Item
8.01 Other Events
On
September 6, 2017, Wizard World China, LLC (“Wizard China”), a wholly-owned subsidiary of Wizard World, Inc.,
a Delaware corporation, entered into a binding memorandum of understanding (the “MOU”) with CN Live USA Culture Co,
a California limited liability company (“CNL”), and YMK, LLC (“YMK” and, together with Wizard China and
CNL, the “Parties), dated as of August 30, 2017. Pursuant to the MOU, the Parties intend to mutually agree upon and enter
into a definitive agreement covering the subject matter of the MOU.
Pursuant
to the MOU, Wizard China will deliver to CNL content for an English-language channel (the “Wizard Channel”) that provides
entertainment news, gaming, sports and general entertainment programming as part of CNL’s multichannel video programming
platform (the “Service”). The Service is currently comprised of a number of Mandarin-language channels provided on
a free, non-subscription basis to viewers within the People’s Republic of China, including Macau, Taiwan, and Hong Kong
(the “Territory”). Pursuant to the MOU, Wizard China grants to CNL the limited right and obligation to transmit, distribute
and exhibit the Wizard Channel solely in the Territory, via a free non-subscription, 24/7 live linear basis, to internet-enabled,
mobile, television, projectors and computer devices. The Wizard Channel shall be provided to CNL at no cost, provided that CNL
shall be responsible for all costs related to clearance of the programs for distribution in the Territory. YMK shall be responsible
for developing the relationship among the Parties, translating and interpreting communications among the Parties, and other duties
as agreed to by the Parties. Wizard China shall have sole discretion to determine the program formatting and the amount of advertising
and promotional inventory made available in connection with the Wizard Channel, and shall retain the exclusive right to sell (or
license to sell) one hundred percent (100%) of the available advertising inventory on the Wizard Channel. CNL shall be responsible
for obtaining and maintaining all applicable governmental permits and approvals for ensuring that all content of the Wizard Channel
complies with all applicable laws and regulations of the People’s Republic of China, and has the full right to publish,
review and if applicable, the withdrawal of the content if it does not comply with governmental. To the extent a particular program
provided as part of the Wizard Channel does not comply with relevant regulations, Wizard China has the absolute discretion to
withdraw such content from the Wizard Channel.
The
revenue distribution from gross advertising proceeds minus allowable costs shall be payable and allocated as follows: forty percent
(40%) to Wizard China, forty percent (40%) to CNL and twenty percent (20%) to YMK.
Pursuant
to the MOU, the term shall be for five years, commencing thirty (30) days following notice by Wizard China that it is prepared
to proceed with programming the Wizard Channel. Wizard China and/or CNL shall have the option to renew the term for up to five
(5) successive one (1) year periods by providing notice to either party, no later than July 1
st
of the then current
term. Wizard China and/or CNL may unilaterally terminate the MOU under certain circumstances, in accordance with terms and conditions
of the MOU, and subject to notice requirements in connection therewith.
The
foregoing description of the terms of the MOU does not purport to be complete and is qualified in its entirety by the complete
text of the document attached as Exhibit 99.1 to this Current Report on Form 8-K.
On
September 11, 2017, the Company issued a press release announcing the execution of the MOU.