UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þx ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: December 31, ~~2012~~2014

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 0-21878

SIMON WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware

04-3081657

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

18952 MacArthur Boulevard, Irvine, California 92612

(Address of principal executive office)

(949) 251-4660

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share		NONE

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ¨ No þx

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes ¨ No þx

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange ~~Act~~ Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days: Yes þx No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): Yes þx No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: þx

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company þx

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ¨ No þ

At June 30, ~~2012~~2014, the aggregate market value of voting stock held by non-affiliates of the registrant was $1368,~~155,810~~581.

At March 2023, ~~2013~~2015, 5074,~~611~~501,~~879~~ 559 shares of the registrant’s common stock were outstanding.

SIMON WORLDWIDE, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, ~~2012~~2014

INDEX

PART I		3	3
Item 1. Business	~~Item 1. Business~~	3	3
Item 1A. Risk Factors	~~Item 1A. Risk Factors~~	3	4
Item 1B. Unresolved Staff Comments	~~Item 1B. Unresolved Staff Comments~~	7	5
Item 2. Properties	~~Item 2. Properties~~	7	5
Item 3. Legal Proceedings	~~Item 3. Legal Proceedings~~	7	5
Item 4. Mine Safety Disclosure	~~Item 4. Mine Safety Disclosure~~	7	5
PART II		8	6
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	~~Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~	8	6
Item 6. Selected Financial Data	~~Item 6. Selected Financial Data~~	8	6
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	8	6
Item 8. Financial Statements and Supplementary Data	~~Item 8. Financial Statements and Supplementary Data~~	11	9
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~	11	9
Item 9A. Controls and Procedures	~~Item 9A. Controls and Procedures~~	11	9
Item 9B. Other Information	~~Item 9B. Other Information~~	12	10
PART III		13	11
Item 10. Directors, Executive Officers and Corporate Governance	~~Item 10. Directors, Executive Officers and Corporate Governance~~	13	11
Item 11. Executive Compensation	~~Item 11. Executive Compensation~~	15	13
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~	20	19
Item 13. Certain Relationships, Related Transactions and Director Independence	~~Item 13. Certain Relationships, Related Transactions and Director Independence~~	22	21
Item 14. Principal Accountant Fees and Services	~~Item 14. Principal Accountant Fees and Services~~	22	21
PART IV		23	22
Item 15. Exhibits and Financial Statement Schedules	~~Item 15. Exhibits and Financial Statement Schedules~~	23	22
SIGNATURES		24	23
Ex-31 Section 302 Certification of CEO and CFO
Ex-31.1 Section 302 Certification of CEO
Ex-32 Section 906 Certification of CEO and CFO
Ex-31.2 Section 302 Certification of CFO
Ex-101 Instance Document
Ex-32 Section 906 Certification of CEO and CFO
Ex-101 Schema Document
Ex-101 Instance Document
Ex-101 Calculation Linkbase Document
Ex-101 Schema Document
Ex-101 Definition Linkbase Document
Ex-101 Calculation Linkbase Document
Ex-101 Labels Linkbase Document
Ex-101 Definition Linkbase Document
Ex-101 Presentation Linkbase Document
Ex-101 Labels Linkbase Document
Ex-101 Presentation Linkbase Document

PART I

Item 1.

Business

General

Prior to August 2001, Simon Worldwide, Inc. (the “Company”)~~, incorporated~~ inwas ~~Delaware and founded in 1976, had been operating as~~ a multi-national, full- service promotional marketing company. In August 2001, McDonald’s ~~specializing~~Corporation in(“McDonald’s”), the ~~design~~Company’s ~~and~~principal ~~development~~customer, ofterminated ~~high~~its 25-~~impact~~year ~~promotional~~relationship ~~products~~with ~~and~~the ~~sales~~Company ~~promotions.~~as ~~The~~a ~~major~~result ~~client~~ of the embezzlement by a former Company ~~had~~employee ~~been~~of ~~McDonald’s~~winning ~~Corporation~~game (“pieces from McDonald’s~~”),~~ ~~for~~promotional ~~which~~games administered by the Company’s. ~~Simon~~Other ~~Marketing~~customers ~~subsidiary~~also ~~designed~~terminated ~~and~~their ~~implemented~~relationships ~~marketing~~with ~~promotions~~the Company, ~~which~~resulting ~~included~~in ~~premiums,~~the ~~games,~~Company ~~sweepstakes,~~no ~~events,~~longer ~~contests~~having a business. By April 2002, the Company had effectively eliminated a ~~coupon~~majority ~~offers,~~of ~~sports~~its ~~marketing,~~ongoing ~~licensing,~~promotions business operations and ~~promotional~~was ~~retail~~in ~~items.~~the ~~Net~~process ~~sales~~of todisposing ~~McDonald’s~~of its assets and ~~Philip~~settling ~~Morris,~~its ~~another~~liabilities ~~significant~~related ~~former~~to ~~client,~~the ~~accounted~~promotions ~~for~~business ~~78%~~and defending and ~~8%,~~pursuing ~~respectively~~litigation with respect thereto. As a result of these efforts, the Company has been able to resolve a significant number of ~~total~~outstanding ~~net~~liabilities ~~sales~~that existed in August 2001 or arose subsequent to that date.

OnThe ~~August 21, 2001, the~~ Company ~~was~~is ~~notified~~managed by ~~McDonald’s~~the ~~that~~Chief itExecutive ~~was~~Officer, ~~terminating~~Greg ~~its~~Mays, ~~approximately~~and ~~25-year~~Chief ~~relationship~~Financial ~~with~~Officer, ~~Simon~~Anthony ~~Marketing as~~Espiritu, atogether ~~result~~with ofan ~~the~~acting ~~arrest~~general ~~of Jerome P~~counsel. ~~Jacobson~~The Board ~~(“Mr. Jacobson”), a former employee~~ of ~~Simon~~Directors ~~Marketing~~has ~~who~~considered ~~subsequently~~various ~~pled~~alternative ~~guilty~~courses toof ~~embezzling~~action ~~winning~~for ~~game~~the ~~pieces from McDonald’s promotional games administered by Simon Marketing. No other~~ Company, ~~employee~~including ~~was~~possibly ~~found~~acquiring toor ~~have~~combining ~~any~~with ~~knowledge~~one of or ~~complicity~~more inoperating ~~his~~businesses. ~~illegal~~The ~~scheme.~~Board ~~Simon~~of ~~Marketing~~Directors ~~was~~has ~~identified~~reviewed inand ~~the~~analyzed ~~criminal~~a ~~indictment~~number of Mrproposed transactions. On March ~~Jacobson~~22, ~~along with McDonald’s~~2013, asthe anCompany ~~innocent~~announced ~~victim~~in ~~of Mr. Jacobson’s~~a ~~fraudulent~~current ~~scheme.~~report ~~Further,~~ on ~~August 23,~~Form ~~2001,~~8-K ~~the~~that ~~Company~~it, ~~was~~together ~~notified~~with ~~that~~Richard ~~its~~Beckman, ~~second~~Joel ~~largest~~Katz ~~customer~~and OA3, ~~Philip~~LLC ~~Morris~~(“OA3”), ~~was~~had ~~also~~entered ~~ending~~into ~~its~~the ~~approximately~~limited ~~nine-year~~liability ~~relationship~~company ~~with~~agreement (the ~~Company.~~“LLC Agreement”) ~~As a result~~ of ~~the above~~Three ~~events~~Lions Entertainment, ~~the~~LLC ~~Company~~(“Three noLions”) ~~longer~~on ~~has~~March 18, ~~an ongoing promotions business~~2013.

~~Since~~Pursuant ~~August~~to ~~2001~~the LLC Agreement, the Company contributed ~~has~~$3.15 ~~concentrated~~million ~~its~~to ~~efforts~~Three ~~on reducing~~Lions ~~its~~in ~~costs~~exchange ~~and~~for ~~settling~~membership ~~numerous~~units ~~claims,~~representing ~~contractual~~60% ~~obligations,~~of ~~and~~the ~~pending~~economic ~~litigation.~~returns Byof ~~April~~Three ~~2002~~Lions, ~~the~~including ~~Company~~certain ~~had~~preferences ~~effectively~~with ~~eliminated~~respect ato ~~majority~~common ofholders ~~its~~on ~~ongoing~~operating ~~promotions~~returns ~~business operations~~ and ~~was~~on ina ~~the~~liquidation ~~process~~or ofsale ~~disposing~~ of ~~its~~Three ~~assets~~Lions. ~~and~~In ~~settling~~respect ~~its~~of ~~liabilities~~such ~~related~~previously toissued ~~the~~membership ~~promotions~~units, ~~business~~the ~~and~~Company ~~defending~~made ~~and~~a ~~pursuing~~second ~~litigation~~capital ~~with~~contribution ~~respect~~to ~~thereto.~~Three InLions ~~essence,~~in the ~~Company~~amount ~~discontinued~~of ~~its~~$1.85 ~~promotions~~million ~~business~~on April 26, 2013, and ~~changed~~a ~~the~~third ~~nature~~and offinal ~~its~~capital ~~operation~~contribution to ~~focus~~Three ~~on its~~Lions ~~pending~~in ~~litigation~~the amount ~~and~~of ~~winding~~$3.5 ~~down~~million ~~its~~on ~~contracted~~October 2, ~~obligations~~2013. As a result of these ~~efforts~~transactions, the Company’s ~~has~~business ~~been~~substantially ~~able~~consisted toof ~~resolve~~acting aas ~~significant~~the ~~number~~majority equityholder of, ~~outstanding~~and ~~liabilities~~holding ~~that~~a ~~existed~~membership interest in, ~~August~~Three ~~2001~~Lions. orThe ~~arose~~business ~~subsequent~~and operations toof ~~that~~Three ~~date.~~Lions ~~As of~~were ~~December 31,~~managed ~~2012~~and directed by a five person Executive Board, three of whom the Company had ~~reduced~~the ~~its~~power ~~workforce~~to designate. The Executive Board governed under majority vote, subject to 4certain ~~employees~~major ~~from~~decisions ~~136~~that ~~employees~~required asthe unanimous approval of ~~December 31,~~either ~~2001~~the members of Three Lions or its Executive Board (“Special Approval”).

~~During~~The ~~the second~~Company ~~quarter~~was ofparty ~~2002,~~to ~~the~~a ~~discontinued activities of the Company~~Pledge Agreement, ~~consisting~~dated ~~of revenues~~May 7, ~~operating costs~~2014, ~~certain general and administrative costs and certain assets and liabilities associated~~ with ~~the~~SunTrust ~~Company’s~~Bank ~~promotions~~(“SunTrust”) ~~business,~~wherein ~~were classified as discontinued operations for financial reporting purposes. In October 2010,~~ the Company ~~settled~~pledged ~~the~~all ~~remaining~~of ~~liability in~~ its ~~discontinued~~equity ~~promotions~~interests ~~business~~in ~~which~~Three ~~was~~Lions ~~a post-employment obligation. At December 31, 2012~~ (and ~~2011, the~~all ~~Company~~proceeds ~~had stockholders’ equity~~ of ~~$7.6 million~~such ~~and~~interests) ~~$9.1~~to ~~million,~~SunTrust ~~respectively.~~as ~~With~~security nofor ~~revenues~~Three ~~from~~Lions’ ~~operations,~~obligations ~~the Company closely monitors and controls its expenditures within~~ under a ~~reasonably~~revolving ~~predictable~~credit ~~range.~~facility ~~Cash~~that ~~used~~Three inLions ~~operating activities~~obtained ~~was~~from $1SunTrust.5 ~~million and $1.9 million for the years ended December 31, 2012 and 2011, respectively.~~ The Company’s ~~incurred~~pledge ~~losses~~of inits ~~2012~~equity ~~and~~interests ~~continues to incur losses~~ in ~~2013~~Three ~~for~~Lions ~~the~~terminated ~~general~~only ~~and~~upon ~~administrative expenses incurred to manage~~ the ~~affairs~~payment ofin ~~the~~full ~~Company.~~and Bytermination ~~utilizing cash which had been received pursuant to the settlement~~ of ~~the~~Three ~~Company~~Lions’s ~~litigation~~obligations ~~with~~under ~~McDonald’s~~the ~~in 2004, $2.1 million received from Yucaipa AEC Associates, LLC (“Yucaipa AEC”) in~~revolving ~~July 2008~~credit ~~and March 2009, and $1~~facility.75 ~~million~~Three ~~received~~Lions inpaid ~~August 2008~~ in ~~settlement~~full of the ~~Company’s~~revolving ~~lawsuit~~credit ~~against~~facility ~~PricewaterhouseCoopers~~on ~~LLC~~December 18, ~~management believes it has sufficient capital resources and liquidity to operate the Company for at least one year~~2014.

~~The~~Due ~~Company~~to isa ~~currently~~confluence ~~managed~~of bya ~~the~~number ~~Chief~~of ~~Executive~~adverse ~~Officer~~factors, but ~~and~~in ~~principal~~particular, ~~financial~~a ~~officer,~~ratings ~~Greg~~performance ~~Mays~~well below expectations on Three Lion’s initial Fashion RocksTM broadcast on September 9, ~~together~~2014, ~~with~~and the resultant decision to cancel further anproduction ~~acting~~on ~~general~~other ~~counsel~~projects, Three Lions recorded unanticipated losses. ~~The~~In a meeting held on October 27, 2014, the Executive Board of ~~Directors~~Three ~~has~~Lions considered ~~various~~and ~~alternative~~unanimously ~~courses~~approved ofa ~~action~~plan ~~for~~proposed ~~the~~by ~~Company~~Three Lions’ management, ~~including~~with ~~possibly~~the assistance ~~acquiring~~of orits ~~combining~~advisors, to proceed with ~~one~~the orvoluntary ~~more~~liquidation ~~operating~~and ~~businesses~~dissolution of Three Lions in accordance with Delaware law. ~~The~~On ~~Board~~January 30, of2015, ~~Directors~~Three ~~has~~Lions ~~reviewed~~was ~~and~~dissolved ~~analyzed a~~with ~~number~~the filing of ~~proposed~~its ~~transactions~~Certificate of Cancellation with the state of Delaware. OnNo ~~March~~amounts ~~22,~~were ~~2013,~~distributed to the Company or to the other members of Three Lions in the liquidation.

Company announced in a current report of Form 8-K that it, together with Richard Beckman, Joel Katz and OA3 had entered into the limited liability company agreement (the “Operating Agreement”) of Three Lions Entertainment, LLC (“Three Lions”). Pursuant to the Operating Agreement, the Company made an initial capital contribution of $3,150,000 with respect to membership units representing 60% of the voting power of Three Lions. The membership units received by the Company represent a 60% interest in the economic returns of Three Lions, including certain preferences with respect to common holders on operating returns and on a liquidation or sale of Three Lions. The Company has the ability to, but is not required to, make certain additional capital contributions. If the Company does not make additional contributions, OA3 is obligated to make such contributions in the amounts that would otherwise be made by the Company. If OA3 makes such contributions, OA3 will receive a proportionate interest in Three Lions, subject to certain exceptions. The Company cannot predict whether such course of action will be successful.

On June 11, 2008, the Company entered into an Exchange and Recapitalization Agreement (the “Recapitalization Agreement”) with Overseas Toys, L.P. (“Overseas Toys”), the then holder of all the outstanding shares of preferred stock of the Company, pursuant to which all the outstanding preferred stock would be converted into shares of common stock representing 70% of the shares of common stock outstanding immediately following the conversion. Subsequently, Overseas Toys’ holding of common stock increased to 82.5% due to: i) the reduction in outstanding shares of common stock in connection with the Company’s April 26, 2010, purchase of 3,589,201 shares from Everest Special Situations Fund L.P. and ii) the December 10, 2010, purchase of 3,822,912 shares by Overseas Toys in connection with its tender offer to purchase shares of the Company’s common stock it did not already own (further described below). The Recapitalization Agreement was negotiated on the Company’s behalf by the Special Committee of disinterested directors which, based in part upon the opinion of the Special Committee’s financial advisor, determined that the transaction was fair to the holders of common stock from a financial point of view. At a special meeting held on September 18, 2008, the stockholders of the Company approved amendments to the Company’s certificate of incorporation proposed in order to effect a recapitalization of the Company pursuant to the terms of the Recapitalization Agreement.

Under the Recapitalization Agreement, the Company issued 37,940,756 shares of common stock with a fair value of $15.2 million in exchange for 34,717 shares of preferred stock (representing all outstanding preferred shares) with a carrying value of $34.7 million and related accrued dividends of approximately $147,000. The Company recorded $19.7 million to retained earnings in September 2008 representing the excess of carrying value of the preferred stock received over the fair market value of the common shares issued as such difference essentially represented a return to the Company.

In 2010, Overseas Toys, L.P. completed a tender offer for all shares of the Company not owned by Overseas Toys, L.P. As a result of the 2010 tender offer, the officers of the Company were not required to dissolve and liquidate the Company as would have been required under the Recapitalization Agreement if such tender offer had not been consummated.

Item 1A.

Risk Factors

The following important factors, among others, in some cases have affected, and in the future could affect, the Company’s actual results and could cause the Company’s actual consolidated results for the Company’s current year and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company.

~~Uncertain~~3 ~~Outlook~~

TheTable Company no longer has any revenue generating business. The Board of Directors has considered various alternative courses of action for the Company, including possibly acquiring or combining with one or more operating businesses. The Board of Directors has reviewed and analyzed a number of proposed transactions. On March 22, 2013, the Company announced in a current report of Form 8-K that it, together with Richard Beckman, Joel Katz and OA3 had entered into the Operating Agreement of Three Lions. Pursuant to the Contents

Risks Related to the Company

Our business, results of operations and financial condition depended principally on the success of Three Lions, which recorded substantial unanticipated losses and has liquidated. Accordingly, we have recorded the total loss of our $8.5 million investment in Three Lions and did not receive any proceeds from Three Lions’ liquidation. This has resulted in a material adverse effect on our business, financial condition, results of operations and prospects.

We have not had an operating business since 2002. Since 2002, our Board of Directors has considered various alternative courses of action for our company, including possibly acquiring or combining with one or more operating businesses, and it has reviewed and analyzed a number of proposed transactions. In March 2013, we invested our remaining cash assets in the acquisition of a majority economic interest in Three Lions, a start-up television production company with a particular emphasis on branded entertainment and special events. In October 2013, we consummated a $5 million rights offering of our common stock to our existing shareholders to fund our remaining $3.5 million capital contribution to Three Lions and to provide working capital for us until Three Lions was projected to be able to provide us with distributions to help pay our operating costs. As a result of these transactions, since March 2013, our business has consisted almost entirely of acting as the majority equityholder of, and holding a membership interest in, Three Lions.

Three Lions held its initial Fashion Rocks^TM broadcast on September 9, 2014 and experienced a ratings performance well below expectations. As a result of the poor ratings and sponsorship revenue that fell well short of projections, Three Lions recorded unanticipated losses of $7.5 million in connection with the broadcast. Three Lions sought out new financing sources to provide the necessary funding for Three Lions next production, but was not successful and unable to secure a new source of working capital. In a meeting held on October 27, 2014, and after reviewing financial information and projections provided by Three Lions and its advisors, the Executive Board of Three Lions considered and unanimously approved a plan proposed by Three Lions’ management, with the assistance of its advisors, to proceed with the voluntary liquidation and dissolution of Three Lions in accordance with Delaware law. On January 30, 2015, Three Lions was dissolved with the filing of its Certificate of Cancellation with the state of Delaware. No amounts were distributed to us or to the other members of Three Lions in the liquidation.

Accordingly, we have suffered the loss of our entire $8.5 million capital investment in Three Lions. We also lost our $199,583 cash collateralized bank letter of credit that we provided to support payments on an office lease obtained by Three Lions, and we incurred additional legal and other professional fees and associated costs in connection with Three Lions’ liquidation totaling approximately $20,000. These losses have had and will continue to have a material adverse effect on our business, financial condition, results of operations and prospects.

Our investment in Three Lions constituted our primary asset on our financial statement and we have no other assets with the potential of generating positive cash flow for us. Considering our current cash position of $1.0 million at December 31, 2014, our average historical spending to support continuing operations, and a short-term funding commitment from our largest shareholder, our management believes we have sufficient capital resources and liquidity to continue to operate in a manner consistent with our recent operations for at least one year. However, given our lack of an operating business or other revenue generating opportunities, our management believes that we will deplete our remaining cash resources in a little over one year. There can be no assurances that we will be able to secure financing or an operating business before our remaining cash is depleted. To the extent that we are unable to identify and obtain an alternate source of funds, we will likely be forced to liquidate.

We have a long history of net losses, no recent history of profitability, and no current operations or investments that would enable us to become profitable in the future.

We reported net losses of $3.6 million and $1.5 million for the years ended December 31, 2013 and 2012, respectively. These losses have increased significantly in 2014. For the year ended December 31, 2014, we recorded a net loss of $7.0 million. We have not had an operating business since 2002. Our management had expected that our investment in Three Lions would eventually provide us with positive cash flow to help fund our operations. In light of the liquidation of Three Lions, we currently have no operations or investments that would enable us to become profitable in the future. While our Board of Directors has instructed management to explore all possible strategic options for us to secure additional financing and/or an operating business, there can be no assurances whatsoever that we will be able to identify a viable strategic option to enable us to continue operations. If we are unable to identify such a viable funding source, we will likely have to liquidate.

~~Operating~~We ~~Agreement,~~only ~~the~~have ~~Company~~sufficient ~~made~~cash ~~an initial capital contribution of $3,150,000 with respect~~ to ~~membership~~meet ~~units~~our ~~representing~~operating ~~60%~~needs offor ~~the~~approximately ~~voting~~12 ~~power~~months of Three Lions. The membership units received by the Company represent a 60% interest in the economic returns of Three Lions, including certain preferences with respect to common holders on operating returns and onwill alikely ~~liquidation or sale of Three Lions. The Company has the ability to,~~need ~~but is not required~~ to, ~~make~~liquidate ~~certain~~if ~~additional~~we ~~capital~~are ~~contributions.~~unable ~~If the Company does not make additional contributions, OA3 is obligated~~ to ~~make~~secure ~~such~~new ~~contributions in the amounts that would otherwise be made by the Company~~financing. ~~If OA3 makes such contributions, OA3 will receive a proportionate interest in Three Lions, subject to certain exceptions. The Company cannot predict whether such course of action will be successful.~~

~~Dependence~~At onDecember 31, ~~Key~~2014, ~~Personnel~~we had a cash balance of approximately $1.0 million. Considering our average spending to support continuing operations and a short-term funding commitment from our largest shareholder, our management believes we have sufficient capital resources and liquidity to operate in a manner consistent with our recent operations for at least one year. However, given our lack of an operating business or other revenue generating opportunities, our management believes that we will deplete our remaining cash resources in a little over one year. There can be no assurances that we will be able to secure financing or an operating business before our remaining cash is depleted. To the extent that we are unable to identify and obtain an alternate source of funds, we will likely be forced to liquidate.

WeAffiliates ~~are dependent on several key personnel, including our directors. In light~~ of ~~our~~Overseas ~~uncertain~~Toys ~~outlook,~~control ~~there~~us isand nomay ~~assurance~~have ~~that~~conflicts ~~our key personnel can be retained. The loss~~ of ~~the~~interest ~~services~~with of our ~~key~~other ~~personnel would harm the Company~~stockholders. In addition, the Company has a limited number of personnel. As such, this presents a challenge in maintaining compliance with Section 404 of the Sarbanes-Oxley Act of 2002. If Section 404 compliance is not properly maintained, the Company’s internal control over financial reporting may be adversely affected.

~~Investments~~Overseas Toys beneficially owns approximately 87.6% of our common stock. As a result, Overseas Toys is able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the approval of any corporate transaction or the outcome of any other matter submitted to our stockholders for approval, including potential mergers, capital issues and other significant corporate transactions. This concentrated ownership position limits other stockholders’ ability to influence corporate matters and, as a result, we may take actions that some of our stockholders do not view as beneficial.

~~The Company~~Overseas ~~held~~Toys anis ~~investment~~controlled inby aan ~~privately~~affiliate ~~held~~of ~~technology~~The ~~company~~Yucaipa Companies, ~~which~~or ~~was~~Yucaipa. ~~sold~~Four inof ~~2011.~~our ~~The~~six ~~Company~~directors ~~continues~~are also tocurrent ~~hold~~or ~~investments~~former indirectors ~~other~~or ~~privately~~executive ~~held~~officers ~~companies.~~of, ~~One~~or ofadvisors ~~these~~to, ~~investments~~Yucaipa ~~was~~or ~~originally~~certain ~~intended~~of ~~primarily~~its toportfolio companies. Overseas Toys also ~~provide~~has ~~the Company~~sufficient ~~with~~voting anpower ~~expanded~~to ~~technology~~amend ~~presence~~our organizational documents. The ~~other~~interests ~~private~~of ~~company~~Overseas inToys ~~which~~may not coincide with the ~~Company~~interests ~~has~~of another ~~investment~~holders isof inour acommon ~~biotechnology~~stock. ~~company~~Additionally, ~~which~~Yucaipa isand ~~subject~~its toaffiliates ~~all~~are in the ~~risks~~business ~~inherent~~of making investments in ~~biotechnology.~~companies Inand ~~addition~~may, ~~these~~from ~~companies~~time ~~are~~to ~~subject~~time, toacquire ~~the~~and hold interests in businesses that compete ~~valuation~~directly ~~volatility~~or ~~associated~~indirectly with ~~the~~us. ~~investment~~Yucaipa ~~community~~ and ~~capital~~its ~~markets.~~affiliates ~~The~~may ~~carrying~~also ~~value~~pursue, offor ~~the~~their ~~Company’s~~own ~~investments~~account, inacquisition ~~these~~opportunities ~~companies~~that ismay ~~subject~~be toappropriate ~~the~~for ~~aforementioned~~us, ~~risks.~~and ~~Periodically~~as a result, ~~the~~those ~~Company~~acquisition ~~performs~~opportunities may not be available to us. So long as Overseas Toys continues to own a ~~review~~significant amount of the ~~carrying~~ ~~value~~outstanding shares of ~~its~~our ~~investments~~common instock, ~~these~~it ~~companies,~~will ~~and~~continue ~~considers~~to ~~such~~be ~~factors~~able asto ~~current~~strongly ~~results,~~influence ~~trends~~or ~~and~~effectively ~~future~~control ~~prospects~~our ofdecisions, ~~the~~including ~~investee~~potential mergers or acquisitions, ~~general~~asset ~~market~~sales, liquidation ~~conditions~~and dissolution, and other ~~economic~~significant ~~factors~~corporate transactions that our other stockholders may desire.

We may have a limited ability to use some or all of our net operating loss carryforwards in the future.

As a result of prior operating losses, we have net operating loss, or “NOL,” carryforwards for federal income tax purposes. The ability to utilize our NOL carryforwards to reduce taxable income in future years could become subject to significant limitations under Section 382 of the Internal Revenue Code if we undergo an ownership change. We would undergo an ownership change if, among other things, the stockholders who own, directly or indirectly, 5% or more of our common stock, or are otherwise treated as “5% shareholders” under Section 382 of the U.S. Internal Revenue Code and the regulations promulgated thereunder, increase their aggregate percentage ownership of our stock by more than 50 percentage points over the lowest percentage of the stock owned by these stockholders at any time during the testing period, which is generally the three-year period preceding the potential ownership change.

In the event of an ownership change, Section 382 of the U.S. Internal Revenue Code imposes an annual limitation on the amount of taxable income a corporation may offset with NOL carryforwards. The annual limitation is generally equal to the value of the stock of the corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate for the month in which the ownership change occurs (the long-term tax-exempt rate for March 2015 is 2.67%). Any unused annual limitation may generally be carried over to later years until the NOL carryforwards expire. While we do not believe that our 2013 rights offering and the issuance of shares pursuant to exercised subscription rights triggered an ownership change upon the consummation of the rights offering, they could increase the likelihood that we may undergo an ownership change for purposes of Section 382 of the U.S. Internal Revenue Code in the future.

We are dependent on certain key personnel.

We are dependent on several key personnel, including our directors. In light of our uncertain outlook, there is no assurance that our key personnel can be retained. The loss of the services of our key personnel would harm us. In addition, we have a limited number of personnel. As such, this presents a challenge in maintaining compliance with Section 404 of the Sarbanes-Oxley Act of 2002. If Section 404 compliance is not properly maintained, our internal control over financial reporting may be adversely affected.

As a smaller reporting company, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. Our auditors are not required to attest to the effectiveness of our internal control over financial reporting. As a result, investors may become less comfortable with the effectiveness of our internal controls and the risk that material weakness or other deficiencies in internal controls go undetected may increase.

Risks Related to the Securities Markets and Ownership of our Common Stock

The market price of our common stock could fluctuate in the future and may continue to decline substantially.

The market price for our common stock has fluctuated in the past, and several factors could cause the price to fluctuate or decline substantially in the future, including:

•

the material adverse effect that the losses associated with our investment in Three Lions and the liquidation of Three Lions has had on our business, financial condition, results of operations and prospects;

•

stockholder sentiment regarding the failure of our investment in Three Lions and the significant losses incurred by us in connection therewith;

•

the liquidation of Three Lions and the inability of Three Lions to generate revenue or distribute dividends to us and its other members;

•

announcements of developments related to our business or prospects;

•

our dwindling cash resources, lack of any income generating assets and dim prospects for obtaining alternative sources of capital or debt financing;

•

the likelihood that we will need to liquidate in the near future if we do not obtain additional working capital;

•

fluctuations in our operations;

•

issuances of a substantial number of shares of our common stock into the marketplace, including upon the exercise of subscription rights;

•

general conditions in the domestic economy or the worldwide economy;

•

a shortfall in earnings compared to our stockholders’ expectations;

•

announcements of new acquisitions or dispositions; and

•

an outbreak of war or hostilities.

Due to these factors, the price of our stock may decline even further or become worthless and investors may be unable to resell their shares of our stock for a profit or for any amount at all. If we do have to liquidate, it is likely that our shareholders will lose all or a substantial portion of their respective investments in our stock. In addition, the stock market experiences extreme volatility that often is unrelated to the performance of particular companies. These market fluctuations may cause our stock price to decline regardless of our performance.

The trading volume of our common stock is very limited and if you invest you may have difficulty selling your shares in the future at the times and in the amounts you might want.

While our common stock is quoted on the OTCQB Marketplace under the symbol “SWWI,” our stock is not listed on any stock exchange. The trading volume of our common stock is very limited. The limited trading market for our common stock may lead to exaggerated fluctuations in market prices and possible market inefficiencies, as compared to a more actively traded stock. It may also make it more difficult to dispose of our common stock at expected prices or at all, especially for holders seeking to dispose of a large number of shares of our stock.

Forward Looking Information

From time to time, the Company may provide forward looking information such as forecasts of expected future performance or statements about the Company’s plans and objectives. This information may be contained in filings with the Securities and Exchange Commission, press releases, or oral statements by the officers of the Company. The Company desires to take advantage of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995 and these risk factors are intended to do so.

Item 1B.

Unresolved Staff Comments

Not applicable.

Item 2.

Properties

In September 2011, the Company signed a 12-month lease agreement for 2,000 square feet of office space in Irvine, California, with a monthly rent of approximately $3,700, into which the Company relocated its remaining scaled-down operations. In March 2012, this lease was extended an additional 12-months through August 2013 at a monthly rent of approximately $3,800. In April 2013, this lease was extended again for additional 24-months through August 2015 at an average monthly rent of approximately $3,700 during the lease term. For a summary of the Company’s minimum rental commitments under all non-cancelable operating leases as of December 31, ~~2012~~2014, see Notes to Consolidated Financial Statements.

Item 3.

Legal Proceedings

None.

Item 4.

Mine Safety Disclosure

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Until May 3, 2002, the Company’s stock traded on The Nasdaq Stock Market under the symbol SWWI. On May 3, 2002, the Company’s stock was delisted by Nasdaq due to the fact that the Company’s stock was trading at a price below the minimum Nasdaq requirement. The following table presents, for the periods indicated, the high and low sales prices of the Company’s common stock as reported on the over-the-counter market in the Pink Sheets. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

	2012				2011
	High		Low		High		Low
First quarter	$	0.14	$	0.10	$	0.33	$	0.20
Second quarter		0.10		0.10		0.24		0.15
Third quarter		0.14		0.10		0.20		0.14
Fourth quarter		0.12		0.09		0.14		0.12

As of March 20, 2013, the Company had approximately 341 holders of record of its common stock. The last reported sale price of the Company’s common stock on March 20, 2013, was $0.11.

The Company has never paid cash dividends, other than series A preferred stock distributions in 2000 and stockholder distributions of Subchapter S earnings during 1993 and 1992.

On April 26, 2010, the Company purchased 3,589,201 shares of its outstanding common stock from Everest Special Situations Fund L.P., formerly the Company’s second largest shareholder, for $1,256,220. These shares are held by the Company as treasury stock resulting in 50,611,879 shares outstanding as of December 31, 2012.

Item 6. Selected Financial Data

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Associated Risks

From time to time, the Company may provide forward-looking information such as forecasts of expected future performance or statements about the Company’s plans and objectives, including certain information provided below. These forward-looking statements are based largely on the Company’s expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Company’s control. The Company wishes to caution readers that actual results may differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company including, without limitation, as a result of factors described in Item 1A. Risk Factors.

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent liabilities. On an ongoing basis, management evaluates its estimates and bases its estimates on historical experience and on various other assumptions that are believed

to be reasonable under the circumstances, the results of which form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Management applies the following critical accounting policies in the preparation of the Company’s consolidated financial statements:

Long-Term Investments

The Company’s accounting policy for long-term investments is considered critical because long-term investments are one of the Company’s most material assets other than cash and cash equivalents.

The Company held an investment in a privately held technology company, which was sold in 2011. The Company continues to hold investments in other privately held companies. One of these investments was originally intended primarily to also provide the Company with an expanded technology presence. The other private company in which the Company has an investment is in a biotechnology company which is subject to all the risks inherent in biotechnology. In addition, these companies are subject to the valuation volatility associated with the investment community and capital markets. The carrying value of the Company’s investments in these companies is subject to the aforementioned risks. Periodically, the Company performs a review of the carrying value of its investments in these companies, and considers such factors as current results, trends and future prospects of the investee, general market conditions, and other economic factors.

Certain investments are designated as available-for-sale in accordance with the provisions primarily codified under ASC 320-10-25, “Investments—Debt and Equity Securities,” and as such, unrealized gains and losses are reported in the accumulated other comprehensive income component of stockholders’ equity. These investments are included in other assets in the accompanying consolidated balance sheets.

Contingencies

The Company records an accrued liability and related charge for an estimated loss from a loss contingency if two conditions are met: (1) information is available prior to the issuance of the financial statements that indicates it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (2) the amount of loss can be reasonably estimated. Accruals for general or unspecified business risks are not recorded. Gain contingencies are recognized when realized.

Recently Issued Accounting Standards

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements. Instead, the new amendments require an organization to: 1) Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income – but only if the item reclassified is required under U.S. generally accepted accounting principles (U.S. GAAP) to be reclassified to net income in its entirety in the same reporting period; and 2) Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet instead of directly to income or expenses.

ASU No. 2013-02 will be effective for the Company beginning January 1, 2013. The Company does not expect this adoption to have a material effect on the Company’s consolidated statements of financial position or results of operations.

~~Results~~PART II ~~of Operations~~

~~2012~~Until ~~Compared~~May 3, 2002, the Company’s stock traded on The NASDAQ Stock Market under the symbol SWWI. On May 3, 2002, the Company’s stock was delisted by NASDAQ due to ~~2011~~the fact that the Company’s stock was trading at a price below the minimum NASDAQ requirement. The following table presents, for the periods indicated, the high and low sales prices of the Company’s common stock as reported on the over-the-counter market in the Pink Sheets. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

There were no revenues during 2012 and 2011.


	2014				2013
	High		Low		High		Low
First quarter	$	0.06	$	0.04	$	0.15	$	0.10
Second quarter		0.05		0.04		0.14		0.08
Third quarter		0.06		0.04		0.13		0.08
Fourth quarter		0.05		0.01		0.11		0.04

~~General~~As ~~and~~of ~~administrative~~March 19, ~~expenses~~2015, ~~totaled~~the ~~$1.6~~Company ~~million~~had inapproximately ~~2012~~335 ~~compared~~holders toof ~~$2.0~~record ~~million~~of inits ~~2011~~common stock. The ~~decrease~~ ~~can~~last bereported ~~primarily~~sale price ~~attributed~~of tothe aCompany’s ~~reduction~~common instock ~~director~~on ~~fees~~March 19, ~~and~~2015, ~~labor~~was ~~costs~~$0.01.

~~Interest~~The ~~income~~Company ~~totaled~~has ~~$9,000~~never inpaid ~~2012~~cash ~~compared to $25~~dividends,~~000~~ inother ~~2011.~~than ~~The~~series ~~decrease~~A ispreferred stock ~~primarily~~distributions ~~due to reductions~~ in ~~average~~2000 ~~cash balances~~ and ~~average~~stockholder ~~interest~~distributions ~~rates~~of inSubchapter ~~2012~~S ~~when~~earnings ~~compared~~during to1993 ~~2011~~and 1992.

~~Other~~Item ~~income totaled $34,000 in 2012 and $15,000 in 2011~~6. ~~The~~Selected ~~amount~~Financial for 2012 relates to the Company providing limited accounting and administrative services to another company controlled by the Company’s largest shareholder. The arrangement entails providing these services through an undetermined end date, including payments totaling $9,000 for the first quarter of 2013. The Company does not consider this arrangement to be part of its recurring operations. The amount for 2011 related to investment income and was the result of a sale of the Company’s remaining equity investment in a technology related company that had a cost basis of $59,000. Data

~~Equity~~Not ~~in Yucaipa AEC (loss) earnings totaled $(9,000) for 2012 and $1,000 for 2011~~applicable. The Company expects this investment to be liquidated during 2013 and does not expect any future economic benefit prior to its liquidation. Accordingly, the book value of the investment is $0 at December 31, 2012.

~~Liquidity~~Item 7. Management’s Discussion and ~~Capital~~Analysis ~~Resources~~of Financial Condition and Results of Operations

The lack of any operating revenue has had and will continue to have a substantial adverse impact on the Company’s cash position. The Company incurred losses in 2012 and continues to incur losses in 2013 for the general and administrative expenses incurred to manage the affairs of the Company. Inasmuch as the Company no longer generates operating income, the source of current and future working capital is expected to be cash on hand and proceeds from the sale of its remaining longForward-~~term~~Looking ~~investments.~~Statements ~~Management believes it has sufficient capital resources~~ and ~~liquidity~~Associated toRisks ~~operate the Company for at least one year.~~

~~The~~From ~~Board of Directors has considered various alternative~~time ~~courses~~to oftime, ~~action for~~ the Company, ~~including~~may ~~possibly~~provide ~~acquiring~~forward-looking orinformation ~~combining~~such ~~with~~as ~~one~~forecasts ~~or more operating businesses. The Board~~ of ~~Directors~~expected ~~has~~future ~~reviewed~~performance ~~and~~or ~~analyzed~~statements aabout ~~number of proposed transactions. On March 22, 2013,~~ the Company’s ~~announced~~plans inand ~~a current report of Form 8-K that it~~objectives, ~~together~~including ~~with~~certain ~~Richard~~information ~~Beckman,~~provided ~~Joel~~below. ~~Katz~~These ~~and~~forward-looking ~~OA3 had entered into the limited liability company agreement (the “Operating Agreement”) of Three Lions Entertainment, LLC (“Three Lions”). Pursuant~~statements toare ~~the~~based ~~Operating~~largely ~~Agreement,~~on the Company’s ~~made~~expectations anand ~~initial~~are ~~capital~~subject ~~contribution of $3,150,000 with respect~~ to ~~membership~~a ~~units~~number ~~representing 60%~~ of ~~the~~risks ~~voting~~and ~~power~~uncertainties, certain of ~~Three~~which ~~Lions.~~are ~~The~~beyond ~~membership units received by~~ the Company’s ~~represent a 60% interest in the economic returns of Three Lions, including certain preferences with respect to common holders on operating returns and on a liquidation or sale of Three Lions~~control. The Company ~~has~~wishes ~~the ability~~ to, ~~but~~caution isreaders ~~not~~that ~~required~~actual ~~to,~~results ~~make~~may ~~certain~~differ ~~additional~~materially from ~~capital~~those ~~contributions.~~expressed ~~If the Company does not make additional contributions, OA3 is obligated to make such contributions~~ in ~~the~~any ~~amounts~~forward-looking ~~that~~statements ~~would otherwise be~~ made by ~~the Company. If OA3 makes such contributions~~, ~~OA3~~or ~~will~~on ~~receive~~behalf ~~a proportionate interest in Three Lions~~of, ~~subject~~the ~~to certain exceptions. The~~ Company ~~cannot~~including, ~~predict~~without ~~whether~~limitation, ~~such~~as ~~course~~a ofresult ~~action will be successful. Considering our current cash position~~ of ~~$7.3~~factors ~~million~~described atin ~~December~~Item ~~31,~~1A. ~~2012~~Risk ~~and our average spending to support operations, management believes it has sufficient capital resources and liquidity to operate the Company for at least one year~~Factors.

8Critical Accounting Policies

~~Table~~Management’s discussion and analysis of ~~Contents~~financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent liabilities. On an ongoing basis, management evaluates its estimates and bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

~~Working capital at December 31, 2012 and 2011 was $7.3 million and $~~8.8 ~~million, respectively.~~

NetTable cash used in operating activities during 2012 and 2011 totaled $1.5 million and $1.9 million, respectively, primarily due to a loss from operations resulting from the general and administrative expenses to manage the affairs of the Company. Contents

~~There~~Management ~~was~~applies nothe ~~cash~~following ~~provided~~critical ~~by investing~~accounting ~~activities~~policies ~~during~~in ~~2012. Net cash received from investing activities during 2011 totaled $73,000 due to~~ the ~~sale~~preparation of ~~one of~~ the Company’s consolidated ~~equity~~financial ~~investments.~~statements:

~~There~~Long-Term ~~were~~Investments ~~no financing cash flows during 2012 and 2011.~~

The Company’s isaccounting ~~also~~policy ~~involved~~for inlong-term ~~other litigation~~investments ~~and~~is ~~legal~~considered ~~matters~~critical ~~from~~because ~~time~~long-term toinvestments ~~time~~are inone ~~the ordinary course~~ of ~~business in which it is~~ the ~~plaintiff. The~~ Company’s ~~does~~most ~~not believe that the ultimate resolution of these other litigation and legal matters, if any, will have a~~ material ~~adverse~~assets ~~effect~~other onthan ~~its financial condition, results of operations, or net~~ cash ~~flows.~~and However, the results of legal proceedings cannot be predicted with certainty. During 2012, there were no litigation or legal matters settled. Thus, there was no impact on the Company’s financial condition, results of operations, or net cash ~~flows~~equivalents.

~~Off-Balance~~The ~~Sheet~~Company ~~Arrangements~~holds an investment in a biotechnology company which is subject to all the risks inherent in biotechnology. In addition, this company is subject to the valuation volatility associated with the investment community and capital markets. The carrying value of the Company’s investments in this company is subject to the aforementioned risks. Periodically, the Company performs a review of the carrying value of its investment in this company, and considers such factors as current results, trends and future prospects of the investee, general market conditions, and other economic factors.

~~The~~Investments ~~Company~~are ~~has~~designated noas ~~off~~available-~~balance~~for-sale ~~sheet~~in ~~arrangements~~accordance with the provisions primarily codified under ASC 320-10-25, “Investments—Debt ~~investments~~and inEquity ~~special~~Securities,” ~~purpose~~and ~~entities~~as such, orunrealized ~~undisclosed~~gains ~~borrowings~~and orlosses ~~debts.~~are Inreported ~~addition,~~in the ~~Company has~~accumulated noother ~~derivative~~comprehensive ~~contracts~~income orcomponent ~~synthetic~~of ~~leases~~stockholders’ equity. This investment is included in other assets in the accompanying consolidated balance sheets.

~~Item~~The Company also had an investment in a Variable Interest Entity (“VIE”), Three Lions, which has liquidated and was dissolved on January 830, 2015. ~~Financial~~VIEs ~~Statements~~are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest, and/or ~~Supplementary~~(ii) do ~~Data~~not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary, and is generally the entity with (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

Description	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2012 and 2011		F-2
Consolidated Statements of Operations for the Years Ended December 31, 2012 and 2011		F-3
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2012 and 2011		F-4
Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 2012 and 2011		F-5
Consolidated Statements of Cash Flows for the Years ended December 31, 2012 and 2011		F-6
Notes to Consolidated Financial Statements		F-7

Recently Issued Accounting Standards

~~Item~~In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 92014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40). ~~Changes~~The amendments in ~~and~~this ~~Disagreements~~ASU ~~with~~provide ~~Accountants~~guidance onabout management’s ~~Accounting~~responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and ~~Financial~~to provide related footnote disclosures. ASU No. 2014-15 is effective for the Company beginning ~~Disclosure~~January 1, 2016. The Company does not expect the adoption of this ASU to significantly impact the Company’s consolidated statements of financial position or results of operations.

~~None.~~Results of Operations

Operations consist of activities ~~Item 9A~~required to maintain the Company’s current corporate infrastructure that will enable the Board of Directors to pursue various alternative courses of action going forward. ~~Controls~~Operational costs primarily consist of the salaries and ~~Procedures~~benefits of executive management and corporate finance staff, professional fees, board of director fees, and space and facility costs.

~~Evaluation~~2014 ofCompared ~~Disclosure~~to ~~Controls and Procedures~~ 2013

AsThere ofwere ~~December 31,~~no ~~2012,~~revenues ~~the~~during ~~Company~~2014 ~~evaluated the effectiveness~~ and ~~design and operation of its disclosure controls and procedures~~2013. The Company’s disclosure controls and procedures are the controls and other procedures that the Company designed to ensure that it records, processes, summarizes, and reports in a timely manner the information that it must disclose in reports that the Company files with or submits to the Securities and Exchange Commission. Greg Mays, the principal executive officer and principal financial officer, reviewed and participated in this evaluation. Based on this evaluation, the Company made the determination that its disclosure controls were effective.

9General and administrative expenses totaled $1.0 million in 2014 compared to $1.1 million in 2013. The decrease is primarily due to a decrease in professional fees.

~~Table~~Interest ofincome ~~Contents~~totaled $1,000 in 2014 compared to $3,000 in 2013. The decrease is primarily due to reductions in average cash balances in 2014 when compared to 2013.

~~Report~~Other income totaled $294,000 in 2014 compared to $217,000 in 2013. The increase is primarily due to the Company providing limited accounting services to Three Lions for four additional months during 2014 when compared to 2013. Because of ~~Management~~Three onLions’ ~~Internal~~liquidation, ~~Control~~this ~~Over~~arrangement ~~Financial~~has ~~Reporting~~ended. The Company also provided limited accounting and administrative services to a company controlled by the Company’s largest shareholder during 2014 and 2013. This arrangement entails providing these services through an undetermined end date, including payments totaling approximately $36,000 for the first quarter of 2015. The Company does not consider this arrangement to be part of its recurring operations.

~~The~~9 management of the Company is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Internal control over financial reporting is the process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

ThereTable are inherent limitations in the effectiveness of internal control over financial reporting, including the possibility that misstatements may not be prevented or detected. Accordingly, even effective internal controls over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Furthermore, the effectiveness of internal controls can change as circumstances change. Contents

~~Management~~Equity ~~has~~in ~~evaluated~~loss ~~the effectiveness~~ of ~~internal~~Three ~~control~~Lions ~~over financial reporting as of December 31~~Entertainment, ~~2012,~~LLC ~~using~~totaled ~~criteria~~$6.0 ~~described~~million ~~in Internal~~for ~~Control —~~2014 ~~Integrated~~compared ~~Framework~~to ~~issued~~$2.7 bymillion ~~the~~for ~~Committee~~2013. The ofincrease ~~Sponsoring~~is ~~Organizations~~primarily ofdue ~~the~~to ~~Treadway~~losses ~~Commission~~incurred ~~(“COSO”).~~from ~~Based~~Three ~~on management~~Lion’s ~~assessment,~~initial ~~management~~Fashion ~~concluded~~RocksTM ~~that~~broadcast ~~the~~on ~~Company’s internal control over financial reporting was effective as of December~~September 319, ~~2012~~2014.

~~Changes~~Stock inRights ~~Internal~~Offering ~~Control Over Financial Reporting~~

~~During~~On October 1, 2013, we completed a rights offering of common stock to our stockholders (the ~~Company’s~~“Rights ~~fourth~~Offering”). ~~fiscal~~The ~~quarter~~Rights Offering was fully subscribed and ~~since~~resulted ~~the~~in ~~date~~net proceeds of ~~the~~approximately ~~evaluation~~$4.2 ~~noted~~million. ~~above,~~We ~~there~~issued ~~have~~23,854,680 ~~not~~shares ~~been~~of ~~any~~stock ~~significant~~to ~~changes~~our stockholders in conjunction with the Rights Offering. In connection with the Rights Offering, Overseas Toys, the Company’s ~~internal~~majority ~~controls~~shareholder, orexercised inall ~~other~~of ~~factors~~the rights issued to it and subscribed for the maximum additional shares pursuant to the over-subscription privilege that ~~could~~it ~~significantly~~was ~~affect~~entitled ~~those~~to ~~controls~~purchase.

~~Item 9B. Other~~Liquidity ~~Information~~and Capital Resources

~~None~~The lack of any operating revenue has had and will continue to have a substantial adverse impact on the Company’s cash position. The Company incurred losses in 2014 and continues to incur losses in 2015 for the general and administrative expenses incurred to manage the affairs of the Company. Inasmuch as the Company no longer generates operating income, the source of current and future working capital is expected to be cash on hand, proceeds from the sale of its remaining long-term investment, and a short-term funding commitment from its largest shareholder. Management believes it has sufficient capital resources and liquidity to operate the Company for at least one year.

10The Board of Directors has considered various alternative courses of action for the Company, including possibly acquiring or combining with one or more operating businesses. The Board of Directors has reviewed and analyzed a number of proposed transactions. On March 22, 2013, the Company announced in a current report on Form 8-K that it, together with Richard Beckman, Joel Katz and OA3 had entered into the LLC Agreement Three Lions. Pursuant to the LLC Agreement, the Company made an initial capital contribution of $3.15 million with respect to membership units representing 60% of the voting power of Three Lions. The membership units received by the Company represent a 60% interest in the economic returns of Three Lions, including certain preferences with respect to common holders on operating returns and on a liquidation or sale of Three Lions. The Company made a second capital contribution to Three Lions in the amount of $1.85 million on April 26, 2013. The Company made a third and final capital contribution to Three Lions of $3.5 million on October 2, 2013.

~~Table~~Three Lions held its initial Fashion RocksTM broadcast on September 9, 2014 and experienced a ratings performance well below expectations. As a result of ~~Contents~~the poor ratings and sponsorship revenue that fell well short of projections, Three Lions recorded unanticipated losses of $7.5 million in connection with the broadcast. Three Lions sought out new financing sources to provide the necessary funding for Three Lions next production, but was not successful and unable to secure a new source of working capital. In a meeting held on October 27, 2014, and after reviewing financial information and projections provided by Three Lions and its advisors, the Executive Board of Three Lions considered and unanimously approved a plan proposed by Three Lions’ management, with the assistance of its advisors, to proceed with the voluntary liquidation and dissolution of Three Lions in accordance with Delaware law. On January 30, 2015, Three Lions was dissolved with the filing of its Certificate of Cancellation with the state of Delaware. No amounts were distributed to the Company or to the other members of Three Lions in the liquidation.

~~PART III~~Accordingly, we have suffered the loss of our entire $8.5 million capital investment in Three Lions. We also lost our $199,583 cash collateralized bank letter of credit that we provided to support payments on an office lease obtained by Three Lions, and we incurred additional legal and other professional fees and associated costs in connection with Three Lions’ liquidation totaling approximately $20,000. These losses have had and will continue to have a material adverse effect on our business, financial condition, results of operations and prospects.

~~Item 10.~~Working ~~Directors~~capital at December 31, ~~Executive~~2014 ~~Officers~~and 2013 was $1.0 million and ~~Corporate~~$1.9 ~~Governance~~million, respectively.

~~The~~Net ~~Company’s~~cash ~~certificate~~used ofin ~~incorporation~~operating ~~provides~~activities ~~that~~during ~~the~~2014 ~~number~~and of2013 ~~directors~~totaled ~~shall~~$.6 bemillion ~~determined~~and ~~from~~$1.1 ~~time~~million, torespectively. ~~time~~The bycash ~~the~~used ~~Board~~in ofoperating ~~Directors~~activities ~~(but~~during ~~shall~~2014 bewas noprimarily ~~less~~due ~~than~~to ~~three~~a ~~and~~loss nofrom ~~more~~operations ~~than~~resulting ~~fifteen)~~from the general and ~~that~~administrative expenses to manage the ~~Board~~affairs of ~~Directors~~the ~~shall~~Company bepartially ~~divided~~offset ~~into~~by ~~three~~equity ~~classes.~~in ~~The~~the ~~size~~losses of the Company’s ~~Board~~Three ofLions ~~Directors~~investment, isa ~~six~~decrease ~~members~~in restricted cash, and changes in working capital items. ~~Overseas~~The ~~Toys,~~cash ~~the~~used ~~Company’s~~in ~~controlling~~operating ~~shareholder, had~~activities ~~the~~during ~~right~~2013 was primarily due to ~~designate~~a ~~three~~loss ~~individuals~~from operations resulting from the general and administrative expenses to manage the ~~Board~~affairs of ~~Directors~~the Company and toan increase ~~designate~~in restricted cash partially offset by equity in the ~~chairman~~loss of ~~the~~Three ~~board~~Lions.

In10 accordance with the Company’s Restated Certificate of Incorporation filed with the state of Delaware on September 18, 2008, Overseas Toys may designate 70% of the members of the Board of Directors, rounded up or down to the nearest director, and such percentage is limited to 70% even in the case of additional stock purchases by Overseas Toys. The designees of Overseas Toys currently serving on the Board of Directors are Ira Tochner, Bradford Nugent, and Greg Mays.

TheTable following table sets forth the names and ages of the Directors, and the years in which each individual has served as a director: Contents

Name	Age	Class	Year TermExpires	Service as Director
Joseph W. Bartlett	79	I	2009	1993 to present
Allan I. Brown	72	I	2009	1999 to present
Greg Mays	66	II	2010	2004 to present
Bradford Nugent	33	II	2010	2009 to present
Ira Tochner	51	II	2010	2006 to present
Terrence Wallock	68	III	2008	2006 to present

There was no cash provided by investing activities during 2014. Net cash used in investing activities during 2013 totaled $8.7 million due to the Company’s payments for acquiring membership units in Three Lions.

NoThere ~~stockholders~~was ~~meeting~~no tocash ~~elect~~provided ~~directors~~by ~~has~~financing ~~been~~activities during ~~held~~2014. ~~since~~Net ~~2007~~cash provided by financing activities during 2013 totaled $4.2 Inmillion ~~accordance~~primarily ~~with~~due ~~Delaware~~to ~~law~~cash ~~and~~received ~~the Company’s~~from ~~by-laws,~~an ~~the~~issuance ~~directors’~~of ~~terms~~common ~~continue~~stock ~~until~~net ~~their~~of ~~successors~~issuance ~~are~~costs ~~elected~~pursuant ~~and~~to ~~qualified~~the Rights Offering.

~~There~~The ~~were~~Company ~~four~~may ~~meetings~~be involved in other litigation and legal matters from time to time in the ordinary course of business in which it is the plaintiff. The ~~Board~~Company does not believe that the ultimate resolution of ~~Directors~~these ~~held~~other ~~during~~litigation ~~2012~~and legal matters, if any, will have a material adverse effect on its financial condition, results of operations, or net cash flows. However, the results of legal proceedings cannot be predicted with certainty. During 2014, there were no litigation or legal matters settled. Thus, there was no impact on the Company’s financial condition, results of operations, or net cash flows.

~~Business~~Off-Balance ~~History~~Sheet ofArrangements ~~Directors and Executive Officers~~

~~Mr. Bartlett~~The ~~has served as a director of the~~ Company ~~since~~has ~~1993 due to his experience in venture capital, corporate restructurings, mergers and~~no ~~acquisitions,~~off-balance ~~and~~sheet corporate governance matters. He is also currently engaged in the private practice of law as of counsel to the law firm of Sullivan & Worcester LLP. He was of counsel to the law firm of Sonnenschein Nath & Rosenthal LLP from February 2008 through September 2008arrangements, ~~and~~investments ~~he was of counsel to the law firm of Fish & Richardson, P.C. from 2003 through January 2008. From 1996 through 2002, Mr. Bartlett was a partner~~ in ~~the~~special ~~law~~purpose ~~firm of Morrison & Foerster LLP. He was a partner in the law firm of Mayer~~entities, ~~Brown &~~or ~~Platt~~undisclosed ~~from~~borrowings ~~July~~or ~~1991 until March 1996~~debts. ~~From~~In ~~1969 until November 1990~~addition, ~~Mr. Bartlett was a partner of, and from November 1990 until June 1991 he was of counsel to,~~ the ~~law~~Company ~~firm~~has ofno ~~Gaston &~~derivative ~~Snow.~~contracts ~~Mr. Bartlett~~or ~~served~~synthetic ~~as Under Secretary of the United States Department of Commerce from 1967 to 1968 and as law clerk to the Chief Justice of the United States in 1960~~leases.

~~Mr. Brown~~Item ~~has served as a director of the Company since 1999 due to his marketing, strategic planning, and executive experience~~8. HeFinancial ~~was~~Statements ~~the Company’s chief executive officer~~ and ~~president~~Supplementary from July 2001 until March 2002 when his employment with the Company terminated. From November 1999 to July 2001, Mr. Brown served as the Company’s co-chief executive officer and co-president. From November 1975 until March 2002, Mr. Brown served as the chief executive officer of Simon Marketing. Data

Mr. Mays has been the Company’s Chief Executive Officer since October 2008, Chief Financial Officer since May 2003, and a director of the Company since May 2004. Mr. Mays brings to the board of directors


Description		Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2014 and 2013		F-2
Consolidated Statements of Operations for the Years Ended December 31, 2014 and 2013		F-3
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2014 and 2013		F-4
Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 2014 and 2013		F-5
Consolidated Statements of Cash Flows for the Years ended December 31, 2014 and 2013		F-6
Notes to Consolidated Financial Statements		F-7

11Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

~~Table~~None. ~~of Contents~~

~~considerable~~Item ~~operational experience in corporate restructurings, mergers and acquisitions, and corporate finance~~9A. ~~Beginning~~ inControls ~~2001, Mr. Mays liquidated the business components of the Company. Since 2000, Mr. Mays has had a private consulting practice, specializing in management~~ and company reorganization. During that period of time, he has been Chairman and Chief Executive Officer of three different public companies and one private company, all requiring various levels of restructuring. Most recently, Mr. Mays served as Chairman and Chief Executive Officer of Source Interlink Companies from October 2008 to August 2010. In 2006 and 2007, Mr. Mays served as Chairman and Chief Executive Officer of Wild Oats, which was subsequently acquired by Whole Foods in September 2007. Prior to that, he worked under an umbrella of equity companies in a very active merger and acquisition environment. Specializing in the supermarkets retail business, Mr. Mays held numerous executive positions in the acquired supermarket companies all of which had an emphasis of improving shareholder value with the exit strategy to realize value to all stakeholders. Mr. Mays is currently a director of the Great Atlantic and Pacific Tea Company, Source Interlink Companies, and Americold Realty Trust. Procedures

~~Mr. Nugent~~Evaluation ~~joined The Yucaipa Companies (“Yucaipa”) in 2005. Prior to joining Yucaipa, he was a member~~ of ~~the~~Disclosure ~~Leveraged~~Controls Finance Group at CIBC World Markets in addition to serving as an Investment Associate at Flag Capital Management, a multi-strategy hedge fund. Mr. Nugent has served as a director of the Company since 2009 due to his extensive experience in venture capital and ~~corporate~~Procedures ~~finance. Mr. Nugent currently serves on several boards of Yucaipa investments, including AFA Foods, Inc. and is actively involved in originating, structuring and executing Yucaipa investments.~~

~~Mr.~~As of December ~~Tochner~~31, ~~has~~2014, ~~served~~the asCompany aevaluated ~~member~~the ofeffectiveness ~~our~~and ~~board~~design and operation of ~~directors~~its ~~since~~disclosure ~~2006~~controls and ~~has~~procedures. ~~served~~The asCompany’s disclosure ~~the~~controls ~~chairman~~and ofprocedures ~~our~~are ~~board~~the ofcontrols ~~directors~~and ~~since~~other ~~2006. Mr. Tochner~~procedures ~~provides~~that the Company ~~with~~designed ~~extensive experience~~to inensure ~~mergers~~that ~~and~~it ~~acquisitions~~records, ~~strategic~~processes, ~~planning~~summarizes, and ~~corporate~~reports ~~finance~~in a timely manner the information that it must disclose in reports that the Company files with or submits to the Securities and ~~accounting~~Exchange Commission. ~~Mr. Tochner~~ isGreg ~~also~~Mays, athe ~~partner~~principal atexecutive ~~Yucaipa.~~officer, Inand ~~addition~~Anthony toEspiritu, ~~serving~~the onprincipal ~~our~~financial ~~board~~officer of ~~directors~~the Company, ~~Mr. Tochner~~reviewed ~~serves~~and asparticipated ain ~~director~~this ofevaluation. ~~Allied~~Based on this ~~Holdings~~evaluation, ~~Inc.~~the principal executive and ~~trustee~~principal financial officers of ~~Americold~~the ~~Realty~~Company ~~Trust~~concluded that the Company’s disclosure controls and procedures were effective.

~~Mr. Wallock~~11 is an attorney, consultant, and private investor. He serves as the Company’s secretary and acting general counsel and has served as a director of the Company since 2006 due to his considerable experience in corporate restructurings, mergers and acquisitions, and corporate governance matters. Prior to engaging in a consulting and private legal practice in 2000, he served a number of public companies as senior executive and general counsel, including Denny’s Inc., The Vons Companies, Inc., and Ralphs Grocery Company. Mr. Wallock also serves on the Board of Trustees of Americold Realty Trust and on the Board of Managers of New Market Impressions LLC and TEN Media LLC. He previously served on the Board of Directors of the Great Atlantic and Pacific Tea Company.

TheTable Company’sof ongoing operations are managed by Greg Mays, Chief Executive Officer and Principal Financial Officer, in consultation with Terry Wallock, the Company’s acting general counsel. Contents

~~Board~~Report ~~Committees~~of Management on Internal Control Over Financial Reporting

The ~~Board~~management ~~has~~of ~~two~~the ~~standing~~Company ~~committees:~~is anresponsible ~~Audit~~for ~~Committee~~establishing and amaintaining ~~Compensation~~adequate ~~Committee.~~internal ~~The~~control ~~members~~over ofthe ~~each~~Company’s ~~committee~~financial ~~are~~reporting ~~appointed~~as bydefined in ~~the~~Rules 13a-15(f) ~~Board~~ and ~~are noted~~15d-15(f) ~~below.~~under ~~Actions~~the ~~taken~~Securities byExchange ~~any~~Act ~~committee~~ of ~~the~~1934. ~~Board~~Internal ~~are~~control ~~reported~~over tofinancial ~~the~~reporting ~~Board,~~is ~~usually at~~ the ~~next~~process ~~Board~~designed ~~meeting~~to ~~following~~provide areasonable ~~committee~~assurance ~~meeting.~~regarding ~~Each~~the ~~standing~~reliability ~~committee~~of isfinancial ~~governed~~reporting byand athe ~~committee-specific charter that is reviewed periodically by~~preparation of the ~~applicable~~Company’s ~~committee~~financial ~~pursuant~~statements tofor ~~the~~external ~~rules~~purposes ~~set forth~~ in ~~each~~accordance ~~charter.~~with ~~The~~accounting ~~two~~principles ~~members~~generally ofaccepted ~~the~~in ~~Audit Committee and~~ the ~~two~~United ~~members~~States of ~~the Compensation Committee are independent directors~~America.

~~The~~There ~~Audit~~are ~~Committee~~inherent limitations in the effectiveness of internal control over financial reporting, including the possibility that misstatements may not be prevented or detected. Accordingly, even effective internal controls over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Furthermore, the effectiveness of internal controls can change as circumstances change.

~~The~~Management ~~Audit~~has ~~Committee~~evaluated ~~members are Messrs. Bartlett (chairman) and Brown. Messrs. Bartlett and Brown meet~~ the ~~independence~~effectiveness ~~requirements~~of ~~promulgated~~internal bycontrol ~~the~~over ~~SEC.~~financial ~~The~~reporting ~~Audit~~as ~~Committee’s~~of ~~oversight~~December 31, ~~responsibilities~~2014, ~~include~~using criteria ~~matters~~described ~~relating~~in toInternal ~~the~~Control — ~~Company’s~~Integrated ~~financial~~Framework ~~disclosure~~issued ~~and~~by ~~reporting process, including~~ the ~~system~~Committee of ~~internal~~Sponsoring ~~controls,~~Organizations of the ~~performance~~Treadway ofCommission an(“COSO”). ~~internal~~Based ~~audit~~on ~~function~~management’s assessment, ~~compliance~~management ~~with~~concluded ~~legal~~that ~~and~~the Company’s ~~regulatory~~internal ~~requirements,~~control ~~and~~over ~~the~~financial ~~appointment~~reporting ~~and~~was ~~activities~~effective as of ~~the~~December 31, ~~Company’s independent auditors~~2014.

12Changes in Internal Control Over Financial Reporting

~~Table~~During the Company’s fourth fiscal quarter and since the date of ~~Contents~~the evaluation noted above, there have not been any significant changes in the Company’s internal controls or in other factors that could significantly affect those controls.

~~The~~Item Audit Committee does not currently have a “financial expert,” as defined in the rules of the Securities and Exchange Commission, and required under rules applicable to national stock exchanges because the Company is no longer listed on a national stock exchange9B. OnOther May 3, 2002, the Company’s stock was delisted by Nasdaq due to the fact that the Company’s stock was trading at a price below the minimum Nasdaq requirement. In the event the Company should ever qualify and seek relisting, the Company would be required to have an audit committee financial expert. The Audit Committee held four meetings during 2012. Information

~~The~~None. ~~Compensation Committee~~

~~The~~12 Compensation Committee members are Messrs. Bartlett and Brown (chairman). Messrs. Bartlett and Brown meet the independence requirements promulgated by the SEC. The Compensation Committee’s responsibilities include the discharge of the Board’s responsibilities relating to the compensation of the Company’s directors, officers, and key employees, the administration of any incentive compensation and stock plan, the review and recommendation to the Board of the Company’s Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, and the production of an annual report on executive compensation for inclusion in the Company’s proxy statement or 10-K in accordance with applicable rules and regulations. While there were no meetings held by the Compensation Committee during 2012, the full Board acted on compensation matters by unanimous written consent once during 2012.

NominatingTable Committeeof Contents

~~The~~PART III Company does not have a standing nominating committee or a committee performing similar functions. Given the status of the Company’s operations and the Company’s belief that it has benefited from having a board composed of individuals familiar with the Company’s operations, the Company has not found it necessary to obtain nominees from outside its Board of Directors.

~~Section 16(a)~~Item ~~Beneficial~~10. ~~Ownership~~Directors, ~~Reporting~~Executive ~~Compliance~~Officers and Corporate Governance

~~Section 16(a)~~The ~~of the Exchange Act requires the~~ Company’s ~~directors,~~certificate ~~executive officers and holders~~ of ~~more~~incorporation provides ~~than~~that ~~10% of~~ the ~~Company’s~~number ~~common~~of ~~stock~~directors onshall anbe ~~as-converted~~determined ~~basis~~from ~~(collectively,~~time ~~“Reporting Persons”)~~ to ~~file~~time ~~with~~by the ~~SEC~~Board ~~initial reports~~ of ~~ownership~~ ~~and~~Directors ~~reports~~(but ofshall ~~changes~~be inno ~~ownership~~less ofthan ~~common~~three ~~stock~~and ofno ~~the~~more ~~Company.~~than ~~Such~~fifteen) ~~persons~~and ~~are~~that ~~required~~the byBoard ~~regulations~~ of ~~the~~Directors ~~SEC~~shall tobe ~~furnish~~divided ~~the~~into ~~Company~~three ~~with copies of all such filings~~classes. ~~Based~~The onsize ~~its review~~ of the ~~copies of such filings received by~~ ~~it with respect to the fiscal year ended December 31, 2012, and written representations from certain Reporting Persons, the~~ Company’s ~~believes~~Board ~~that~~of ~~all~~Directors ~~Reporting~~is ~~Persons~~six ~~complied with all Section 16(a) filing requirements in the fiscal year ended December 31, 2012~~members.

~~Code~~In accordance with Article XII of ~~Ethics~~the Company’s Restated Certificate of Incorporation filed with the state of Delaware on September 18, 2008, Overseas Toys, the Company’s controlling shareholder, had the right to designate up to 70% of the members of the Board of Directors and to designate the chairman of the board. Although the provisions of Article XII have since expired and are no longer in effect, the designees of Overseas Toys who were designated pursuant to such provisions and who are currently serving on the Board of Directors are Ira Tochner, Bradford Nugent, and Greg Mays.

The ~~Company~~following ~~has~~table ~~adopted~~sets aforth ~~code~~the ofnames ~~ethics~~and ~~applicable~~ages toof ~~all~~the ~~directors~~Directors, ~~officers,~~ and ~~employees~~the ~~which~~years isin ~~designed~~which toeach ~~deter~~individual ~~wrongdoing~~has ~~and~~served toas ~~promote honest and ethical conduct and compliance with applicable laws and regulations. The Company undertakes to provide~~ a ~~copy~~director: ~~to any person without charge upon written request.~~

Item 11. Executive Compensation


Name	Age	Class	Year Term Expires	Service as Director
Joseph W. Bartlett	81	I	2009		1993 to present

Allan I. Brown	74	I	2009		1999 to present

Greg Mays	68	II	2010		2004 to present

Bradford Nugent	35	II	2010		2009 to present

Ira Tochner	53	II	2010		2006 to present

Terrence Wallock	70	III	2008		2006 to present

~~Compensation~~No ~~Discussion~~stockholders meeting to elect directors has been held since 2007. In accordance with Delaware law and ~~Analysis~~the Company’s by-laws, the directors’ terms continue until their successors are elected and qualified.

~~Overview~~ There were five meetings of the Board of Directors held during 2014.

~~The~~Business ~~principal~~History ~~responsibilities~~ of ~~the~~Directors ~~Compensation~~and ~~Committee~~Executive ~~are:~~Officers

•Mr. Bartlett has served as a director of the Company since 1993 due to ~~discharge~~his experience in venture capital, corporate restructurings, mergers and acquisitions, and corporate governance matters. He is also currently engaged in the ~~Board~~practice of ~~Directors’~~law ~~responsibilities~~as ~~relating~~Special Counsel at McCarter & English, LLP, he has been of counsel to the ~~compensation~~law firm of Sullivan & Worcester LLP from February 2008 to May of 2013. He was of counsel to the ~~Company’s~~law ~~directors~~firm of Sonnenschein Nath & Rosenthal LLP from February 2008 through September 2008, ~~officers~~and he was of counsel to the law firm of Fish & Richardson, P.C. from 2003 through January 2008. From 1996 through 2002, Mr. Bartlett was a partner in the law firm of Morrison & Foerster LLP. He was a partner in the law firm of Mayer, Brown & Platt from July 1991 until March 1996. From 1969 until November 1990, Mr. Bartlett was a partner of, and ~~key~~from ~~employees;~~November 1990 until June 1991 he was of counsel to, the law firm of Gaston & Snow. Mr. Bartlett served as Under Secretary of the United States Department of Commerce from 1967 to 1968 and as law clerk to the Chief Justice of the United States in 1960.

•Mr. Brown has served as a director of the Company since 1999 due to behis ~~responsible~~marketing, strategic ~~for~~planning, and executive experience. He was the ~~administration~~Company’s ofchief ~~any~~executive ~~incentive~~officer ~~compensation~~and president from July 2001 until March 2002 when his employment with the Company terminated. From November 1999 to July 2001, Mr. Brown served as the Company’s co-chief executive officer and ~~stock~~co-president. ~~plans;~~From November 1975 until March 2002, Mr. Brown served as the chief executive officer of Simon Marketing.

13Mr. Mays has served as the Company’s Chief Executive Officer since October 2008 and a Director since May 2004. Mr. Mays’ professional background includes over 40 years of executive management experience in a variety of industries. In the last 14 years, Mr. Mays’ primary focus has been the executive management of companies that investors have classified the business within a “special situation” portfolio. In addition, Mr. Mays currently serves as Chairman of The Great Atlantic &

~~Table~~13 ~~of Contents~~

•Table to be responsible for the review and recommendation to the Board of Directors of the Company’s Compensation Discussion and Analysis; andContents

• Pacific toTea beCompany, ~~responsible~~Americold ~~for~~Realty ~~the~~Trust, ~~production~~and Source Home Entertainment and as a Director of anSource ~~annual~~Media ~~report~~Holdco. onMr. Mays ~~executive~~also is the Chairman of the compensation committees for Americold ~~inclusion~~Realty inTrust and Source Media Holdco and a member of the ~~Company’s~~audit ~~proxy~~committees ~~statement~~for orAmericold ~~Form~~Realty ~~10-K,~~Trust asand ~~applicable~~The Great Atlantic & Pacific Tea Company.

~~Compensation~~Mr. Nugent ~~Philosophy~~is a Partner at The Yucaipa Companies and ~~Objectives~~ is active in sourcing and executing investment opportunities, structuring financing for investments, and monitoring portfolio company performance and strategic initiatives focusing primarily on the consumer and hospitality space. Prior to joining the Firm in 2005, Mr. Nugent served as an Associate of Flag Capital Management, a multi-strategy hedge fund with over $3 billion in commitments. Previously, Mr. Nugent completed the analyst program in the Leveraged Finance and Sponsor Coverage group at CIBC World Markets, consummating several leveraged transactions in various industries. Mr. Nugent received his BA with honors from Columbia College in New York City.

~~The~~Mr. Tochner ~~Compensation~~has ~~Committee~~served as a member of our board of directors since 2006 and has ~~tried~~served toas ~~structure~~the ~~compensation~~chairman of our board of directors since 2006. Mr. Tochner provides the Company with extensive experience in mergers and acquisitions, strategic planning, and corporate finance and accounting. Mr. Tochner is also a partner at Yucaipa. In addition to: serving on our board of directors, Mr. Tochner serves as a trustee of Americold Realty Trust and as a director of Wild Oats Marketing, Aquahydrate and TEN Media.

•Mr. Wallock ~~provide~~is ~~competitive~~an ~~compensation~~attorney, ~~that~~consultant, ~~will~~and ~~attract~~private investor. He serves as the Company’s secretary and ~~retain~~acting ~~qualified~~general ~~officers~~counsel and ~~key~~has ~~employees;~~served as a director of the Company since 2006 due to his considerable experience in corporate restructurings, mergers and acquisitions, and corporate governance matters. Prior to engaging in a consulting and private legal practice in 2000, he served a number of public companies as senior executive and general counsel, including Denny’s Inc., The Vons Companies, Inc., and Ralphs Grocery Company. Mr. Wallock also serves on the Board of Trustees of Americold Realty Trust, the Board of Managers of New Market Impressions LLC and TEN Media LLC, and the Board of Directors of the Great Atlantic and Pacific Tea Company. He previously served on the Board of Directors of Source Interlink Companies.

•Mr. Espiritu ~~reward~~is ~~officers~~a Certified Public Accountant and ~~key~~has ~~employees~~over 20 years’ experience in accounting, financial reporting, and auditing. He has served as the Company’s Chief Financial Officer since 2013 and controller from 2004 to 2013. As controller, he had been responsible for ~~their~~the ~~contributions~~day-to-day management of the Company’s and its subsidiaries’ accounting and finance operations, Sarbanes-Oxley compliance, and preparation of quarterly and annual filings with the Securities and Exchange Commission. Mr. Espiritu has also managed the accounting services provided by the Company to Wild Oats Marketing, LLC, the owner of the Wild Oats organic foods brand and an entity controlled by the Company;’s largest shareholder, since 2012, and to Three Lions from 2013 to 2015. Commencing in 2015, Mr. Espiritu began managing the accounting services provided to VodkaCo, LLC, another entity controlled by the Company’s largest shareholder, which is owner of the 50 Bleu brand of vodka. Earlier in his career, Mr. Espiritu served as the financial reporting manager of the Company and held auditing positions at Deloitte & Touche and Transamerica Corporation.

•The ~~align officers~~Company’s ongoing operations are managed by Greg Mays, Chief Executive Officer, and Anthony ~~key~~Espiritu, ~~employees’~~Principal ~~interests~~Financial Officer, in consultation with Terry Wallock, the ~~interests~~Company’s ofacting ~~shareholders~~general counsel.

~~The~~Board ~~Compensation Committee endeavors to achieve these objectives while at the same time providing for administrative costs to be as low as possible.~~Committees

~~Setting~~The ~~Executive~~Board has two standing committees: an Audit Committee and a Compensation Committee. The members of each committee are appointed by the Board and are noted below. Actions taken by any committee of the Board are reported to the Board, usually at the next Board meeting following a committee meeting. Each standing committee is governed by a committee-specific charter that is reviewed periodically by the applicable committee pursuant to the rules set forth in each charter. The two members of the Audit Committee and the two members of the Compensation Committee are independent directors.

The ~~Company~~Audit ~~did not make any change to the compensation arrangements existing prior to the beginning of 2012 for the Company’s executive officers, as the Compensation~~ Committee ~~determined that the existing arrangements were structured to achieve the key objectives outlined above, which the Compensation Committee believes will ultimately enhance shareholder value.~~

InThe ~~establishing~~Audit ~~the~~Committee ~~compensation~~members ~~arrangements~~are Messrs. ~~that~~Bartlett ~~were~~(chairman) ~~continued~~and inBrown. ~~2012,~~Messrs. ~~the~~Bartlett ~~Compensation~~and ~~Committee~~Brown ~~considered~~meet ~~various~~the ~~factors~~independence inrequirements ~~determining~~promulgated by the ~~amount~~SEC. ofThe ~~compensation,~~Audit ~~including wind-down of the Company~~Committee’s ~~former~~oversight ~~promotions business operations, additional~~ responsibilities ~~and~~include ~~potential~~matters ~~liabilities~~relating ~~assumed resulting from the Sarbanes-Oxley Act of 2002, the completion of projects critical~~ to the Company’s ~~long-term~~financial ~~success,~~ disclosure and ~~the Company’s~~reporting ~~need to retain experienced executives~~process, ~~knowledgeable~~including ~~about~~ the ~~Company~~system ~~for~~of ~~ongoing~~internal ~~administration~~controls, asthe ~~well~~performance asof ~~future~~an ~~opportunities.~~internal ~~These~~audit ~~factors~~function, ~~however,~~compliance ~~were~~with ~~not~~legal ~~assigned~~and ~~individual~~regulatory ~~mathematical~~requirements, ~~weights~~and ~~when~~ the ~~Compensation Committee~~appointment ~~made such determinations,~~ and ~~therefore,~~activities ~~such~~of ~~determinations were based on~~ the ~~Compensation Committee~~Company’s ~~judgment~~independent ~~as to what is reasonable and appropriate~~auditors. While the Compensation Committee considered general market trends in setting compensation levels under the Executive Services Agreements, it did not benchmark compensation levels to specific companies.

~~2012~~The Audit Committee does not currently have a “financial expert,” as defined in the rules of the Securities and Exchange Commission, and required ~~Executive~~under ~~Compensation~~rules ~~Components~~ applicable to national stock exchanges because the Company is no longer listed on a

As14 detailed below under the title “Executive Services Agreements with Officers,” the agreement that the Company has entered into with its remaining executive officer is terminable on 90 days notice by either the Company or Greg Mays. During any such notice period or for the time with respect to which an equivalent payment is made, the executive is entitled to receive health benefits from the Company and provide for mutual releases upon termination. The Company believes that it has structured its post-termination payments so as to be able to attract needed talent, but to minimize the magnitude of its post-termination financial obligations. Given that the Company currently has no operating business, the Compensation Committee has structured compensation pursuant to the Executive Services Agreement to consist exclusively of cash compensation, paid currently.

TheTable Company has historically made equity awards to its directors and executive officers, though did not make any such awards in 2012 as the Compensation Committee believed that the key objectives of compensation outlined above were more appropriately satisfied by cash compensation, paid currently, pending a refocus of the Company’s business. The Company does not have any program, plan, or practice of timing option grants to its executives in coordination with the release of material non-public information and did not have any such program, plan, or practice during 2012. Contents

14 national stock exchange. On May 3, 2002, the Company’s stock was delisted by NASDAQ due to the fact that the Company’s stock was trading at a price below the minimum NASDAQ requirement. In the event the Company should ever qualify and seek relisting, the Company would be required to have an audit committee financial expert. The Audit Committee held four meetings during 2014.

~~Table~~The ofCompensation ~~Contents~~Committee

The Compensation Committee members are Messrs. Bartlett and Brown (chairman). Messrs. Bartlett and Brown meet the independence requirements promulgated by the SEC. The Compensation Committee’s responsibilities include the discharge of the Board’s responsibilities relating to the compensation of the Company’s ~~has~~directors, ~~not~~officers, ~~formally~~and ~~adopted~~key employees, the administration of any ~~stock~~incentive ~~ownership~~compensation orand stock ~~retention guidelines~~plan, inthe ~~part~~review ~~due~~and recommendation to the Board of the Company’s Compensation Discussion and ~~illiquid~~Analysis ~~nature~~required by Item 402(b) of Regulation S-K, and the production of an annual report on executive compensation for inclusion in the Company’s ~~stock~~proxy statement or 10-K in accordance with applicable rules and regulations. There were no meetings held by the Compensation Committee during 2014.

~~The~~Nominating ~~Company~~Committee believes that its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company because none of its compensation policies and practices reward risk taking by its directors, officers, and employees.

~~Tax~~The Company does not have a standing nominating committee or a committee performing similar functions. Given the status of the Company’s operations and the ~~Accounting~~Company’s ~~Implications~~ belief that it has benefited from having a board composed of individuals familiar with the Company’s operations, the Company has not found it necessary to obtain nominees from outside its Board of Directors.

~~Deductibility~~Section 16(a) ofBeneficial ~~Executive~~Ownership ~~Compensation:~~ Reporting Compliance

AsSection 16(a) ~~part~~ of ~~its~~the ~~role,~~Exchange Act requires the ~~Compensation~~Company’s ~~Committee~~directors, ~~reviews~~executive officers and ~~considers~~holders ~~the~~of ~~deductibility~~more than 10% of ~~executive~~the ~~compensation~~Company’s ~~under~~common ~~Section 162~~stock on an as-converted basis (mcollectively, “Reporting Persons”) ofto file with the ~~Internal~~SEC ~~Revenue~~initial ~~Code,~~reports ~~which~~of ~~provides~~ownership ~~that~~and reports of changes in ownership of common stock of the Company. ~~may~~Such ~~not~~persons ~~deduct~~are ~~compensation~~required by regulations of ~~more~~the ~~than~~SEC ~~$1,000,000~~to furnish ~~that~~the isCompany ~~paid~~with tocopies ~~certain~~of ~~individuals~~all such filings. ~~Given~~Based on its review of the ~~level~~copies of ~~compensation~~such ~~paid~~filings received by ~~the~~it ~~Company~~with respect to ~~its~~the ~~executive~~fiscal ~~officers~~year ended December 31, ~~this~~ $12014,~~000~~ and written representations from certain Reporting Persons,~~000~~ ~~limitation~~the Company ~~has~~believes ~~not~~that ~~been~~all Reporting Persons complied with all Section 16(a) ~~limiting~~filing ~~issue~~requirements ~~for~~in the ~~Company~~fiscal inyear ~~structuring~~ended ~~its~~December 31, ~~compensation~~2014.

~~Nonqualified~~Code ~~Deferred Compensation:~~of Ethics

OnThe ~~October 22,~~Company ~~2004,~~has ~~the~~adopted ~~American~~a ~~Jobs~~code ~~Creation Act~~ of ~~2004~~ethics applicable ~~was~~to ~~signed~~all ~~into~~directors, ~~law~~officers, ~~changing~~and ~~the~~employees ~~tax~~which ~~rules~~is ~~applicable~~designed to ~~nonqualified~~ ~~deferred~~deter ~~compensation~~wrongdoing ~~arrangements.~~and ~~While~~to ~~the~~promote ~~Company~~honest ~~does~~and ~~not~~ethical ~~have~~conduct ~~any~~and ~~nonqualified~~compliance ~~deferred~~with ~~compensation~~applicable ~~arrangements,~~laws ~~the~~and ~~Company~~regulations. ~~will~~The ~~continue~~Company undertakes to ~~monitor~~provide ~~these~~a ~~regulations~~copy ~~in order~~ to beany inperson ~~compliance should it, in the future, elect~~without tocharge ~~make~~upon ~~payments~~written ~~of nonqualified deferred compensation~~request.

~~Summary~~Item ~~Compensation~~11. ~~Table~~Executive Compensation

~~The~~Compensation ~~following~~Discussion ~~table sets forth the compensation the Company paid or earned by the individual who served as principal executive officer~~ and ~~principal financial~~Analysis officer during the year. The Company had no other executive officers. During 2012 and 2011, there were no bonuses, stock awards, option awards, non-equity incentive plan compensation, pension earnings, or non-qualified deferred compensation earnings.

Name	Year		(a) Salary		(b) All OtherCompensation			Total
Greg Mays		2012	$	114,808	$	37,731	(c)	$	152,539
Chief Executive Officer, Chief Financial Officer, and Director		2011		210,000		58,000	(d)		268,000

Overview

~~(a)~~The ~~All~~principal ~~cash~~responsibilities ~~compensation~~of ~~received~~the inCompensation ~~capacity~~Committee asare: ~~an executive officer consists of salary.~~

~~(b)~~• Into ~~accordance~~discharge ~~with~~ the ~~rules~~Board of ~~the~~Directors’ ~~Securities~~responsibilities ~~and~~relating ~~Exchange~~to ~~Commission,~~the ~~other~~ compensation ~~in the form~~ of ~~perquisites and other personal benefits have been omitted because~~ the ~~aggregate~~Company’s ~~amount~~directors, ofofficers ~~such perquisites~~ and ~~other~~key ~~personal benefits was less than $10,000.~~employees;

~~(c)~~• ~~Amount~~to ~~consists~~be ofresponsible ~~$31,731~~ for ~~board~~the ~~retainer~~administration ~~and~~of ~~$6,000~~any ~~for~~incentive ~~board~~compensation ~~meeting~~and ~~fees.~~stock plans;

~~(d)~~• ~~Amount~~to ~~consists~~be ofresponsible ~~$50,000~~ for ~~board~~the ~~retainer~~review and ~~$8,000~~recommendation ~~for~~to ~~board~~the ~~meeting~~Board ~~fees.~~of Directors of the Company’s Compensation Discussion and Analysis; and

~~Grants~~• to be responsible for the production of ~~Plan~~an annual report on executive compensation for inclusion in the Company’s proxy statement or Form 10-~~Based~~K, ~~Awards~~as applicable.

~~There~~15 ~~were no grants of equity or non-equity plan-based awards during the last fiscal year.~~

ExecutiveTable Servicesof Agreements with Officers Contents

InCompensation ~~May~~Philosophy ~~2003,~~and ~~the~~Objectives ~~Company entered into an Executive Services Agreement with Mr. Mays. The purpose of the Agreement was to substantially lower the administrative costs of the Company going forward while at the same~~

15The Compensation Committee has tried to structure compensation to:

~~Table~~• ofprovide ~~Contents~~competitive compensation that will attract and retain qualified officers and key employees;

~~time~~• ~~retaining~~reward ~~the~~officers availability of an experienced executive knowledgeable about the Company for ongoing administration as well as future opportunities. The Agreement provided for compensation at the rate of $4,040 per week to Mr. Mays. Additional hourly compensation is provided after termination of the Agreement and, inkey ~~some~~employees ~~circumstances during the term,~~ for ~~extensive~~their ~~commitments~~contributions ~~of time related~~ to ~~any legal or administrative proceedings and merger and acquisition activities in which~~ the Company; ~~may be involved. During 2012, no such additional payments were made. The Agreement provides for the payment of health insurance benefits~~ and ~~for mutual releases upon termination.~~

By• ~~amendments~~align ~~dated May 3, 2004, the Agreement was amended to allow termination at any time by the Company by the lump sum payment of one year~~officers’s ~~compensation~~ and bykey ~~the executive upon one year~~employees’s ~~notice,~~interests ~~except~~with ~~in certain circumstances wherein~~ the ~~executive~~interests ~~can resign immediately and receive a lump sum payment~~ of ~~one year’s salary~~shareholders. ~~Under the amendment health benefits are to be provided during any notice period or for the time with respect to which an equivalent payment is made.~~

The ~~Company entered into a~~Compensation ~~new~~Committee ~~Executive~~endeavors ~~Services~~to ~~Agreement~~achieve ~~with~~these ~~Mr. Mays~~objectives onwhile ~~March 27,~~at ~~2006, upon termination of his prior agreement. As detailed below under~~ the ~~heading~~same ~~“Post-Employment~~time ~~Compensation,”~~providing ~~the New Executive Services Agreement to which Mr. Mays is party does not provide~~ for ~~any~~administrative ~~payments~~costs to ~~Mr. Mays~~be inas ~~the~~low ~~event~~as ~~of voluntary termination by Mr~~possible. ~~Mays~~ ~~and only 90 days payment to Mr. Mays in the event of involuntary termination.~~

~~Health~~Setting Executive ~~benefits~~Compensation ~~provided during 2012 by the Company to Mr. Mays totaled $30,006.~~

~~Outstanding~~The ~~Equity~~Company ~~Awards~~did atnot ~~Fiscal~~make ~~Year-End~~any change to the compensation arrangements existing prior to the beginning of 2014 for the Company’s executive officers, as the Compensation Committee determined that the existing arrangements were structured to achieve the key objectives outlined above, which the Compensation Committee believes will ultimately enhance shareholder value.

~~The~~In ~~following~~establishing ~~table~~the ~~includes~~compensation ~~information~~arrangements that were continued in 2014, the Compensation Committee considered various factors in determining ~~relating~~the toamount of compensation, including wind-down of the ~~value~~Company’s former promotions business operations, additional responsibilities and potential liabilities assumed resulting from the Sarbanes-Oxley Act of ~~all~~2002, ~~unexercised~~the ~~options~~completion ~~previously~~of ~~awarded~~projects critical to the ~~executive~~Company’s ~~officers~~long-term ~~named~~success, ~~above~~and asthe ofCompany’s ~~December 31~~need to retain experienced executives, ~~2012~~knowledgeable about the Company for ongoing administration as well as future opportunities. InThese ~~addition~~factors, ~~there~~however, were nonot ~~unexercisable~~assigned individual ~~options~~mathematical weights when the Compensation Committee made such determinations, ~~unearned~~and ~~options~~therefore, orsuch ~~stock~~determinations ~~awards~~were ~~outstanding~~based on the Compensation Committee’s judgment as ofto what is reasonable and appropriate. While the Compensation ~~December 31~~Committee considered general market trends in setting compensation levels under the Executive Services Agreements, ~~2012~~it did not benchmark compensation levels to specific companies.

Name and Principal Position

Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable

OptionExercisePrice

OptionExpirationDate

Greg Mays Chief Executive Officer, Chief Financial Officer, and Director

10,000

0.10

05/09/13

2014 Executive Compensation Components

~~Option~~As detailed ~~Exercises~~below under the title “Executive Services Agreements with Officers,” the agreement that the Company has entered into with its remaining executive officer is terminable on 90 days notice by either the Company or Greg Mays. During any such notice period or for the time with respect to which an equivalent payment is made, the executive is entitled to receive health benefits from the Company and ~~Stock~~provide ~~Vested~~for mutual releases upon termination. The Company believes that it has structured its post-termination payments so as to be able to attract needed talent, but to minimize the magnitude of its post-termination financial obligations. Given that the Company currently has no operating business, the Compensation Committee has structured compensation pursuant to the Executive Services Agreement to consist exclusively of cash compensation, paid currently.

~~There~~The ~~were~~Company nohas ~~options~~historically ~~exercised~~made byequity ~~the~~awards to its directors and executive ~~officer~~officers, ~~named~~though ~~above~~did ~~during~~not make any such awards in 2014 as the ~~year~~Compensation Committee ~~ended~~believed ~~December 31,~~that ~~2012.~~the Inkey ~~addition~~objectives of compensation outlined above were more appropriately satisfied by cash compensation, paid currently, pending a refocus of the Company’s ~~did~~business. The Company does not ~~make~~have any ~~stock~~program, ~~awards~~plan, ~~and~~or practice ~~there~~of ~~was~~timing nooption ~~vesting~~grants to its executives in coordination with the release of ~~stock awards~~material non-public information and did not have any such program, plan, or practice during ~~2012~~2014.

~~Post-Employment~~The ~~Compensation~~Company has not formally adopted any stock ownership or stock retention guidelines, in part due to the illiquid nature of the Company’s stock.

The Company ~~does~~believes that its compensation policies and practices are not reasonably likely to have ~~any~~a ~~pension~~material ~~plans~~adverse oreffect ~~non-qualified~~on ~~deferred~~the Company because none of its compensation ~~arrangements~~policies and practices reward risk taking by its directors, officers, and employees.

~~Potential~~16 ~~Payments upon Termination~~

VoluntaryTable Termination:of Contents

~~The~~Tax ~~New Executive Services Agreement between Mr. Mays~~ and ~~the Company~~Accounting ~~does~~Implications ~~not provide for any payment in the case of voluntary termination.~~

16Deductibility of Executive Compensation:

~~Table~~As part of ~~Contents~~its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that the Company may not deduct compensation of more than $1,000,000 that is paid to certain individuals. Given the level of compensation paid by the Company to its executive officers, this $1,000,000 limitation has not been a limiting issue for the Company in structuring its compensation.

~~Involuntary~~Nonqualified ~~Termination~~Deferred Compensation:

~~The~~On ~~New~~October 22, 2004, ~~Executive~~the ~~Services~~American ~~Agreement~~Jobs ~~between~~Creation MrAct of 2004 was signed into law, changing the tax rules applicable to nonqualified deferred compensation arrangements. ~~Mays~~ ~~and~~While the Company does not ~~provide~~have ~~for~~ any ~~payment~~nonqualified indeferred compensation arrangements, the ~~case~~Company will ofcontinue ~~involuntary~~to ~~termination~~monitor ~~other~~these ~~than~~regulations ~~the~~in ~~payment~~order ofto ~~salary~~be ~~during~~in compliance should it, in the ~~90-day~~future, ~~notice period~~elect ~~which~~to ~~would~~make ~~total~~payments ~~$52,500~~of nonqualified deferred compensation.

~~Retirement:~~Summary Compensation Table

~~Mr. Mays’~~The ~~New~~following ~~Executive~~table ~~Services~~sets forth ~~Agreement~~the ~~does~~compensation ~~not~~the ~~provide~~Company ~~for~~paid ~~any~~or ~~payment~~earned inby the ~~case~~individuals ofwho ~~retirement~~served as principal executive officer and principal financial officer during the year. The Company had no other executive officers. During 2014 and 2013, there were no stock awards, option awards, non-equity incentive plan compensation, pension earnings, or non-qualified deferred compensation earnings.

Change in Control:


Name	Year	(a) Salary		(b) All Other Compensation			Total

Greg Mays	2014	$	50,000	$	—		$	50,000
Chief Executive Officer and Director	2013		50,000		—			50,000

Anthony Espiritu	2014	$	165,000	$	—		$	165,000
Chief Financial Officer	2013		92,671		20,000	(c)		112,671

~~The~~(a) ~~New~~All ~~Executive~~cash ~~Services~~compensation ~~Agreement~~received ~~between~~in ~~Mr. Mays~~capacity ~~and~~as ~~the Company~~an ~~does~~executive ~~not~~officer ~~provide~~consists ~~for any payment in the case~~ of ~~a change in control~~salary.

~~Health~~(b) ~~Insurance~~In ~~Benefits:~~accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits have been omitted because the aggregate amount of such perquisites and other personal benefits was less than $10,000.

~~In the event of voluntary or involuntary termination or a change in control, Mr. Mays would be eligible to continue health coverage under the Consolidated Omnibus Budget Reconciliation Act~~ (~~COBRA~~c) asAmount ~~long~~consists ~~as permissible under COBRA (currently 18 months) at the expense~~ of ~~the Company following termination of employment at substantially the same benefit level as provided during employment in the approximate amount of~~ $2520,~~300,~~000 ~~paid~~for ~~in monthly installments over an 18-month period~~bonus.

~~Directors’~~Grants ~~Compensation~~of Plan-Based Awards

OnThere August 20, 2012, the Company suspended all compensation arrangements to Directors. The following table provides compensation information for 2012 for each member of our Board of Directors except for board members already disclosed in the Summary Compensation table above. Also during 2012, there were no ~~stock~~grants ~~awards,~~of ~~option~~equity ~~awards,~~or non-equity ~~incentive~~ plan ~~compensation, pension earnings, non~~-~~qualified~~based ~~deferred~~awards ~~compensation~~during ~~earnings,~~the orlast ~~other~~fiscal ~~compensation:~~year.

Name	(a) FeesEarned or Paid in Cash			Total
Joseph Bartlett	$	60,491	(b)	$	60,491
Allan Brown		57,404	(c)		57,404
Bradford Nugent		31,731	(d)		31,731
Ira Tochner		37,731	(e)		37,731
Terry Wallock		37,731	(f)		37,731

Executive Services Agreements with Officers

~~(a)~~In ~~Until~~May ~~August 20~~2003, the ~~2012,~~Company ~~directors~~entered ~~were~~into ~~paid~~ an ~~annual~~Executive ~~retainer~~Services Agreement with Mr. Mays. The purpose of ~~$50,000~~the ~~and~~Agreement ~~received~~was ato ~~fee~~substantially lower the administrative costs of ~~$2,000~~the ~~for~~Company ~~each~~going ~~Board~~forward while at the same time retaining the availability of ~~Directors,~~an experienced ~~Audit~~executive ~~and~~knowledgeable ~~Compensation~~about ~~Committee~~the ~~meeting~~Company ~~attended~~for ongoing administration as well as future opportunities. ~~Also~~The ~~until~~Agreement ~~August~~provided ~~20,~~for ~~2012,~~compensation at the ~~chairmen~~rate of $4,040 per week to Mr. Mays. Additional hourly compensation is provided after termination of the ~~Audit~~Agreement and, ~~the~~in ~~Compensation~~some ~~Committees~~circumstances ~~also~~during ~~received~~the ~~annual~~term, ~~retainers~~for extensive commitments of ~~$7,500~~time related to any legal or administrative proceedings and ~~$5,000,~~merger ~~respectively~~and acquisition activities in which the Company may be involved. During 2014, ~~plus~~no ansuch additional ~~$500~~payments were made. The Agreement provides for ~~each~~the ~~committee~~payment ~~meeting~~of ~~they~~health ~~chaired~~insurance benefits and for mutual releases upon termination.

~~(b)~~17 Amount consists of $31,731 for board retainer, $6,000 for board meeting fees, $7,500 for Audit Committee meeting fees, $10,500 in other board fees, and $4,760 for Audit Committee chair fee. Mr. Bartlett held 20,000 stock options, all of which were vested, at December 31, 2012.

(c)Table Amount consists of $31,731 for board retainer, $6,000 for board meeting fees, $6,000 for Audit Committee meeting fees, $10,500 in other board fees, and $3,173 for Compensation Committee chair fee. Mr. Brown held 20,000 stock options, all of which were vested, at December 31, 2012.Contents

~~(d)~~By ~~Amount~~amendments ~~consists~~dated May 3, 2004, the Agreement was amended to allow termination at any time by the Company by the lump sum payment of ~~board~~one ~~retainer~~year’s compensation and by the executive upon one year’s notice, except in certain circumstances wherein the executive can resign immediately and receive a lump sum payment of one year’s salary. Under the amendment health benefits are to be provided during any notice period or for the time with respect to which an equivalent payment is made.

~~(e)~~The Company ~~Amount~~entered ~~consists~~into a new Executive Services Agreement with Mr. Mays on March 27, 2006, upon termination of ~~$31~~his prior agreement. As detailed below under the heading “Post-Employment Compensation,~~731~~” the New Executive Services Agreement to which Mr. Mays is party does not provide for ~~board~~any ~~retainer~~payments to Mr. Mays in the event of voluntary termination by Mr. Mays and ~~$6,000~~only ~~for~~90 days ~~board~~payment ~~meeting~~to ~~fees~~Mr. Mays in the event of involuntary termination.

~~(f)~~Health ~~Amount~~benefits ~~consists~~provided ofduring ~~$31,731~~2014 ~~for~~by ~~board~~the ~~retainer~~Company ~~and~~to ~~$6,000 for board meeting fees.~~ Mr. Mays ~~Wallock~~totaled ~~held 5~~$8,~~000 stock options, all of which were vested, at December 31, 2012~~266.

17The Company does not have an Executive Services Agreement with Mr. Espiritu. The Company does have a severance agreement with Mr. Espiritu that provides for 12-month’s salary and health benefits in the event of involuntary termination (the “Severance Agreement”). Health benefits provided to Mr. Espiritu during 2014 totaled $26,366.

~~Table~~Outstanding ofEquity ~~Contents~~Awards at Fiscal Year-End

~~Executive~~There ~~Services~~were no ~~Agreements~~unexercised ~~with~~or ~~Directors~~unexercisable options, unearned options, or stock awards previously awarded to the executive officers named above outstanding as of December 31, 2014.

InOption ~~May~~Exercises ~~2003, the Company entered into Executive Services Agreements with Messrs. Bartlett, Brown,~~ and ~~Wallock.~~Stock ~~The~~Vested purpose of the agreements was to substantially lower the administrative costs of the Company going forward while at the same time retaining the availability of experienced executives knowledgeable about the Company for ongoing administration as well as future opportunities. The agreements provide for compensation at the rate of $1,000 per month to Messrs. Bartlett and Brown, and $3,365 per week to Mr. Wallock. Additional hourly compensation is provided after termination of the agreements and, in some circumstances during the term, for extensive commitments of time related to any legal or administrative proceedings and merger and acquisition activities in which the Company may be involved. During 2011, no such additional payments were made. The agreements provide for the payment of health insurance benefits and provide for mutual releases upon termination. By amendments dated May 3, 2004, and, in the case of Mr. Wallock, May 27, 2006, the agreements were amended to allow termination at any time by the Company by the lump sum payment of one year’s compensation and by the executive upon one year’s notice, except in certain circumstances wherein the executive can resign immediately and receive a lump sum payment of one year’s salary. By amendment dated November 10, 2008, the Agreement with Mr. Wallock was further amended to comply with Section 409A of the Internal Revenue Code by deleting the right by Mr. Wallock to resign and receive any lump sum payments. On August 20, 2012, the Company suspended all compensation for director service, which included the Executive Services Agreements with Messrs. Bartlett and Brown described above. Under the amendments health benefits may be continued under the Consolidated Omnibus Budget Reconciliation Act (COBRA) as long as permissible under COBRA (currently 18 months) at the expense of the Company following termination of services.

~~Compensation~~There ~~Committee~~were ~~Interlocks~~no options exercised during the year ended December 31, 2014. The Company did not make any stock awards and ~~Insider~~there ~~Participation~~was no vesting of stock awards during 2014.

~~The~~Post-Employment Compensation Committee consists of Messrs. Bartlett and Mr. Brown. No person who served as a member of the Compensation Committee was, during the past fiscal year, an officer or employee of the Company, was formerly an officer of the Company or any of its subsidiaries, or had any relationship requiring disclosure herein. No executive officer of the Company served as a member of the Board of Directors or compensation committee of another entity (or other committee of the Board of Directors performing equivalent functions), one of whose executive officers served as a director of the Company.

~~Compensation~~The ~~Committee~~Company ~~Report~~does not have any pension plans or non-qualified deferred compensation arrangements.

WePotential ~~have~~Payments ~~reviewed~~upon ~~and~~Termination discussed with management the Compensation Discussion and Analysis to be included in the Company’s 2012 Form 10-K. Based on such reviews and discussions, we recommend to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Form 10-K.

~~The~~Voluntary ~~Compensation Committee consists of~~Termination:

~~Allan~~The INew Executive Services Agreement between Mr. Mays ~~Brown~~and the Company does not provide for any payment in the case of voluntary termination.

~~Joseph~~The WSeverance Agreement between Mr. Espiritu ~~Bartlett~~and the Company does not receive any payment in the case of voluntary termination.

~~The~~Involuntary ~~information~~Termination: contained in this Report of the Compensation Committee on Executive Compensation shall not be deemed to be “soliciting material.” No portion of this Report of the Compensation Committee on Executive Compensation shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety this Annual Report on Form 10-K in which this report appears, except to the extent that the Company specifically incorporates this report or any portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.

18The New Executive Services Agreement between Mr. Mays and the Company does not provide for any payment in the case of involuntary termination other than the payment of salary during the 90-day notice period which would total $52,500.

~~Table~~The Severance Agreement between Mr. Espiritu and the Company provides for a payment of ~~Contents~~equal to 12-month’s salary totaling $165,000.

~~Item 12.~~Retirement: ~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~

The ~~following~~New ~~tables~~Executive ~~set~~Services ~~forth~~Agreement ~~certain~~between ~~information~~Mr. Mays ~~regarding~~and ~~beneficial ownership of~~ the Company~~’s common~~ ~~stock~~does atnot ~~March 20,~~provide ~~2013.~~for ~~Except~~any aspayment ~~otherwise indicated~~ in the ~~footnotes,~~case ~~the Company believes that the beneficial owners~~ of its common stock listed below, based on information furnished by such owners, have sole investment and voting power with respect to the shares of the Company’s common stock shown as beneficially owned by themretirement.

~~Security~~The ~~Ownership~~Severance ofAgreement ~~Certain Beneficial~~between ~~Owners~~Mr. Espiritu and the Company does not receive any payment in the case of retirement.

~~The~~18 ~~following table sets forth each person known by the Company (other than directors and executive officers) to own beneficially more than 5% of the outstanding common stock:~~

Name and Address Of Beneficial Owner (a)		Number of SharesOf Common StockBeneficially Owned				PercentageOf Class
Overseas Toys, L.P. (b)(c)(d) Multi-Accounts, LLC OA3, LLC Ronald W. Burkle			41,763,668				82.5	%

~~(a)~~Change ~~The number of shares beneficially owned by each stockholder is determined~~ in ~~accordance~~Control: with the rules of the Securities and Exchange Commission and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock that the stockholder has sole or shared voting or investment power and any shares of common stock that the stockholder has a right to acquire within sixty (60) days after March 20, 2013, through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options, warrants or other rights into shares of common stock.

~~(b)~~The AsNew ~~the~~Executive ~~sole~~Services ~~general~~Agreement ~~partner~~between ~~of Overseas Toys, L~~Mr.P. Mays ~~(“Overseas~~and ~~Toys”), Multi-Accounts, LLC (“Multi-Accounts”) may be deemed to beneficially own~~ the ~~shares~~Company ~~held~~does bynot ~~Overseas~~provide ~~Toys.~~for Asany ~~the~~payment ~~managing~~in ~~member of Multi-Accounts, OA3, LLC (“OA3”) may be deemed to beneficially own~~ the ~~shares~~case ~~held by Overseas Toys. As the managing member~~ of ~~OA3,~~a ~~Ronald~~change ~~Burkle~~in ~~may be deemed to beneficially own the shares held by Overseas Toys~~control. Each of Multi-Accounts, OA3 and Mr. Burkle disclaims ownership of such shares except to the extent of its or his pecuniary interest therein. The address of each of Overseas Toys, L.P., Multi-Accounts, LLC, OA3, LLC, and Ronald W. Burkle is 9130 West Sunset Boulevard, Los Angeles, California 90069.

~~(c)~~The ~~Based~~Severance onAgreement ~~50,611,879~~between ~~shares~~Mr. Espiritu ofand ~~common~~the ~~stock~~Company ~~outstanding~~does asnot receive any payment in the case of ~~March~~a ~~20,~~change ~~2013~~in control.

~~(d)~~Health ~~The~~Insurance ~~information~~Benefits: ~~concerning these holders is based solely on information contained in filings pursuant to the Securities Exchange Act of 1934.~~

19In the event of voluntary or involuntary termination or a change in control, Mr. Mays would be eligible to continue health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) as long as permissible under COBRA (currently 18 months) at the expense of the Company following termination of employment at substantially the same benefit level as provided during employment in the approximate amount of $12,839, paid in monthly installments over an 18-month period.

~~Table~~In the event of ~~Contents~~involuntary termination, Mr. Espiritu would be eligible to continue health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for 12 months at the expense of the Company following termination of employment at substantially the same benefit level as provided during employment totaling approximately $28,944, paid in monthly installments over a 12-month period.

~~Security~~Directors’ ~~Ownership~~Compensation ~~of Management~~

~~The~~On ~~following table sets forth information at March~~August 20, ~~2013~~ 2012, ~~regarding~~ the ~~beneficial ownership of the~~ Company’s ~~common~~suspended ~~stock~~all ~~(including~~compensation ~~common~~arrangements ~~stock~~to ~~issuable~~Directors. ~~upon~~Accordingly, ~~the~~there ~~exercise~~was ofno ~~stock~~director ~~options exercisable~~compensation ~~within~~during ~~60 days~~2014. ofAlso ~~March 20~~during 2014, ~~2013) by~~there ~~each~~were ~~director~~no ~~and~~stock ~~each~~awards, ~~executive~~option ~~officer~~awards, ~~named~~non-equity inincentive ~~the~~plan ~~Summary~~compensation, ~~Compensation Table~~pension earnings, ~~and~~non-qualified bydeferred ~~all~~compensation ofearnings, ~~the~~or ~~Company’s~~other ~~directors~~compensation. ~~and persons performing the roles of executive officers as a group:~~

Name and Address Of Beneficial Owner (a)	Number of SharesOf Common StockBeneficially Owned		Percentage OfClass (b)
Allan I. Brown (c)		1,133,023		2.2	%
Joseph W. Bartlett (d)		20,000		*
Greg Mays (e)		10,000		*
Bradford Nugent		—		—
Ira Tochner		—		—
Terrence Wallock (f)		5,000		*
All directors and executive officers as a group (6 persons)		1,168,023		2.3	%

Executive Services Agreements with Directors

*In ~~Represents~~May ~~less~~2003, ~~than~~the Company entered into Executive Services Agreements with Messrs. Bartlett, Brown, and Wallock. The purpose of the agreements was to substantially lower the administrative costs of the Company going forward while at the same time retaining the availability of experienced executives knowledgeable about the Company for ongoing administration as well as future opportunities. The agreements provide for compensation at the rate of $1%,000 per month to Messrs. Bartlett and Brown, and $3,365 per week to Mr. Wallock. Additional hourly compensation is provided after termination of the agreements and, in some circumstances during the term, for extensive commitments of time related to any legal or administrative proceedings and merger and acquisition activities in which the Company may be involved. During 2014, no such additional payments were made. The agreements provide for the payment of health insurance benefits and provide for mutual releases upon termination. By amendments dated May 3, 2004, and, in the case of Mr. Wallock, May 27, 2006, the agreements were amended to allow termination at any time by the Company by the lump sum payment of one year’s compensation and by the executive upon one year’s notice, except in certain circumstances wherein the executive can resign immediately and receive a lump sum payment of one year’s salary. By amendment dated November 10, 2008, the Agreement with Mr. Wallock was further amended to comply with Section 409A of the Internal Revenue Code by deleting the right by Mr. Wallock to resign and receive any lump sum payments. On August 20, 2012, the Company suspended all compensation for director service, which included the Executive Services Agreements with Messrs. Bartlett and Brown described above. Under the amendments health benefits may be continued under the Consolidated Omnibus Budget Reconciliation Act (COBRA) as long as permissible under COBRA (currently 18 months) at the expense of the Company following termination of services.

~~(a)~~Compensation ~~The~~Committee ~~address~~Interlocks ~~of each of the directors~~ and ~~executive~~Insider ~~officers~~Participation is c/o Simon Worldwide, Inc., 18952 MacArthur Boulevard Suite 470, Irvine, California, 92612. The number of shares beneficially owned by each stockholder is determined in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock that the stockholder has sole or shared voting or investment power and any shares of common stock that the stockholder has a right to acquire within sixty (60) days after March 20, 2013, through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options, warrants or other rights.

~~(b)~~The ~~Based~~Compensation onCommittee 50consists of Messrs. Bartlett and Mr. Brown. No person who served as a member of the Compensation Committee was,~~611~~ during the past fiscal year,~~879~~ ~~shares~~an officer or employee of ~~common~~the ~~stock~~Company, ~~outstanding~~was formerly an officer of the Company or any of its subsidiaries, or had any relationship requiring disclosure herein. No executive officer of the Company served as a member of ~~March~~the 20Board of Directors or compensation committee of another entity (or other committee of the Board of Directors performing equivalent functions), ~~2013~~one of whose executive officers served as a director of the Company.

~~(c)~~19 Includes 20,000 shares issuable pursuant to stock options exercisable within 60 days of March 20, 2013. Mr. Brown has the sole power to vote, or to direct the vote of, and the sole power to dispose, or to direct the disposition of, 1,113,023 shares of common stock.

(d)Table The 20,000 shares are issuable pursuant to stock options exercisable within 60 days of March 20, 2013.Contents

~~(e)~~Compensation ~~The~~Committee ~~10,000~~Report ~~shares are issuable pursuant to stock options exercisable within 60 days of March 20, 2013.~~

~~(f)~~We ~~The~~have ~~5,000~~reviewed ~~shares~~and ~~are~~discussed ~~issuable~~with ~~pursuant~~management the Compensation Discussion and Analysis to ~~stock~~be ~~options~~included ~~exercisable~~in ~~within~~the 60Company’s ~~days~~2014 ofForm 10-K. ~~March~~Based 20on such reviews and discussions, ~~2013~~we recommend to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Form 10-K.

~~Securities~~The ~~Authorized~~Compensation ~~for~~Committee ~~Issuance~~consists ~~Under~~of: ~~Equity Compensation Plans~~

~~The~~Allan ~~following table sets forth information as of December 31, 2012, regarding the Company’s 1993 Omnibus Stock Plan (the “1993 Plan”)~~I. ~~The~~Brown Company’s stockholders previously approved the 1993 Plan and all amendments that were subject to stockholder approval. As of December 31, 2012, options to purchase 55,000 shares of common stock were outstanding under the 1993 Plan. The 1993 Plan expired in May 2003, except as to options outstanding.

	Number of Sharesof Common Stockto be Issued UponExercise ofOutstanding StockOptions	Weighted-AverageExercise Priceof OutstandingStock Options	Number of Sharesof Common StockAvailable forFuture Issuance(excluding thosein column (a))Under the StockOption Plans
Plans Approved by Stockholders	55,000	$.10 per share	None
Plans Not Approved by Stockholders	Not applicable	Not applicable	Not applicable
Total	55,000	$.10 per share	None

Joseph W. Bartlett

20The information contained in this Report of the Compensation Committee on Executive Compensation shall not be deemed to be “soliciting material.” No portion of this Report of the Compensation Committee on Executive Compensation shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety this Annual Report on Form 10-K in which this report appears, except to the extent that the Company specifically incorporates this report or any portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.

~~Table~~Item 12. Security Ownership of ~~Contents~~Certain Beneficial Owners and Management and Related Stockholder Matters

~~Item~~The following tables set forth certain information regarding beneficial ownership of the Company’s common stock at March 1323, 2015. ~~Certain~~Except ~~Relationships~~as otherwise indicated in the footnotes, ~~Related~~the ~~Transactions~~Company ~~and~~believes ~~Director~~that the beneficial owners of its common ~~Independence~~stock listed below, based on information furnished by such owners, have sole investment and voting power with respect to the shares of the Company’s common stock shown as beneficially owned by them.

~~The~~Security ~~Board~~Ownership of ~~Directors~~Certain ~~has~~Beneficial ~~determined~~Owners that Messrs. Bartlett, Brown, and Tochner are “independent” directors, meeting all applicable independence standards promulgated by the SEC, including Rule 10A-3(b)(1) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and by the National Association of Securities Dealers, Inc. (“NASD”). In making this determination, the Board of Directors affirmatively determined that none of such directors has a relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Messrs. Mays, Nugent and Wallock are not independent directors under the independence standards promulgated by the SEC and NASD.

~~Item 14. Principal~~The following ~~Accountant~~table ~~Fees~~sets forth each person known by the Company (other than directors and ~~Services~~executive officers) to own beneficially more than 5% of the outstanding common stock:

The following table presents fees, including reimbursement for expenses, for professional services rendered by Ernst & Young LLP (“EY”):


Name and Address Of Beneficial Owner (a)	Number of Shares Of Common Stock Beneficially Owned		Percentage Of Class

Overseas Toys, L.P. (b)(c)(d)
Multi-Accounts, LLC
OA3, LLC
Ronald W. Burkle		65,287,045		87.6	%

	Fiscal Year
	2012		2011
	(in thousands)
Audit fees (a)	$	136	$	130
Audit-related fees (b)		3		4
Tax fees (c)		—		—
All other fees (d)		—		—
Total	$	139	$	134

(a)

The number of shares beneficially owned by each stockholder is determined in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock that the stockholder has sole or shared voting or investment power and any shares of common stock that the stockholder has a right to acquire within sixty (60) days after March 23, 2015, through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options, warrants or other rights into shares of common stock.

(ab) ~~Audit~~As ~~fees~~the ~~are~~sole ~~related~~general partner of Overseas Toys, L.P. (“Overseas Toys”), Multi-Accounts, LLC (“Multi-Accounts”) may be deemed to beneficially own the ~~audit~~shares ofheld by Overseas Toys. As the ~~Company’s~~managing ~~consolidated~~member ~~annual~~of ~~financial~~Multi-Accounts, ~~statements~~OA3, ~~review~~LLC (“OA3”) may be deemed to beneficially own the shares held by Overseas Toys. As the managing member of OA3, Ronald Burkle may be deemed to beneficially own the ~~interim~~shares ~~consolidated~~held ~~financial~~by ~~statements~~Overseas Toys. Each of Multi-Accounts, OA3 and ~~services~~Mr. ~~normally~~Burkle ~~provided~~disclaims byownership of such shares except to the ~~Company’s~~extent ~~independent~~of ~~registered~~its ~~public~~or ~~accounting~~his ~~firm~~pecuniary ininterest ~~connection~~therein. ~~with~~The ~~statutory~~address ~~and~~of ~~regulatory~~each ~~filings~~of Overseas Toys, L.P., Multi-Accounts, LLC, OA3, LLC, and ~~engagements~~Ronald W. Burkle is 9130 West Sunset Boulevard, Los Angeles, California 90069.

(bc) ~~Audit-related~~Based ~~fees~~on ~~are~~74,501,559 ~~for~~shares ~~assurance and related services that are reasonably related to the performance~~ of ~~the~~common ~~audit~~stock oroutstanding ~~review~~as of ~~the~~March ~~Company’s~~23, ~~consolidated financial statements and are not reported under Audit fees~~2015.

(cd) ~~Tax~~The ~~fees~~information ~~are~~concerning ~~related~~these holders is based solely on information contained in filings pursuant to ~~tax~~the ~~compliance,~~Securities ~~planning,~~Exchange ~~and~~Act ~~consulting~~of 1934.

~~(d)~~20 ~~All other fees are for services other than those reported in the other categories.~~

PolicyTable on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor Contents

~~Pre-approval~~Security isOwnership ~~provided by the Audit Committee for up to one year~~ of ~~all~~Management audit and permissible non-audit services provided by the Company’s independent auditor. Any pre-approval is detailed as to the particular service or category of service and is generally subject to a specific fee. The Company’s independent registered public accounting firm did not provide any non-audit services to the Company except as specifically pre-approved by the Audit Committee.

21The following table sets forth information at March 23, 2015, regarding the beneficial ownership of the Company’s common stock (including common stock issuable upon the exercise of stock options exercisable within 60 days of March 23, 2015) by each director and each executive officer named in the Summary Compensation Table, and by all of the Company’s directors and persons performing the roles of executive officers as a group:


Name and Address Of Beneficial Owner (a)	Number of Shares Of Common Stock Beneficially Owned		Percentage Of Class (b)

Allan I. Brown		1,113,023		1.5	%

Joseph W. Bartlett		20,000			*

Greg Mays		10,000			*

Bradford Nugent		—		—

Ira Tochner		—		—

Terrence Wallock		5,000			*

Anthony Espiritu		—		—

All directors and executive officers as a group (6 persons)		1,148,023		1.5	%

~~PART IV~~* Represents less than 1%

~~Item 15~~(a) The address of each of the directors and executive officers is c/o Simon Worldwide, Inc., ~~Exhibits~~18952 MacArthur Boulevard Suite 470, Irvine, California, 92612. The number of shares beneficially owned by each stockholder is determined in accordance with the rules of the Securities and ~~Financial~~Exchange ~~Statement~~Commission ~~Schedules~~and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock that the stockholder has sole or shared voting or investment power and any shares of common stock that the stockholder has a right to acquire within sixty (60) days after March 23, 2015, through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options, warrants or other rights.

(ab) ~~Documents~~Based ~~Filed~~on 74,501,559 shares of common stock outstanding as ~~Part~~ of ~~this~~March ~~Report~~ 23, 2015.

1.Securities ~~Financial Statements:~~Authorized for Issuance Under Equity Compensation Plans

•All ~~Consolidated~~options ~~Balance~~outstanding ~~Sheets~~relating asto the Company’s 1993 Omnibus Stock Plan (the “1993 Plan”) either were exercised or expired during 2013. Accordingly, no options to purchase shares of ~~December~~common stock were outstanding under the 1993 Plan at December 31, ~~2012~~2014. The 1993 Plan expired in May 2003, except as to options outstanding. The Company’s stockholders previously approved the 1993 Plan and ~~2011~~all amendments that were subject to stockholder approval.

•21 ~~Consolidated Statements of Operations for the years ended December 31, 2012 and 2011~~

•Table Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012 and 2011Contents

•Item ~~Consolidated~~13. ~~Statements~~Certain ~~of Stockholders’ Equity for the years ended December 31~~Relationships, ~~2012~~Related Transactions and ~~2011~~Director Independence

•The ~~Consolidated~~Board ~~Statements~~of Directors has determined that Messrs. Bartlett, Brown, and Tochner are “independent” directors, meeting all applicable independence standards promulgated by the SEC, including Rule 10A-3(b)(1) pursuant to the Securities Exchange Act of ~~Cash~~1934, as ~~Flows~~amended ~~for~~(the “Exchange Act”), and by the ~~years~~National ~~ended~~Association ~~December~~of 31Securities Dealers, ~~2012~~Inc. (“NASD”). In making this determination, the Board of Directors affirmatively determined that none of such directors has a relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Messrs. Mays, Nugent and ~~2011~~Wallock are not independent directors under the independence standards promulgated by the SEC and NASD.

•Item ~~Notes~~14. toPrincipal ~~Consolidated~~Accountant ~~Financial~~Fees ~~Statements~~and Services

2.The ~~Financial~~following ~~Statement~~table ~~Schedules.~~presents ~~Schedules~~fees, ~~for~~including ~~which~~reimbursement ~~provision~~for expenses, isfor ~~made~~professional inservices ~~the~~rendered ~~applicable~~by ~~accounting~~Ernst & ~~regulations~~Young ofLLP ~~the~~(“EY”): ~~Securities and Exchange Commission are not applicable, and therefore have been omitted.~~

(b) Exhibits


	Fiscal Year
	2014		2013
	(in thousands)
Audit fees (a)	$	157	$	231
Audit-related fees (b)		—		—
Tax fees (c)		—		—
All other fees (d)		—		—

Total	$	157	$	231

~~Reference~~(a) isAudit ~~made~~fees are related to the ~~Exhibit Index~~audit of the Company’s consolidated annual financial statements, ~~which~~review ~~follows.~~of the interim consolidated financial statements, and services normally provided by the Company’s independent registered public accounting firm in connection with statutory and regulatory filings and engagements.

22(b) Audit-related fees are for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under Audit fees.

~~Table~~(c) ofTax ~~Contents~~fees are related to tax compliance, planning, and consulting.

~~SIGNATURES~~(d) All other fees are for services other than those reported in the other categories.

~~Pursuant~~Policy toon ~~the~~Audit Committee ~~requirements~~Pre-Approval of ~~Section 13~~Audit orand ~~15(d)~~Non-Audit ofServices ~~the Securities Exchange Act~~ of ~~1934,~~Independent ~~the~~Auditor ~~registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~

~~SIMON~~Pre-approval ~~WORLDWIDE,~~is ~~INC~~provided by the Audit Committee for up to one year of all audit and permissible non-audit services provided by the Company’s independent auditor. ~~/S/~~Any ~~GREG~~pre-approval ~~MAYS~~is ~~Greg~~detailed ~~Mays~~as ~~Chief~~to ~~Executive~~the ~~Officer~~particular service or category of service and ~~Chief~~is ~~Financial~~generally ~~Officer~~subject to a specific fee. The Company’s independent registered public accounting firm did not provide any non-audit services to the Company except as specifically pre-approved by the Audit Committee.

~~March 29,~~22 ~~2013~~

PursuantTable to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Contents

/S/ JOSEPH W. BARTLETT Joseph W. Bartlett	Director	March 29, 2013
/S/ ALLAN I. BROWN Allan I. Brown	Director	March 29, 2013
/S/ GREG MAYS Greg Mays	Director, Chief Executive Officer, and Chief Financial Officer	March 29, 2013
/S/ BRADFORD NUGENT Bradford Nugent	Director	March 29, 2013
/S/ IRA TOCHNER Ira Tochner	Director	March 29, 2013
/S/ TERRENCE WALLOCK Terrence Wallock	Director	March 29, 2013

PART IV

23Item 15. Exhibits and Financial Statement Schedules

~~Table~~(a) Documents Filed as Part of ~~Contents~~this Report

~~EXHIBITS~~1. Financial Statements:

ExhibitNumber		Description
2.6(6)		Settlement Agreement and Mutual General Release between Cyrk and Simon dated January 31, 2006
2.7(6)		Subordinated Promissory Note in the principal amount of $1,410,000 from Cyrk to Simon dated January 31, 2006
3.1(7)		Restated Certificate of Incorporation of the Registrant
3.2(6)		Amended and Restated By-laws of the Registrant, effective March 27, 2006
4.1(1)		Specimen certificate representing Common Stock
10.1(2)(3)		1993 Omnibus Stock Plan, as amended
10.10(4)		Registration Rights Agreement between the Company and Overseas Toys, L.P.
10.29(5)		May 30, 2003, Executive Services Agreements with Joseph Bartlett, Allan Brown, Gregory Mays, and Terrence Wallock
10.30(6)		May 3, 2004, Amendment No. 1 to Executive Services Agreements with Messrs. Bartlett and Brown, (replaces previously filed copies of these amendments)
10.31(6)		March 27, 2006, Amendment No. 2 to Wallock Executive Services Agreement
10.32(6)		March 27, 2006, New Executive Services Agreement with Mr. Mays
31		Certifications pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 (the “Exchange Act”), filed herewith
32		Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes- Oxley Act of 2002, filed herewith
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

•

Consolidated Balance Sheets as of December 31, 2014 and 2013

*• ~~XBRL~~Consolidated ~~(Extensible~~Statements ~~Business Reporting Language) information is furnished and not filed herewith, is not a part~~ of aOperations ~~registration statement or Prospectus~~ for ~~purposes of sections 11 or 12 of~~ the ~~Securities~~years ~~Act~~ended ofDecember ~~1933~~31, is2014 ~~deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934,~~ and ~~otherwise is not subject to liability under these sections.~~2013

~~Footnotes:~~• Consolidated Statements of Comprehensive Loss for the years ended December 31, 2014 and 2013

~~(1)~~• ~~Filed~~Consolidated asStatements anof ~~exhibit to the Registrant~~Stockholders’s ~~Registration~~Equity ~~Statement~~for onthe ~~Form~~years ~~S-1~~ended ~~(Registration~~December ~~No.~~31, ~~33-63118)~~2014 ~~or an amendment thereto~~ and ~~incorporated herein by reference.~~2013

~~(2)~~• ~~Management~~Consolidated ~~contract~~Statements orof ~~compensatory~~Cash ~~plan~~Flows orfor ~~arrangement.~~the years ended December 31, 2014 and 2013

~~(3)~~• ~~Filed~~Notes ~~as an exhibit~~ to ~~the~~Consolidated ~~Annual~~Financial ~~Report on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.~~Statements

~~(4)~~2. Financial ~~Filed~~Statement asSchedules. anSchedules for ~~exhibit~~which toprovision ~~the~~is ~~Annual~~made ~~Report~~in onthe ~~Form~~applicable ~~10-K~~accounting ~~for~~regulations of the ~~year~~Securities ~~ended~~and ~~December~~Exchange ~~31,~~Commission ~~1999~~are not applicable, and ~~incorporated~~therefore ~~herein~~have bybeen ~~reference~~omitted.

(5b) ~~Filed as an exhibit to the Registrant’s Report on Form 10-K for the year ended December 31, 2002, filed on July 29, 2003, and incorporated herein by reference.~~ Exhibits

~~(6)~~Reference ~~Filed~~is asmade ~~an exhibit~~ to the ~~Registrant’s Report on Form 10-K for the year ended December 31~~Exhibit Index, ~~2005,~~which ~~filed on March 31, 2006, and incorporated herein by reference~~follows.

~~(7) Filed as an exhibit to the Registrant’s Report on Form 8-K, filed on September~~ 23, ~~2008, and incorporated herein by reference.~~

24Table of Contents

~~Table~~SIGNATURES ~~of Contents~~

~~REPORT~~Pursuant OFto ~~INDEPENDENT~~the ~~REGISTERED~~requirements ~~PUBLIC~~of ~~ACCOUNTING~~Section 13 ~~FIRM~~or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~Board~~SIMON ofWORLDWIDE, ~~Directors~~INC. ~~and Stockholders~~

~~Simon~~/s/ ~~Worldwide,~~GREG ~~Inc.~~MAYS Greg Mays Chief Executive Officer /s/ ANTHONY ESPIRITU Anthony Espiritu Chief Financial Officer March 31, 2015

WePursuant ~~have~~to ~~audited~~ the ~~accompanying~~requirements ~~consolidated balance sheets~~ of ~~Simon Worldwide, Inc. as of December 31, 2012 and 2011, and~~ the ~~related~~Securities ~~consolidated~~Exchange ~~statements~~Act of ~~operations~~1934, ~~comprehensive~~this ~~loss,~~report ~~stockholders’~~has ~~equity,~~been ~~and~~signed ~~cash~~below ~~flows~~by ~~for~~ the ~~years~~following persons ~~then~~on ~~ended.~~behalf ~~These financial statements are the responsibility~~ of the ~~Company’s~~registrant ~~management.~~and ~~Our~~in ~~responsibility~~the iscapacities toand ~~express an opinion~~ on ~~these~~the ~~financial~~dates ~~statements based on our audits~~indicated.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


/s/ JOSEPH W. BARTLETT	Director	March 31, 2015
Joseph W. Bartlett

/s/ ALLAN I. BROWN	Director	March 31, 2015
Allan I. Brown

/s/ GREG MAYS	Director and Chief Executive Officer	March 31, 2015
Greg Mays

/s/ BRADFORD NUGENT	Director	March 31, 2015
Bradford Nugent

/s/ IRA TOCHNER	Director	March 31, 2015
Ira Tochner

/s/ TERRENCE WALLOCK	Director	March 31, 2015
Terrence Wallock

In24 our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Simon Worldwide, Inc. at December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/Table Ernst &of Young LLP Contents

~~Los~~EXHIBITS ~~Angeles, California~~

March 29, 2013


Exhibit Number		Description

2.1†		Limited Liability Company Agreement, dated as of March 18, 2013, by and among Three Lions Entertainment, LLC, Simon and the other parties set forth on the signature pages thereto (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K/A (File No. 000-21878) filed on August 23, 2013)

2.2		First Amendment to Limited Liability Company Agreement of Three Lions Entertainment, LLC, dated May 7, 2014, by and among the Company, Richard Beckman, Joel Katz and OA3, LLC (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K (File No. 000-21878) filed on May 13, 2014)

3.1(7)		Restated Certificate of Incorporation of the Registrant

3.2(6)		Amended and Restated By-laws of the Registrant, effective March 27, 2006

4.1(1)		Specimen certificate representing Common Stock

10.1(2)(3)		1993 Omnibus Stock Plan, as amended

10.10(4)		Registration Rights Agreement between the Company and Overseas Toys, L.P.

10.29(5)		May 30, 2003, Executive Services Agreements with Joseph Bartlett, Allan Brown, Gregory Mays, and Terrence Wallock

10.30(6)		May 3, 2004, Amendment No. 1 to Executive Services Agreements with Messrs. Bartlett and Brown, (replaces previously filed copies of these amendments)

10.31(6)		March 27, 2006, Amendment No. 2 to Wallock Executive Services Agreement

10.32(6)		March 27, 2006, New Executive Services Agreement with Mr. Mays

10.33		Pledge Agreement, dated May 7, 2014, between the Company and SunTrust Bank, as Administrative Agent for the lenders referred to therein (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K (File No. 000-21878) filed on May 13, 2014)

31.1		Certification of Greg Mays pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 (the “Exchange Act”), filed herewith

31.2		Certification of Anthony Espiritu pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 (the “Exchange Act”), filed herewith

32		Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, filed herewith

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

~~F-1~~ 25

~~PART IV —~~Footnotes: ~~FINANCIAL INFORMATION~~

~~SIMON~~† ~~WORLDWIDE,~~Certain ~~INC~~portions have been omitted pursuant to a confidential treatment request. Omitted information has been separately filed with the Securities and Exchange Commission.

~~CONSOLIDATED~~(1) ~~BALANCE~~Filed ~~SHEETS~~as an exhibit to the Registrant’s Registration Statement on Form S-1 (Registration No. 33-63118) or an amendment thereto and incorporated herein by reference.

As(2) ofManagement ~~December 31,~~contract ~~2012~~or ~~and~~compensatory ~~2011~~plan or arrangement.

(in3) ~~thousands~~Filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, ~~except~~1994, ~~share~~and ~~data)~~incorporated herein by reference.

	December 31,2012			December 31,2011
ASSETS
Current assets:
Cash and cash equivalents	$	7,303		$	8,779
Prepaid expenses and other current assets		105			138
Total current assets		7,408			8,917
Investments		—			9
Other assets		295			321
Total non-current assets		295			330
	$	7,703		$	9,247
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	58		$	73
Accrued expenses and other current liabilities		49			57
Total current liabilities		107			130
Commitments and Contingencies
Stockholders’ equity:
Common stock, $.01 par value; 100,000,000 shares authorized; 54,613,949 shares issued at December 31, 2012 and 2011; 50,611,879 shares outstanding net of 4,002,070 treasury shares at par value at December 31, 2012 and 2011		506			506
Additional paid-in capital		152,083			152,083
Accumulated deficit		(144,998	)		(143,476	)
Accumulated other comprehensive income		5			4
Total stockholders’ equity		7,596			9,117
	$	7,703		$	9,247

(4)	Filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference.

~~See~~(5) ~~the~~Filed ~~accompanying~~as ~~Notes~~an exhibit to ~~Consolidated~~the ~~Financial~~Registrant’s ~~Statements.~~Report on Form 10-K for the year ended December 31, 2002, filed on July 29, 2003, and incorporated herein by reference.

F(6) Filed as an exhibit to the Registrant’s Report on Form 10-2 K for the year ended December 31, 2005, filed on March 31, 2006, and incorporated herein by reference.

~~Table~~(7) ofFiled ~~Contents~~as an exhibit to the Registrant’s Report on Form 8-K, filed on September 23, 2008, and incorporated herein by reference.

~~SIMON~~26 ~~WORLDWIDE, INC.~~

CONSOLIDATEDTable STATEMENTSof OF OPERATIONS Contents

~~For~~REPORT ~~the~~OF ~~Years~~INDEPENDENT ~~Ended~~REGISTERED ~~December 31,~~PUBLIC ~~2012~~ACCOUNTING ~~and~~FIRM ~~2011~~

~~(in~~Board ~~thousands,~~of ~~except~~Directors ~~per~~and ~~share~~Stockholders ~~data)~~

	2012			2011
Revenue	$	—		$	—
General and administrative expenses		1,552			2,017
Operating loss		(1,552	)		(2,017	)
Interest income		9			25
Other income		34			15
Equity in Yucaipa AEC (loss) earnings		(9	)		1
Loss before income taxes		(1,518	)		(1,976	)
Income tax provision		(4	)		—
Net loss	$	(1,522	)	$	(1,976	)
Net loss per share – basic and diluted:
Loss per common share	$	(0.03	)	$	(0.04	)
Weighted average shares outstanding		50,612			50,612

Simon Worldwide, Inc.

~~See~~We have audited the accompanying ~~Notes~~consolidated balance sheets of Simon Worldwide, Inc. as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to ~~Consolidated~~express ~~Financial~~an ~~Statements~~opinion on these financial statements based on our audits.

~~F-3~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~Table~~In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ~~Contents~~Simon Worldwide, Inc. at December 31, 2014 and 2013, and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

~~SIMON~~/s/ ~~WORLDWIDE,~~Ernst & ~~INC.~~Young LLP

~~CONSOLIDATED~~Los ~~STATEMENTS~~Angeles, OFCalifornia ~~COMPREHENSIVE LOSS~~

~~For the Years Ended December~~March 31, ~~2012~~2015 ~~and 2011~~

~~(in~~F-1 ~~thousands, except per share data)~~

	2012			2011
Net loss	$	(1,522	)	$	(1,976	)
Other comprehensive income (loss):
Unrealized gain (loss) on investments		1			(3	)
Other comprehensive income (loss)		1			(3	)
Comprehensive loss	$	(1,521	)	$	(1,979	)

~~See~~PART IV — ~~the~~FINANCIAL ~~accompanying~~INFORMATION ~~Notes to Consolidated Financial Statements.~~

~~F-4~~ SIMON WORLDWIDE, INC.

~~Table~~CONSOLIDATED ofBALANCE ~~Contents~~SHEETS

~~SIMON~~As ~~WORLDWIDE~~of December 31, ~~INC.~~2014 and 2013

~~CONSOLIDATED~~(in ~~STATEMENTS~~thousands, OFexcept ~~STOCKHOLDERS’~~share ~~EQUITY~~data)

For the Years ended December 31, 2012 and 2011


	December 31, 2014			December 31, 2013

ASSETS
Current assets:
Cash and cash equivalents	$	1,042		$	1,643
Restricted cash		36			236
Prepaid expenses and other current assets		43			125

Total current assets		1,121			2,004
Investment in Three Lions Entertainment, LLC		—			5,987
Other assets		223			282

Total non-current assets		223			6,269

	$	1,344		$	8,273


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	103		$	32
Accrued expenses and other current liabilities		64			51

Total current liabilities		167			83

Commitments and Contingencies

Stockholders’ equity:
Common stock, $.01 par value; 100,000,000 shares authorized; 74,501,559 shares outstanding net of 4,002,070 treasury shares at par value at December 31, 2014 and 2013		745			745
Additional paid-in capital		156,064			156,064
Accumulated deficit		(155,623	)		(148,632	)
Accumulated other comprehensive (loss) income		(9	)		13

Total stockholders’ equity		1,177			8,190

	$	1,344		$	8,273

~~(in~~See ~~thousands)~~the accompanying Notes to Consolidated Financial Statements.

	CommonStock($.01 Par Value)		AdditionalPaid-inCapital		RetainedDeficit			AccumulatedOtherComprehensiveIncome (Loss)			TotalStockholders’Equity
Balance, December 31, 2010	$	506	$	152,083	$	(141,500	)	$	7		$	11,096
Net loss						(1,976	)					(1,976	)
Other comprehensive loss									(3	)		(3	)
Balance, December 31, 2011		506		152,083		(143,476	)		4			9,117
Net loss						(1,522	)					(1,522	)
Other comprehensive income									1			1
Balance, December 31, 2012	$	506	$	152,083	$	(144,998	)	$	5		$	7,596

F-2

SeeTable theof accompanying Notes to Consolidated Financial Statements. Contents

~~F-5~~ SIMON WORLDWIDE, INC.

~~Table~~CONSOLIDATED ofSTATEMENTS ~~Contents~~OF OPERATIONS

~~SIMON~~For ~~WORLDWIDE~~the Years Ended December 31, ~~INC.~~2014 and 2013

~~CONSOLIDATED~~(in ~~STATEMENTS~~thousands, OFexcept ~~CASH~~per ~~FLOWS~~share data)

For the Years Ended December 31, 2012 and 2011


	2014			2013
Revenue	$	—		$	—
General and administrative expenses		1,090			1,112

Operating loss		(1,090	)		(1,112	)
Interest income		1			3
Other income		294			217
Other expense		(200	)		—
Equity in loss of Three Lions Entertainment, LLC		(5,987	)		(2,743	)

Loss before income taxes		(6,982	)		(3,635	)
Income tax (provision) benefit		(9	)		1

Net loss	$	(6,991	)	$	(3,634	)


Net loss per share – basic and diluted:
Loss per common share	$	(0.09	)	$	(0.06	)

Weighted average shares outstanding		74,502			56,580

~~(in~~See ~~thousands)~~the accompanying Notes to Consolidated Financial Statements.

	2012			2011
Cash flows from operating activities:
Net loss	$	(1,522	)	$	(1,976	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in Yucaipa AEC loss (earnings)		9			(1	)
Gain on sale of investment		—			(15	)
Increase (decrease) in cash from changes in working capital items:
Prepaid expenses and other current assets		58			138
Accounts payable		(15	)		(62	)
Accrued expenses and other current liabilities		(6	)		(3	)
Net cash used in operating activities		(1,476	)		(1,919	)
Cash flows from investing activities:
Proceed from sale of investment		—			73
Net cash provided by investing activities		—			73
Net cash provided by financing activities		—			—
Net decrease in cash and cash equivalents		(1,476	)		(1,846	)
Cash and cash equivalents, beginning of period		8,779			10,625
Cash and cash equivalents, end of period	$	7,303		$	8,779
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	3		$	3

F-3

SeeTable theof accompanying Notes to Condensed Consolidated Financial Statements. Contents

~~F-6~~ SIMON WORLDWIDE, INC.

~~Table~~CONSOLIDATED ofSTATEMENTS ~~Contents~~OF COMPREHENSIVE LOSS

~~SIMON~~For ~~WORLDWIDE~~the Years Ended December 31, ~~INC.~~2014 and 2013

~~NOTES TO~~(in ~~CONSOLIDATED~~thousands, ~~FINANCIAL~~except ~~STATEMENTS~~per share data)

1. Nature of Business, Loss of Customers, Resulting Events, and Management’s Plans


	2014			2013
Net loss	$	(6,991	)	$	(3,634	)

Other comprehensive (loss) income:
Unrealized (loss) gain on investments, net of tax		(22	)		8

Other comprehensive (loss) income		(22	)		8


Comprehensive loss	$	(7,013	)	$	(3,626	)

~~Prior~~See ~~to August 2001,~~ the ~~Company,~~accompanying ~~incorporated~~Notes in Delaware and founded in 1976, had been operating as a multi-national full-service promotional marketing company, specializing in the design and development of high-impact promotional products and sales promotions. The majority of the Company’s revenue was derived from the sale of products to ~~consumer~~Consolidated ~~products~~Financial ~~and services companies seeking to promote their brand names and corporate identities and build brand loyalty~~Statements. The major client of the Company was McDonald’s Corporation (“McDonald’s”), for whom the Company’s Simon Marketing subsidiary designed and implemented marketing promotions, which included premiums, games, sweepstakes, events, contests, coupon offers, sports marketing, licensing, and promotional retail items. Net sales to McDonald’s and Philip Morris, another significant former client, accounted for 78% and 8%, respectively, of total net sales in 2001.

~~On August 21, 2001, the Company was notified by McDonald’s that they were terminating their approximately 25~~F-~~year~~4 relationship with Simon Marketing as a result of the arrest of Jerome P. Jacobson (“Mr. Jacobson”), a former employee of Simon Marketing who subsequently pled guilty to embezzling winning game pieces from McDonald’s promotional games administered by Simon Marketing. No other Company employee was found to have any knowledge of or complicity in his illegal scheme. Simon Marketing was identified in the criminal indictment of Mr. Jacobson, along with McDonald’s, as an innocent victim of Mr. Jacobson’s fraudulent scheme. Further, on August 23, 2001, the Company was notified that its second largest customer, Philip Morris, was also ending its approximately nine-year relationship with the Company. As a result of the above events, the Company no longer has an on-going promotions business.

SinceTable August 2001, the Company has concentrated its efforts on reducing its costs and settling numerous claims, contractual obligations, and pending litigation. By April 2002, the Company had effectively eliminated a majority of its ongoing promotions business operations and was in the process of disposing of its assets and settling its liabilities related to the promotions business and defending and pursuing litigation with respect thereto. In essence, the Company discontinued its promotions business and changed the nature of its operation to focus on its pending litigation and winding down its contracted obligations. As a result of these efforts, the Company has been able to resolve a significant number of outstanding liabilities that existed in August 2001 or arose subsequent to that date. As of December 31, 2012, the Company had reduced its workforce to 4 employees from 136 employees as of December 31, 2001. Contents

~~With~~SIMON ~~no revenues from operations~~WORLDWIDE, ~~the Company closely monitors and controls its expenditures within a reasonably predictable range~~INC. Cash used by operating activities was $1.5 million and $1.9 million in the years ended December 31, 2012 and 2011, respectively. The Company incurred losses within its operations in 2012 and continues to incur losses in 2013 for the general and administrative expenses incurred to manage the affairs of the Company. By utilizing cash available at December 31, 2012, to maintain its scaled back operations, management believes it has sufficient capital resources and liquidity to operate the Company for at least one year.

~~2. Significant~~CONSOLIDATED ~~Accounting~~STATEMENTS ~~Policies~~OF STOCKHOLDERS’ EQUITY

~~Principles~~For ofthe ~~Consolidation~~Years ended December 31, 2014 and 2013

~~The accompanying consolidated financial statements include the accounts of the Company and subsidiaries. All intercompany accounts and transactions have been eliminated~~ (in ~~consolidation.~~thousands)

Use of Estimates


	Common Stock ($.01 Par Value)		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balance, December 31, 2012	$	506	$	152,083		$	(144,998	)	$	5		$	7,596

Net loss							(3,634	)					(3,634	)
Common stock issued		239		4,774									5,013
Equity issuance costs				(793	)								(793	)
Other comprehensive income										8			8

Balance, December 31, 2013		745		156,064			(148,632	)		13			8,190


Net loss							(6,991	)					(6,991	)
Other comprehensive loss										(22	)		(22	)

Balance, December 31, 2014	$	745	$	156,064		$	(155,623	)	$	(9	)	$	1,177

~~The~~F-5 preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of

F-7 Table of Contents

~~Table~~SIMON ofWORLDWIDE, ~~Contents~~INC.

~~assets~~CONSOLIDATED ~~and~~STATEMENTS ~~liabilities~~OF ~~and~~CASH ~~disclosure~~FLOWS ~~of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.~~

~~Stock-Based~~For ~~Compensation~~the Years Ended December 31, 2014 and 2013

~~At December 31, 2012, the Company had one stock-based compensation plan. In accordance with Accounting Standards Codification~~ (~~“ASC”~~in thousands) ~~718-10-30,~~ the Company accounts for awards of equity instruments at their grant date fair value with the stock-based compensation cost expensed ratably on a straight-line basis over the requisite service period. There were no employee stock-based awards granted or vested during 2012 and 2011.

Concentration of Credit Risk


	2014			2013
Cash flows from operating activities:
Net loss	$	(6,991	)	$	(3,634	)

Adjustments to reconcile net loss to net cash used in operating activities:
Equity in loss of Three Lions Entertainment, LLC		5,987			2,743
Decrease (increase) in restricted cash		200			(200	)
Change in value of other assets		37			27
Deferred income tax benefit		—			(6	)
Increase (decrease) in cash from changes in working capital items:
Prepaid expenses and other current assets		82			(20	)
Accounts payable		71			(26	)
Accrued expenses and other current liabilities		13			2

Net cash used in operating activities		(601	)		(1,114	)

Cash flows from investing activities:
Investment in Three Lions Entertainment, LLC		—			(8,730	)

Net cash used in investing activities		—			(8,730	)

Cash flows from financing activities:
Proceeds from common stock issuance		—			5,009
Equity issuance costs		—			(793	)
Proceeds from stock option exercises		—			4

Net cash provided by financing activities		—			4,220

Net decrease in cash and cash equivalents		(601	)		(5,624	)
Cash and cash equivalents, beginning of period		1,643			7,267

Cash and cash equivalents, end of period	$	1,042		$	1,643


Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	6		$	3

~~The~~See ~~Company~~the ~~deposits~~accompanying ~~its~~Notes ~~cash and cash equivalent in U.S.-denominated amounts with what it believes~~ to beCondensed ~~credit-worthy~~Consolidated ~~U.S.~~Financial ~~financial institutions~~Statements. ~~However, cash and cash equivalent balances exceed FDIC insured levels at various times during the year.~~

~~Financial~~F-6 ~~Instruments~~

TheTable carrying amounts of cash equivalents, accounts payable, and accrued liabilities approximate their fair values. Contents

~~Cash~~SIMON ~~Equivalents~~WORLDWIDE, INC.

~~Cash~~NOTES TO ~~equivalents~~CONSOLIDATED ~~consist~~FINANCIAL ofSTATEMENTS ~~short-term, highly liquid investments, which have original maturities at the date of purchase of three-months or less.~~

~~Investments~~1. Nature of Business, Loss of Customers, Resulting Events, and Management’s Plans

~~The~~Prior to August 2001, the Company ~~accounted~~was ~~for~~a ~~its~~multi-national, ~~investment~~full inservice ~~Yucaipa~~promotional ~~AEC~~marketing ~~Associates,~~company. aIn ~~related~~August ~~party~~2001, ~~using~~McDonald’s Corporation (“McDonald’s”), the ~~equity~~Company’s ~~method~~principal incustomer, ~~accordance~~terminated its 25-year relationship with ~~ASC~~the ~~272-10,~~Company ~~“Limited~~as ~~Liability~~a ~~Entities.”~~result Inof the ~~fourth quarter~~embezzlement by a former Company employee of ~~2012~~winning game pieces from McDonald’s promotional games administered by the Company. Other customers also terminated their relationships with the Company, resulting in the Company ~~wrote~~no ~~down~~longer having a business. By April 2002, the ~~carrying~~Company ~~value~~had effectively eliminated a majority of ~~this~~its ongoing ~~investment~~promotions tobusiness ~~zero~~operations and ~~discontinued~~was ~~applying~~in the ~~equity-method~~process of ~~accounting~~disposing asof its assets and settling its liabilities related to the promotions business and defending and pursuing litigation with respect thereto. As a result of these efforts, the Company has nobeen ~~additional~~able ~~investment~~to resolve a significant number of outstanding liabilities that existed in ~~Yucaipa~~August ~~AEC~~2001 ~~Associates~~or toarose ~~absorb~~subsequent ~~further~~to ~~losses~~that date.

~~Certain~~The Company ~~investments~~is ~~are~~managed ~~designated~~by asthe ~~available-for-sale~~Chief inExecutive ~~accordance~~Officer, Greg Mays, and Chief Financial Officer, Anthony Espiritu, together with ~~the~~an ~~provisions~~acting ~~primarily~~general ~~codified~~counsel. ~~under~~The ~~ASC~~Board ~~320-10-25~~of Directors has considered various alternative courses of action for the Company, ~~“Investments—Debt~~including ~~and~~possibly ~~Equity~~acquiring ~~Securities,”~~or ~~and~~combining aswith ~~such,~~one ~~unrealized~~or ~~gains~~more ~~and~~operating ~~losses~~businesses. ~~are~~The ~~reported~~Board inof ~~the~~Directors ~~accumulated~~has ~~other~~reviewed ~~comprehensive~~and ~~income~~analyzed ~~component~~a number of ~~stockholders’~~proposed ~~equity~~transactions. ~~These~~On ~~investments~~March 22, ~~are~~2013, ~~included~~the Company announced in ~~other~~a current report on Form 8-K that ~~assets~~it, intogether with Richard Beckman, Joel Katz and OA3, LLC (“OA3”), had entered into the ~~accompanying~~limited ~~consolidated~~liability ~~balance~~company ~~sheets.~~agreement (the “LLC Agreement”) of Three Lions Entertainment, LLC (“Three Lions”) on March 18, 2013.

~~Income~~Pursuant ~~Taxes~~to the LLC Agreement, the Company contributed $3.15 million to Three Lions in exchange for membership units representing 60% of the economic returns of Three Lions, including certain preferences with respect to common holders on operating returns and on a liquidation or sale of Three Lions. In respect of such previously issued membership units, the Company made a second capital contribution to Three Lions in the amount of $1.85 million on April 26, 2013, and a third and final capital contribution to Three Lions in the amount of $3.5 million on October 2, 2013. As a result of these transactions, the Company’s business substantially consisted of acting as the majority equityholder of, and holding a membership interest in, Three Lions. The business and operations of Three Lions were managed and directed by a five person Executive Board, three of whom the Company had the power to designate. The Executive Board governed under majority vote, subject to certain major decisions that required the unanimous approval of either the members of Three Lions or its Executive Board (“Special Approval”).

The Company ~~accounts~~was ~~for~~party ~~income~~to ~~taxes~~a inPledge ~~accordance~~Agreement, ~~with~~dated ~~ASC~~May 7, ~~740-10~~2014, ~~“Income~~with ~~Taxes,”~~SunTrust ~~which~~Bank ~~requires~~(“SunTrust”) ~~that~~wherein ~~deferred~~the ~~tax~~Company ~~assets~~pledged ~~and~~all ~~liabilities~~of beits equity ~~computed~~interests ~~based~~in onThree ~~the~~Lions ~~difference~~(and ~~between the~~all ~~financial~~proceeds ~~statement~~of ~~and~~such ~~income~~interests) ~~tax~~to ~~bases~~SunTrust ofas ~~assets~~security ~~and~~for ~~liabilities~~Three ~~using~~Lions’ ~~enacted~~obligations ~~tax~~under ~~rates.~~a ~~Deferred~~revolving ~~income~~credit ~~tax~~facility ~~expenses~~that orThree ~~credits~~Lions ~~are~~obtained ~~based~~from onSunTrust. ~~the~~The ~~changes~~Company’s inpledge ~~the~~of ~~asset~~its orequity interests ~~liability~~in ~~from~~Three ~~period~~Lions toterminated ~~period.~~only Aupon ~~valuation~~the ~~allowance~~payment isin ~~recognized~~full ~~if, based~~and ontermination ~~the~~of ~~available~~Three ~~evidence,~~Lions’ itobligations isunder ~~more~~the ~~likely~~revolving ~~than~~credit ~~not~~facility. ~~that~~Three ~~some~~Lions orpaid ~~all~~in offull the ~~deferred~~revolving ~~tax~~credit ~~asset~~facility ~~will~~on ~~not~~December 18, ~~be realized~~2014.

~~The~~Due ~~Company records liabilities related~~ to ~~uncertain~~a ~~tax~~confluence ~~positions~~of ina ~~accordance~~number ~~with~~of ~~ASC~~adverse ~~740~~factors, ~~which~~but ~~provides guidance~~ in ~~accounting~~particular, ~~for~~a ~~uncertainty~~ratings inperformance ~~income~~well ~~taxes~~below ~~recognized~~expectations inon anThree ~~enterprise~~Lion’s ~~financial~~initial ~~statements~~Fashion RocksTM bybroadcast ~~prescribing~~on aSeptember 9, ~~minimum~~2014, ~~recognition threshold~~ and ~~measurement~~the ~~attribute~~resultant ~~for~~decision ato ~~tax~~cancel ~~position~~further ~~taken~~production ~~and~~on ~~expected~~other toprojects, beThree ~~taken~~Lions inrecorded unanticipated losses. In a ~~tax~~meeting ~~return.~~held ~~For~~on October 27, ~~tax~~2014, ~~benefits~~the toExecutive beBoard ~~recognized~~of ~~under~~Three ~~ASC~~Lions ~~740,~~considered and unanimously approved a ~~tax~~plan ~~position~~proposed ~~must~~by beThree ~~more~~Lions’ ~~likely-than-not~~management, towith bethe ~~sustained~~assistance ~~upon~~of ~~examination~~its byadvisors, to proceed with the ~~taxing~~voluntary liquidation and dissolution of Three ~~authorities.~~Lions ~~The~~in ~~amount~~accordance ~~recognized~~with isDelaware ~~measured~~law. asOn ~~the~~January 30, ~~largest~~2015, ~~amount~~Three ofLions ~~benefit~~was ~~that~~dissolved iswith ~~greater~~the ~~than~~filing ~~50%~~of ~~likely~~its Certificate of ~~being~~Cancellation ~~realized~~with ~~upon~~the ~~settlement.~~state ~~The~~of ~~Company~~Delaware. ~~does~~No ~~not~~amounts ~~have~~were adistributed ~~liability~~to ~~for~~the ~~unrecognized~~Company ~~tax~~or ~~benefits~~to atthe ~~December 31,~~other ~~2012~~members ~~and~~of Three ~~2011,~~Lions ~~respectively~~in the liquidation.

FWith no revenues from operations, the Company closely monitors and controls its expenditures within a reasonably predictable range. Cash used by operating activities was $.6 million and $1.1 million for the years ended December 31, 2014 and 2013, respectively. The Company incurred losses within its operations in 2014 and continues to incur losses in 2015 for the general and administrative expenses incurred to manage the affairs of the Company. By utilizing cash available at December 31, 2014, to maintain its scaled back operations and a short-8term funding commitment from the Company’s largest shareholder, management believes it has sufficient capital resources and liquidity to operate the Company for at least one year.

~~Table~~F-7 ~~of Contents~~

EarningsTable (Loss)of Per Common Share Contents

~~Earnings~~2. ~~(loss)~~Significant ~~per~~Accounting common share have been determined in accordance with the provisions of ASC 260-10, “Earnings Per Share,” which requires dual presentation of basic and diluted earnings per share on the face of the income statement and a reconciliation of the numerator and denominator of the basic earnings per share computation to the numerator and denominator of the diluted earnings per share computation (see Note 8). Policies

~~Recently~~Principles ~~Issued~~of ~~Accounting~~Consolidation ~~Standards~~

~~In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts~~The ~~Reclassified~~accompanying ~~Out~~consolidated of Accumulated Other Comprehensive Income, to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements~~. Instead,~~ ~~the~~include ~~new amendments require an organization to: 1) Present (either on~~ the ~~face~~accounts of the ~~statement~~Company ~~where~~and net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income — but only if the item reclassified is required under Usubsidiaries.S. ~~generally~~All ~~accepted~~intercompany ~~accounting~~accounts ~~principles~~and ~~(U.S.~~transactions ~~GAAP)~~have tobeen beeliminated ~~reclassified to net income~~ in ~~its entirety~~consolidation. inCertain ~~the~~prior ~~same reporting~~ period; ~~and~~amounts 2)were ~~Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be~~ reclassified ~~directly~~ to ~~net~~conform ~~income in their~~to ~~entirety~~current ~~in the same reporting~~ period. ~~This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet instead of directly to income or expenses~~presentation.

~~ASU~~Use ~~No. 2013-02 will be effective for the Company beginning January 1, 2013. The Company does not expect this adoption to have a material effect on the Company’s consolidated statements~~ of ~~financial~~Estimates ~~position or results of operations.~~

~~3. Commitments~~The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and ~~Contingencies~~assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~The~~Concentration ~~Company is involved in litigation and legal matters which have arisen in the ordinary course~~ of ~~business.~~Credit ~~The~~Risk ~~Company does not believe that the ultimate resolution of these litigation and legal matters will have a material adverse effect on its financial condition, results of operations, or net cash flows.~~

4The Company deposits its cash and cash equivalent in U. ~~Lease~~S.-denominated ~~Obligations~~amounts with what it believes to be credit-worthy U.S. financial institutions. However, cash and ~~Other~~cash ~~Commercial~~equivalent ~~Commitments~~balances exceed FDIC insured levels at various times during the year.

~~The~~Financial ~~approximate~~Instruments ~~minimum rental commitments under all noncancelable leases at December 31, 2012, totaled $31,000 and are due in 2013.~~

~~Rental~~The ~~expense~~carrying ~~for~~amounts ~~all~~of ~~operating~~cash ~~leases was approximately $46~~equivalents,~~000~~ ~~and~~accounts ~~$64~~payable,~~000~~ ~~in 2012~~ and ~~2011,~~accrued ~~respectively.~~liabilities ~~Rent~~approximate istheir ~~charged~~fair ~~to operations on a straight-line basis~~values.

~~The~~Cash ~~Company~~Equivalents ~~also has a letter of credit totaling approximately $36,000 at December 31, 2012, which supports the Company’s periodic payroll obligations and is considered restricted.~~

5Cash equivalents consist of short-term, highly liquid investments, which have original maturities at the date of purchase of three-months or less. ~~Income~~ ~~Taxes~~Restricted cash is excluded from cash and cash equivalents.

~~The~~Investments ~~Company had no current federal provision for 2012 and 2011, and a state provision for income taxes of $4,000 and $0 for 2012 and 2011, respectively.~~

FUnder certain criteria as provided for in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810, “Consolidation,” the Company may consolidate a partially-9owned affiliate. To determine whether to consolidate a partially-owned affiliate, the Company first determines if the entity is a variable interest entity (VIE). An entity is considered to be a VIE if it has one of the following characteristics: 1) the entity is thinly capitalized; 2) residual equity holders do not control the entity; 3) equity holders are shielded from economic losses or do not participate fully in the entity’s residual economics; or 4) the entity was established with non-substantive voting. If the entity meets one of these characteristics, the Company then determines if it is the primary beneficiary of the VIE. The party with the power to direct activities of the VIE that most significantly impact the VIE’s economic performance and the potential to absorb benefits or losses that could be significant to the VIE is considered the primary beneficiary and consolidates the VIE. Three Lions met the definition of a variable interest entity as the total equity investment at risk in Three Lions was not sufficient to permit Three Lions to finance its activities without further subordinated financial support by any parties, including the equity holders.

~~Table~~The excess of ~~Contents~~the cost of the Company’s investment in Three Lions over the amount of the Company’s underlying equity in the net assets of Three Lions was recognized as equity method goodwill which was not be amortized but instead reviewed at least annually for impairment. Equity method goodwill is not reported as goodwill in the Company’s consolidated balance sheets, but instead is disclosed in the Notes to Consolidated Financial Statements.

~~The~~Another ~~Company~~investment ~~annually~~of ~~evaluates~~ the ~~positive and negative evidence bearing upon the realizability of its deferred tax assets. The~~ Company, ~~however, has considered results of operations and concluded that it~~ is ~~more~~designated ~~likely~~as ~~than~~available-for-sale ~~not~~in ~~that~~accordance ~~the~~with ~~deferred tax assets will not be realizable. As a result,~~ the ~~Company~~provisions ~~has~~primarily ~~determined~~codified ~~that~~under aASC ~~valuation allowance of~~320-10-25, ~~$31.4~~“Investments—Debt ~~million~~ and ~~$35.0 million~~Equity ~~is required at December 31~~Securities,” ~~2012~~ and ~~2011~~as such, ~~respectively.~~unrealized ~~The~~gains ~~valuation~~and ~~allowance~~losses ~~decreased~~are byreported ~~$3.5~~in ~~million~~the ~~primarily~~accumulated ~~due~~other tocomprehensive ~~the~~income ~~expiration~~component of astockholders’ ~~capital~~equity. ~~loss~~This ~~carry~~investment ~~forward~~is ~~and~~included ~~a decrease~~ in ~~the~~non-current other ~~asset~~ ~~reserves~~assets ~~partially offset by an increase~~ in ~~deferred~~the ~~tax~~accompanying ~~assets~~consolidated ~~arising~~balance ~~from current year’s net operating losses~~sheets. ~~The~~ ~~tax effects of temporary differences that gave rise to deferred tax assets as of December 31, 2012 and 2011, were as follows (in thousands):~~

	December 31,
	2012			2011
Deferred tax assets:
Net operating losses	$	28,824		$	28,196
Capital losses		3,907			6,173
Other asset reserves		268			2,335
AMT credit		—			649
Deferred compensation		19			9
Total deferred tax assets		33,018			37,362
Valuation allowance		(31,432	)		(34,968	)
		1,586			2,394
Deferred tax liabilities:
State deferreds		(1,586	)		(2,394	)
Total deferred tax liabilities		(1,586	)		(2,394	)
Net deferred taxes	$	—		$	—

F-8

AsTable of December 31, 2012, the Company had federal NOLs of approximately $73.6 million that will expire from 2021 through 2032. The Company had post-apportionment state NOLs of approximately $42.4 million that will expire from 2013 through 2032. The Company also has pre-apportionment NOLs from New York State and New York City totaling $105.1 million at December 31, 2012. Since the Company has no revenue-generating operations, the apportionment factor is zero and thus no deferred tax asset is recognized. The NOLs from New York State and New York City carry forward for 20 years (expiring between 2020 and 2032). If the Company were to commence operations in New York State or New York City in future years, the apportionment factor would exceed zero resulting in deferred tax assets for which realization would be assessed. Contents

InIncome ~~connection~~Taxes with the September, 18, 2008, recapitalization of the Company, the Company completed a review of any potential limitation on the use of its NOLs under Section 382 of the Internal Revenue Code. Because of our current lack of operations, we have established a valuation allowance for the entire amount of federal and state NOLs as it is unlikely that we can realize these deferred tax benefits in the future. Based on such review, the Company does not believe Section 382 of the Internal Revenue Code will adversely impact its ability to use its current net operating losses.

The ~~following~~Company isaccounts afor ~~reconciliation~~income oftaxes in accordance with ASC 740-10, “Income Taxes,” which requires that deferred tax assets and liabilities be computed based on the ~~statutory~~difference ~~federal~~between the financial statement and income tax ~~rate~~ bases of assets and liabilities using enacted tax rates. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. A valuation allowance is recognized if, based on the ~~actual~~available ~~effective~~evidence, ~~income~~it is more likely than not that some or all of the deferred tax ~~rate~~asset ~~for~~will ~~continuing~~not ~~operations:~~be realized.

	2012			2011
Federal tax (benefit) rate		(34.0	)%		(34.0	)%
Increase (decrease) in taxes resulting from:
State income taxes		(5.8	)		(5.8	)
Change in valuation allowance		39.1			38.1
Permanent differences		0.7			1.6
Minimum tax		0.3			0.1
		0.3	%		0.0	%

The Company records liabilities related to uncertain tax positions in accordance with ASC 740, which provides guidance in accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for a tax position taken and expected to be taken in a tax return. For tax benefits to be recognized under ASC 740, a tax position must be more likely-than-not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company does not have a liability for unrecognized tax benefits at December 31, 2014 and 2013, respectively.

~~F-10~~Earnings (Loss) Per Common Share

~~Table~~Earnings (loss) per common share have been determined in accordance with the provisions of ~~Contents~~ASC 260-10, “Earnings Per Share,” which requires dual presentation of basic and diluted earnings per share on the face of the income statement and a reconciliation of the numerator and denominator of the basic earnings per share computation to the numerator and denominator of the diluted earnings per share computation.

6.Recently ~~Accrued~~Issued ~~Expenses~~Accounting ~~and~~Standards ~~Other Current Liabilities~~

AtIn ~~December~~August 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 312014-15, ~~2012~~Presentation of Financial Statements—Going Concern (Subtopic 205-40). The amendments in this ASU provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and ~~2011~~to provide related footnote disclosures. ASU No. 2014-15 is effective for the Company beginning January 1, ~~accrued~~2016. ~~expenses~~The ~~and~~Company ~~other~~does ~~current liabilities~~not ~~consisted~~expect the adoption of this ASU to significantly impact the ~~following~~Company’s ~~(in~~consolidated ~~thousands):~~statements of financial position or results of operations.

	December 31,
	2012		2011
Accrued payroll, related items and deferred compensation	$	40	$	38
Professional and other service providers		—		8
Franchise tax payable		9		11
	$	49	$	57

3. Variable Interest Entity (“VIE”)

7Three Lions met the definition of a variable interest entity as the total equity investment at risk in Three Lions was not sufficient to permit Three Lions to finance its activities without further subordinated financial support by any parties, including the equity holders. ~~Stock~~Management ~~Plan~~determined at the date of the Company’s third contribution that the entity was a variable interest entity primarily based on the equity investment at risk in Three Lions totaling $9.0 million, which consisted of three contributions by the Company of $3.1 million on March 18, 2013, $1.9 million on April 26, 2013, and $3.5 million on October 2, 2013, and founder contributions of $.5 million, compared to capital in excess of that amount deemed necessary to develop and produce content, market and air the first revenue-generating event on September 9, 2014. The Company’s contributions total $8.5 million and the founders’ contributions total $.5 million. As the Company did not have sufficient cash on hand to make its third contribution, the Company raised capital through an offering of its common stock to its shareholders.

~~1993~~The ~~Omnibus~~Company’s ~~Stock~~equity ~~Plan~~interest in Three Lions represented a variable interest in a VIE. Due to certain requirements under the LLC Agreement of Three Lions, the Company, through its voting rights associated with its LLC units, did not have the sole power to direct the activities of Three Lions that most significantly impacted Three Lion’s economic performance and the obligation to absorb losses of Three Lions that could potentially be significant to Three Lions or the right to receive benefits from Three Lions that could potentially be significant to Three Lions. Specifically, the Company shared power with the founders who controlled the common units of Three Lions to approve budgets and business plans and make key business decisions all of which required unanimous consent from all the executive board members. As a result, the Company was not the primary beneficiary of Three Lions and thus did not consolidate it. However, the Company had significant influence over Three Lions and therefore, accounted for its ownership interest in Three Lions under the equity method of accounting.

~~Under~~Through ~~its 1993 Omnibus Stock Plan~~December 31, ~~as amended (the “Omnibus Plan”)~~2014, the Company’s ~~reserved~~total upcontributions ~~to 3,000,000 shares~~ of ~~its common stock for issuance pursuant to the grant of incentive stock options, nonqualified stock options, or restricted stock~~$8.5 ~~The~~million ~~Omnibus~~were ~~Plan~~reduced ~~is administered~~ by ~~the~~Simon’s ~~Compensation~~absorption ~~Committee~~ of ~~the~~its ~~Board~~share of ~~Directors.~~Three Lions’ ~~Subject~~operating tolosses ~~the~~from ~~provisions of~~ the ~~Omnibus~~period ~~Plan~~March 18, ~~the~~2013, ~~Compensation~~through ~~Committee~~December 31, ~~had~~2014, ~~the~~which ~~authority~~reduced ~~to select~~ the ~~optionees~~carrying orvalue ~~restricted stock recipients and determine the terms~~ of ~~the~~its ~~options~~Three orLions ~~restricted~~investment ~~stock~~to ~~granted~~$0. Also, ~~including: (i)~~ the ~~number~~Company ofwas ~~shares;~~required ~~(ii) the~~to ~~exercise~~issue ~~period~~a ~~(which~~cash ~~may~~collateralized ~~not~~bank ~~exceed~~letter ~~ten~~of credit ~~years);~~on ~~(iii)~~April ~~the~~12, ~~exercise~~2013 ~~or purchase price (which~~ in the ~~case~~amount of an$.2 ~~incentive~~million ~~stock~~with ~~option~~an ~~cannot~~expiration ~~be less than the market price of the common stock on the~~ date of ~~grant); (iv)~~April ~~the type and duration of options or restrictions~~15, ~~limitations on transfer~~2015, ~~and~~to ~~other restrictions;~~guarantee ~~and~~payments ~~(v) the~~on ~~time, manner, and form of payment.~~

~~Generally,~~F-9 an option is not transferable by the option holder except by will or by the laws of descent and distribution. Also, generally, no incentive stock option may be exercised more than 60 days following termination of employment. However, in the event that termination is due to death or disability, the option is exercisable for a maximum of 180 days after such termination.

OptionsTable granted under this plan generally become exercisable in three equal installments commencing on the first anniversary of the date of grant. Options granted during 2003 became exercisable in two equal installments commencing on the first anniversary of the date of grant. As the Omnibus Plan terminated in May 2003 except as to options outstanding at that time, no further options were granted under the plan. Contents

~~The~~ an ~~following~~office ~~summarizes~~lease obtained by Three Lions. In connection with the ~~status~~liquidation of Three Lions, the Company’s ~~incentive~~lost ~~stock~~its ~~options~~cash ascollateralized bank letter of credit and, accordingly, it has recorded loss of $.2 million for the year ended December 31, ~~2012~~2014. ~~and~~The ~~2012~~Company’s investment, and ~~changes~~guarantee, ~~for~~related to Three Lions totaled $8.7 million and represented the ~~years~~Company’s ~~then~~maximum ~~ended:~~exposures to loss.

	2012				2011
	Shares		WeightedExercisePrice		Shares			WeightedExercisePrice
Outstanding at the beginning of year		55,000	$	0.10		60,000		$	0.26
Granted		—		—		—			—
Exercised		—		—		—			—
Expired/Forfeited		—		—		(5,000	)		2.00
Outstanding at end of year		55,000		0.10		55,000			0.10
Options exercisable at year-end		55,000		0.10		55,000			0.10
Options available for future grant		—				—
Weighted average fair value of options granted during the year		Not applicable				Not applicable

Due to a confluence of a number of adverse factors, but in particular, a ratings performance well below expectations on Three Lion’s initial Fashion Rocks^TM broadcast on September 9, 2014, and the resultant decision to cancel further production on other projects, Three Lions recorded unanticipated losses. In a meeting held on October 27, 2014, the executive board of Three Lions considered and unanimously approved a plan proposed by Three Lions’ management, with the assistance of its advisors, to proceed with the voluntary liquidation and dissolution of Three Lions in accordance with Delaware law. On January 30, 2015, Three Lions was dissolved with the filing of its Certificate of Cancellation with the state of Delaware. No amounts were distributed to the Company or to the other members of Three Lions in the liquidation.

~~F-11~~A summary of the assets and liabilities as of December 31, 2014 and operating results for the year then ended, related to Three Lions are as follows (in thousands):


Current assets:
Cash	$	2

Total current assets		2

Total assets		2
Total liabilities		—

Net assets	$	2


Revenue	$	15,802
Cost of revenue		(23,335	)

Gross loss		(7,533	)
General and administrative expenses		(4,391	)
Depreciation and amortization		(49	)

Operating loss		(11,973	)
Interest income		4
Interest expense		(97	)
Liquidation costs, net of $23 recoveries		(1,606	)
Debt forgiveness		9,443
Settlement losses		(93	)

Net loss	$	(4,322	)

The ~~following~~debt ~~table~~forgiveness ~~summarizes~~totaling ~~information~~$9.4 ~~about~~million ~~stock~~relates ~~options~~to the deficiency between the amount of Three Lions’ assets ~~outstanding~~distributed atto ~~December 31~~its creditors and the amount owed to such creditors. The creditors of Three Lions do not have recourse against the general credit of the Company, ~~2012:~~regardless of whether Three Lions is accounted for as a consolidated entity.

	Options Outstanding and Exercisable
Range of Exercise Prices	NumberOutstanding andExercisable		WeightedAverageRemainingContractualLife		WeightedAveragePrice		AggregateIntrinsicValue
$ 0.10 – $ 0.10		55,000		0.35	$	0.10	$	—

4. Long-term Investment

The ~~aggregate~~Company ~~intrinsic~~holds an investment in an available-for-sale equity security with a fair value of approximately $15,000 and $37,000 at December 31, 2014 and 2013, respectively, which is included in other assets in the ~~preceding~~accompanying ~~table~~consolidated ~~represents~~balance ~~the~~sheets. ~~total~~The ~~pretax~~cost ~~intrinsic~~basis ~~value~~in this available-for-sale security was approximately $19,000 ~~based~~at onDecember 31, ~~the~~2014 ~~Company’s~~and ~~closing~~2013. Total ~~stock~~unrealized ~~price~~(losses) ofgains in accumulated other comprehensive income totaled approximately $~~0.10~~(4,000) onand $18,000 at December 31, ~~2012~~2014 and 2013, respectively. This investment is recorded at fair value using quoted prices in active markets for identical assets or liabilities (Level 1).

85. ~~Earnings~~Commitments ~~per~~and ~~Share Disclosure~~ Contingencies

The Company ~~calculates~~may ~~its~~be ~~earnings~~involved ~~per share~~ in ~~accordance~~litigation ~~with~~and ~~ASC~~legal ~~260-10,~~matters ~~“Earnings~~which ~~Per~~arise ~~Share.”~~in ~~There~~the ~~were~~ordinary ~~50,611,879 weighted~~course ~~average~~of ~~shares~~business. ~~outstanding~~The onCompany adoes ~~basic~~not ~~and~~believe that ~~diluted basis for~~ the ~~years~~ultimate ~~ended~~resolution ~~December 31,~~of ~~2012~~these litigation and ~~2011.~~legal ~~In addition~~matters, ~~there~~if ~~were 55~~any,~~000~~ ~~weighted~~will ~~average~~have ~~shares~~a ~~related~~material toadverse ~~stock~~effect ~~options~~on ~~exercisable~~its ~~for~~financial ~~the years ended December 31~~condition, ~~2012~~ ~~and~~results ~~2011, that were not included in the computation~~ of ~~diluted~~operations, ~~earnings~~or ~~per share because to do so would have been antidilutive as the Company has a~~ net ~~loss~~cash ~~for each period presented~~flows.

9.F-10 ~~Subsequent Event~~

OnTable March 22, 2013, the Company announced in a current report of Form 8-K that it, together with Richard Beckman, Joel Katz and OA3 had entered into the limited liability company agreement (the “Operating Agreement”) of Three Lions Entertainment, LLC (“Three Lions”). Pursuant to the Operating Agreement, the Company made an initial capital contribution of $3,150,000 with respect to membership units representing 60% of the voting power of Three Lions. The membership units received by the Company represent a 60% interest in the economic returns of Three Lions, including certain preferences with respect to common holders on operating returns and on a liquidation or sale of Three Lions. The Company has the ability to, but is not required to, make certain additional capital contributions. If the Company does not make additional contributions, OA3 is obligated to make such contributions in the amounts that would otherwise be made by the Company. If OA3 makes such contributions, OA3 will receive a proportionate interest in Three Lions, subject to certain exceptions. Contents

~~F-12~~ 6. Lease Obligations and Other Commercial Commitments

The approximate minimum rental commitments under all noncancelable leases at December 31, 2014, total $30,537 and are due in 2015.

Rental expense for all operating leases was approximately $48,000 and $47,000 in 2014 and 2013, respectively. Rent is charged to operations on a straight-line basis.

At December 31, 2014, the Company has a letter of credit totaling approximately $36,000 which is considered restricted cash and supports the Company’s periodic payroll obligations.

7.	Income Taxes

The Company had a provision (benefit) for income taxes for the years ended December 31, 2014 and 2013 that consisted of the following (in thousands):


	2014		2013
Current:
Foreign	$	—	$	—
Federal		—		—
State		9		5

Total		9		5
Deferred:
Foreign		—		—
Federal		—		(5	)
State		—		(1	)

Total		—		(6	)
Total:
Foreign		—		—
Federal		—		(5	)
State		9		4

Total	$	9	$	(1	)

F-11

The Company annually evaluates the positive and negative evidence bearing upon the realizability of its deferred tax assets. The Company, however, has considered results of current operations and concluded that it is more likely than not that the deferred tax assets will not be realizable. As a result, the Company has determined that a valuation allowance of $38.2 and $31.9 million is required at December 31, 2014 and 2013, respectively. The valuation allowance decreased primarily due to an increase in deferred tax assets arising from current year’s net operating losses (“NOLs”) which was partially offset by reduction in deferred tax assets related to capital losses. The tax effects of temporary differences that gave rise to deferred tax assets at December 31, 2014 and 2013, were as follows (in thousands):


	December 31,
	2014			2013
Deferred tax assets:
Net operating losses	$	42,579		$	28,973
Capital losses		361			4,153
Other asset reserves		—			1
Accrued expenses		18			23

Total deferred tax assets		42,958			33,150
Valuation allowance		(38,166	)		(31,931	)

		4,792			1,219
Deferred tax liabilities:
State deferreds		(4,814	)		(1,219	)
Other investment		22			—

Total deferred tax liabilities		(4,792	)		(1,219	)

Net deferred taxes	$	—		$	—

As of December 31, 2014, the Company had federal NOLs totaling approximately $83.8 million and post-apportionment state NOLs totaling approximately $158.8 million. New York State made changes to the carryforward rules for NOLs, and the New York State NOLs have been revalued to be post-apportionment in accordance with New York State instructions. The New York State post-apportionment NOLs included above total $122.6 million. The federal NOLs carry forward for 20 years and being to expire in 2021 through 2035. The state post-apportioned NOLs are from various states and begin to expire in 2015 through 2035.

The Company also has pre-apportionment NOLs from New York City totaling $113.7 million as of December 31, 2014. Since the Company has no revenue-generating operations in New York City and none are expected in the future, management has determined that none of the NOLs should be recognized. If the Company were to commence operations in New York City in future years, the realizability of the NOLs and related deferred tax assets will be assessed at such time. The NOLs from New York City carry forward for 20 years and begin to expire in 2021 through 2035.

The federal and state NOLs may be subject to certain limitations under Section 382 of the Internal Revenue Code, which could significantly restrict the Company’s ability to use the NOLs to offset taxable income in subsequent years. The Company completed a review of any potential limitation on the use of its net operating losses under Section 382 on August 9, 2008, and an update to this review on June 7, 2013. Based on such reviews, the Company does not believe Section 382 of the Internal Revenue Code will adversely impact its ability to use its current net operating losses to offset future taxable income, if any.

The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate for continuing operations:


	2014			2013
Federal tax (benefit) rate		34.0	%		(34.0	)%

Increase (decrease) in taxes resulting from:
State income taxes		5.8			(5.8	)
Change in valuation allowance		(39.4	)		39.2
Permanent differences		(0.4	)		0.6
Minimum tax		(0.1	)		0.1

		(0.1	)%		0.1	%

F-12

8.	Accrued Expenses and Other Current Liabilities

At December 31, 2014 and 2013, accrued expenses and other current liabilities consisted of the following (in thousands):


	December 31,
	2014		2013
Accrued payroll, related items and deferred compensation	$	46	$	47
Accrued insurance expense		18		—
Accrued professional fees		—		4

	$	64	$	51

9.	Stock Plan

1993 Omnibus Stock Plan

Under its 1993 Omnibus Stock Plan, as amended (the “Omnibus Plan”), the Company reserved up to 3,000,000 shares of its common stock for issuance pursuant to the grant of incentive stock options, nonqualified stock options, or restricted stock. The Omnibus Plan is administered by the Compensation Committee of the Board of Directors. Subject to the provisions of the Omnibus Plan, the Compensation Committee had the authority to select the optionees or restricted stock recipients and determine the terms of the options or restricted stock granted, including: (i) the number of shares; (ii) the exercise period (which may not exceed ten years); (iii) the exercise or purchase price (which in the case of an incentive stock option cannot be less than the market price of the common stock on the date of grant); (iv) the type and duration of options or restrictions, limitations on transfer, and other restrictions; and (v) the time, manner, and form of payment.

Generally, an option is not transferable by the option holder except by will or by the laws of descent and distribution. Also, generally, no incentive stock option may be exercised more than 60 days following termination of employment. However, in the event that termination is due to death or disability, the option is exercisable for a maximum of 180 days after such termination.

Options granted under this plan generally become exercisable in three equal installments commencing on the first anniversary of the date of grant. Options granted during 2003 became exercisable in two equal installments commencing on the first anniversary of the date of grant. As the Omnibus Plan terminated in May 2003 except as to options outstanding at that time, no further options were granted under the plan.

All options outstanding relating to the Company’s Omnibus Plan either were exercised or expired during 2013. Accordingly, no options to purchase shares of common stock were outstanding at December 31, 2014 and 2013. In addition, no further options are available for grant under the plan.

F-13

The following summarizes the status of the Company’s incentive stock options as of December 31, 2014 and 2013 and changes for the years then ended:


	2014				2013
	Shares		Weighted Exercise Price		Shares			Weighted Exercise Price
Outstanding at the beginning of year		—	$	—		55,000		$	0.10
Granted		—		—		—			—
Exercised		—		—		(35,000	)		0.10
Expired/Forfeited		—		—		(20,000	)		0.10

Outstanding at end of year		—		—		—			—


Options exercisable at year-end		—		—		—			—


Options available for future grant		—				—


Weighted average fair value of options granted during the year		Not applicable				Not applicable

10.

Loss per Share Disclosure

The Company calculates its loss per share in accordance with ASC 260-10, “Earnings Per Share.” There were 74,501,559 and 56,580,155 weighted average shares outstanding on a basic and diluted basis for the years ended December 31, 2014 and 2013, respectively. In addition, there 22,671 weighted average shares related to stock options exercisable for the year ended December 31, 2013 that were not included in the computation of diluted earnings per share because to do so would have been antidilutive as the Company has a net loss for 2013. All outstanding stock options of the Company either were exercised or expired during 2013.

11.

Related-Party Transactions

During 2014 and 2013, the Company earned approximately $158,000 and $105,000, respectively, from Three Lions, a VIE of the Company, related to limited accounting services and reimbursements. Of these amounts, $0 and $12,500 was in accounts receivable at December 31, 2014 and 2013. Also, during 2014 and 2013, the Company earned $144,000 and $117,000, respectively, from Wild Oats Marketing, LLC, a company controlled by the Company’s largest shareholder, related to limited accounting and administrative services. Of these amounts, $12,000 is in accounts receivable at December 31, 2014 and 2013.

F-14

Filing Compare · SIMON WORLDWIDE INC