as a director
on December 1, 2011.



Director Agreements



The Company has entered into director agreements
with each of its directors. Each director agreement commences on the date that the respective director was appointed a member of
the Board and continues through the Company’s next annual stockholders’ meeting, unless automatically renewed at the
option of the Board on such date that such director is re-elected to the Board. Pursuant to the director agreements entered into
with our directors other than Mr. Mathews and Mr. Mats, each director is granted a non-qualified option to purchase up to 150,000
shares of the Company’s common stock. Mr. Mats’ director agreement provides for a quarterly issuance of 10,000 shares
of restricted common stock. Mr. Mats was not granted non-qualified options to purchase the Company’s common stock. Mr. Mathews’
director agreement provides for a quarterly stipend of twenty thousand dollars ($20,000). Other than an initial $10,000 payment,
Mr. Mathews waived the remainder of this stipend during the year ended December 31, 2011.



38







In conjunction with the director agreements,
we entered into an indemnification agreement with each director that is effective during the term that such director serves as
a member of the Board until six years thereafter. The indemnification agreement indemnifies the director to the fullest extent
permitted under Delaware law for any claims arising out of, or resulting from, among other things, (i) any actual, alleged or suspected
act or failure to act as a director or agent of the Company and (ii) any actual, alleged or suspected act or failure to act in
respect of any business, transaction, communication, filing, disclosure or other activity of the Company. Further, the director
is indemnified for any losses pertaining to such claims, provided, however, that the losses not include expenses incurred by the
director in respect of any claim as which such director shall have been adjudged liable to the Company, unless the Delaware Chancery
Court rules otherwise.



Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters.



Our authorized
capital stock consists of 100,000,000 shares, of which 80,000,000 are for shares of common stock, par value $0.0001 per share,
and 20,000,000 are for shares of preferred stock, par value $0.0001 per share, of which 50,000 have been designated as Series A
Cumulative Convertible Preferred Stock. As of April 13, 2012, therewere 35,044,878 shares of
our common stock issued and outstanding, all of which were fully paid, non-assessable and entitled to vote. Each share of our common
stock entitles its holder to one vote on each matter submitted to the stockholders.



The following table sets forth information
as of April 13, 2012, with respect to the beneficial ownership of our common stock by (i) each of our officers and directors, (ii)
our officers and directors as a group and (iii) each person known by us to beneficially own five percent (5%) or more of our outstanding
common stock. Unless otherwise specified, the address of each of the persons set forth below is in care of Wizard World, Inc.,
1350 Avenue of the Americas, 2nd floor, New York, NY 10019.



|Title of Class |  |  | Name of Beneficial Owner (1)                                   |  | Number of Shares |            |      | Percent of Class (2) (3) | 
|-------------- |  |  | -------------------------------------------------------------- |  | ---------------- | ---------- | ---- | ------------------------ | 
|               |  |  |                                                                |  |                  |            |      |                          | 
|Common         |  |  | Michael Mathews, Chairman                                      |  |                  | 857,143    | (4)  |                          | 
|Common         |  |  | Vadim Mats, Director                                           |  |                  | 50,000     | (5)  |                          | 
|Common         |  |  | Greg Suess, Director                                           |  |                  | 0          | (6)  |                          | 
|Common         |  |  | John Macaluso, Chief Executive Officer, Director               |  |                  | 8,050,000  | (7)  |                          | 
|Common         |  |  | John Maatta, Director                                          |  |                  | 0          | (8)  |                          | 
|               |  |  |                                                                |  |                  |            |      |                          | 
|Common         |  |  | All officers and directors as a group (5 persons)              |  |                  | 8,957,143  |      |                          | 
|               |  |  |                                                                |  |                  |            |      |                          | 
|Common         |  |  | 4 Brothers LLC (9)                                             |  |                  | 3,351,250  |      |                          | 
|Common         |  |  | It’s All Normal LLC (10)                                       |  |                  | 2,393,750  |      |                          | 
|Common         |  |  | Pivot Media LLC (11)                                           |  |                  | 3,830,000  |      |                          | 
|Common         |  |  | Bristol Capital LLC (12)                                       |  |                  | 2,172,759  | (13) |                          | 
|Common         |  |  | Bristol Investment Fund Ltd. (14)                              |  |                  | 2,951,845  | (15) |                          | 
|Common         |  |  | Robert Knie                                                    |  |                  | 2,400,000  | (16) |                          | 
|Common         |  |  | The David Rosenberg Irrevocable Trust (17)                     |  |                  | 2,150,000  |      |                          | 
|Common         |  |  | Eric Weisblum                                                  |  |                  | 1,950,000  |      |                          | 
|Common         |  |  | Gem Funding LLC (18)                                           |  |                  | 0          | (19) |                          | 
|               |  |  |                                                                |  |                  |            |      |                          | 
|Common         |  |  | All officers, directors and 5% holders as a group (13 persons) |  |                  | 30,156,747 |      |                          | 



39







* denotes less than 1%



| | (1) | Beneficial ownership generally includes voting or investment power with
respect to securities. Unless otherwise indicated, each of the beneficial owners listed above has direct ownership of and sole
voting power and investment power with respect to the securities.  Beneficial ownership is determined in accordance with
Rule 13d–3(d)(1) under the Exchange Act and includes securities for which the beneficial owner has the right to acquire beneficial
ownership within 60 days.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Figures may not round up due to rounding of percentages.
| | --- | --------------------------------------------------------



| | (3) | Based on35,044,878shares of common
stock issued and outstanding as of April 13, 2012.
| | --- | -------------------------------------------------------------------------------------



| | (4) | Includes 500,000 shares issued in accordance with the Consulting Agreement,
dated March 23, 2011, with the Company, pursuant to which Mr. Mathews is to receive an aggregate of 1,000,000 shares of common
stock, payable in equal installments over a period of four years. This total also includes 357,143 shares of common stock held
in the name of the Michael Mathews 2011 Children’s GRAT, to which Mr. Mathews is not the beneficiary nor the trustee.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | This total does not include shares issuable upon exercise of an option
for 150,000 shares of common stock, of which approximately 45,000 have vested.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Does not include (i) shares issuable upon exercise of an option for
150,000 shares of common stock, of which approximately 45,000 have vested; (ii) 62,500 shares of common stock underlying Series
A Preferred Stock; and warrants to purchase 18,750 shares of common stock at an exercise price of $0.40.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Does not include (i) shares issuable upon exercise of an option for
150,000 shares of common stock, of which approximately 45,000 have vested (ii) shares issuable upon exercise of an option for 2,750,000
shares of common stock, of which 0 have vested; (iii) 250,000 shares of common stock underlying Series A Preferred Stock; (iv)
warrants to purchase 75,000 shares of common stock at an exercise price of $0.40; and (v) warrants to purchase 1,000,000 shares
of common stock at an exercise price of $0.40.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Does not include shares issuable upon exercise of an option for 150,000
shares of common stock, of which approximately 45,000 have vested.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | 4 Brothers LLC is organized and exiting under the laws of the State
of Delaware. Gareb Shamus is the managing member of 4 Brothers LLC, and, acting alone, has voting and dispositive power over the
shares beneficially owned by 4 Brothers LLC.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | It’s All Normal LLC is organized and exiting under the laws of
the State of Delaware. Gareb Shamus is the managing member of It’s All Normal LLC, and, acting alone, has voting and dispositive
power over the shares beneficially owned by It’s All Normal LLC.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (11) | Pivot Media LLC is organized and exiting under the laws of the State
of Delaware. Gareb Shamus is the managing member of Pivot Media LLC, and, acting alone, has voting and dispositive power over the
shares beneficially owned by Pivot Media LLC.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (12) | Bristol Capital LLC is organized and exiting under the laws of the State
of Delaware. Paul Kessler is the managing member of Bristol Capital LLC, and, acting alone, has voting and dispositive power over
the shares beneficially owned by Bristol Capital LLC.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (13) | This total does not include 750,000 options to purchase shares of the Company’s common stock
at an exercise price of $0.40 per share.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------



| | (14) | Bristol Investment Fund Ltd., a Cayman Islands Exempted Company. Paul
Kessler is the managing member of Bristol Investment Fund Ltd., and, acting alone, has voting and dispositive power over the shares
beneficially owned by Bristol Investment Fund Ltd.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



40







| | (15) | Does not include (i) 625,000 shares of common stock underlying Series
A Preferred Stock and (ii) warrants to purchase 187,500 shares of common stock at an exercise price of $0.40.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (16) | This total does not include (i) 100,000 shares underlying a convertible promissory note in the
principal amount of $40,000 (ii) 50,000 warrants at an exercise price of $0.40; and (iii) 750,000 options to purchase shares of
the Company’s commons stock at an exercise price of $0.40.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (17) | The beneficiary of the trust is Natalie Schlossberg and the trustee
is Mitch Schlossberg, the son of Natalie Schlossberg.
| | ---- | -------------------------------------------------------------------------------------------------------------------------



| | (18) | Gem Funding LLC is organized and exiting under the laws of the State
of Delaware. Corie Weisblum is the managing member of Gem Funding LLC, and, acting alone, has voting and dispositive power over
the shares beneficially owned by Gem Funding LLC.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (19) | This total does not include warrants to purchase 2,000,000 shares of common stock at an exercise
price of $0.40 per share.
| | ---- | --------------------------------------------------------------------------------------------------------------------------



Stock Option Issuances Under the 2011
Incentive Compensation and Award Plan



Option Grants



On May 9, 2011, as subsequently amended
on September 14, 2011 and April 11, 2012, we adopted the 2011 Incentive Stock and Award Plan, which was authorized and approved
by the Board, and have granted to all directors (other than our Executive Chairman Michael Mathews, who received restricted stock
awards) options to purchase our common stock pursuant to the terms of their employment, consulting and/or director agreements.



In conjunction with the director agreements
and indemnification agreements described above, we entered into a Non-qualified Stock Option Agreement (“Stock Option Agreement”)
with each director, pursuant to which the director was granted a non-qualified stock purchase option (the “Non-qualified
Option”) to purchase up to an aggregate of one hundred fifty thousand (150,000) shares of our common stock, subject to the
terms and conditions of the Plan. The exercise price for the Non-qualified Option is the closing price of the Company’s common
stock on the execution date of the director agreement.  The Non-qualified Option is exercisable for a period of five
years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per
fiscal quarter at the end of such quarter, and pro-rated for the number of days the director served on the Board during such fiscal
quarter. Notwithstanding the foregoing, if the director ceases to be a member of Board at any time during the three (3)-year vesting
period for any reason (such as resignation, withdrawal, death, disability or any other reason), then any un-vested portion of the
Non-qualified Option shall be irrefutably forfeited.



Restricted Stock Awards



On March 23,
2011, we entered into the Consulting Agreement with our Chairman Michael Mathews, pursuant to which Mr. Mathews will, among other
things, develop a digital platform for the Company and establish digital planning systems that will include all forms of digital
media and social, search, content, and videoapplications. The term of the Consulting Agreement is for a four (4) year period.
As compensation for his services, Mr. Mathews received, with the first issuance of 250,000 shares occurring on March 23, 2011,
one million (1,000,000) restricted shares of the Company’s common stock, issuable in four yearly installments. Mr. Mathews
has received 500,000 shares under the Consulting Agreement as of the date hereof.



On January 14,
2011, we entered into a director agreement with Vadim Mats. The term of the Agreement is for a one year. As compensation
for his services, Mr. Matsshall receive at the end of every fiscalquarter
during the Directorship Term ten thousand (10,000) shares of the Company’s restricted common stock, par value $0.0001 per
share. For any period during the term that Mr. Mats does not serve a full quarter, the amount of shares of common stock issued
shall be pro-rated based on the number of days during such quarter that the Mr. Mats was a member of the Company’s Board
of Directors. On April 11, 2012, Mr. Mats waived his right to receive the stock award granted to him under his director agreement
going forward.



41







DESCRIPTION OF SECURITIES



General



Our authorized capital stock consists of
100,000,000 shares, of which 80,000,000 shares are common stock, par value $0.0001 per share and 20,000,000 are for shares of preferred
stock, par value $0.0001 per share, of which 50,000 have been designated as Series A Cumulative Convertible Preferred Stock (“Series
A Preferred Stock”).



Common Stock



As of April
13, 2012, therewere 35,044,878 shares of our common stock issued and outstanding held by 18
beneficial owners or record.



Voting Rights



Each share of stock entitles the holder
to one vote for each share on all matters submitted to a stockholder vote. Directors are elected by a plurality of the votes of
the shares present in person or represented by proxy at an annual shareholders’ meeting and entitled to vote on the election
of directors. Any other action shall be authorized by a majority of the votes cast, unless otherwise provided under the Delaware
General Corporation Law. Holders of our stock representing a majority of the voting power of our capital stock issued, outstanding
and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders.



Dividend Rights



Holders of our common stock are entitled
to share in all dividends that our board of directors, in its discretion, declares from legally available funds, but only after
we have satisfied our dividend obligations to the holders of our Series A Preferred Stock.



Liquidation Rights



In the event of a liquidation, dissolution
or winding up, each outstanding share entitles its holder to participate pro rata in all assets that are legally available for
distribution and remain after (i) payment of liabilities and (ii) payment in full of all amounts due to the holders of the Series
A Preferred Stock (on an as converted basis).



Conversion and Redemption Rights



Holders of our common stock have no pre-emptive
rights, no conversion rights and there are no redemption provisions applicable to our common stock.



Series A Cumulative Convertible Preferred
Stock



As of April 13, 2012, there were approximately
23,763 shares of our Series A Preferred Stock issued and outstanding held by approximately 30 shareholders of record. Each share
of our Series A Preferred Stock has a stated value equal to $100.00 (the “Stated Value”).



Voting Rights



The holders of our Series A Preferred Stock
do not vote together with the holders of our common stock on an as converted basis. The vote of the holders of our Series A Preferred
Stock is required, however, to (i) amend our certificate of incorporation or bylaws in a way that would be adverse to the holders
of our Series A Preferred Stock, (ii) redeem or repurchase our stock (other than with respect to the Series A Preferred Stock),
(iii) effect a liquidation event, (iv) declare or pay dividends (other than on the Series A Preferred Stock), and (v) issue any
securities in parity or senior to the rights of the Series A Preferred Stock.



42







Dividends



The holders of our Series A Preferred Stock
are entitled to receive preferential dividends at the rate of 8% per share per annum of the Stated Value out of any funds legally
available, and before any dividend or other distribution will be paid or declared and set apart for payment on any shares of our
common stock. Upon the occurrence of an event of default, the dividend rate will increase to 15% per annum on the Stated Value.
The dividends compound annually and are fully cumulative, accumulate from the date of original issuance of the Series A Preferred
Stock, and are payable annually on the last day of each calendar year, in arrears, (i) in cash; (ii) at our option, in additional
shares of Series A Preferred Stock valued at the Stated Value in an amount equal to 150% of the cash dividend otherwise payable;
or (iii) at our option, a combination of cash and additional shares of Series A Preferred Stock.



Liquidation



Upon the occurrence of a “liquidation
event”, the holders of our Series A Preferred Stock are entitled to receive, before any payment or distribution is made on
any shares of our common stock, out of the assets available for distribution to our stockholders, an amount equal to two (2) times
the Stated Value and all accrued and unpaid dividends. If the assets available are insufficient to pay the holders of our Series
A Preferred Stock in full, then the assets will be distributed pro rata among the holders of our Series A Preferred Stock.



A “liquidation event” occurs
in the event of (i) our liquidation, dissolution or winding-up, whether voluntary or involuntary, (ii) (A) our purchase or redemption
of any shares of any class of our stock or (B) a merger or consolidation with or into any entity, unless, among other things, the
holders of our Series A Preferred Stock receive securities of the surviving corporation having substantially similar rights and
our stockholders immediately prior to such transaction are holders of at least a majority of the voting securities of the surviving
entity.



Redemption



Upon (i) the occurrence of an event of
default, (ii) a “change in control” or (iii) our liquidation, dissolution or winding up, and if the holder of the Series
A Preferred Stock so elects, we must pay a sum of money determined by multiplying the then current purchase price of the outstanding
Series A Preferred Stock by 110%, plus accrued but unpaid dividends, no later than thirty (30) business days after request for
redemption is made.  “Change in Control” means (i) our Company no longer having a class of shares publicly
traded, listed or quoted, (ii) our becoming a subsidiary of another entity, (iii) a majority of our board of directors as of the
Closing Date no longer serving as our directors of the Corporation, and (iv) the sale, lease or transfer of substantially all of
our assets or the assets of our subsidiary.



Conversion



Each holder of our Series A Preferred Stock
has the right at any time after the issuance of Series A Preferred Stock to convert the shares at the Stated Value and accrued
but unpaid declared dividends into shares of our common stock at a conversion rate of $0.40 per share.



Except under certain circumstances (such
as the issuance of our common stock pursuant to a stock option plan), if we issue shares of our common stock or securities convertible
into or exchangeable or exercisable for shares of our common stock, for a purchase price, conversion price or exercise price that
is less than the then current conversion price of our Series A Preferred Stock, then the conversion price of our Series A Preferred
Stock will be reduced to such lower price.



The conversion price for our Series A Preferred
Stock is further adjusted in the event of: (i) a declaration of any dividend or distribution on our common stock, (ii) stock split
or (iii) reclassification of our common stock, proportionately so that the holders of our Series A Preferred Stock are entitled
receive the kind and number of shares or other securities to which they would have owned or have been entitled to receive after
the happening of any of such events had such shares of our Series A Preferred Stock been converted immediately prior to the happening
of such event.



43







If we merge with or into any other corporation
where we are not the surviving entity, then unless the right to convert shares of our Series A Preferred Stock is terminated as
part of such merger, then, if permitted under applicable law, the holder of our Series A Preferred Stock will have the right to
convert each of their shares of Series A Preferred Stock into the same kind and amount of shares of stock receivable upon the merger.  A
similar provision applies to the sale of all or substantially all of our assets.



If a holder of our Series A Preferred Stock
notifies us of such holder’s election to convert and we do not deliver the shares of common stock issuable upon such conversion,
and the holder has to buy shares of our common stock on the open market because of their obligation to deliver shares of common
stock, then we will pay such holder the difference between the price paid on the open market and the Stated Value.  We
will also pay interest at the annual rate of 15% for each day that we are late as well as $100 per business day for each $10,000
of Stated Value and dividend which is not timely delivered.



Neither we nor the holder of our Series
A Preferred may convert any amount that would result in the holder having a beneficial ownership of our common stock which would
be in excess of the sum of (i) the number of shares of common stock beneficially owned by the holder and its affiliates on the
conversion date and (ii) the number of shares of our common stock issuable upon the conversion, which would result in the aggregate
beneficial ownership by such holder and its affiliates of more than 4.99% of the outstanding shares of our common stock.  The
holder of our Series A Preferred Stock may waive the conversion limitation in whole or in part upon and effective after sixty one
(61) days’ prior written notice to our Company.



Series A Common Stock Purchase Warrants



Our Series A
Common Stock Purchase Warrants (the “Warrants”) have a term of five years after their issuance date and an exercise
price of $0.60 per share. As of April 13, 2012, we have warrants outstanding that are exercisable for an aggregate of upto
5,812,274 shares of our common stock. The exercise price of all Warrants issued prior to December 6,
2011, has been re-priced to $0.40 per share.



The warrant holder may pay the exercise
price in cash or through a cashless exercise if the fair market value of our common stock is greater than the current exercise
price.



If we issue common stock, except in the
event of certain circumstances (such as the issuance of common stock pursuant to a stock option plan), for a consideration less
than the exercise price then in effect, then the exercise price will be reduced to the lower exercise price. Upon any reduction
of the exercise price, the number of shares of our common stock that the warrant holder is entitled to receive upon exercise will
also be adjusted.



If, at any time while the Warrants are
outstanding, (i) we merge or consolidate with or into another entity, (ii) we sell all or substantially all of our assets, (iii)
we effect a tender offer or exchange offer, (iv) we consummate a stock purchase agreement or other business combination with another
person or entity that results in such person or entity acquiring more than 50% of our outstanding shares of common stock, (v) any
“person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or
more of our common stock in the aggregate or (vi) we effect any reclassification of our common stock or any share exchange where
our common stock is converted into or exchanged for other securities, cash or property,then the warrant holder will have
the right to receive, for each share of common stock issuable upon exercise of the Warrant, (a) the number of shares of common
stock of the successor or acquiring corporation or of our Company if we are the surviving corporation, and any additional consideration
receivable by the warrant holder of the number of shares of common stock for which the Warrant is exercisable immediately prior
to such event or (b) under certain transactions (such as where the consideration paid to holders of our common stock consists solely
of cash), cash equal to the Black-Scholes value.  To the extent necessary to effectuate the above, any successor or surviving
entity will issue to the warrant holder a new warrant evidencing the warrant holder's right to exercise such warrant as described
above.



If a warrant holder notifies us of such
holder’s election to exercise and we do not deliver the shares of common stock issuable upon such exercise, and the warrant
holder has to buy shares of our common stock on the open market because of their obligation to deliver shares of common stock,
then we will pay such holder the difference between the price paid on the open market and the Stated Value. We will also pay interest
at the annual rate of 15% for each day that we are late in delivering shares of our common stock.



44







The warrant holder cannot exercise any
amount that would result in the holder having a beneficial ownership of our common stock which would be in excess of the sum of
(i) the number of shares of common stock beneficially owned by the holder and its affiliates on the exercise date and (ii) the
number of shares of our common stock issuable upon exercise, which would result in the aggregate beneficial ownership by such holder
and its affiliates of more than 4.99% of the outstanding shares of our common stock. The warrant holder may waive the exercise
limitation in whole or in part upon and effective after sixty one (61) days’ prior written notice to our Company.



Non-Qualified Stock Options



Our Non-qualified Stock Options are issued
pursuant to our Plan. We have issued Non-qualified Stock Options to each of our directors (other than our Chairman Michael Mathews,
who received restricted stock awards), pursuant to which each director may purchase up to an aggregate of one hundred fifty thousand
(150,000) shares of our Common Stock.  The Non-qualified Stock Options vests quarterly over a three (3) year period,
subject to the optionee continuing to be a member of our board of directors on each applicable vesting date, and remains exercisable
until 5:30 p.m. New York time on the date that is the fifth (5th) year anniversary of the date of grant. All or any part of the
vested but unexercised portion of the Non-qualified Stock Option is subject to forfeiture under certain circumstances, such as
in the event of a breach of insider trading rules or obligations of confidentiality, in the event that the optionee or such optionee’s
affiliates competes with our Company or solicits our employees or customers, and in the event of death, disability or retirement.



Convertible Promissory Notes



Our convertible promissory notes (the “Convertible
Notes”) have a term of 4 months, and an annual interest rate of 14% and a default interest rate of 18% per annum, payable
on the maturity date of the Convertible Notes.  The Convertible Notes are convertible at $0.40 per share (the “Conversion
Price”). For as long as the Convertible Notes are outstanding, in the event that we issue securities prior to the full conversion
or payment of the Convertible Note for consideration that is less than the Conversion Price, or issue securities with a conversion
or exercise price lower than the Conversion Price, then the Conversion Price is reduced to such price. The Convertible Notes may
not be prepaid, converted, redeemed or called by the Company without the consent of the noteholder. The notes are currently in
default.



Anti-Takeover Provisions



Our charter and bylaws contain provisions
that may make it more difficult for a third party to acquire or may discourage acquisition bids for us.  Our Board may,
without action of our stockholders, issue authorized but unissued shares of preferred stock. The existence of unissued preferred
stock may enable the Board, without further action by the stockholders, to issue such stock to persons friendly to current management
or to issue such stock with terms that could render more difficult or discourage an attempt to obtain control of us, thereby protecting
the continuity of our management. Our shares of preferred stock could therefore be issued quickly with terms that could delay,
defer, or prevent a change in control of us, or make removal of management more difficult.



Item 13. Certain Relationships and Related
Transactions.



We present all possible transactions between
us and our officers, directors and 5% stockholders, and our affiliates, to our Board for their consideration and approval. Any
such transaction will require approval by a majority of the disinterested directors and such transactions will be on terms no less
favorable than those available to disinterested third parties. During their year ended December 31, 2011, the Company had the following
transactions with related persons reportable under Item 404 of Regulation S-K:



On May 31, 2011,
the Company entered into an agreement with Toywiz, Inc. (“Toywiz”), a company run by Kenneth Shamus, brother of the
Company’s former Chief Executive Officer Gareb Shamus, to monetize the Toywiz website. Under the terms of this agreement,
Toywiz is paid 50% of the advertising revenue attributable to the Toywiz site, with a minimumguarantee of $5,000.00 per
month.



45







In June 2011, the Company signed up with
interclick in order to monetize the Toywiz and Wizard World websites. Prior to Yahoo!’s acquisition of interclick, Michael
Mathews, the Company’s Chairman, was a member of interclick’s Board of Directors and a shareholder. During the year
ended December 31, 2011, a total of $38,702.07 in ad revenue was generated from the two websites.



On June 25, 2011, the Company entered into
a $250,000.00 marketing agreement with interclick, to provide online marketing services to the Company. This agreement was subsequently
renegotiated down to $125,000, and was later terminated.





On September 1, 2011, the Company entered
into a verbal agreement with California Concepts, Inc. (“Concepts”), to provide consulting services to the Company.
John Macaluso, the Company’s Chief Executive Officer, is the chief executive officer of Concepts. Pursuant to the terms of
the consulting agreement, Concepts was to receive $10,000 per month for the consulting services. On February 7, 2012, the Company
entered into a formal written agreement, documenting the terms of the previous verbal agreement. On March 19, 2012, in conjunction
with Mr. Macaluso’s appointment as the Company’s Chief Executive Officer, the consulting agreement with Concepts was
terminated. Concepts received $40,000 for services rendered during the fiscal year ended December 31, 2011. For the period from
January 1, 2012, until March 19, 2012, Concepts received a total of $25,384.79 for services rendered.





Item 14. Principal Accountant Fees and
Services.



Audit Fees



(a) The aggregate fees billed by Li &
Company, P.C. for the audit of the Company’s financial statements for the fiscal years ended December 31, 2011 and 2010,
were $45,000 and 30,000, respectively.



Audit Related Fees



(b) Li & Company, P.C. did not bill
the Company any amounts for assurance and related services that were related to its audit or review of the Company’s financial
statements during the fiscal years ended December 31, 2011 and 2010, respectively.



Tax Fees



(c) The aggregate fees billed by Li &
Company, P.C. for tax compliance, advice and planning were $0 for the fiscal year ended December 31, 2011 and $0 for the fiscal
year ended December 31, 2010.



All Other Fees



(d) Li & Company, P.C. did not bill the Company for any
products and services other than the foregoing during the fiscal years ended December 31, 2011 and 2010, respectively.



46







PART IV



Item 15. Exhibits, Financial Statement Schedules.



|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2.1         |  | Share Purchase and Share Exchange Agreement, dated November 5, 2010, by and among GoEnergy, Inc., Strato Malamas, an individual and the majority stockholder of GoEnergy, Inc., Kick the Can Corp., a Nevada corporation, Kicking the Can, L.L.C., a Delaware limited liability company and the majority shareholder of Kick the Can Corp., and certain shareholders of Kick the Can Corp. that are signatories thereto (as filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 16, 2010).
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.1         |  | Certificate of Incorporation of GoEnergy, Inc. (as filed as Exhibit 1.1 to the Company’s Registration Statement on Form SB-2, filed with the SEC on March 25, 2003).                                                                                                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.2         |  | Bylaws (as filed as Exhibit 2.1 to the Company’s Registration Statement on Form SB-2, filed with the SEC on March 25, 2003).                                                                                                                                                                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.3         |  | Certificate of Amendment to the Certificate of Incorporation of GoEnergy, Inc., dated December 6, 2010 (as filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed with the SEC on December 13, 2010).                                                                                                                                                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.4         |  | Certificate of Correction, dated December 8, 2010 (as filed as Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed with the SEC on December 13, 2010).                                                                                                                                                                                                                                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.5         |  | Second Certificate of Correction filed January 20, 2011 (as filed as Exhibit 3.5 to the Company’s Current Report on Form 8-K, filed with the SEC on January 25, 2011).                                                                                                                                                                                                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.6         |  | Certificate to set forth Designations, Voting Powers, Preferences, Limitations, Restrictions, and Relative Rights of Series A Cumulative Convertible Preferred Stock, $0.0001 par value per share (as filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 13, 2010).                                                                                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.7         |  | Certificate of Amendment to Certificate to set forth Designations, Voting Powers, Preferences, Limitations, Restrictions, and Relative Rights of Series A Cumulative Convertible Preferred Stock, $.0001 par value per share (as filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed with the SEC on April 25, 2011).                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.8         |  | Certificate of Amendment to Certificate to set forth Designations, Voting Powers, Preferences, Limitations, Restrictions, and Relative Rights of Series A Cumulative Convertible Preferred Stock, $.0001 par value per share (as filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 30, 2012).                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.1         |  | Form of 2011 Series A Common Stock Purchase Warrant (as filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on April 25, 2011).                                                                                                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.2         |  | Form of Convertible Promissory Note, dated August 19, 2011 (as filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on August 30, 2011).                                                                                                                                                                                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.1        |  | Director Agreement, dated January 18, 2011, by and between GoEnergy, Inc. and Vadim Mats (as filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 18, 2011).                                                                                                                                                                                                                                                                                                                               



47







|10.2  |  | Director Agreement, dated March 23, 2011, by and between Wizard World, Inc. and Michael Mathews (as filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 25, 2011).                                         
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                       
|10.3  |  | Consultant Agreement, dated March 23, 2011, by and between Wizard World, Inc. and Michael Mathews (as filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on March 25, 2011).                                       
|      |  |                                                                                                                                                                                                                                                       
|10.4  |  | Form of 2011 Series A Subscription Agreement (as filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 25, 2011).                                                                                            
|      |  |                                                                                                                                                                                                                                                       
|10.5  |  | Director Agreement, dated May 9, 2011, by between Wizard World, Inc. and Greg Suess (as filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 9, 2011).                                                        
|      |  |                                                                                                                                                                                                                                                       
|10.6  |  | 2011 Stock Incentive and Award Plan (as filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 12, 2011.                                                                                                        
|      |  |                                                                                                                                                                                                                                                       
|10.7  |  | Amendment to the 2011 Incentive Stock and Award Plan (as filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 15, 2011).                                                                                
|      |  |                                                                                                                                                                                                                                                       
|10.8  |  | 2011 Amended and Restated Stock Incentive and Award Plan. *                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                       
|10.9  |  | Form of Non-Qualified Stock Option Agreement (as filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on May 12, 2011).                                                                                              
|      |  |                                                                                                                                                                                                                                                       
|10.10 |  | Director Agreement, dated May 13, 2011, by and between Wizard World, Inc. and John Macaluso. *                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                       
|10.11 |  | Director Agreement, dated May 25, 2011, by and between Wizard World, Inc. and John Maatta.*                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                       
|10.12 |  | Employment Agreement, dated May 25, 2011, by and between Wizard World, Inc. and Gareb Shamus (as filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 31, 2011).                                              
|      |  |                                                                                                                                                                                                                                                       
|10.13 |  | Form of Subscription Agreement, dated August 19, 2011. *                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                       
|10.14 |  | Office Service Agreement, dated January 18, 2011, by and between Kick the Can Corp. and NYC Office Suites (as filed as Exhibit 10.11 to the Company’s Current Report on Form 8-K, filed with the SEC on September 13, 2011).                          
|      |  |                                                                                                                                                                                                                                                       
|10.15 |  | Internet Domain Name Assignment Agreement, dated January 2011, by and between Gareb Shamus Enterprises, Inc. and Kick the Can Corp. (as filed as Exhibit 10.12 to the Company’s Current Report on Form 8-K, filed with the SEC on September 13, 2011).
|      |  |                                                                                                                                                                                                                                                       
|10.16 |  | Mid-Ohio Acquisition Agreement, dated November 13, 2010, by and between Kicking the Can L.L.C and GCX Holdings LLC (as filed as Exhibit 10.15 to the Company’s Current Report on Form 8-K/A, filed with the SEC on November 16, 2011).                
|      |  |                                                                                                                                                                                                                                                       
|10.17 |  | Form of Senior Convertible Debenture, dated December 6, 2011. *                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                       
|10.18 |  | Subscription Agreement, dated December 21, 2011, by and between the Company and the Michael Mathews 2011 Children’s GRAT. *                                                                                                                           
|      |  |                                                                                                                                                                                                                                                       
|10.19 |  | Consultant Agreement, dated March 23, 2011, between Wizard World, Inc. and Michael Mathews (as filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 25, 2011).                                                           
|      |  |                                                                                                                                                                                                                                                       
|31.1  |  | Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *                                                                                        



48







|31.2 |  | Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                               
|32.1 |  | Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *           
|     |  |                                                                                                                                                               
|32.2 |  | Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *           



* filed herewith



49







SIGNATURES



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



|                     | WIZARD WORLD, INC.
|-------------------- | ------------------
|                     |                   
|Date: April 16, 2012 | By:               
|                     |                   
|                     |                   
|                     |                   
|                     |                   
|                     |                   



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



|Signature           |  | Title                                           |  | Date          
|------------------- |  | ----------------------------------------------- |  | --------------
|                    |  |                                                 |  |               
|/s/ Michael Mathews |  | Chairman of the Board                           |  | April 16, 2012
|Michael Mathews     |  |                                                 |  |               
|                    |  |                                                 |  |               
|/s/ John Macaluso   |  | Chief Executive Officer, Principal Executive    |  | April 16, 2012
|John Macaluso       |  | Officer, Principal Financial Officer, Principal |  |               
|                    |  | Accounting Officer, Director                    |  |               
|                    |  |                                                 |  |               
|/s/ John Maatta     |  | Director                                        |  | April 16, 2012
|John Maatta         |  |                                                 |  |               
|                    |  |                                                 |  |               
|/s/ Vadim Mats      |  | Director                                        |  | April 16, 2012
|Vadim Mats          |  |                                                 |  |               
|                    |  |                                                 |  |               
|/s/ Greg Suess      |  | Director                                        |  | April 16, 2012
|Greg Suess          |  |                                                 |  |               



50







WIZARD WORLD, INC.



December 31, 2011 and 2010



Index to the Consolidated Financial Statements



|Contents                                                                                       | Page(s)
|---------------------------------------------------------------------------------------------- | -------
|                                                                                               |        
|                                                                                               |        
|Report of Independent Registered Public Accounting Firm                                        | F-2    
|                                                                                               |        
|Consolidated Balance Sheets at December 31, 2011 and 2010                                      | F-3    
|                                                                                               |        
|Consolidated Statements of Operations for the Years Ended December 31, 2011 and 2010           | F-4    
|                                                                                               |        
|Consolidated Statement of Stockholders’ Deficit for the Years Ended December 31, 2011 and 2010 | F-5    
|                                                                                               |        
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2011 and 2010           | F-6    
|                                                                                               |        
|Notes to the Consolidated Financial Statements                                                 | F-7    



F-1







REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors and Stockholder of

Wizard World, Inc.

New York, New York



We have audited the accompanying consolidated
balance sheets of Wizard World, Inc., (the “Company”) as of December 31, 2011 and 2010 and the related consolidated
statements of operations, stockholders’ deficit and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company’s management. 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 includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31,
2011 and 2010 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.



The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial
statements, the Company had an accumulated deficit at December 31, 2010 and had a net loss and net cash used in operating activities
for the year then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans in regards to these matters are also described in Note 3. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.







/s/Li & Company, PC

Li & Company, PC



Skillman, New Jersey

April 16, 2012



F-2







Wizard World, Inc.

Consolidated Balance Sheets







|                                                                                                                                                               |  | December 31, 2011 |            |   | December 31, 2010 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ----------------- | -
|                                                                                                                                                               |  |                   |            |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Assets                                                                                                                                                         |  |                   |            |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Current Assets                                                                                                                                                 |  |                   |            |   |                   |  
|Cash                                                                                                                                                           |  | $                 | 422,135    |   |                   | $
|Accounts receivable, net                                                                                                                                       |  |                   | 54,202     |   |                   |  
|Prepaid expenses                                                                                                                                               |  |                   | 164,135    |   |                   |  
|Debt issuance costs, net                                                                                                                                       |  |                   | 29,500     |   |                   |  
|Total Current Assets                                                                                                                                           |  |                   | 669,972    |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Property and equipment, net                                                                                                                                    |  |                   | 8,048      |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Other Asset                                                                                                                                                    |  |                   | 13,375     |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Total Assets                                                                                                                                                   |  | $                 | 691,395    |   |                   | $
|                                                                                                                                                               |  |                   |            |   |                   |  
|Liabilities and Stockholders' Deficit                                                                                                                          |  |                   |            |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Current Liabilities:                                                                                                                                           |  |                   |            |   |                   |  
|Accounts payable and accrued liabilites                                                                                                                        |  | $                 | 1,214,603  |   |                   | $
|Accrued dividend                                                                                                                                               |  |                   | 116,694    |   |                   |  
|Unearned convention revenue                                                                                                                                    |  |                   | 169,354    |   |                   |  
|Notes payable - related party                                                                                                                                  |  |                   | -          |   |                   |  
|Convertible promissory notes, net                                                                                                                              |  |                   | 633,146    |   |                   |  
|Derivative liability                                                                                                                                           |  |                   | 1,946,669  |   |                   |  
|Total Current Liabilities                                                                                                                                      |  |                   | 4,080,466  |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Total Liabilities                                                                                                                                              |  |                   | 4,080,466  |   |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Stockholders' Deficit                                                                                                                                          |  |                   |            |   |                   |  
|Series A, convertible preferred
    stock,  $0.0001 par value; 50,000 shares authorized, 1,550,968 and 975.968 shares issued and outstanding,
    respectively |  |                   | 155        |   |                   |  
|Common Stock,  $0.0001 par
    value; 200,000,000 shares authorized, 35,044,878 and 34,687,735 shares issued and outstanding, respectively                     |  |                   | 3,505      |   |                   |  
|Additional paid-in capital                                                                                                                                     |  |                   | 2,344,593  |   |                   |  
|Accumulated deficit                                                                                                                                            |  |                   | (5,737,324 | ) |                   |  
|Total Stockholders' Deficit                                                                                                                                    |  |                   | (3,389,071 | ) |                   |  
|                                                                                                                                                               |  |                   |            |   |                   |  
|Total Liabilities and Stockholders' Deficit                                                                                                                    |  | $                 | 691,395    |   |                   | $





See accompanying notes to financial statements





F-3





Wizard World, Inc.

Consolidated Statements of
Operations







|                                                                                   |  | For the Year Ended |           
|---------------------------------------------------------------------------------- |  | ------------------ | ----------
|                                                                                   |  | December 31, 2011  |           
|                                                                                   |  |                    |           
|                                                                                   |  |                    |           
|Convention revenue                                                                 |  | $                  | 3,782,124 
|                                                                                   |  |                    |           
|Cost of revenue                                                                    |  |                    | 2,831,211 
|                                                                                   |  |                    |           
|Gross profit                                                                       |  |                    | 950,913   
|                                                                                   |  |                    |           
|Operating expenses                                                                 |  |                    |           
|Compensation                                                                       |  |                    | 872,891   
|Consulting fees                                                                    |  |                    | 1,462,165 
|Web development fees                                                               |  |                    | 815,039   
|General and administrative                                                         |  |                    | 958,120   
|Total operating expenses                                                           |  |                    | 4,108,215 
|                                                                                   |  |                    |           
|Loss from operations                                                               |  |                    | (3,157,302
|                                                                                   |  |                    |           
|Other income (expenses)                                                            |  |                    |           
|Interest income                                                                    |  |                    | 1,228     
|Interest expense                                                                   |  |                    | (331,031  
|Bad debt recovery                                                                  |  |                    | 199,019   
|Change in fair value of derivative liabilities                                     |  |                    | 1,278,848 
|Total other income (expense)                                                       |  |                    | 1,148,064 
|                                                                                   |  |                    |           
|Loss before income tax provision                                                   |  |                    | (2,009,238
|                                                                                   |  |                    |           
|Income Tax Provision                                                               |  |                    | -         
|                                                                                   |  |                    |           
|Net loss                                                                           |  | $                  | (2,009,238
|                                                                                   |  |                    |           
|Deemed dividend on Series A Convertible Preferred Stock                            |  |                    | (111,346  
|                                                                                   |  |                    |           
|Net loss attributable to common stockholders                                       |  | $                  | (2,120,584
|                                                                                   |  |                    |           
|Net loss per common share attributable to  common stockholders - basic and diluted |  | $                  | (0.06     
|Weighted average common shares outstanding                                         |  |                    |           
|- basic and diluted                                                                |  |                    | 34,697,520







See accompanying notes to financial statements





F-4





WIZARD WORLD, INC.

Consolidated Statement of Stockholders'
Deficit

Years Ended December 31, 2011 and
2010







|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           | Total                | 
|----------------------------------------------------------------------------- |  | ------------------- | --------- |  | ---------------- | - | --- | ---------- |  |  | ----------- |  |  | ------------------- | ----- |  | ------- | - | --------- | -------------------- | 
|                                                                              |  | Preferred
    Stock |           |  | Common
    Stock |   |     | Additional |  |  | Accumulated |  |  | Stockholders'       |      
|                                                                              |  | Shares              |           |  | Amount           |   |     | Shares     |  |  | Amount      |  |  | Paid-in
    Capital |       |  | Deficit |   |           | Equity
    (Deficit) | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Balance - December 31, 2009                                                   |  |                     | -         |  |                  |   | -   |            |  |  | 19,125,000  |  |  |                     | 1,912 |  |         |   | (1,911    | )                    | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Issuance of shares and warrants
    for cash                                  |  |                     |           |  |                  |   |     |            |  |  | 13,802,576  |  |  |                     | 1,381 |  |         |   | 1,353     |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Issuance of preferred stock
    and warrants for cash less costs of $125,500  |  |                     | 975,968   |  |                  |   | 98  |            |  |  |             |  |  |                     |       |  |         |   | 850,330   |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Direct expense to accumulated
    deficit for derivative liability            |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Deemed dividend                                                               |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Issuance of shares in recapitalization                                        |  |                     |           |  |                  |   |     |            |  |  | 1,760,159   |  |  |                     | 176   |  |         |   | (176      | )                    | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Net loss                                                                      |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Balance - December 31, 2010                                                   |  |                     | 975,968   |  |                  |   | 98  |            |  |  | 34,687,735  |  |  |                     | 3,469 |  |         |   | 849,596   |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Share-based compensation                                                      |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   | 700,090   |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Issuance of stock for cash                                                    |  |                     |           |  |                  |   |     |            |  |  | 357,143     |  |  |                     | 36    |  |         |   | 249,964   |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Issuance of preferred stock
    and warrants for cash net of costs of $30,000 |  |                     | 575,000   |  |                  |   | 57  |            |  |  |             |  |  |                     |       |  |         |   | 544,943   |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Direct expense to accumulated
    deficit for derivative liability            |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Deemed dividend                                                               |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Net loss                                                                      |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|                                                                              |  |                     |           |  |                  |   |     |            |  |  |             |  |  |                     |       |  |         |   |           |                      | 
|Balance - December 31,
    2011                                               |  |                     | 1,550,968 |  |                  | $ | 155 |            |  |  | 35,044,878  |  |  | $                   | 3,505 |  |         | $ | 2,344,593 |                      | 







See accompanying notes to financial statements





F-5





Wizard World, Inc.

Consolidated Statements of Cash Flows







|                                                                                   |  | For the Year Ended |           
|---------------------------------------------------------------------------------- |  | ------------------ | ----------
|                                                                                   |  | December 31, 2011  |           
|                                                                                   |  |                    |           
|                                                                                   |  |                    |           
|Cash Flows From Operating Activities:                                              |  |                    |           
|Net loss                                                                           |  | $                  | (2,009,238
|Adjustments to reconcile net loss to net cash used in operating activities:        |  |                    |           
|Bad debt                                                                           |  |                    | 9,075     
|Depreciation                                                                       |  |                    | 2,750     
|Change in fair value of derivative liabilities                                     |  |                    | (1,278,848
|Amortization of debt issuance costs                                                |  |                    | 12,500    
|Accretion of debt discount                                                         |  |                    | 318,018   
|Share based payments                                                               |  |                    | 700,090   
|Changes in operating assets and liabilities:                                       |  |                    |           
|Accounts receivable                                                                |  |                    | (44,150   
|Prepaid expenses and other long term asset                                         |  |                    | (82,204   
|Accounts payable and accrued liabilities                                           |  |                    | 705,751   
|Unearned convention revenue                                                        |  |                    | 93,701    
|Net Cash Used In Operating Activities                                              |  |                    | (1,572,555
|                                                                                   |  |                    |           
|Cash Flows From Investing Activities:                                              |  |                    |           
|Purchases of property and equipment                                                |  |                    | (3,991    
|Net Cash Used In Investing Activities                                              |  |                    | (3,991    
|                                                                                   |  |                    |           
|Cash Flows From Financing Activities:                                              |  |                    |           
|Cash overdraft                                                                     |  |                    |           
|Payment of debt issuance costs                                                     |  |                    | (42,000   
|Proceeds from the issuance of convertible preferred stock                          |  |                    | 575,000   
|Payment of stock issuance costs                                                    |  |                    | (30,000   
|Proceeds from the issuance of stock and warrants                                   |  |                    | 250,000   
|Proceeds from issuance of convertible notes and warrants                           |  |                    | 778,100   
|Net proceeds (repayment) of related party - notes payable                          |  |                    | (74,983   
|Net Cash Provided By Financing Activities                                          |  |                    | 1,456,117 
|                                                                                   |  |                    |           
|Net change  in cash                                                                |  |                    | (120,429  
|                                                                                   |  |                    |           
|Cash at beginning of year                                                          |  |                    | 542,564   
|                                                                                   |  |                    |           
|Cash at end of year                                                                |  | $                  | 422,135   
|                                                                                   |  |                    |           
|Supplemental disclosures of cash flow information:                                 |  |                    |           
|Cash paid for interest                                                             |  | $                  | -         
|Cash paid for taxes                                                                |  | $                  | -         
|                                                                                   |  |                    |           
|Supplemental disclosure of non-cash investing and financing activities:            |  |                    |           
|Direct expense to retained earnings for derivative liability                       |  | $                  | 501,975   
|Debt discount recorded on convertible debt accounted for as a derivative liability |  | $                  | 462,971   
|Deemed dividend                                                                    |  | $                  | 111,346   



See accompanying notes to financial statements



F-6







Wizard World, Inc.

December 31, 2011 and 2010

Notes to the Consolidated Financial Statements



Note 1 - Organization and Operations



Wizard World, Inc. (Formerly Goenergy,
Inc.)



Wizard World, Inc.,
formerly Goenergy, Inc. (“Wizard World” or the “Company”) was incorporated on May 2, 2001, under the laws
of the State of Delaware.



Kick the Can Corp.



Kick The Can Corp.
was incorporated on September 20, 2010, under the laws of the State of Delaware.



Kicking the Can, L.L.C.



Kicking The Can, L.L.C.
was formed on April 17, 2009, under the laws of the State of Delaware.



Wizard Conventions, Inc.



Wizard Conventions,
Inc. was incorporated on February 28, 1997, under the laws of the State of Delaware. The Company is a producer of pop culture and
live multimedia conventions across North America that provides a social networking and entertainment venue for popular fiction
enthusiasts of movies, TV shows, video games, technology, toys, social networking/gaming platforms, comic books and graphic novels.



Acquisition of Kick the Can Corp./
Wizard Conventions, Inc.



On December 7, 2010,
the Company entered into and consummated a share exchange agreement with successor, Kick the Can Corp (“KTC Corp.”)
and its predecessors Wizard Conventions, Inc. and Kicking The Can, L.L.C. (“Conventions”). Pursuant to the Exchange
Agreement, the Company issued 32,927,596 shares of its common stock to the KTC Corp. shareholders in exchange for 100% of the issued
and outstanding shares of KTC Corp. The transaction has been treated as a reverse acquisition withKTC
Corp.deemed the accounting acquirer and the Company deemed the accounting acquiree under the
purchase method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards Codification. The reverse merger
is deemed a capital transaction and the net assets of KTC Corp. (the accounting acquirer) are carried forward to the Company (the
legal acquirer and the reporting entity) at their carrying value before the combination. The acquisition process utilizes the capital
structure of the Company and the assets and liabilities of KTC Corp.which are recorded at historical
cost. The equity of the Company is the historical equity of KTC Corp.retroactively restated
to reflect the number of shares issued by the Company in the transaction. Because of the predecessor/successor relationship between
the Company and KTC Corp., Conventions ultimately became the accounting acquirer.



Note 2 - Summary of Significant Accounting
Policies



Basis of Presentation



The Company’s
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (“U.S. GAAP”).



Principles of Consolidation



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



|Entity                   |  | Reporting period ending date(s) and reporting period(s)      
|------------------------ |  | -------------------------------------------------------------
|                         |  |                                                              
|The Company              |  | As of December 31, 2010 and 2009 and for the years then ended
|                         |  |                                                              
|KTC Corp.                |  | As of December 31, 2011 and 2010 and for the years then ended
|                         |  |                                                              
|Kicking the Can L.L.C.   |  | As of December 31, 2011 and 2010 and for the years then ended
|                         |  |                                                              
|Wizard Conventions, Inc. |  | As of December 31, 2011 and 2010 and for the years then ended



F-7







All inter-company balances
and transactions have been eliminated.



Use of Estimates and Assumptions



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



The Company’s
significant estimates and assumptions include the fair value of financial instruments; allowance for doubtful accounts; the carrying
value, recoverability and impairment, if any, of long-lived assets, including the values assigned to property and equipment, income
tax rate, income tax provision, deferred tax assets allowance of deferred tax assets and the assumption that the Company will continue
as a going concern.  Those significant accounting estimates or assumptions bear the risk of change due to the fact that
there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure
or value.



Management bases its
estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements
taken as a wholeunder the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources.



Management regularly
evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts
and circumstances, historical experience and reasonable assumptions. After such evaluations, and if deemed appropriate, those estimates
are adjusted accordingly. Actual results could differ from those estimates.



Fair Value of Financial Instruments



The Company follows
paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments
and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the
fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting
principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.
To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes
a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities
and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37
are described below:

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



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



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



F-8







The
carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts
payable and accrued expenses approximate their fair value because of the short maturity of those instruments.The Company’s
convertible preferred stock and warrantsapproximate the fair value of such instruments based
upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements
at December 31, 2011 and 2010.



The Company uses Level
3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liability
at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income
(loss) that are attributable to the change in the fair value of the derivative warrant liability.



Transactions involving
related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations
can be substantiated.



It is not, however,
practical to determine the fair value of advances from significant stockholder and lease arrangement with the significant stockholder
due to their related party nature.



Fair Value of Financial Assets and
Liabilities Measured on a Recurring Basis



Level 3 Financial
Liabilities – Derivative conversion features and warrant liabilities



Financial assets and
liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as
of December 31, 2011:



|                                                       |  |                |           |  | Fair Value Measurement Using |  
|------------------------------------------------------ |  | -------------- | --------- |  | ---------------------------- | -
|                                                       |  | Carrying Value |           |  | Level 1                      |  
|                                                       |  |                |           |  |                              |  
|Derivative conversion features and warrant liabilities |  | $              | 1,946,669 |  |                              | $
|                                                       |  |                |           |  |                              |  



Financial assets and
liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as
of December 31, 2010:



|                                                       |  |                |           |  | Fair Value Measurement Using |  
|------------------------------------------------------ |  | -------------- | --------- |  | ---------------------------- | -
|                                                       |  | Carrying Value |           |  | Level 1                      |  
|                                                       |  |                |           |  |                              |  
|Derivative conversion features and warrant liabilities |  | $              | 2,260,571 |  |                              | $
|                                                       |  |                |           |  |                              |  



The table below provides
a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured
at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2011:



|                                            |  | Fair Value Measurement Using Level 3 Inputs |           
|------------------------------------------- |  | ------------------------------------------- | ----------
|                                            |  | Derivative Liabilities                      |           
|                                            |  |                                             |           
|Balance, December 31, 2010                  |  | $                                           | 2,260,571 
|Total gains or losses (realized/unrealized) |  |                                             |           
|included in net loss                        |  |                                             | (1,278,848
|Purchases, issuances and settlements        |  |                                             | 964,946   
|Transfers in and/or out of Level 3          |  |                                             | -         
|Balance, December 31, 2011                  |  | $                                           | 1,946,669 



During the year ended
December 30, 2011 and 2010, the company recorded the value of the derivative liability associated with the features embedded in
the Series A Cumulative Convertible Preferred Stock directly to retained earnings, similar to a deemed dividend.



Carrying Value, Recoverability and
Impairment of Long-Lived Assets



The Company has adopted
paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived
assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.



F-9







The Company assesses
the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related
long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived
assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally
estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.



The Company considers
the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance
or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the
manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or
changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased
competitive pressures; and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators
at least annually and more frequently upon the occurrence of such events.



The impairment charges,
if any, are included in operating expenses in the accompanying statements of operations.



Cash Equivalents



The Company considers
all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.



Accounts Receivable and Allowance
for Doubtful Accounts



Accounts
receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts.The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the
customer’s current credit worthiness, as determined by the review of their current credit information; and determines the
allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.



Outstanding
account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best
estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included
in general and administrative expenses, if any. Pursuant to paragraph 310-10-50-2of the FASB Accounting Standards Codification
account balances are charged off against the allowance after all means of collection have been exhausted
and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6of the FASB Accounting
Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received.



The Company does not
have any off-balance-sheet credit exposure to its customers.



Property and Equipment



Property and equipment
is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations
as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective
estimated residual values) over the assets estimated useful life of three (3) to five (5) years. Upon sale or retirement of furniture
and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in
statements of operations.



Derivative Instruments



The Company evaluates
its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify
as derivatives to be separately accounted for in accordance with Paragraph 810-10-05-4 of the Codification and Paragraph 815-40-25
of the Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market
each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in
fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion or exercise of
a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified
to equity.



F-10







In circumstances where
the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative
instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted
for as a single, compound derivative instrument.



The classification
of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at
the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification
are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities
will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative
instrument is expected within 12 months of the balance sheet date.



Related Parties



The Company follows
subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related
party transactions.



Pursuant to Section
850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests.



The financial statements
shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature
of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to
an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each
of the periods for which income statements are presented and the effects of any change in the method of establishing the terms
from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented
and, if not otherwise apparent, the terms and manner of settlement.



Commitments and Contingencies



The Company follows
subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist
as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only
be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment
inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against
the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings
or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.



If the assessment of
a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated,
then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates
that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would
be disclosed.



Loss contingencies
considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Management does not believe, based upon information available at this time, that these matters will have a material adverse effect
on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that
such matters will not materially and adversely affect the Company’s business, financial position, and results of operations
or cash flows.



F-11







Revenue Recognition



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



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



Stock-Based Compensation for Obtaining
Employee Services



The Company accounts
for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition
and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification.
Pursuant to paragraph718-10-30-6 of the FASB Accounting Standards Codification, all transactions
in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance
is complete or the date on which it is probable that performance will occur.



The fair value of options
and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing
valuation model. The ranges of assumptions for inputs are as follows:



|· | Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding.  Pursuant to Paragraph 718-10-50-2 of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  The Company uses historical data to estimate employee termination behavior.  The contractual term of share options or similar instruments is used as expected term of share options or similar instruments for the Company if it is a newly formed corporation.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | Expected volatility of the entity’s shares and the method used to estimate it. An entity that uses a method that employs different volatilities during the contractual term shall disclose the range of expected volatilities used and the weighted-average expected volatility. A thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected contractual life of the option and similar instruments.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option and similar instruments.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company’s
policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line
basis over the requisite service period for the entire award.



F-12







Income Tax Provision



The Company accounts
for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are
reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in the statements of operations in the period that includes the enactment date.



The Company adopted
section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses
the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more
likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits
of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest
benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also
provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures.



The estimated future
tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated
balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred
tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.



Management makes judgments
as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.
In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax
jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.



Uncertain Tax Positions



The
Company did not take any uncertain tax positions andhad no adjustments to its income tax liabilities or benefits pursuant
to the provisions of Section 740-10-25 during the years ended December 31, 2011 and 2010..



Net Income (Loss) per Common Share



Net loss per common
share is computed pursuant to Section 260-10-45 of the Codification.  Basic net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per
common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding
shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through
convertible debt, stock options or warrants.



The following table
shows the potentially outstanding dilutive common shares excluded from the diluted net loss per share calculation for the years
ended December 31, 2011 and 2010 as they were anti-dilutive:



|                                                               |  | December 31, 2011 |            |  | December 31, 2010 | 
|-------------------------------------------------------------- |  | ----------------- | ---------- |  | ----------------- | 
|Convertible preferred stock                                    |  |                   | 3,877,500  |  |                   | 
|Convertible notes                                              |  |                   | 1,945,373  |  |                   | 
|Stock purchase warrants                                        |  |                   | 5,000,000  |  |                   | 
|Stock options                                                  |  |                   | 450,000    |  |                   | 
|Warrants issued with the convertible preferred stock and notes |  |                   | 1,464,588  |  |                   | 
|Warrants issued with convertible promissory notes              |  |                   | 566,436    |  |                   | 
|Total                                                          |  |                   | 13,303,897 |  |                   | 



Cash Flows Reporting



The Company adopted
paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and
uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting
Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals
of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating
cash receipts and payments



F-13







Subsequent Events



The Company follows
the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company
will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB
Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed
to users, such as through filing them on EDGAR.



Recently Issued Accounting Pronouncements



FASB
Accounting Standards Update No. 2011-05



In June 2011, the FASB
issued the FASB Accounting Standards Update No. 2011-05 “Comprehensive Income” (“ASU 2011-05”),whichwas the result of a joint project with the IASB and
amends the guidance in ASC 220, Comprehensive Income,by eliminating the option to present components of other comprehensive
income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now gives entities the option to present
all non-owner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate
but consecutive statements. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement
or in two separate but consecutive statements, the amendments require entities to present all reclassification adjustments from
OCI to net income on the face of the statement of comprehensive income.



The amendments in this
Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within those
years, beginning after December 15, 2011.



FASB
Accounting Standards Update No. 2011-08



In September 2011,
the FASB issued the FASB Accounting Standards Update No. 2011-08 “Intangibles—Goodwill and Other:Testing Goodwill for Impairment” (“ASU 2011-08”).This Update is to simplify how public and nonpublic
entities test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether
it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining
whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update,
an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than
not that its fair value is less than its carrying amount.



The guidance is effective
for interim and annual periods beginning on or after December 15, 2011.Early adoption is permitted.



FASB
Accounting Standards Update No. 2011-10



In December 2011, the
FASB issued the FASB Accounting Standards Update No. 2011-10 “Property, Plant and Equipment: Derecognition of in Substance
Real Estate-a Scope Clarification” (“ASU 2011-09”).This Update is to resolve the diversity in practice as
to how financial statements have been reflecting circumstances when parent company reporting entities cease to have controlling
financial interests in subsidiaries that are in substance real estate, where the situation arises as a result of default on nonrecourse
debt of the subsidiaries.



The amended guidance
is effective for annual reporting periods ending after June 15, 2012for public entities. Early adoption is permitted.



FASB
Accounting Standards Update No. 2011-11



In December 2011, the
FASB issued the FASB Accounting Standards Update No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities”
(“ASU 2011-11”).This Update requires an entity to disclose information about
offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements
on its financial position.The objective of this disclosure is to facilitate comparison between
those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial
statements on the basis of IFRS.



The amended guidance
is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.



F-14







FASB
Accounting Standards Update No. 2011-12



In December 2011, the
FASB issued the FASB Accounting Standards Update No. 2011-12“Comprehensive Income: Deferral of the Effective Date for
Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards
Update No. 2011-05” (“ASU 2011-12”).This Update is a deferral of the effective date pertaining to reclassification
adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits of
those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time required
to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary to
reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were in
place before the issuance of Update 2011-05.



All
other requirements in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income
either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should
apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011.



Other
Recently Issued, but Not Yet Effective Accounting Pronouncements



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



Note 3 – Going Concern



The
accompanying consolidated financial statements have been preparedassuming that the Company will continue as a going concern,
which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.



As reflected in the
accompanying consolidated financial statements, the Company had an accumulated deficit at December 31, 2011, and had a net loss
and net cash used in operating activities for the year then ended, respectively. These factors raise substantial doubt about the
Company’s ability to continue as a going concern.



The
Company’s cash position may not be significant enough to support the Company’s daily operations. Management
intends to raise additional funds by way of a public or private offering. Management believes that the actions presently
being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue
as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to
raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern
is dependent upon the Company’s ability to further implement its business plan and generate revenues.



The consolidated financial
statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.



Note 4 – Property and Equipment



Property and equipment
consisted of the following at December 31, 2011 and 2010:



|                               |  | December 31, 2011 |        |   | December 31, 2010 |   |          | Estimated Useful Life
|------------------------------ |  | ----------------- | ------ | - | ----------------- | - | -------- | ---------------------
|                               |  |                   |        |   |                   |   |          |                      
|Furniture and fixtures         |  |                   | -      |   |                   |   | 47,844   |                      
|Computer Equipment             |  |                   | 10,206 |   |                   |   | 70,662   |                      
|                               |  |                   |        |   |                   |   |          |                      
|                               |  |                   | 10,206 |   |                   |   | 118,506  |                      
|Less: Accumulated depreciation |  |                   | (2,158 | ) |                   |   | (111,699 | )                    
|                               |  | $                 | 8,048  |   |                   | $ | 6,807    |                      



F-15







Depreciation Expense



Depreciation expense
for the years ended December 31, 2011 and 2010 was $2,750 and $6,812, respectively. During the year ended December 31, 2011, the
company abandoned certain assets when the company moved offices.



Note 5 - Notes Payable – Related
Party



The Company had notes
payable to a related party. The notes were secured by all assets of the Company, non-interest bearing and due on demand.



Notes payable – related
party at December 31, 2011 and 2010, consisted of the following:



|              |  | December 31, 2011 |   |  | December 31, 2010 |  
|------------- |  | ----------------- | - |  | ----------------- | -
|              |  |                   |   |  |                   |  
|Notes payable |  | $                 | - |  |                   | $
|              |  |                   |   |  |                   |  
|              |  | $                 | - |  |                   | $



Note 6 – Convertible Promissory
Notes



On August 19, 2011,
Wizard World entered into stock subscription agreements with certain investors in connection with an offering of up to $455,000
principal amount of Convertible Promissory Notes, with $453,100 being issued.  The Notes accrue interest at an annual
rate of 14% and are due four months from the issuance date.  The Notes are convertible at $0.60 per share price. These
notes are currently in default.



In conjunction with
the Notes, each investor was granted a Series A Common Stock Purchase Warrant exercisable for one share of common stock of the
Company for each $2.00 of investment.  The Warrants have a five year term and are exercisable at $.60 per share, which
may be paid via a cashless exercise.



On December 6, 2011,
Wizard World entered into stock subscription agreements with accredited investors, for the issuance and sale of an aggregate of
$325,000 in Senior Convertible Debentures. The Debentures bear interest at six percent (6%) per annum maturing February 28, 2012.
The notes, at issuance, gave rise to a debt discount of $206,375 which is being amortized over the lives of the notes. The unamortized
balance at December 31, 2011 was $144,954.



On March 30, 2012,
the December 6, 2011 Debentures converted into shares of the Company’s Series A Cumulative Convertible Preferred Stock, par
value $0.0001, at $0.40 per shares.



Note 7 - Commitments and Contingencies



Employment and Director Agreements



Gareb Shamus Agreement



On May 25, 2011, Wizard
World, Inc. entered into an employment agreement with Mr. Gareb Shamus, President and CEO of the Company.



On May 25, 2011, the
Company also entered into a Director Agreement with Mr. Shamus. The term of the Director Agreement commences on May 25, 2011
and continues through the Company’s next annual stockholders’ meeting. However, the Director Agreement may, at the
option of the Board, be automatically renewed on such date that Mr. Shamus is re-elected to the Board.



For Mr. Shamus’
service on the Board, he received, upon execution of the Director Agreement, and in accordance with a Non-Qualified Stock
Option Agreement, entered into as of May 25, 2011, by and between the Company and Mr. Shamus, a non-qualified stock option to purchase
up to one hundred and fifty thousand (150,000) shares of the Company’s common stock, par value $.0001 per share, at an exercise
price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement.
The option is exercisable for a period of five years and vests 33% annually over a period of three (3) years, pro-rated for the
number of days Mr. Shamus served on the Board.



F-16







On December 1, 2011,
Mr. Gareb Shamus resigned his positions as President, Chief Executive Officer and Director of the Company.



John D. Maatta Agreement



On May 25, 2011, Wizard
World entered into a Director Agreement with Mr. John D. Maatta in connection with his appointment to the Board of Directors of
the Company.  The term of the Director Agreement commences on May 25, 2011 and continues through the Company’s next
annual stockholders’ meeting.  However, the Director Agreement may, at the option of the Board, be automatically renewed
on such date that Mr. Maatta is re-elected to the Board.



Mr. Maatta received,
upon execution of the Director Agreement and pursuant to a Non-Qualified Stock Option Agreement, entered into as of May 25, 2011,
by and between the Company and Mr. Maatta, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000)
shares of the Company’s common stock, par value $.0001 per share, at an exercise price per share equal to the closing price
of the Company’s common stock on the execution date of the Director Agreement.  The option is exercisable
for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred
(12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending July 31, 2011, and pro-rated for
the number of days Mr. Maatta served on the Board during such fiscal quarter.  Notwithstanding the foregoing, if Mr.
Maatta ceases to be a member of the Board at any time during the three (3)-year vesting period for any reason (such as resignation,
withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited.



John D. Macaluso Agreement



On May 13, 2011, Wizard
World entered into a Director Agreement with Mr. John Macaluso in connection with his appointment to the Board of Directors of
the Company.  The term of the Director Agreement is from May 13, 2011 through the Company’s next annual stockholders’
meeting.  The Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Macaluso
is re-elected to the Board.



Mr. Macaluso received,
upon execution of the Director Agreement and pursuant to a Non-Qualified Stock Option Agreement, entered into as of May 13, 2011,
by and between the Company and Mr. Macaluso, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000)
shares of the Company’s common stock, par value $.0001 per share, at an exercise price per share equal to the closing
price of the Company’s common stock on the execution date of the Director Agreement.  The option is exercisable
for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred
(12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending July 31, 2011, and pro-rated for
the number of days Mr. Macaluso served on the Board during such fiscal quarter.  Notwithstanding the foregoing,
if Mr. Macaluso ceases to be a member of Board at any time during the three (3) year vesting period for any reason (such as resignation,
withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited.



Greg Suess Agreement



On May 9, 2011, Wizard
World entered into a Director Agreement, made as of May 9, 2011, with Mr. Greg Suess in connection with his appointment to the
Board of Directors of the Company.  The term of the Director Agreement is from May 9, 2011 through the Company’s next
annual stockholders’ meeting.  The Director Agreement may, at the option of the Board, be automatically renewed on such
date that Mr. Suess is re-elected to the Board.



Mr. Suess received,
upon execution of the Director Agreement, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000)
shares of the Company’s common stock at an exercise price per share equal to the closing price of the Company’s common
stock on the execution date of the Director Agreement.  The option is exercisable for a period of five years and vests
in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per fiscal quarter
at the end of such quarter, commencing in the quarter ending July 31, 2011, and pro-rated for the number of days Mr. Suess served
on the Board during the fiscal quarter.  Notwithstanding the foregoing, if Mr. Suess ceases to be a member of the Board
at any time during the three (3) year vesting period for any reason (such as resignation, withdrawal, death, disability or any
other reason), then any un-vested options shall be irrefutably forfeited.



Note 8 – Stockholders’ Deficit



Series A Cumulative Convertible Preferred
Stock



Immediately after the
Share Exchange, the Company entered into subscription agreements with certain subscribers for the issuance and sale of (i) of $975,928
in Series A Cumulative Convertible Preferred Stock with the rights and preferences set forth in the Certificate of Designation,
convertible into shares of common stock at $0.40 per share; and (ii) Warrants to purchase shares of the Company’s common
stock.



F-17







The Company paid $125,500 in stock issuance
costs to complete the convertible preferred stock and warrant raise.



On April 18, 2011,
the Company entered into subscription agreements with certain subscribers for the issuance and sale of (i) $575,000 in Series A
Cumulative Convertible Preferred Stock with the rights and preferences set forth in the Certificate of Designation, convertible
into shares of common stock at $0.40 at per share; and (ii) Warrants to purchase shares of the Company’s common stock.



The Company paid $30,000 in stock issuance
costs to complete the convertible preferred stock and warrant raise.



Common Stock



On
December 17, 2010, the Company entered into a financial reporting services agreement with Brio Financial Group (“Brio”)
expiring December 31, 2011.Pursuant to the agreement the Company is required to pay the firm $4,500 per month. In
addition, a retainer of $8,000 is included in prepaid expenses as of December 31, 2010 and was expensed during the year ended December
31, 2011. The Company also agreed to issue Brio 30,000 shares of restricted common stock per quarter payable at the end of each
quarter. 30,000 shares per quarter for the years ended December 31, 2010 and for the year ended December 31, 2011 were valued at
$0.40 - $0.60 per share, or $72,000 in the aggregate, and recorded as consulting expensefor
the year ended December 31, 2011. The common stock has not yet been issued and the liability
is included in accounts payable and accrued liabilities.



On January 14, 2011,
the directors of the Company approved by unanimous written consent and the stockholders of the Company holding a majority in interest
of the Company’s voting equity approved by written consent the appointment of Mr. Vadim Mats as a member of the Board of
Directors of the Company, effective as of January 14, 2011. Mr. Mats earns 10,000 shares of the company’s common stock quarterly.
As of December 31, 2011, the Company is yet to issue Mr. Mats 40,000 shares of common stock. The Company has valued the issuance
and has recorded and accrual of $20,000.



On
February 1, 2011, the Company entered into an engagement letter with Lucosky Brookman (“Lucbro”) to provide legal services
with respect to certain securities work.Pursuant to the agreement the Company is required to pay the firm $4,000 per month
along with 5,000 shares of the Company’s common stock. The Company also agreed to issue Lucbro 150,000 shares of restricted
common upon execution of the agreement. The 205,000 shares for the year ended December 31, 2011 were valued at $0.40 - $0.60 per
share, or $88,000 in the aggregate, and recorded as consulting expensefor the year ended December
31, 2011. The common stock has not yet been issued and the liability is included in accounts
payable and accrued liabilities.



On March 23, 2011,
Wizard World entered into a Director Agreement with Michael Mathews, pursuant to which Mr. Mathews was appointed Chairman of the
Company’s board of directors.  The term of the Director Agreement is from March 23, 2011 through the Company’s
next annual stockholders’ meeting.  The Director Agreement may, at the option of the Board, be automatically renewed
on such date that Mr. Mathews is re-elected to the Board.  Under the Director Agreement, Mr. Mathews shall be paid a quarterly
stipend of twenty thousand dollars ($20,000). Mr. Mathews has waived this stipend for the calendar year ended December 31, 2011.



On March 23, 2011,
the Company entered into a Consulting Agreement with Mr. Mathews pursuant to which Mr. Mathews will, among other things, develop
a digital platform for the Company and establish digital planning systems that will include all forms of digital media and social,
search, content, and video applications. The term of the Consulting Agreement is for a four (4) year period. As compensation for
his services, Mr. Mathews shall receive, with the first issuance of 250,000 shares occurring on March 23, 2011, one million (1,000,000)
restricted shares of the Company’s common stock, issuable in four yearly installments. As of December 31, 2011, the Company
is yet to issue Mr. Mathews 437,500 shares of common stock per the vesting arrangement. The Company has valued the issuance and
has recorded and accrual of $200,000.



On March 23, 2011,
the Company entered into a Consulting Agreement with Brad Powers pursuant to which Mr. Powers will, among other things, develop
a digital platform for the Company and establish digital planning systems that will include all forms of digital media and social,
search, content, and video applications. The term of the Consulting Agreement is for a four (4) year period. As compensation for
his services, Mr. Powers shall receive 62,500 shares of restricted Company common stock upon execution of the agreement and an
additional 62,500 restricted shares of the Company’s common stock, issuable in annual installments on the anniversary of
the execution of the agreement. The 109,375 shares for the year ended December 31, 2011 were valued at $0.40 - $0.60 per share,
or $50,000 in the aggregate, and recorded as consulting expensefor the year ended December 31,
2011. The common stock has not yet been issued and the liability is included in accounts payable
and accrued liabilities.



F-18







On December 21, 2011,
Wizard World, entered into a stock subscription agreement with one investor, the Michael Mathews 2011 Children’s GRAT (the
“Trust”).  Michael Mathews is the Company’s Executive Chairman.  Pursuant to the terms of
the Agreement, the Company issued 357,143 shares of the Company’s common stock, par value $0.001 per share, at $0.70 per
share, for a total subscription price of $250,000.



Warrants



On January 3, 2011,
the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not
limited to, strategic planning; management and business operations; introductions to further the Company’s business goals;
provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which
the Company reasonably requests that Consultant provide to the Company. The Term is for six monthsand the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price
of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance.



On January 3, 2011,
the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not
limited to, strategic planning; management and business operations; introductions to further the Company’s business goals;
provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which
the Company reasonably requests that Consultant provide to the Company. The Term is for six monthsand the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price
of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance.



On March 3, 2011, the
Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited
to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide
advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the
Company reasonably requests that Consultant provide to the Company. The Term is for six monthsand
the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40
per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance.



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



|                                 |  | Warrants |           |  | Weighted Average Exercise Price |  
|-------------------------------- |  | -------- | --------- |  | ------------------------------- | -
|                                 |  |          |           |  |                                 |  
|Outstanding – December 31, 2010  |  |          | 2,688,892 |  |                                 | $
|Exercisable – December 31, 2010  |  |          | 2,688,892 |  |                                 | $
|Granted                          |  |          | 4,342,132 |  |                                 | $
|Exercised                        |  |          | -         |  |                                 | $
|Forfeited/Cancelled              |  |          | -         |  |                                 | $
|Outstanding – December 31, 2011  |  |          | 7,031,024 |  |                                 | $
|Exercisable –  December 31, 2011 |  |          | 7,031,024 |  |                                 | $



|Warrants Outstanding |      |  | Warrants Exercisable | 
|-------------------- | ---- |  | -------------------- | 
|                     |      |  |                      | 
|Range of             |      |  | Number Outstanding   | 
|exercise price       |     
|$                    | 0.40 |  |                      | 
|                     |      |  |                      | 



At December 31, 2011 and 2010 the total
intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.



Equity Incentive Plan



On May 9, 2011, the
Board of Directors of Wizard World approved, authorized and adopted (subject to stockholder approval) the 2011 Incentive Stock
and Award Plan (the “Plan”).  The Plan provides for the issuance of up to 3,000,000shares
of common stock, par value $.0001 per share, of the Company through the grant of non-qualified options (the “Non-qualified
Options”), incentive options (the “Incentive Options” and together with the Non-qualified Options,
the “Options”) and restricted stock (the “Restricted Stock”) to directors, officers, consultants,
attorneys, advisors and employees.



F-19







The 2011 Award Plan shall be administered
by a committee consisting of two or more independent, non-employee and outside directors (the “Committee”).
In the absence of such a Committee, the Board of the Company shall administer the Plan.



Each Option shall contain the following
material terms:



(i) the exercise
price, which shall be determined by the Committee at the time of grant, shall not be less than 100% of the Fair Market Value (defined
as the closing price on the final trading day immediately prior to the grant on the principal exchange or quotation system on which
the common stock is listed or quoted, as applicable) of the common stock of the Company, provided that if the recipient
of the Option owns more than ten percent (10%) of the total combined voting power of the Company, the exercise price shall be at
least 110% of the Fair Market Value;



(ii) the term
of each Option shall be fixed by the Committee, provided that such Option shall not be exercisable more than five (5) years
after the date such Option is granted, and provided further that with respect to an Incentive Option, if the recipient owns
more than ten percent (10%) of the total combined voting power of the Company, the Incentive Option shall not be exercisable more
than five (5) years after the date such Incentive Option is granted;



(iii) subject
to acceleration in the event of a Change of Control of the Company (as further described in the Plan), the period during which
the Options vest shall be designated by the Committee or, in the absence of any Option vesting periods designated by the Committee
at the time of grant, shall vest and become exercisable in equal amounts on each fiscal quarter of the Company through the four
(4) year anniversary of the date on which the Option was granted;



(iv) no Option
is transferable and each is exercisable only by the recipient of such Option except in the event of the death of the recipient;
and



(v) with respect
to Incentive Options, the aggregate Fair Market Value of common stock exercisable for the first time during any calendar year shall
not exceed $100,000.

Each award of Restricted Stock is subject to the following material terms:



(i)no
rights to an award of Restricted Stock is granted to the intended recipient of Restricted Stock unless and until the grant of Restricted
Stock is accepted within the period prescribed by the Committee;



(ii)Restricted
Stock shall not be delivered until they are free of any restrictions specified by the Committee at the time of grant;



(iii)recipients
of Restricted Stock have the rights of a stockholder of the Company as of the date of the grant of the Restricted Stock;



(iv)shares
of Restricted Stock are forfeitable until the terms of the Restricted Stock grant have been satisfied or the employment with the
Company is terminated; and



(v)the
Restricted Stock is not transferable until the date on which the Committee has specified such restrictions have lapsed.



Note 9 – Income Tax Provision



Deferred Tax Assets



At
December 31, 2011, the Company has available for federal income tax purposes a net operating loss (“NOL”) carry-forwards
of approximately $1,237,000 that may be used to offset future taxable income through the fiscal year ending December 31, 2030.No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated
financial statements since the Company believes that the realization of its net deferred tax asset of approximately $420,000 was
not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset
by a valuation allowance of $420,000.



Deferred tax assets
consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred
tax assets because of the uncertainty regarding its realizability.  The valuation allowance increased approximately $239,000
and $9,000 for the years ended December 31, 2010 and 2009.



F-20







Components of deferred tax assets as of
December 31, 2011 and 2010 are as follows:



|                                                    |  |                   |          |   |                   |  
|--------------------------------------------------- |  | ----------------- | -------- | - | ----------------- | -
|                                                    |  | December 31, 2011 |          |   | December 31, 2010 |  
|Net deferred tax assets – Non-current:              |  |                   |          |   |                   |  
|                                                    |  |                   |          |   |                   |  
|Expected income tax benefit from NOL carry-forwards |  | $                 | 420,000  |   |                   | $
|Less valuation allowance                            |  |                   | (420,000 | ) |                   |  
|Deferred tax assets, net of valuation allowance     |  | $                 | -        |   |                   | $



Income Tax Provision in the Consolidated
Statements of Operations



A reconciliation of
the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:



|                                                                   |  | Year Ended December 31, 2011 |       |    | Year Ended December 31, 2010 | 
|------------------------------------------------------------------ |  | ---------------------------- | ----- | -- | ---------------------------- | 
|                                                                   |  |                              |       |    |                              | 
|Federal statutory income tax rate                                  |  |                              | 34.0  | %  |                              | 
|Change in valuation allowance on net operating loss carry-forwards |  |                              | (34.0 | )% |                              | 
|Effective income tax rate                                          |  |                              | 0.0   | %  |                              | 



Note 10 – Subsequent Events



The Company has evaluated
all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if
they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosedas follows:



On March 30, 2012,
the Company closed on a first round of financing related to an offering of up to $2,000,000 of the Company’s Series A Cumulative
Convertible Preferred Stock, by entering into subscription agreements with ten (10) accredited investors for the issuance and sale
of (i) an aggregate of $825,000 in Series A Preferred and (ii) Series A Common Stock Purchase Warrants, on the basis of one warrant
for every $2.00 of investment.



In connection with
the Closing, and pursuant to mandatory conversion feature of those certain Senior Convertible Debentures in the aggregate amount
of $325,000, issued on December 6, 2011, the Debentures were mandatorily converted (into shares of Series A Preferred and Warrants
upon the same terms of the Offering. A total of 3,250 shares of Series A Preferred and 162,500 Warrants were issued by the Company
to the Debenture Investors pursuant to the Mandatory Conversion.



F-21