Attached files
file | filename |
---|---|
EX-3.4 - Creek Road Miners, Inc. | v205257_ex3-4.htm |
EX-4.2 - Creek Road Miners, Inc. | v205257_ex4-2.htm |
EX-3.3 - Creek Road Miners, Inc. | v205257_ex3-3.htm |
EX-4.1 - Creek Road Miners, Inc. | v205257_ex4-1.htm |
EX-10.1 - Creek Road Miners, Inc. | v205257_ex10-1.htm |
EX-17.1 - Creek Road Miners, Inc. | v205257_ex17-1.htm |
EX-21.1 - Creek Road Miners, Inc. | v205257_ex21-1.htm |
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): December 7,
2010
GoENERGY
INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
000-33383
|
|
98-0357690
|
(State or other jurisdiction of
incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification
No.)
|
3960 Howard Hughes Parkway, Suite
500
Las Vegas, NV
|
89169
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(310)
600-8757
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
FORWARD-LOOKING
STATEMENTS
This
Form 8-K and other reports filed by Registrant from time to time with the
Securities and Exchange Commission (collectively the “Filings”) contain or may
contain forward looking statements and information that is based upon beliefs
of, and information currently available to, Registrant’s management as well as
estimates and assumptions made by Registrant’s management. When used in the
Filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”,
“intend”, “plan” or the negative of these terms and similar expressions as they
relate to Registrant or Registrant’s management identify forward looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors (including the risks contained in the section of this report entitled
“Risk Factors”) relating to Registrant’s industry, Registrant’s operations and
results of operations. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may differ significantly from those anticipated, believed, estimated, expected,
intended or planned.
You
should not place undue reliance on any forward-looking statement, each of which
applies only as of the date of this Form 8-K. Except as required by
law, we undertake no obligation to update or revise publicly any of the
forward-looking statements after the date of this Form 8-K to conform our
statements to actual results or changed expectations, or the results of any
revision to these forward-looking statements.
In
this Form 8-K, references to “we,” “our,” “us,” “GoEnergy,” the “Company” or
“our Company” refer to GoEnergy, Inc., a Delaware corporation.
Item
1.01. Entry into a Material Definitive Agreement.
On
December 7, 2010, the Company acquired Kick the Can Corp., a Nevada corporation
(“KTC Corp”), and a producer of pop culture and multimedia conventions across
the United States that markets movies, TV shows, video games, technology, toys,
social networking/gaming platforms, comic books and graphic novels, pursuant to
a share exchange agreement (the “Exchange Agreement”) by and among the Company,
Strato Malamas, an individual and the majority stockholder of GoEnergy, KTC
Corp., Kicking the Can, L.L.C., a Delaware limited liability company and the
majority shareholder of KTC Corp. (“KTC LLC”), and certain shareholders of KTC
Corp. that are signatories thereto (together with KTC LLC, the “KTC Corp.
Shareholders”). The closing of the transaction (the “Closing”) took place
on December 7, 2010 (the “Closing Date”). On the Closing Date, pursuant to the
terms of the Exchange Agreement, we acquired all of the outstanding shares of
KTC Corp. (the “KTC Corp. Shares”) from the KTC Corp. Shareholders, and the KTC
Corp. Shareholders transferred and contributed all of their KTC Corp. Shares to
us. In exchange, we issued to the KTC Corp. Shareholders, their designees or
assigns, 33,430,107 shares (the “Exchange Shares”), or approximately 95.5% of
the shares of common stock, par value $.0001 per share (the “Common Stock”), of
the Company issued and outstanding after the Closing (the “Share
Exchange”).
As the
result of the Share Exchange, KTC Corp. became a wholly-owned subsidiary of the
Company. The sole director of the Company and majority shareholder approved the
Exchange Agreement and the transactions contemplated under the Exchange
Agreement. The sole director and majority shareholder of KTC Corp. approved the
Exchange Agreement and the transactions contemplated thereunder.
As a
condition of the Share Exchange, Terry Fields (“Fields”) resigned from all
officer positions, other than as CFO, of the Company and Gareb Shamus (“Shamus”)
was appointed as the Company’s President and Chief Executive
Officer. It has been agreed that Fields shall resign as CFO after the
filing of the Company’s Form 10-Q for the three month period ended October 31,
2010. As a further condition to the Share Exchange, Fields resigned
as the sole director of the Company, effective as of the eleventh day after the
mailing of the information statement on Form 14f-1 (which is required by Rule
14f-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), and Shamus was appointed as Chairman effective as of the
Closing Date.
Immediately
after the Share Exchange, we entered into subscription agreements (the
“Subscription Agreements”) with certain accredited investors (the “Subscribers”)
for the issuance and sale of (i) up to $1.5 million in Series A Cumulative
Convertible Preferred Stock with the rights and preferences set forth in the
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, attached hereto as Exhibit 4.1 (“Certificate
of Designation”), and is convertible into shares of the Company’s Common Stock
at a per share conversion price of $0.40; and (ii) Warrants in the form attached
hereto as Exhibit 4.2 (the “Warrants”) to purchase shares of the Company’s
Common Stock (the “Warrant Shares”) at an exercise price of $0.60 per share
(collectively, the “Offering”).
The Share
Exchange is discussed more fully in Section 2.01 of this Current Report on Form
8-K. The information therein is hereby incorporated in this Section
1.01 by reference. The description of the transactions contemplated
by the Exchange Agreement, Subscription Agreement, Warrants and the other
documents set forth herein does not purport to be complete and is qualified in
its entirety by reference to the full text of the exhibits filed herewith and
incorporated herein by reference.
Item 2.01. Completion
of Acquisition or Disposition of Assets.
CLOSING
OF EXCHANGE AGREEMENT
As
described in Item 1.01 above, on December 7, 2010, we acquired Kick the Can
Corp. (“KTC Corp”), a producer of pop culture and multimedia conventions across
the United States that markets movies, TV shows, video games, technology, toys,
social networking/gaming platforms, comic books and graphic novels.
On the Closing Date, pursuant to the terms of the Exchange Agreement, we
acquired all the KTC Corp. Shares from the KTC Corp. Shareholders, and the KTC
Corp. Shareholders transferred and contributed all of their KTC Corp. Shares to
us. In exchange, we issued a total of 33,430,107 shares of our Common
Stock to the KTC Corp. Shareholders, their designees or assigns, which totals
approximately 95.5% of the issued and outstanding shares of our Common Stock on
a fully-diluted basis as of and immediately after the Closing of the Share
Exchange.
On the
Closing Date, KTC Corp. became a wholly-owned subsidiary of the
Company. The Company’s sole director and majority shareholder
approved the Exchange Agreement and the transactions contemplated under the
Exchange Agreement. Immediately following the closing of the Share
Exchange, the Company changed its business plan to that of KTC Corp.’s
business.
KTC Corp.
was incorporated in Nevada on September 21, 2010. Pursuant to an
Asset Purchase Agreement dated September 29, 2010, KTC Corp. acquired from KTC
LLC the production rights to the Atlanta Comic Con, Big Apple Comic Con,
Cincinnati Comic Con, Connecticut Comic Con, Nashville Comic Con, New England
Comic Con, North Coast Comic Con and Toronto Comic Con, in exchange for the
issuance of 16 million shares of KTC Corp. common stock, par value $.0001 per
share, to KTC LLC.
The
Company was a “shell company” (as such term is defined in Rule 12b-2 under the
Exchange Act) immediately before the completion of the Share
Exchange. Accordingly, pursuant to the requirements of Item
2.01(a)(f) of Form 8-K, set forth below is the information that would be
required if the Company were filing a general form for registration of
securities on Form 10 under the Exchange Act, reflecting the Company’s Common
Stock, which is the only class of its securities subject to the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act upon
consummation of the Share Exchange, with such information reflecting the Company
and its securities upon consummation of the Share Exchange.
BUSINESS
Overview
We are a
producer of pop culture and multimedia conventions across North America that
markets movies, TV shows, video games, technology, toys, social
networking/gaming platforms, comic books and graphic novels.
Background
GoEnergy,
Inc. ( “we,” “our,” “us,” the “Company,” “our Company” or “GoEnergy”)
was incorporated in Delaware on May 2, 2001. After raising initial capital for
operations through a private placement offering pursuant to Regulation S of
the Securities Act of 1933, as amended (the “Securities Act”), conducted between
May 2, 2001 and July 31, 2001, we commenced reviewing various oil and gas
property acquisition opportunities.
In March
2002, we acquired a 25% working interest and a 19.50% net revenue interest in
oil and gas leases located in Hood County, Texas. In the same month, we also
acquired a 1% working interest, and corresponding 0.78% net revenue interest, in
another property located in Hood County known as the Tolar Property. Tests
performed on the properties did not indicate a commercial potential for either
property so operations were ceased on both properties. We have abandoned
our interest in the Hood County Property and Tolar Property.
On April
2, 2005, we purchased a 100% interest in a property in British Columbia, Canada
known as the Eagle Property from David Heyman, who in March 2005 staked a
property claim for us in this property, for $4,000. The funds for this
purchase came from our working capital, which consisted of funds from a private
placement and loans from our former President Strato Malamas. The
Eagle Property is without known reserves and our efforts there were exploratory
in nature. We did not have any sources of capital available for us to
continue exploration on the Eagle Property.
On
December 7, 2010 (the “Closing Date”), we acquired Kick the Can Corp. (“KTC
Corp”), a producer of pop culture and multimedia conventions across the United
States that markets movies, TV shows, video games, technology, toys, social
networking/gaming platforms, comic books and graphic novels, pursuant to a share
exchange agreement (the “Exchange Agreement”) by and among the Company, Strato
Malamas, an individual and our majority stockholder, KTC Corp., Kicking the Can,
L.L.C., a Delaware limited liability company and the majority shareholder of KTC
Corp. (“KTC LLC”), and certain shareholders of KTC Corp. (together with KTC LLC,
the “KTC Corp. Shareholders”). On the Closing Date, we acquired all of the
outstanding shares of KTC Corp. (the “KTC Corp. Shares”) from the KTC Corp.
Shareholders, and the KTC Corp. Shareholders transferred and contributed all of
their KTC Corp. Shares to us. In exchange, we issued to the KTC Corp.
Shareholders, their designees or assigns, an aggregate of 33,430,107 shares (the
“Exchange Shares”), or approximately 95.5% of the shares of common stock, par
value $.0001 per share (the “Common Stock”), of our Company issued and
outstanding after the Closing (the “Share Exchange”) on a fully-diluted basis as
of the closing of the Share Exchange. As a result, KTC Corp. became
our wholly-owned subsidiary on the Closing Date.
KTC Corp.
was incorporated in Nevada on September 21, 2010. In exchange for the
issuance to KTC LLC of 16 million shares of the common stock of KTC Corp.
pursuant to an Asset Purchase Agreement dated September 29, 2010 (the “Asset
Purchase Agreement”) between KTC Corp. and KTC Corp., KTC Corp. acquired (the
“Asset Purchase”) from KTC LLC the production rights to the following
conventions: the Atlanta Comic Con, Big Apple Comic Con, Cincinnati Comic Con,
Connecticut Comic Con, Nashville Comic Con, New England Comic Con, North Coast
Comic Con and Toronto Comic Con (collectively, the “Initial Comic
Cons”). In November 2010, KTC Corp. acquired the rights to produce
the Nola Comic Con in New Orleans.
Our
Business
Overview
We have
the rights to the name, marks, domain, customer lists and production rights for
a portfolio of fourteen pop culture and multimedia conventions (“Comic Cons”)
across North America, and are in the process of acquiring from KTC LLC the
rights to produce the Mid Ohio Comic Con in Columbus, Ohio, Central Canada Comic
Con in Winnipeg and Houston Comic Con. In addition, we originated in-house
and produced the Anaheim Comic Con in April 2010 and the Austin Comic Con in
November 2010. We have thirteen conventions scheduled for the 2011
tour and plan to add at least five more conventions to the 2011
tour. We project that we will produce twenty five conventions in
2012. Our Comic Cons provide sales, marketing, promotions, public
relations, advertising and sponsorships for entertainment companies, toy
companies, gaming companies, publishing companies, marketers, corporate sponsors
and retailers. The demand for our Comic Cons results in our
production of multiple conventions in certain cities such as New York City in
one year.
A
majority of our target audience is male-oriented and are major buyers
of many types of entertainment and media, including movies, music, toys, video
games, apps, consumer electronics, computers, and lifestyle products, such
as clothes, footwear, digital devices, mobile phones and men’s personal items.
We believe that this male demographic consists of tens of million consumers
in the United States and has hundreds of billion in spending
power. Through our Comic Cons, we introduce movies, TV shows, video
games, technology, animation, toys, action figures, social networking/gaming
platforms, comic books and graphic novels and their ancillary merchandise
products, covering such media properties as Spider-Man, Transformers, Star Wars,
Star Trek, Iron Man and Batman.
Conventions
We earn
revenue from ticket sales, exhibitor sales, sponsorships and promotions at
our Comic Cons. Our operations are centered on the following two business
components:
|
•
|
Live Conventions, which
consists of live events in large cities across North America;
and
|
|
•
|
Sponsorships and
Promotions, which consists of sponsorships for conventions and
related promotion
opportunities.
|
Strategy
Our
objective is to use our conventions and business model to become a
market leader in sales and marketing of pop culture. Key elements of our
strategy include:
|
•
|
producing
high quality live convention events for promotion of consumer products and
entertainment;
|
|
•
|
expanding our
relationships with entertainment and media companies that our affiliate
KTC LLC has established; and
|
|
•
|
forming
strategic relationships with new media and entertainment companies to
promote their products.
|
Sponsorships and
Promotions
Sponsorships. We provide
sponsorships that allow advertisers a full range of promotional vehicles on-site
and through its public relations efforts. Sponsorships include, among
other things, the opportunity to display brand names at our live events.
Sponsors pay a fee based upon the position of their advertising media and the
exposure it will receive. We continue to pursue and negotiate with additional
sponsors for the 2011 tour. This activity is ongoing as part of our sales and
revenue generating efforts.
Promotions. Promotional
opportunities include product placement and brand associations on-site at the
conventions. As our brand grows, we expect to earn revenues by co-creating
promotions with companies and brands seeking to benefit from the popularity of
the Comic Cons and the exposure received from appearing at
them.
Digital Media. We use
Facebook and Twitter to create awareness of our conventions and provide updates
to our consumers throughout North America. We also use, through an informal
arrangement with our affiliate Wizard Entertainment, its website www.wizardworld.com
to create awareness of the Comic Cons and an online community for our fans.
Through www.wizardworld.com,
our fans are able to obtain the latest convention news and
information. Our arrangement will be formalized in an agreement, the
terms of which are yet to be negotiated.
Marketing
Our conventions are
promoted through a variety of media outlets, including television, radio, print
and the Internet. Our conventions garner a large amount of publicity
surrounding the events, including from local TV stations, radio stations,
newspapers, national press such as AP and Reuters, and fan websites and
blogs.
Trademarks and
Copyrights
We have a
portfolio of trademarks and service marks and maintain a catalog of copyrighted
works. Since intellectual property is material to all aspects of our operations,
we expend substantial cost and effort in an attempt to maintain and protect our
intellectual property and to avoid infringing other parties’ intellectual
property. For example, we protect our intellectual property rights
by, among other things, searching the Internet to detect unauthorized use of our
intellectual property, causing the seizure of goods that feature unauthorized
use of our intellectual property and seeking restraining orders and/or damages
in court against individuals or entities infringing upon our intellectual
property rights. We also rely on trademark, copyright and confidentiality laws
and contracts.
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 all fire safety and occupancy matters as part of the rental
agreement. Crowd control varies by location and are either taken care
of by the convention center personnel or by a third party security service
recommended by the convention center.
The
convention centers, however, require us to obtain liability
insurance. We are in the process of obtaining such liability
insurance.
Customers
Our
client base is diverse. We have access to some of the leading movie studios,
video game producers, comic book publishers, television broadcasters and toy
manufacturers and are continuing to develop the relationships initially
established by KTC LLC.
No single
advertiser, promoter or sponsor contributes a significant portion of our
revenues.
Competition;
Competitive Strengths
Our
competitors are local one-time event comic cons. We have a
competitive advantage over these comic cons because they do not have our
economies of scale and operating efficiencies. Our production costs
remain relatively constant despite the number of Comic Cons we operate because,
for example, we do not significantly increase the number of personnel, who are
either employees or consultants, as we produce more Comic
Cons. Further, the size of our Comic Cons and the volume at which we
produce them give us the leverage to negotiate discounts on such things as
hotels and other travel expenses.
There is
also the San Diego Comic-Con that occurs every year in San
Diego. However, because of its history, size and well established
industry presence, we have made a deliberate decision to not try to compete with
it and therefore do not consider them a competitor.
We also
believe that the size and volume of our Comic Con tours create a barrier to
entry of new industry participants because, due to their size, such new industry
participants would find it difficult to enter into certain markets, such as the
larger metropolitan cities. Further, because we produce a number of
events throughout the year and across North America, we believe that we provide
an attractive opportunity for sponsors with limited coverage who want to expand
their exposure nationally.
Sales
Channels
We have
outsourced our ticket sales to a completely 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. As an alternative, tickets can be purchased at the
live events themselves.
Pricing
Policy
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 convention. Tickets typically range from $25 for a
single day pass to $55 for a weekend pass. Entry of children 10 and under is
free at all events.
Sales
and Marketing Strategy
We promote our shows through a number
of different outlets, including through local radio and TV stations, newspapers,
magazines and online sites. We also use online social networks like
Facebook as a resource for our fans and Twitter as a provider of updates to our
fans. In addition, we promote our Comic Cons through Wizard magazine, FunFare
magazine, ToyFare magazine and www.wizardworld.com, each of which is a property of our
affiliate Wizard Entertainment, through an informal arrangement we have with
Wizard Entertainment. Such arrangement
will be formalized in an agreement, the terms of which have yet to be
negotiated.
Growth
Strategy
We plan
to increase our presence in the comic con market by acquiring the rights to
conventions across North America and building and developing new shows
in-house. For example, we created and produced the Anaheim Comic Con
in April 2010 and the Austin Comic Con in November 2010.
Employees
We do not
have any of our own employees. We currently obtain the services of
the employees of either KTC LLC or Wizard Entertainment to operate the comic
cons through an informal arrangement between us and KTC LLC and Wizard
Entertainment. We plan to enter into a shared services agreement with
KTC LLC and Wizard Entertainment, the terms of which have yet to be
negotiated.
RISK
FACTORS
You
should carefully consider the risks described below together with all of the
other information included in this report before making an investment decision
with regard to our securities. The statements contained in or
incorporated herein that are not historic facts are forward-looking statements
that are subject to risks and uncertainties that could cause actual results to
differ materially from those set forth in or implied by forward-looking
statements. If any of the following risks actually occurs, our business,
financial condition or results of operations could be harmed. In that case, you
may lose all or part of your investment.
Risks
Relating to our Business
Our
future success depends on attracting sponsors and pop culture promoters who will
advertise at our Comic Cons. If we fail to attract a sufficient number of
sponsors and pop culture promoters, our operating results and revenues may not
meet expectations.
One
important strategy underlying our recent acquisitions is to create an integrated
platform of tours on which sponsors and pop-culture promoters 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 promoters
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.
If
we do not maintain and develop our 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 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.
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 its agreement 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 in that sector, and our ability to cross-sell sales and
marketing services among different platforms, may be impaired. Depending on the
circumstances, the consequences could be far-reaching and harmful to our
reputation, existing business relationships and future growth
potential.
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.
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, financial condition, results of operations and cashflow from
operations.
The
failure to perform or termination of any of the agreements by a partner or a
counterparty, the discontinuation of operations of a partner or counterparty,
the loss of good relations with a partner or counterparty or our inability to
obtain similar relationships or agreements may have an adverse effect on our
operating results and financial condition.
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
products consumers will purchase. Content in which we have invested significant
resources may fail to respond to consumer demand at the time. A decrease in the
level of media exposure or popularity of our market pop culture or a loss in
sales could have a material adverse effect on our business, prospects and
financial condition.
We
may not be able to prevent others from using our intellectual
property.
We regard
our trademarks, trade names, copyrights and similar intellectual property as
critical to our success. We plan to rely on a combination of trademark, trade
secret and copyright laws, and non-disclosure and other contractual provisions
to protect our proprietary rights. We also try to protect our
intellectual property rights by, among other things, searching the Internet to
detect unauthorized use of our intellectual property, causing the seizure of
goods that feature unauthorized use of our intellectual property and seeking
restraining orders and/or damages in court against individuals or entities
infringing upon our intellectual property rights.
However,
policing the unauthorized use of our intellectual property is often difficult
and the steps we have taken 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. Litigation relating to our intellectual property
might result in substantial costs and diversion of resources and management
attention. Because the policing of intellectual and intangible rights may be
difficult and the ideas and other aspects underlying our business model may not
in all cases be protectable under intellectual property laws, there can be no
assurance that we can prevent competitors from marketing the same or similar
products and services.
We
may be subject to claims by third parties that we infringe on their intellectual
property.
Although
management does not believe that our 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 associated and may be a distraction
to management. We also may not be able to protect unauthorized use
of intellectual property licensed to us and take appropriate steps to enforce
its rights. The ownership of certain trademarks used by us or
our strategic partners may be subject to claims by other parties and if
litigation of such disputes arises, substantial costs and interruption of our
business, or the business of our strategic partners, may result, which may
adversely affect our business or results of operations.
We
cannot assure you that our growth strategy will be successful, which may result
in a negative impact on our growth, financial condition, results of operations
and cash flow.
One of
our strategies is to grow through acquiring rights to more conventions, but
there may be obstacles to expanding our business. We cannot, therefore, assure
you that we will be able to successfully overcome such obstacles and establish
conventions in any additional markets. Our inability to implement this
sustainable growth strategy successfully may have a negative impact on our
growth, future financial condition, results of operations or cash
flows.
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 accordingly.
Our
capital needs will depend on numerous factors, including (i) our profitability;
(ii) the release of competitive products by our competition; and (iii) the
amount of our capital expenditures, including acquisitions. Moreover,
the costs involved may exceed those originally contemplated. Costs 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 cannot
assure you that we will be able to obtain capital in the future to meet our
needs. If we cannot obtain additional funding, we may be required to:
(i) limit our expansion; (ii) limit our marketing efforts; and (iii) decrease or
eliminate capital expenditures. Such reductions could materially adversely
affect our business and our ability to compete. Even if we do find a
source of additional capital, we may not be able to negotiate terms and
conditions for receiving the additional capital that are favorable to us. Any
future capital investments could dilute or otherwise materially and adversely
affect the holdings or rights of our existing shareholders.
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 resulting in the failure to generate revenues at levels we
expect.
In order
to maximize potential growth in our current and potential markets, we may have
to expand our production 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.
We could face a
variety of risks if we expand into new and complementary
businesses.
We hope
to identify and enter into new or complementary businesses. Risks of expansion
may include, among other risks: potential diversion of management’s attention
and other resources, including available cash, from our existing businesses;
unanticipated liabilities or contingencies; reduced earnings due to increased
amortization, impairment charges and other costs; competition from other
companies with more experience in such businesses; and possible additional
regulatory requirements and compliance costs.
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. 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.
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.
The
loss of the services of our key employees, particularly the services rendered by
Gareb Shamus, our President, Chief Executive Offices and Chairman, could harm
our business.
Our
success depends to a significant degree on the services rendered to us by our
key employees. In particular, we are heavily dependent on the
continued services of Gareb Shamus, our President, Chief Executive Officer and
Chairman. We do not currently have an employment agreement with Mr. Shamus nor
do we have key man insurance on Mr. Shamus. The loss of Mr. Shamus
and other members of our senior management team, and our inability to attract
highly skilled personnel with sufficient experience in our industry, could harm
our business.
Need
to attract and maintain employees.
Our
future success also depends upon our continuing ability to attract and retain
qualified personnel. Expansion of our business and operation will require
additional managers and employees with industry experience, and 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 these qualified people, our prospects, business, financial condition and
results of operations will be materially and adversely affected.
Risks
Relating to Being a Public Company
Our
management has limited experience in managing and operating a public
company. Any failure to comply or adequately comply with federal securities
laws, rules or regulations could subject us to fines or regulatory actions,
which may materially adversely affect our business, results of operations and
financial condition.
Our
current management has limited experience managing and operating a public
company and relies in many instances on the professional experience and advice
of third parties, including its attorneys and accountants. Failure to comply or
adequately comply with any laws, rules or regulations applicable to our business
may result in fines or regulatory actions, which may materially adversely affect
our business, results of operation or financial condition and could result in
delays in the development of an active and liquid trading market for our
stock.
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, costs associated with newly applicable corporate governance
requirements, including requirements under the Sarbanes-Oxley Act of 2002 and
other rules implemented by the Securities and Exchange Commission. 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 our board of directors or as executive
officers. We are currently evaluating and monitoring developments with respect
to these newly applicable rules, and we cannot predict or estimate 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 and the market
price of our common stock may be adversely impacted.
As
directed by Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the
Securities and Exchange Commission adopted rules requiring public companies to
include a report of management on the company’s internal controls over financial
reporting in their annual reports, including Form 10-K. Under current Securities
and Exchange Commission 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 receive a positive attestation from our independent registered
public accounting firm with respect to our internal controls, investors and
others may lose confidence in the reliability of our financial statements and
our stock price and ability to obtain equity or debt financing as needed could
suffer.
Risks
Relating To Our Industry
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
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.
We
derive a substantial proportion of our revenues from advertising, and the
advertising market is particularly volatile.
We derive
the majority of our revenues from the provision of advertisements and
sponsorships. 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:
|
•
|
a
downturn in economic conditions;
|
|
•
|
a
deterioration of the ratings of their programs;
or
|
|
•
|
a
decline in advertising spending in
general.
|
If we are
unable to continually attract advertisers to our Comic Cons, we will 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.
Risks Related To Our
Securities
Our
common stock is quoted on the Pink Sheets, which may have an
unfavorable impact on our stock price and liquidity.
Our
Common Stock is quoted on the Pink Sheets. 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 Pink Sheets.
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 of one’s orders for shares of
our Common Stock being executed, and current prices may differ significantly
from the price one was quoted at the time of one’s order entry.
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 have
to issue securities that may have rights, preferences and privileges senior to
our Common Stock.
Currently,
there is no 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, GOEE. However, our stock has been thinly
traded. 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.
|
In
addition, our Common Stock is unlikely to be followed by any market analysts,
and there may be few institutions acting as market makers for our Common Stock.
Either of these factors could adversely affect the liquidity and trading price
of our Common Stock. 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 us 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
may be subject to the penny stock rules which will make our securities more
difficult to sell.
We will
be subject to the Securities and Exchange Commission’s “penny stock” rules if
our securities sell below $5.00 per share. Penny stocks generally are equity
securities with a price of less than $5.00. The penny stock rules
require broker-dealers to deliver a standardized risk disclosure document
prepared by the Securities and Exchange Commission 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. 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.
In
addition, 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
may find it more difficult to sell their securities.
Insiders have
substantial control over us, and they could delay or prevent a change in our
corporate control even if our other stockholders wanted it to
occur.
As
of December 10, 2010, our executive officers, directors, and principal
stockholders who hold 5% or more of our outstanding common stock beneficially
owned, in the aggregate, approximately 74% 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 us even if our other stockholders wanted it
to occur.
Our
Certificate of Incorporation provide for indemnification of officers and
directors at our expense and limit 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, officers, employees and agents against
attorney’s fees and other expenses incurred by them in any 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 which we
will be unable to recoup.
We have
been advised that, in the opinion of the Securities and Exchange Commission,
indemnification for liabilities arising under federal securities laws is against
public policy as expressed in 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
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.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
PLAN OF OPERATION
This
Current Report on Form 8-K contains forward-looking statements within the
meaning of the federal securities laws. These include statements about our
expectations, beliefs, intentions or strategies for the future, which we
indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,”
“will,” “we believe,” “GoEnergy believes,” “management believes” and similar
language. Except for the historical information contained herein, the
matters discussed in this “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” and elsewhere in this report are
forward-looking statements that involve risks and uncertainties. The factors
listed in the section captioned “Risk Factors,” as well as any cautionary
language in this report, provide examples of risks, uncertainties and events
that may cause our actual results to differ materially from those projected.
Except as may be required by law, we undertake no obligation to update any
forward-looking statement to reflect events after the date of this Form
8-K.
Overview
We are a
producer of pop culture and multimedia conventions (“Comic Cons”) across North
America that market 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.
Background
Kick the
Can Corp. (“KTC Corp.”) was incorporated in Nevada on September 21,
2010. Pursuant to an Asset Purchase Agreement dated September 29,
2010 between KTC Corp. and Kicking the Can, L.L.C., a Delaware limited liability
company (“KTC LLC”), KTC Corp. acquired from KTC LLC the production rights to
the Atlanta Comic Con, Big Apple Comic Con, Cincinnati Comic Con, Connecticut
Comic Con, Nashville Comic Con, New England Comic Con, North Coast Comic Con and
Toronto Comic Con in exchange for the issuance of 16 million shares of KTC Corp.
common stock to KTC LLC.
Plan
of Operation
Our near
and long-term operating strategy focuses on increasing revenues through
additional live events, and increased sponsorship revenues and sales of
convention exhibitor space and tickets, while controlling costs to achieve
profitable operations. Our objective is to use our conventions
and business model to become a market leader in sales and marketing of pop
culture. Key elements of our strategy include:
|
•
|
producing
high quality live convention events for promotion of consumer products and
entertainment;
|
|
•
|
expanding our
relationships with entertainment and media companies;
and
|
|
•
|
forming
strategic relationships with new media and entertainment companies to
promote their products.
|
We will
continue to pursue, negotiate and sell sponsorships and promotion opportunities
to businesses seeking to reach our core target audience of young adult males as
an ongoing part of our sales and revenues generating efforts. As our brand
grows, we expect to earn revenues by co-creating promotions with companies and
brands seeking to benefit from the popularity of our conventions and the
exposure received from appearing at our live conventions.
At
September 30, 2010, KTC Corp.’s cash and cash equivalents were $-0-.
During the period from inception through September 30, 2010, KTC Corp. issued
$1,600 of its common stock, all of which were issued in exchange for the rights
to the comic conventions controlled by KTC LLC. KTC Corp. received an
additional $1,600 in common stock subscriptions, which were not paid for at
September 30, 2010.
Going
Concern
The
financial statements have been prepared assuming that the Company will continue
as a going concern. As reflected in the accompanying financial
statements, the Company had a deficit accumulated during the development stage
of $853 at September 30, 2010, and a net loss from operations of $853 for the
period from September 20, 2010 (inception) through September 30, 2010 with no
revenues since inception.
While the
Company is attempting to commence operations and generate revenues, the
Company’s cash position may not be sufficient enough to support the Company’s
daily operations. Management intends to raise additional
funds through private placements. 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.
Off-Balance Sheet
Arrangements
As of
September 30, 2010, KTC Corp. 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 Plan of Operation.”
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. 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.
Long-lived
assets
We comply
with the accounting and reporting requirements of Statement of Financial
Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. We will periodically evaluate
the carrying value of long-lived assets when events and circumstances warrant
such a review. Long-lived assets will be written down if the evaluation
determines that the fair value is less than the book amount.
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.
|
Level
3
|
Pricing
inputs that are generally observable inputs and not corroborated by market
data.
|
The
carrying amounts of our financial assets and liabilities, such as accrued
expenses approximate our fair values because of the short maturity of this
instrument.
We do not
have any assets or liabilities measured at fair value on a recurring or a
non-recurring basis, consequently, we did not have any fair value adjustments
for assets and liabilities measured at fair value at September 30, 2010, nor
gains or losses are reported in the statement of operations that are
attributable to the change in unrealized gains or losses relating to those
assets and liabilities still held at the reporting date for the period from
September 20, 2010 (inception) through September 30, 2010.
Recent
accounting pronouncements
In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-01 “Equity Topic 505 –
Accounting for Distributions to Shareholders with Components of Stock and
Cash”, which clarify that the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a potential
limitation on the total amount of cash that all shareholders can elect to
receive in the aggregate is considered a share issuance that is reflected in EPS
prospectively and is not a stock dividend for purposes of applying Topics 505
and 260 (Equity and Earnings Per Share (“EPS”)). Those distributions
should be accounted for and included in EPS calculations in accordance with
paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the FASB Accounting
Standards codification. The amendments in this Update also provide a
technical correction to the Accounting Standards Codification. The
correction moves guidance that was previously included in the Overview and
Background Section to the definition of a stock dividend in the Master
Glossary. That guidance indicates that a stock dividend takes nothing
from the property of the corporation and adds nothing to the interests of the
stockholders. It also indicates that the proportional interest of
each shareholder remains the same, and is a key factor to consider in
determining whether a distribution is a stock dividend.
In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-02 “Consolidation Topic
810 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a
Scope Clarification”, which provides amendments to Subtopic 810-10 and
related guidance within U.S. GAAP to clarify that the scope of the decrease in
ownership provisions of the Subtopic and related guidance applies to the
following:
|
1.
|
A
subsidiary or group of assets that is a business or nonprofit
activity;
|
|
2.
|
A
subsidiary that is a business or nonprofit activity that is transferred to
an equity method investee or joint venture;
and
|
|
3.
|
An
exchange of a group of assets that constitutes a business or nonprofit
activity for a noncontrolling interest in an entity (including an equity
method investee or joint venture).
|
The
amendments in this Update also clarify that the decrease in ownership guidance
in Subtopic 810-10 does not apply to the following transactions even if they
involve businesses:
|
1.
|
Sales
of in substance real estate. Entities should apply the sale of
real estate guidance in Subtopics 360-20 (Property, Plant, and Equipment)
and 976-605 (Retail/Land) to such transactions;
and
|
|
2.
|
Conveyances
of oil and gas mineral rights. Entities should apply the
mineral property conveyance and related transactions guidance in Subtopic
932-360 (Oil and Gas-Property, Plant, and Equipment) to such
transactions.
|
If a
decrease in ownership occurs in a subsidiary that is not a business or nonprofit
activity, an entity first needs to consider whether the substance of the
transaction causing the decrease in ownership is addressed in other U.S. GAAP,
such as transfers of financial assets, revenue recognition, exchanges of
nonmonetary assets, sales of in substance real estate, or conveyances of oil and
gas mineral rights, and apply that guidance as applicable. If no other guidance
exists, an entity should apply the guidance in Subtopic 810-10.
In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-06 “Fair Value
Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value
Measurements”, which provides amendments to Subtopic 820-10 that require
new disclosures as follows:
|
1.
|
Transfers
in and out of Levels 1 and 2. A reporting entity should disclose
separately the amounts of significant transfers in and out of Level 1 and
Level 2 fair value measurements and describe the reasons for the
transfers; and
|
|
2.
|
Activity
in Level 3 fair value measurements. In the reconciliation for fair value
measurements using significant unobservable inputs (Level 3), a reporting
entity should present separately information about purchases, sales,
issuances, and settlements (that is, on a gross basis rather than as one
net number).
|
This
Update provides amendments to Subtopic 820-10 that clarify existing disclosures
as follows:
|
1.
|
Level
of disaggregation. A reporting entity should provide fair value
measurement disclosures for each class of assets and liabilities. A class
is often a subset of assets or liabilities within a line item in the
statement of financial position. A reporting entity needs to
use judgment in determining the appropriate classes of assets and
liabilities.; and
|
|
2.
|
Disclosures
about inputs and valuation techniques. A reporting entity should provide
disclosures about the valuation techniques and inputs used to measure fair
value for both recurring and nonrecurring fair value measurements. Those
disclosures are required for fair value measurements that fall in either
Level 2 or Level 3.
|
This
Update also includes conforming amendments to the guidance on employers'
disclosures about postretirement benefit plan assets (Subtopic 715-20). The
conforming amendments to Subtopic 715-20 change the terminology from major categories of assets to
classes of assets and
provide a cross reference to the guidance in Subtopic 820-10 on how to determine
appropriate classes to present fair value disclosures. The new disclosures and
clarifications of existing disclosures are effective for interim and annual
reporting periods beginning after December 15, 2009, except for the disclosures
about purchases, sales, issuances, and settlements in the roll forward of
activity in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods within
those fiscal years.
In
February 2010, the FASB issued the FASB Accounting Standards Update No.
2010-09 “Subsequent Events
(Topic 855) Amendments to Certain Recognition and Disclosure
Requirements”, which provides amendments to Subtopic 855-10 as
follows:
|
1.
|
An
entity that either (a) is an SEC filer or(b) is a conduit bond obligor for
conduit debt securities that are traded in a public market (a domestic or
foreign stock exchange or an over-the-counter market, including local or
regional markets) is required to evaluate subsequent events through the
date that the financial statements are issued. If an entity meets neither
of those criteria, then it should evaluate subsequent events through the
date the financial statements are available to be
issued;
|
|
2.
|
An
entity that is an SEC filer is not required to disclose the date through
which subsequent events have been evaluated. This change alleviates
potential conflicts between Subtopic 855-10 and the SEC's requirements;
and
|
|
3.
|
The
scope of the reissuance disclosure requirements is refined to include
revised financial statements only. The term revised financial statements
is added to the glossary of Topic 855. Revised financial statements
include financial statements revised either as a result of correction of
an error or retrospective application of U.S. generally accepted
accounting principles.
|
All of
the amendments in this Update are effective upon issuance of the final Update,
except for the use of the issued date for conduit debt obligors. That amendment
is effective for interim or annual periods ending after June 15,
2010.
In
April 2010, the FASB issued the FASB Accounting Standards Update No.
2010-17 “Revenue Recognition —
Milestone Method (Topic 605) Milestone Method of Revenue Recognition”,
which provides guidance on the criteria that should be met for determining
whether the milestone method of revenue recognition is appropriate. A vendor can
recognize consideration that is contingent upon achievement of a milestone in
its entirety as revenue in the period in which the milestone is achieved only if
the milestone meets all criteria to be considered substantive.
Determining
whether a milestone is substantive is a matter of judgment made at the inception
of the arrangement. The following criteria must be met for a milestone to be
considered substantive. The consideration earned by achieving the milestone
should:
|
1.
|
Be
commensurate with either of the
following:
|
|
a.
|
The
vendor's performance to achieve the milestone;
and
|
|
b.
|
The
enhancement of the value of the item delivered as a result of a specific
outcome resulting from the vendor's performance to achieve the
milestone.
|
|
2.
|
Relate
solely to past performance; and
|
|
3.
|
Be
reasonable relative to all deliverables and payment terms in the
arrangement.
|
A
milestone should be considered substantive in its entirety. An individual
milestone may not be bifurcated. An arrangement may include more than one
milestone, and each milestone should be evaluated separately to determine
whether the milestone is substantive. Accordingly, an arrangement may contain
both substantive and nonsubstantive milestones.
A
vendor's decision to use the milestone method of revenue recognition for
transactions within the scope of the amendments in this Update is a policy
election. Other proportional revenue recognition methods also may be applied as
long as the application of those other methods does not result in the
recognition of consideration in its entirety in the period the milestone is
achieved.
A vendor
that is affected by the amendments in this Update is required to provide all of
the following disclosures:
|
1.
|
A
description of the overall
arrangement;
|
|
2.
|
A
description of each milestone and related contingent consideration
;
|
|
3.
|
A
determination of whether each milestone is considered substantive
;
|
|
4.
|
The
factors that the entity considered in determining whether the milestone or
milestones are substantive; and
|
|
5.
|
The
amount of consideration recognized during the period for the milestone or
milestones.
|
The
amendments in this Update are effective on a prospective basis for milestones
achieved in fiscal years, and interim periods within those years, beginning on
or after June 15, 2010. Early adoption is permitted. If a vendor elects early
adoption and the period of adoption is not the beginning of the entity's fiscal
year, the entity should apply the amendments retrospectively from the beginning
of the year of adoption. Additionally, a vendor electing early adoption should
disclose the following information at a minimum for all previously reported
interim periods in the fiscal year of adoption:
|
1.
|
Revenue
;
|
|
2.
|
Income
before income taxes ;
|
|
3.
|
Net
income ;
|
|
4.
|
Earnings
per share; and
|
|
5.
|
The
effect of the change for the captions
presented.
|
A vendor
may elect, but is not required, to adopt the amendments in this Update
retrospectively for all prior periods.
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.
MANAGEMENT
Appointment
of New Directors and Officers
Terry
Fields has resigned from his position as Chief Executive Officer and all other
officer positions that he holds with our Company, effective as of the Closing
Date of the Share Exchange, and as the sole director of our Company, effective
as of the eleventh day that an information statement required by Rule 14f-1
promulgated under the Exchange Act is mailed to our stockholders. It
has been agreed that Fields shall resign as Chief Financial Officer after the
filing of the Company’s Form 10-Q for the three month period ended October 31,
2010. Gareb Shamus was appointed as our President, Chief Executive
Officer and Chairman on the Closing Date.
The
following table sets forth the names, ages, and position of our new executive
officer and director. Executive officers are elected annually by our board of
directors. Each executive officer holds his office until he resigns,
is removed by our board of directors, or his successor is elected and
qualified. Directors are elected annually by our stockholders at the
annual meeting. Each director holds office until his successor is
elected and qualified or his earlier resignation or removal.
NAME
|
AGE
|
POSITION
|
||
Gareb
Shamus
|
41
|
President,
Chief Executive Officer and Chairman
|
||
Terry Fields
|
67
|
Chief
Financial Officer and Director
|
A brief
biography of our officers and directors is more fully described in Item
5.02. The information therein is hereby incorporated in this section
by reference.
Audit
Committee; Audit Committee Financial Expert
We have
not yet appointed an audit committee. Our board of directors currently acts as
our audit committee. At the present time, we believe that our board of directors
is capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial
reporting.
We
currently do not have a member who qualifies as an “audit committee financial
expert” as defined in Item 401(e) of Regulation S-K and is “independent” as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act. Our
board of directors is in the process of searching for a suitable candidate for
this position.
Employment
Agreements
We
currently do not have employment agreements with any of our executive
officers.
Family
Relationships
Stephen
Shamus, the brother of Gareb Shamus, our President, CEO and Chairman, is
expected to be appointed Chief Marketing Officer of our
Company.
Involvement
in Certain Legal Proceedings
To the
best of our knowledge, none of our directors or executive officers have been
convicted in a criminal proceeding, excluding traffic violations or similar
misdemeanors, or have been a party to any judicial or administrative proceeding
during the past five years that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws, except for matters that were dismissed without
sanction or settlement. Except as set forth in our discussion below in “Certain
Relationships and Related Transactions,” none of our directors, director
nominees or executive officers has been involved in any transactions with us or
any of our directors, executive officers, affiliates or associates which are
required to be disclosed pursuant to the rules and regulations of the Securities
and Exchange Commission.
Code
of Ethics
We have
not yet adopted a code of ethics.
EXECUTIVE
COMPENSATION
GoEnergy
Executive Compensation Summary
Summary Compensation
Table
The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid by us to the named executive officers during the fiscal years
ended July 31, 2010 and 2009 in all capacities for the accounts of our
executives, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO):
Name and
Principal
Position
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
|
|
|
Totals
($)
|
|
||||||||||
Terry
Fields,
President,
CEO, CFO
and
Secretary
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||
2010
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Outstanding Equity awards at
Fiscal Year End
There are
no outstanding equity awards as of the date hereof.
Director
Compensation
Our
directors do not receive a fee for attending board of directors meetings or
meetings of a committee of the board of directors. All directors are reimbursed
for their reasonable out-of-pocket expenses incurred in connection with
attending board of director and committee meetings.
Option
Grants
We do not
maintain any equity incentive or stock option plan. Accordingly, we
did not grant options to purchase any equity interests to any employees or
officers, and no stock options are issued or outstanding to any
officers. We do, however, anticipate adopting a non-qualified stock
option plan where we will be granting our officers options to purchase our
Common Stock pursuant to the terms of their employment agreements. No
such plan has been finalized or adopted.
Certain
Relationships and Related Transactions
Gareb
Shamus, our President, CEO and Chairman, is also the President and CEO of each
of Wizard Entertainment and its wholly owned subsidiary Wizard
Conventions. Stephen Shamus, the brother of Gareb Shamus, is the
Chief Marketing Officer of each of Wizard Entertainment and Wizard
Conventions, and is
expected to be appointed our Chief Marketing Officer.
In
addition to local radio and TV stations, newspapers, magazines and online sites,
and social networks such as FaceBook and Twitter, we promote our Comic Cons
through Wizard magazine, FunFare magazine, ToyFare magazine and www.wizardworld.com,
each of which is the property of Wizard Entertainment, through an informal
arrangement with Wizard Entertainment. Further, we are currently
receiving the services of Wizard Entertainment and Wizard Conventions personnel
to operate our Comic Cons, and occupy offices leased by Wizard Entertainment,
pursuant to an informal arrangement with Wizard Entertainment. We
plan to enter into a shared services agreement, the terms which are yet to be
negotiated, to formalize these arrangements.
Going
forward, we will present all possible transactions between us and our officers,
directors or 5% stockholders, and our affiliates to our board of directors 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.
PROPERTIES
We occupy
offices at 1010 Avenue of the Americas, Suite 302, New York, NY 10018 that is
leased by our affiliate Wizard Entertainment through an informal arrangement
between us and Wizard Entertainment. We plan to enter into a shared
services agreement with Wizard Entertainment, the terms of which have yet to be
negotiated, to formalize this arrangement. The lease on the property
expires on December 31, 2012 and covers approximately 4,500 square feet, of
which we occupy approximately 830 square feet (exclusive of shared
space). We do not own any real estate.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information as of December 10, 2010 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 Kick the Can Corp., 1010 Avenue of the
Americas, Suite 302, New York, NY 10018
Name and Address of Beneficial Owner
|
Shares of Common Stock
Beneficially Owned(1)
|
Percentage Ownership(2)
|
||||||
Directors and Officers
|
||||||||
Gareb
Shamus
|
||||||||
President,
CEO and Chairman
|
19,437,265 | 55.54 | ||||||
Terry
Fields
|
||||||||
Chief
Financial Officer(3)
|
||||||||
321
South Cannon
|
||||||||
Beverly
Hills, CA 90210
|
0 | * | ||||||
All officers and directors as a
group
|
||||||||
(2 persons named
above)
|
19,437,265 | 55.54 | ||||||
5% Beneficial Owners
|
||||||||
Knie,
Robert
|
2,400,000 | 6.86 | ||||||
The
David Rosenberg Irrevocable Trust(4)
|
2,150,000 | 6.14 | ||||||
Weisblum,
Eric(5)
|
1,950,000 | 5.57 |
* 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)
|
Based
on 35,000,000 shares of common stock issued and outstanding as of December
10, 2010.
|
(3)
|
It
has been agreed that Fields shall resign as CFO after the filing of the
Company’s Form 10-Q for the three month period ended October 31,
2010.
|
(4)
|
The
beneficiary of the Trust is Natalie Schlossberg and the trustee is Mitch
Schlossberg, the son of Natalie Schlossberg. Natalie
Schlossberg is the mother –in-law of shareholder Eric
Weisblum. The trustee disclaims any beneficial ownership of Mr.
Weisblum’s shares of the Company.
|
(5)
|
Eric
Weisblum is the son-in-law of the beneficiary of The David Rosenberg
Irrevocable Trust. Mr. Weisblum disclaims any beneficial
ownership of the Trust’s shares of the
Company.
|
Changes
in Control
We do not
currently have any arrangements which if consummated may result in a change of
control of our Company.
DESCRIPTION
OF SECURITIES
General.
Our authorized capital stock consists of 80,000,000 shares of common stock, par
value $0.0001 per share (“Common Stock”), and 20,000,000 shares of preferred
stock, par value $0.0001 per share (“Preferred Stock”), of which 25,000 have
been designated as Series A Cumulative Convertible Preferred
Stock.
Common
Stock. As of December 10, 2010, there were approximately 35,000,000
shares of our Common Stock issued and outstanding held by approximately 42
stockholders of record.
Voting Rights.
Holders of our Common Stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of Common Stock do not have
cumulative voting rights. Directors are elected by a plurality of the votes of
the shares present in person or represented by proxy at the meeting and entitled
to vote on the election of directors. Any other action shall be
authorized by a majority of the votes
cast. 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. A vote by the holders of a majority of our outstanding shares
is required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our certificate of
incorporation.
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 Cumulative Convertible 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
(on an as converted basis) and the Common Stock.
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.
Preferred
Stock. As of December 10, 2010, there were approximately 9,763
shares of our Series A Cumulative Convertible Preferred Stock issued and
outstanding held by approximately 15 shareholders of record.
Voting Rights.
Holders of our Preferred Stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of Preferred Stock do not have
cumulative voting rights. Therefore, holders of a majority of our shares
(preferred and common) voting for the election of directors can elect all of the
directors. 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. A vote by the holders of a majority of our outstanding shares is
required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our certificate of
incorporation.
Dividend Rights.
Holders of Preferred Stock are entitled to share in all dividends that the board
of directors, in its discretion, declares from legally available
funds.
Liquidation Rights.
In the event of liquidation, dissolution or winding up, each outstanding share
(common and preferred) entitles its holder to participate pro rata in all assets
that remain after payment of liabilities.
Series
A Cumulative Convertible Preferred Stock
As of
December 10, 2010, there were approximately 9,763 shares of our Series A
Cumulative Convertible Preferred Stock issued and outstanding held by
approximately 15 shareholders of record. Each share of our Series A
Cumulative Convertible Preferred Stock (“Series A Preferred”) has a
stated value equal to $100 (the “Stated Value”).
Voting
Rights
The
holders of our Series A Preferred 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 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,
(ii) redeem or repurchase our stock (other than with respect to the Series A
Preferred), (iii) effect a liquidation event, (iv) declare or pay dividends
(other than on the Series A Preferred), and (v) issue any securities in parity
or senior to the rights of the Series A Preferred.
Dividends
The
holders of our Series A Preferred 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, 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 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.
Liquidation.
Upon the
occurrence of a “liquidation event”, the holders of our Series A Preferred 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 is insufficient to pay
the holders of our Series A Preferred in full, then the assets will be
distributed pro rata among the holders of our Series A Preferred.
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 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 so elects, we must pay a sum of money determined by multiplying the
then current purchase price of the outstanding Series A Preferred 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 has the right at any time after the issuance of
Series A Preferred 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 then the
then current conversion price of our Series A Preferred, then the conversion
price of our Series A Preferred will be reduced to such lower
price.
The
conversion price for our Series A Preferred 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 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 been converted immediately
prior to the happening of such event.
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 is terminated
as part of such merger, then, if permitted under applicable law, the holder of
our Series A Preferred will have the right to convert each of their shares of
Series A Preferred 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 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 $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 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 $.60 per
share. As of December 10, 2010, we have warrants outstanding that are
exercisable for an aggregate of up to 614,703 shares of our Common
Stock.
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.
The
warrant holder can not 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.
MARKET
PRICE OF AND DIVIDENDS ON THE COMMON STOCK
AND
RELATED STOCKHOLDER MATTERS
While
there is no established public trading market for our Common Stock, our Common
Stock is quoted on the Pink Sheets under the symbol GOEE.
The
market price of our Common Stock is subject to significant fluctuations in
response to variations in our quarterly operating results, general trends in the
market and other factors, over many of which we have little or no control. In
addition, broad market fluctuations, as well as general economic, business and
political conditions, may adversely affect the market for our Common Stock,
regardless of our actual or projected performance.
Holders
As of the
date hereof, 35,000,000 shares of Common Stock are issued and
outstanding. There are approximately 42 shareholders of our
Common Stock.
Transfer
Agent and Registrar
The
Transfer Agent for our Common Stock is Signature Stock Transfer, Inc., with an
address at 2632 Coachlight Court, Plano, TX 75093. Signature Stock Transfer,
Inc.’s telephone number is (972) 612-4120.
Penny
Stock Regulations
The
Securities and Exchange Commission has adopted regulations which generally
define “penny stock” to be an equity security that has a market price of less
than $5.00 per share. Our Common Stock, when and if a trading market develops,
may fall within the definition of penny stock and be subject to rules that
impose additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000, or annual incomes
exceeding $200,000 individually, or $300,000, together with their
spouse).
For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser’s prior written consent to the transaction. Additionally, for any
transaction, other than exempt transactions, involving a penny stock, the rules
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer’s presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the “penny stock” rules may
restrict the ability of broker-dealers to sell our Common Stock and may affect
the ability of investors to sell their Common Stock in the secondary
market.
Dividend
Policy
Any
future determination as to the declaration and payment of dividends on shares of
our Common Stock will be made at the discretion of our board of directors out of
funds legally available for such purpose. We are under no contractual
obligations or restrictions to declare or pay dividends on our shares of Common
Stock. In addition, we currently have no plans to pay such
dividends. Our board of directors currently intends to retain all
earnings for use in the business for the foreseeable future. See
“Risk Factors.”
Equity
Compensation Plan Information
The
Company does not have an equity compensation plan.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Gareb
Shamus, our President, CEO and Chairman, is also the President, CEO
and Chairman of each of Wizard Entertainment and its wholly owned subsidiary
Wizard Conventions, and is the majority shareholder of Wizard
Entertainment. Stephen Shamus, the brother of Gareb Shamus, is the
Chief Marketing Officer of each of Wizard Entertainment and Wizard Conventions
and is expected to be appointed our Chief Marketing Officer.
In
addition to local radio and TV stations, newspapers, magazines and online sites,
and social networks such as FaceBook and Twitter, we promote our Comic Cons
through Wizard magazine, FunFare magazine, ToyFare magazine and www.wizardworld.com,
each of which is the property of Wizard Entertainment, through an informal
arrangement with Wizard Entertainment. Further, we are currently
receiving the services of Wizard Entertainment and Wizard Conventions personnel
to operate our Comic Cons, and occupy offices leased by Wizard Entertainment,
pursuant to an informal arrangement with Wizard Entertainment. We
plan to enter into a shared services agreement, the terms which are yet to be
negotiated, to formalize these arrangements.
LEGAL
PROCEEDINGS
Currently
there are no legal proceedings pending or threatened against us. However, from
time to time, we may become involved in various lawsuits and legal proceedings
which arise in the ordinary course of business. Litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business.
RECENT
SALES OF UNREGISTERED SECURITIES
Recent
sales of unregistered securities is more fully described in Item
3.02. The information therein is hereby incorporated in this section
by reference.
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Under
Section 145(a) of the Delaware General Corporation Law (“DGCL”), we have the
power to indemnify our directors, officers, employees or agents who are parties
or threatened to be made parties to any threatened, pending or completed civil,
criminal, administrative or investigative action, suit or proceeding (other than
an action by or in the right of the Company) arising from that person’s role as
our director, officer, employee or agent against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to our best interests, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the person’s conduct
was unlawful.
Under
Section 145(b) of the DGCL, we have the power to indemnify our directors,
officers, employees and agents who are parties or threatened to be made parties
to any threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in our favor arising from that person’s role as
our director, officer, employee or agent against expenses (including attorneys’
fees) actually and reasonably incurred by the person in connection with the
defense or settlement of such action or suit if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed to our
best interests, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to us unless and only to the extent that the Delaware Court of Chancery
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
Section
145(c) of the DGCL further provides that if one of our present or former
directors or officers has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to above, or in defense of any claim,
issue or matter therein, such person shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred by such person in
connection therewith.
These
limitations of liability, indemnification and expense advancements may
discourage a stockholder from bringing a lawsuit against directors for breach of
their fiduciary duties. The provisions may also reduce the likelihood of
derivative litigation against directors and officers, even though an action, if
successful, might benefit us and our stockholders. A stockholder’s investment
may be adversely affected to the extent we pay the costs of defense or
settlement and damage awards against directors and officers pursuant to these
limitations of liability and indemnification provisions.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers, and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment of expenses incurred or paid by a director, officer or controlling
person in a successful defense of any action, suit or proceeding) is asserted by
such 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 the court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
We do not
maintain directors’ and officers’ liability insurance covering our directors and
officers against certain claims or liabilities arising out of the performance of
their duties and reasonably incurred in connection with any proceeding, arising
by reason of the fact that such person is or was our agent.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 3.02
Unregistered Sales of Equity Securities.
The
following contains information regarding our sales of unregistered securities
during the past two fiscal years and the three month period from August 1 to
October 31 of 2010. All of the securities sold during these periods
were sales of our shares of Common Stock 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.
Share
Exchange
Pursuant
to the Exchange Agreement, on December 7, 2010, we issued 33,430,107 shares of
our Common Stock to the KTC Corp. Shareholders in exchange for 100% of the
outstanding shares of KTC Corp. Such securities were not registered
under the Securities Act. These securities qualified for exemption under
Section 4(2) of the Securities Act since the issuance of securities by us did
not involve a public offering. The offering was not a “public offering” as
defined in Section 4(2) due to the insubstantial number of persons involved in
the deal, size of the offering, manner of the offering and number of securities
offered.
We did
not undertake an offering in which we sold a high number of securities to a high
number of investors. In addition, these shareholders had the necessary
investment intent as required by Section 4(2) of the Securities Act since they
agreed to and received share certificates bearing a legend stating that such
securities are restricted pursuant to Rule 144 of the Securities Act. This
restriction ensures that these securities would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an
analysis of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act.
Series A Cumulative
Convertible Preferred Stock
Immediately
after the Share Exchange, we entered into subscription agreements with certain
subscribers for the issuance and sale of (i) up to $1,500,0000 in Series A
Cumulative Convertible Preferred Stock with the rights and preferences set forth
in the Certificate of Designation attached hereto as Exhibit 4.1, convertible
into shares of our Common Stock at a per share conversion price of $0.40; and
(ii) Warrants in the form attached hereto as Exhibit 4.2 to purchase shares of
our Common Stock.
These
securities were not registered under the Securities Act. These securities
qualified for exemption under Section 4(2) of the Securities Act since the
issuance of securities by us did not involve a public offering. The offering was
not a “public offering” as defined in Section 4(2) due to the insubstantial
number of persons involved in the deal, size of the offering, manner of the
offering and number of securities offered.
We did
not undertake an offering in which we sold a high number of securities to a high
number of investors. In addition, these shareholders had the necessary
investment intent as required by Section 4(2) of the Securities Act since they
agreed to and received share certificates bearing a legend stating that such
securities are restricted pursuant to Rule 144 of the Securities Act. This
restriction ensures that these securities would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an
analysis of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act.
Item 5.01
Changes in Control of Registrant.
As
explained more fully in Item 2.01, in connection with the Exchange Agreement, on
December 7, 2010, we issued 33,430,107 shares of our Common Stock to the
KTC Corp. Shareholders in exchange for 100% of the outstanding shares of KTC
Corp. As such, immediately following the Closing of the Share
Exchange, the KTC Corp. Shareholders held approximately 95.5% of the total
voting power of our Common Stock entitled to vote.
In
connection with the Closing of the Share Exchange, and as explained more fully
in the above Item 2.01 and below in Item 5.02 of this Current Report on Form
8-K, Terry Fields resigned from his position as Chief Executive Officer and all
other officer positions that he holds with our Company effective as of the
Closing Date and as the sole director effective as of the eleventh day after the
mailing of the information statement required by Rule 14f-1 promulgated under
the Exchange Act. Gareb Shamus was appointed as our President, Chief
Executive Officer and Chairman on the Closing Date.
Item 5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment
of Principal Officers.
Resignation
of Directors
On the
Closing Date, Terry Fields resigned as the sole director of our Company,
effective on the eleventh day after the mailing of an information statement
required by Rule 14f-1 promulgated under the Exchange Act. The resignation was
not the result of any disagreement with us on any matter relating to our
operations, policies or practices.
Resignation
of Officers
On the
Closing Date, Terry Fields resigned from his position as our Chief Executive
Officer and all other officer positions he held with our Company, except for his position as
Chief Financial Officer . His resignation was not the result of any
disagreement with us on any matter relating to our operations, policies or
practices. It has been agreed that Terry Fields shall resign from his
position as our Chief Financial Officer after our Quarterly Report for the Three
Month Period ended October 31, 2010 is filed with the Securities and Exchange
Commission.
Appointment
of Directors and Officers
Gareb
Shamus was appointed as our President and Chief Executive Officer on and
effective as of the Closing Date, and upon effectiveness of an information
statement required by Rule 14f-1 promulgated under the Exchange Act, Gareb
Shamus will be appointed as our Chairman.
The
business background description of Gareb Shamus is as follows:
Gareb
Shamus, age 41, President, Chief Executive Officer and Chairman
Gareb
Shamus has been our President and Chief Executive Officer since the consummation
of the Share Exchange and as Chairman upon the effectiveness of an information
statement required by Rule 14f-1 promulgated under the Exchange
Act. Prior to joining our Company, Mr. Shamus founded in 1991 Wizard
Entertainment, where he is currently President, CEO and Chairman. Mr.
Shamus is also the managing member of Kicking the Can, L.L.C., our majority
shareholder. In addition, Mr. Shamus co-founded in 2009 and is a
director of PGM Media, LLC, which produces an online newsletter called
GeekChicDaily.com. Mr. Shamus was largely responsible for
establishing KTC Corp.’s business of producing media and pop-culture conventions
across North America.
Mr.
Shamus earned a Bachelor of Arts in Economics and graduated magna cum laude from the
State University of New York at Albany.
Related
Party Transactions
Gareb
Shamus, our President, CEO and Chairman, is also the President, CEO and Chairman
of each of Wizard Entertainment and its wholly owned subsidiary Wizard
Conventions. Stephen Shamus, the brother of Gareb Shamus, is the
Chief Marketing Officer of each of Wizard Entertainment and Wizard Conventions,
and is expected to be appointed our Chief Marketing Officer.
In
addition to local radio and TV stations, newspapers, magazines and online sites,
and social networks such as FaceBook and Twitter, we promote our Comic Cons
through Wizard magazine, FunFare magazine, ToyFare magazine and www.wizardworld.com,
each of which is the property of Wizard Entertainment, through an informal
arrangement with Wizard Entertainment. Further, we are currently
receiving the services of Wizard Entertainment and Wizard Conventions personnel
to operate our Comic Cons, and occupy offices leased by Wizard Entertainment,
pursuant to an informal arrangement with Wizard Entertainment. We
plan to enter into a shared services agreement, the terms which are yet to be
negotiated, to formalize these arrangements.
Item
5.03 Amendment to Certificate of Incorporation or Bylaws; Change in Fiscal
Year
On
December 6, 2010, we filed a Certificate of Amendment to our Certificate of
Incorporation changing our name to Wizard World, Inc., and a Certificate of
Correction on December 7, 2010 clarifying that the effective date of such name
change is January 30, 2011.
Item
5.06 Change in Shell Company Status.
As
explained more fully in Item 2.01 above, we were a “shell company” (as such term
is defined in Rule 12b-2 under the Exchange Act) immediately before the Closing
of the Share Exchange. As a result of the Share Exchange, KTC Corp.
became our wholly owned subsidiary and became our main operational
business. Consequently, we believe that the Share Exchange has caused
us to cease to be a shell company. For information about the Share
Exchange, please see the information set forth above under Item 2.01 of this
Current Report on Form 8-K, which information is incorporated herein by
reference.
Item 9.01
Financial Statement and Exhibits.
(a)
Financial Statements of Business Acquired.
The
Unaudited Financial Statements of KTC Corp. as of September 30, 2010 are filed
as Exhibit 99.2 to this Current Report on Form 8-K and are incorporated herein
by reference.
(c)
Shell Company Transactions.
Reference
is made to Items 9.01(a) and 9.01(b) and the exhibits referred to therein,
which are incorporated herein by reference.
(d)
Exhibits.
Exhibit
No.
|
Description
|
|
2.1
|
Share
Purchase and Share Exchange Agreement dated November 5, 2010 by and among
the Company, Strato Malamas, an individual and the majority stockholder of
GoEnergy, Kick the Can Corp., a Nevada corporation, Kicking the Can,
L.L.C., a Delaware limited liability company and the majority shareholder
of KTC Corp., and certain shareholders of KTC Corp. that are signatories
thereto (incorporated by reference to the Form 8-K filed on November 16,
2010).
|
|
3.1
|
Certificate
of Incorporation (incorporated herein by reference to the Form SB-2 filed
on March 25, 2003).
|
|
3.2
|
By-laws
(incorporated herein by reference to the Form SB-2 filed on March 25,
2003).
|
|
3.3
|
Certificate
of Amendment filed December 6, 2010 (1)
|
|
3.4
|
Certificate
of Correction filed December 8, 2010 (1)
|
|
4.1
|
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 (1)
|
|
4.2
|
Form
of Warrant (1)
|
|
10.1
|
Form
of Subscription Agreement, dated December 6, 2010, by and between
GoEnergy, Inc. and the Subscribers (1)
|
|
21.1
|
Subsidiaries
(1)
|
(1) Filed
herewith.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: December
13, 2010
|
By:
|
/s/ Gareb
Shamus
|
Name:
|
Gareb
Shamus
|
|
Title:
|
President
and Chief Executive
Officer
|
KICK
THE CAN CORP.
(A
DEVELOPMENT STAGE COMPANY)
September
30, 2010
INDEX
TO FINANCIAL STATEMENTS
Contents
|
Page(s)
|
||
Report
of Independent Registered Public Accounting Firm
|
F-2
|
||
Balance
Sheet at September 30, 2010
|
F-3
|
||
Statement
of Operations for the Period from September 20, 2010 (Inception) through
September 30, 2010
|
F-4
|
||
Statement
of Stockholders’ Equity for the Period from September 20, 2010 (Inception)
through September 30, 2010
|
F-5
|
||
Statement
of Cash Flows for the Period from September 20, 2010 (Inception) through
September 30, 2010
|
F-6
|
||
Notes
to the Financial Statements
|
|
F-7 to F-14
|
F-1
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Kick The
Can Corp.
(A
development stage company)
Studio
City, California
We have
audited the accompanying balance sheet of Kick The Can Corp. (a development
stage company) (the “Company”) as of September 30, 2010 and the related
statements of operations, stockholders’ equity and cash flows for the period
from September 20, 2010 (inception) through September 30, 2010. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit 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 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 financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of September 30,
2010 and the results of its operations and its cash flows for the period from
September 20, 2010 (inception) through September 30, 2010 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
financial statements, the Company had a deficit accumulated during the
development stage at September 30, 2010, and had a net loss for the period from
September 20, 2010 (inception) through September 30, 2010, with no revenues
earned since inception. 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 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
|
November
2, 2010
|
F-2
KICK
THE CAN CORP.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEET
September 30,
2010
|
||||
ASSETS
|
||||
Current
assets
|
||||
Cash
|
$ | - | ||
Stock
subscription receivable
|
1,6001 | |||
Total
assets
|
$ | 1,600 | ||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
Current
liabilities
|
||||
Accrued
expenses
|
$ | 853 | ||
Total
liabilities
|
853 | |||
Stockholders’
equity
|
||||
Common
stock: $0.001 par value; 60,000,000 shares authorized; 32,000,000 shares
issued and outstanding
|
3,200 | |||
Additional
paid-in capital
|
(1,600 | ) | ||
Deficit
accumulated during the development stage
|
(853 | ) | ||
Total
stockholders’ equity
|
747 | |||
Total
liabilities and stockholders’ equity
|
$ | 1,600 |
See
accompanying notes to the financial statements
F-3
KICK
THE CAN CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT OF
OPERATIONS
For the period
from
September 20,
2010
(Inception)
through
September 30,
2010
|
||||
REVENUE
|
$ | - | ||
OPERATING
EXPENSES
|
||||
General
and administrative
|
853 | |||
Loss
before income taxes
|
(853 | ) | ||
Provision
for income taxes
|
- | |||
Net
loss
|
$ | (853 | ) | |
Net
loss per common share – basic and diluted
|
$ | (0.00 | ) | |
Weighted
average number of common shares outstanding – basic and
diluted
|
17,600,000 |
See
accompanying notes to the financial statements.
F-4
KICK
THE CAN CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF STOCKHOLDERS' EQUITY
For the
Period from September 20, 2010 (Inception) Through September 30,
2010
Common Stock
|
Additional
|
Total
|
||||||||||||||||||
Shares
|
Amount
|
Paid-In
Capital
|
Accumulated
Deficit
|
Stockholders'
Deficit
|
||||||||||||||||
September
20, 2010 (Inception)
|
16,000,000 | $ | 1,600 | $ | - | $ | - | $ | 1,600 | |||||||||||
Purchase
of assets from related party at zero cost basis
|
16,000,000 | 1,600 | (1,600 | ) | - | |||||||||||||||
Net
loss
|
(853 | ) | (853 | ) | ||||||||||||||||
Balance,
September 30, 2010
|
32,000,000 | $ | 3,200 | $ | (1,600 | ) | $ | (853 | ) | $ | 747 |
See
accompanying notes to the financial statements.
F-5
KICK
THE CAN CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CASH FLOWS
For the period
from
September 20, 2010
(Inception)
through
September 30,
2010
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||
Net
loss
|
$ | (853 | ) | |
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
Accrued
expenses
|
853 | |||
Net
cash used in operating activities
|
- | |||
Change
in cash during the period
|
- | |||
Cash,
beginning of the period
|
- | |||
Cash,
end of the period
|
$ | - | ||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||
Interest
paid
|
$ | - | ||
Income
tax paid
|
$ | - | ||
NON-CASH
FINANCING AND INVESTING
|
||||
Common
stock issued for stock subscription receivable
|
$ | 1,600 | ||
Common
stock issued for purchase of related party assets with zero cost
basis
|
$ | 1,600 |
See
accompanying notes to the financial statements
F-6
KICK
THE CAN CORP.
(A
DEVELOPMENT STAGE COMPANY)
SEPTEMBER
30, 2010
NOTES TO
THE FINANCIAL STATEMENTS
Note
1 – Nature of Operations
Kick The
Can Corp. (a development stage company) (“KTC” or the “Company”) was
incorporated in the State of Nevada on September 20, 2010. Initial operations
have included organization and incorporation, target market identification,
marketing plans, and capital formation. A substantial portion of the Company’s
activities has involved developing a business plan and establishing contacts and
visibility in the marketplace. The Company has not generated any revenues since
inception. Kick the Can Corp was formed to develop and acquire pop culture
events throughout North America.
Note
2 – Significant Accounting Policies
Basis of
presentation
The
Company’s financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“U.S.
GAAP”).
Development stage company
The
Company is a development stage company as defined by section 810-10-20 of the
FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since
inception have been considered as part of the Company’s exploration stage
activities.
Use of
estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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 as well as the reported amount of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Due to
the limited level of operations, the Company has not had to make material
assumptions or estimates other than the assumption that the Company is a going
concern.
Fiscal year
end
The
Company elected September 30 as its fiscal year ending date.
Cash
equivalents
The
Company considers all highly liquid investments with maturities of three months
or less at the time of purchase to be cash equivalents.
F-7
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.
|
The
carrying amounts of the Company’s financial assets and liabilities, such as
accrued expenses approximate its fair values because of the short maturity
of this instrument.
The
Company does not have any assets or liabilities measured at fair value on a
recurring or a non-recurring basis, consequently, the Company did not have any
fair value adjustments for assets and liabilities measured at fair value at
September 30, 2010, nor gains or losses are reported in the statement of
operations that are attributable to the change in unrealized gains or losses
relating to those assets and liabilities still held at the reporting date for
the period from September 20, 2010 (inception) through September 30,
2010.
Revenue
recognition
The
Company applies 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.
Income
taxes
The
Company follows Section 740-10-30 of the FASB Accounting Standards Codification,
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
assets and liabilities are based on the differences between the financial
statement and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which 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.
F-8
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
Company had no material adjustments to its liabilities for unrecognized income
tax benefits according to the provisions of Section 740-10-25.
Net loss per common
share
Net loss
per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Basic net loss per 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 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 each
period. There were no potentially dilutive shares outstanding as of
September 30, 2010.
Commitments and
contingencies
The
Company follows subtopic 450-20 of the FASB Accounting Standards Codification to
report accounting for contingencies. Liabilities for loss
contingencies arising from claims, assessments, litigation, fines and penalties
and other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment can be reasonably
estimated.
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. The
Company reports the reporting currency equivalent of foreign currency cash
flows, using the current exchange rate at the time of the cash flows and the
effect of exchange rate changes on cash held in foreign currencies is reported
as a separate item in the reconciliation of beginning and ending balances of
cash and cash equivalents and separately provides information about investing
and financing activities not resulting in cash receipts or payments in the
period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
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.
F-9
Recently issued accounting
standards
In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-01 “Equity Topic 505 –
Accounting for Distributions to Shareholders with Components of Stock and
Cash”, which clarify that the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a potential
limitation on the total amount of cash that all shareholders can elect to
receive in the aggregate is considered a share issuance that is reflected in EPS
prospectively and is not a stock dividend for purposes of applying Topics 505
and 260 (Equity and Earnings Per Share (“EPS”)). Those distributions
should be accounted for and included in EPS calculations in accordance with
paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the FASB Accounting
Standards codification. The amendments in this Update also provide a
technical correction to the Accounting Standards Codification. The
correction moves guidance that was previously included in the Overview and
Background Section to the definition of a stock dividend in the Master
Glossary. That guidance indicates that a stock dividend takes nothing
from the property of the corporation and adds nothing to the interests of the
stockholders. It also indicates that the proportional interest of
each shareholder remains the same, and is a key factor to consider in
determining whether a distribution is a stock dividend.
In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-02 “Consolidation Topic
810 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a
Scope Clarification”, which provides amendments to Subtopic 810-10 and
related guidance within U.S. GAAP to clarify that the scope of the decrease in
ownership provisions of the Subtopic and related guidance applies to the
following:
|
1.
|
A
subsidiary or group of assets that is a business or nonprofit
activity
|
|
2.
|
A
subsidiary that is a business or nonprofit activity that is transferred to
an equity method investee or joint
venture
|
|
3.
|
An
exchange of a group of assets that constitutes a business or nonprofit
activity for a noncontrolling interest in an entity (including an equity
method investee or joint venture).
|
The
amendments in this Update also clarify that the decrease in ownership guidance
in Subtopic 810-10 does not apply to the following transactions even if they
involve businesses:
|
1.
|
Sales
of in substance real estate. Entities should apply the sale of
real estate guidance in Subtopics 360-20 (Property, Plant, and Equipment)
and 976-605 (Retail/Land) to such
transactions.
|
|
2.
|
Conveyances
of oil and gas mineral rights. Entities should apply the
mineral property conveyance and related transactions guidance in Subtopic
932-360 (Oil and Gas-Property, Plant, and Equipment) to such
transactions.
|
If a
decrease in ownership occurs in a subsidiary that is not a business or nonprofit
activity, an entity first needs to consider whether the substance of the
transaction causing the decrease in ownership is addressed in other U.S. GAAP,
such as transfers of financial assets, revenue recognition, exchanges of
nonmonetary assets, sales of in substance real estate, or conveyances of oil and
gas mineral rights, and apply that guidance as applicable. If no other guidance
exists, an entity should apply the guidance in Subtopic 810-10.
F-10
In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-06 “Fair Value
Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value
Measurements”, which provides amendments to Subtopic 820-10 that require
new disclosures as follows:
|
1.
|
Transfers
in and out of Levels 1 and 2. A reporting entity should disclose
separately the amounts of significant transfers in and out of Level 1 and
Level 2 fair value measurements and describe the reasons for the
transfers.
|
|
2.
|
Activity
in Level 3 fair value measurements. In the reconciliation for fair value
measurements using significant unobservable inputs (Level 3), a reporting
entity should present separately information about purchases, sales,
issuances, and settlements (that is, on a gross basis rather than as one
net number).
|
This
Update provides amendments to Subtopic 820-10 that clarify existing disclosures
as follows:
|
1.
|
Level
of disaggregation. A reporting entity should provide fair value
measurement disclosures for each class of assets and liabilities. A class
is often a subset of assets or liabilities within a line item in the
statement of financial position. A reporting entity needs to use judgment
in determining the appropriate classes of assets and
liabilities.
|
|
2.
|
Disclosures
about inputs and valuation techniques. A reporting entity should provide
disclosures about the valuation techniques and inputs used to measure fair
value for both recurring and nonrecurring fair value measurements. Those
disclosures are required for fair value measurements that fall in either
Level 2 or Level 3.
|
This
Update also includes conforming amendments to the guidance on employers'
disclosures about postretirement benefit plan assets (Subtopic 715-20). The
conforming amendments to Subtopic 715-20 change the terminology from major categories of assets to
classes of assets and
provide a cross reference to the guidance in Subtopic 820-10 on how to determine
appropriate classes to present fair value disclosures. The new disclosures and
clarifications of existing disclosures are effective for interim and annual
reporting periods beginning after December 15, 2009, except for the disclosures
about purchases, sales, issuances, and settlements in the roll forward of
activity in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods within
those fiscal years.
In
February 2010, the FASB issued the FASB Accounting Standards Update No.
2010-09 “Subsequent Events
(Topic 855) Amendments to Certain Recognition and Disclosure
Requirements”, which provides amendments to Subtopic 855-10 as
follows:
|
1.
|
An
entity that either (a) is an SEC filer or(b) is a conduit bond obligor for
conduit debt securities that are traded in a public market (a domestic or
foreign stock exchange or an over-the-counter market, including local or
regional markets) is required to evaluate subsequent events through the
date that the financial statements are issued. If an entity meets neither
of those criteria, then it should evaluate subsequent events through the
date the financial statements are available to be
issued.
|
|
2.
|
An
entity that is an SEC filer is not required to disclose the date through
which subsequent events have been evaluated. This change alleviates
potential conflicts between Subtopic 855-10 and the SEC's
requirements.
|
|
3.
|
The
scope of the reissuance disclosure requirements is refined to include
revised financial statements only. The term revised financial statements
is added to the glossary of Topic 855. Revised financial statements
include financial statements revised either as a result of correction of
an error or retrospective application of U.S. generally accepted
accounting principles.
|
F-11
All of
the amendments in this Update are effective upon issuance of the final Update,
except for the use of the issued date for conduit debt obligors. That amendment
is effective for interim or annual periods ending after June 15,
2010.
In
April 2010, the FASB issued the FASB Accounting Standards Update No.
2010-17 “Revenue Recognition —
Milestone Method (Topic 605) Milestone Method of Revenue Recognition”,
which provides guidance on the criteria that should be met for determining
whether the milestone method of revenue recognition is appropriate. A vendor can
recognize consideration that is contingent upon achievement of a milestone in
its entirety as revenue in the period in which the milestone is achieved only if
the milestone meets all criteria to be considered substantive.
Determining
whether a milestone is substantive is a matter of judgment made at the inception
of the arrangement. The following criteria must be met for a milestone to be
considered substantive. The consideration earned by achieving the milestone
should:
|
1.
|
Be
commensurate with either of the
following:
|
|
a.
|
The
vendor's performance to achieve the
milestone
|
|
b.
|
The
enhancement of the value of the item delivered as a result of a specific
outcome resulting from the vendor's performance to achieve the
milestone
|
|
2.
|
Relate
solely to past performance
|
|
3.
|
Be
reasonable relative to all deliverables and payment terms in the
arrangement.
|
A
milestone should be considered substantive in its entirety. An individual
milestone may not be bifurcated. An arrangement may include more than one
milestone, and each milestone should be evaluated separately to determine
whether the milestone is substantive. Accordingly, an arrangement may contain
both substantive and nonsubstantive milestones.
A
vendor's decision to use the milestone method of revenue recognition for
transactions within the scope of the amendments in this Update is a policy
election. Other proportional revenue recognition methods also may be applied as
long as the application of those other methods does not result in the
recognition of consideration in its entirety in the period the milestone is
achieved.
A vendor
that is affected by the amendments in this Update is required to provide all of
the following disclosures:
1.
|
A
description of the overall
arrangement
|
|
2.
|
A
description of each milestone and related contingent
consideration
|
|
3.
|
A
determination of whether each milestone is considered
substantive
|
|
4.
|
The
factors that the entity considered in determining whether the milestone or
milestones are substantive
|
|
5.
|
The
amount of consideration recognized during the period for the milestone or
milestones.
|
F-12
The
amendments in this Update are effective on a prospective basis for milestones
achieved in fiscal years, and interim periods within those years, beginning on
or after June 15, 2010. Early adoption is permitted. If a vendor elects early
adoption and the period of adoption is not the beginning of the entity's fiscal
year, the entity should apply the amendments retrospectively from the beginning
of the year of adoption. Additionally, a vendor electing early adoption should
disclose the following information at a minimum for all previously reported
interim periods in the fiscal year of adoption:
1. Revenue
2. Income
before income taxes
3. Net
income
4. Earnings
per share
5. The
effect of the change for the captions presented.
A vendor
may elect, but is not required, to adopt the amendments in this Update
retrospectively for all prior periods.
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 financial statements have been prepared assuming that the Company
will continue as a going concern. As reflected in the accompanying
financial statements, the Company had a deficit accumulated during the
development stage of $853 at September 30, 2010, and a net loss from operations
of $853 for the period from September 20, 2010 (inception) through September 30,
2010 with no revenues since inception.
While the
Company is attempting to commence operations and generate revenues, the
Company’s cash position may not be sufficient 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
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
Note
4 – Stockholder’ Equity
Issuance of common
stock
The
Company was incorporated on September 20, 2010 at which time 16,000,000 shares
of common stock were subscribed to the Company’s founder at $0.001 per share or
$1,600. Payment of the subscription was received on October 16,
2010.
On
September 29, 2010, the Company issued 16,000,000 shares of its common stock for
certain assets owned by Kicking The Can L.L.C. (“LLC”). The majority member of
LLC is the sole shareholder of KTC and because of this the transaction has
been valued at $0, his basis in these assets.
F-13
Note
5 – Income Taxes
At
September 30, 2010, the Company had net operating loss (“NOL”) carry–forwards
for Federal income tax purposes of $853 that may be offset against future
taxable income through 2030. No tax benefit has been reported with
respect to these net operating loss carry-forwards in the accompanying financial
statements because the Company believes that the realization of the Company’s
net deferred tax assets of approximately $290, calculated at an effective tax
rate of 34%, 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 $290.
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 $290
for the period from September 20, 2010 (inception) through September 30,
2010.
Note
6 – Related Party Transaction
The
Company has been provided office space by its Chief Executive Officer at no
cost. The management determined that such cost is nominal and did not recognize
the rent expense in its financial statements.
Note
7 – Subsequent Events
The
Company has evaluated all events that occur after the balance sheet date through
the date these financials were issued to determine if they must be reported. The
Management of the Company determined that there are no reportable subsequent
events to be disclosed.
F-14