XML 16 R9.htm IDEA: XBRL DOCUMENT v2.4.0.6
Going Concern and Management's Plans
3 Months Ended
Mar. 31, 2012
Going Concern and Management's Plans [Abstract]  
Going Concern and Management's Plans
2.             Going Concern and Management's Plans
 
For the three months ended March 31, 2012, we had a net loss of approximately $4,800,000 and we used cash for operations of approximately $2,402,000.   Our working capital at March 31, 2012 was approximately $528,000.   On May 10, 2012, the Company's Chairman and Chief Executive Officer, Mr. Shane McMahon made a loan to the Company in the amount of $3,000,000.  In consideration for the loan, the Company issued a convertible note to Mr. McMahon in $3,000,000 principal amount.  The note has an annual interest rate of 4% and matures on the earlier of (i) the date on which the Company closes the next financing of equity or equity-linked securities of the Company in which at least $5,000,000 in gross proceeds is raised, and (ii) May 10, 2013.  The note is convertible at any time into shares of the Company's common stock at a conversion price of $10.00 per share; provided, however, that if the Company raises capital at any time prior to the maturity of the note, the note may be converted into the securities received by the investors in the most recent capital raise (as of the date of conversion) at a price equal to the purchase price paid for the securities by such investors.

The Company incurred significant continuing losses during 2011 along with the first quarter of 2012 and has relied on debt and equity financings to fund operations.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  The Company launched its PPV and VOD business during this quarter which is expected to increase cash inflows. We anticipate that we may need to raise additional funds to fully implement our business model and related strategies.
 
The unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.  The Company's independent registered public accounting firm's report of the financial statements for the year ended December 31, 2011, contained an explanatory paragraph regarding the Company's ability to continue as a going concern.