Business Context and Reporting Period
Company: GoEnergy, Inc. (filing as GoENERGY INC., changing name to Wizard World, Inc. effective Jan 30, 2011)
Filing Type: Form 8-K (Current Report)
Date of Report: December 7, 2010
Event: Completion of a reverse merger/share exchange with Kick the Can Corp. (KTC Corp.), a producer of pop culture and multimedia conventions. GoEnergy, previously a shell company with no active operations, acquired 100% of KTC Corp. and adopted its business model.
Key Financial Metrics
Acquisition Consideration: Issuance of 33,430,107 shares of GoEnergy Common Stock to KTC Corp. shareholders, representing approximately 95.5% of the post-closing outstanding shares.
Capital Raise (Post-Closing): Subscription agreements entered for up to $1.5 million in Series A Cumulative Convertible Preferred Stock and Warrants to purchase Common Stock at $0.60 per share.
Acquired Entity Financials (KTC Corp. as of Sept 30, 2010):
- Revenue: $0 (Development stage company; no revenues since inception on Sept 20, 2010).
- Net Loss: $853 for the period from inception through Sept 30, 2010.
- Cash and Cash Equivalents: $0.
- Total Assets: $1,600 (consisting entirely of stock subscription receivable).
- Total Liabilities: $853 (accrued expenses).
- Stockholders' Equity: $747.
Debt and Liquidity: The filing does not report any long-term debt. Liquidity is critically low; KTC Corp. had zero cash on hand as of September 30, 2010. The company relies on the recent private placement and future capital raises to fund operations.
Material Changes vs. Prior Period
- Business Transformation: GoEnergy ceased to be a shell company. Its business focus shifted entirely from abandoned oil and gas exploration to producing pop culture conventions (Comic Cons).
- Control Change: KTC Corp. shareholders now control approximately 95.5% of the voting power of the combined entity.
- Management Change: Terry Fields resigned as CEO and sole director. Gareb Shamus was appointed President, CEO, and Chairman.
- Asset Base: The company now holds rights to 14 conventions across North America (including Atlanta, Big Apple, and Toronto Comic Cons) and plans to add more in 2011.
Guidance, Outlook, Risks, and Contingencies
Outlook and Strategy: Management projects producing 13 conventions in 2011 and 25 in 2012. Revenue is expected from ticket sales, exhibitor fees, and sponsorships targeting a young male demographic.
Going Concern Warning: The audited financial statements for KTC Corp. include a "Going Concern" qualification. The company has a history of losses, no revenues, and zero cash. Continuation as a going concern is dependent on the ability to raise additional funds and generate revenue.
Key Risks:
- Liquidity: Inability to secure additional capital could force a limitation of operations.
- Related Party Transactions: The company relies on informal arrangements with Wizard Entertainment (controlled by CEO Gareb Shamus) for office space, personnel, and marketing. Formal shared services agreements are pending negotiation.
- Market Liquidity: Common stock trades on the Pink Sheets (Symbol: GOEE) and is subject to "penny stock" rules, which may restrict trading and liquidity.
- Intellectual Property: Risks regarding the enforcement of trademarks and potential infringement claims.
Investor Verification Checklist
- Cash Position: Verify the actual cash balance post-closing and the status of the $1.5 million preferred stock offering to confirm funding for the 2011 convention tour.
- Related Party Agreements: Review the terms of the pending shared services agreement with Wizard Entertainment to understand cost structures and potential conflicts of interest.
- Revenue Recognition: Monitor the first actual revenue reports to validate the business model's ability to generate cash from ticket sales and sponsorships.
- Stock Dilution: Track the conversion of Series A Preferred Stock (at $0.40/share) and exercise of Warrants (at $0.60/share) to assess future dilution to common shareholders.
- Management Retention: Confirm the continued employment of Gareb Shamus, identified as a key person risk, given the lack of a formal employment agreement.