Wizard World has notified stockholders that it has insufficient funds to "operate on a long term basis" going into 2017. Specified as part of its quarterly SEC filings, the convention company lists a working capital of $2,543,922 but with an accumulated deficit of $15,263,411. To help mitigate this problem, the company's newly-hired President/CEO John D. Matta and the board are beginning to seek outside funding through loans, equity investments, and cutting some operating costs.
"In order to fund operations past that date is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, or the significant reduction of operating expenses until such time that funds provided by operations are sufficient to fund working capital requirements," reads Wizard World's 10-Q form. "There is no assurance that the Company’s projections and estimates are accurate. The Company is actively managing and controlling the Company’s cash outflows to mitigate these risks."
The company also notes the ongoing lawsuit (and counterclaim) with former Chief Marketing Officer Stephen Shamus. Wizard World says the legal issues are "in an early stage," but that if Shamus' counterclaim is successful they state that "we may be subject to a judgment which could materially impact our financial condition." According to court filings, Shamus is seeking $400,000 in unpaid salary and bonuses, $125,000 severance pay, stock options on 500,000 shares in the company, as well as an unspecified amount of commissions and interest.