Business Context and Reporting Period
This Form 8-K is filed by Wizard World, Inc. (not Prairie Operating Co.) for the reporting period of December 6, 2011. The filing discloses the entry into a material definitive agreement involving the issuance of debt securities to accredited investors.
Key Financial Metrics
- Debt Issuance: $325,000 in Senior Convertible Debentures.
- Interest Rate: 6% per annum.
- Maturity Date: February 28, 2011 (Note: This date appears to be a typographical error in the source text as it precedes the issuance date of December 6, 2011).
- Conversion Price: $0.40 per share into Series A Cumulative Convertible Preferred Stock.
- Liquidity Impact: Proceeds from the private placement are intended to provide capital, though specific cash flow usage is not detailed.
Material Changes
The primary material change is the creation of a direct financial obligation through the sale of $325,000 in Senior Convertible Debentures. This represents a new liability on the balance sheet with mandatory conversion features tied to a future "Qualified Offering" of at least $500,000 in Series A Preferred stock.
Guidance, Outlook, and Risks
- Conversion Mechanics: Debentures are mandatorily convertible upon a Qualified Offering. Subscribers also hold an option to convert at any time prior to maturity.
- Prepayment: The Company retains the right to prepay principal without penalty.
- Risks: The filing notes customary events of default which could accelerate repayment obligations. The transaction relies on exemptions under Section 4(2) of the Securities Act and Rule 506 of Regulation D.
- Management Commentary: No specific forward-looking guidance or outlook regarding future revenue or operations is provided in this filing.
Investor Verification Checklist
- Verify the correct maturity date of the Debentures, as the source text lists February 28, 2011, which is prior to the issuance date.
- Confirm the status of the "Qualified Offering" required to trigger mandatory conversion.
- Review the full text of the Senior Convertible Debenture agreement for complete default provisions.
- Check subsequent filings to determine if the $325,000 principal was repaid or converted.