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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

For the quarterly period ended September 30, 2015

OR

For the transition period from                      to                     

Commission File Number: 0-21878

Simon Worldwide, Inc.

(Exact name of registrant as specified in its charter)

18952 MACARTHUR BOULEVARD, IRVINE, CALIFORNIA 92612

(Address of principal executive offices)

(949) 251-4660

(Registrant’s telephone number, including area code)

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 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  x    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  x    No  ¨

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):

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

At November 6, 2015, 74,501,559 shares of the registrant’s common stock were outstanding.

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SIMON WORLDWIDE, INC.

FORM 10-Q

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PART I — FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

SIMON WORLDWIDE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

See the accompanying Notes to Condensed Consolidated Financial Statements.

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SIMON WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except loss per share data)

See the accompanying Notes to Condensed Consolidated Financial Statements.

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SIMON WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(in thousands)

See the accompanying Notes to Condensed Consolidated Financial Statements.

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SIMON WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

See the accompanying Notes to Condensed Consolidated Financial Statements.

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SIMON WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Simon Worldwide, Inc. (the “Company” or “Simon”) pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes in accordance with accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (“2014 10-K”). Certain prior period amounts were reclassified to conform to current period presentation.

The Company consolidates all entities that it controls by ownership of a majority voting interest as well any variable interest entities (“VIEs”) for which the Company was the primary beneficiary. The Company eliminates from its financial results all intercompany transactions, including the intercompany transactions with any consolidated VIEs.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of those considered necessary for fair presentation of the Company’s financial position, results of operations, and cash flows at the dates and for the periods presented.

Prior to August 2001, the Company was a multi-national, full service promotional marketing company. In August 2001, McDonald’s Corporation (“McDonald’s”), the Company’s principal customer, terminated its 25-year relationship with the Company as a result of the embezzlement by a former Company employee of 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 no longer having a business. 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. 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.

The Company is managed by the Chief Executive Officer, Greg Mays, and Chief Financial Officer, Anthony Espiritu, together with an acting general counsel. 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 on Form 8-K that it, together with Richard Beckman, Joel Katz and OA3, LLC (“OA3”), had entered into the limited liability company agreement (the “LLC Agreement”) of Three Lions Entertainment, LLC (“Three Lions”) on March 18, 2013. Three Lions business consisted of originating, producing, and monetizing annual television programming for broadcast on network television with a particular emphasis on branded entertainment and special events. Branded entertainment is an entertainment-based vehicle that is funded by advertisers and is complementary to a brands marketing strategy.

Pursuant 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 was party to a Pledge Agreement, dated May 7, 2014, with SunTrust Bank (“SunTrust”) wherein the Company pledged all of its equity interests in Three Lions (and all proceeds of such interests) to SunTrust as security for Three Lions’ obligations under a revolving credit facility that Three Lions obtained from SunTrust. The Company’s pledge of its equity interests in Three Lions terminated only upon the payment in full and termination of Three Lions’ obligations under the revolving credit facility. Three Lions paid in full the revolving credit facility on December 18, 2014.

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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^™ 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.

With no revenues from operations, the Company closely monitors and controls its expenditures within a reasonably predictable range. Cash used in operating activities was $.7 million and $.5 million for the nine months ended September 30, 2015 and 2014, 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 September 30, 2015 to maintain its scaled back operations, and a short-term funding commitment from the Company’s largest shareholder, management believes it has sufficient capital resources and liquidity to operate the Company through at least December 31, 2015.

The operating results for the nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the full year.

2. Variable Interest Entity (“VIE”)

CONSOLIDATION OF VARIABLE INTEREST ENTITIES

Under certain criteria as provided for in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810, “Consolidation,” the Company may consolidate a partially-owned 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. Management 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.

The Company’s equity 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.

Through December 31, 2014, the Company’s total contributions of $8.5 million were reduced by Simon’s absorption of its share of Three Lions’ operating losses from the period March 18, 2013, through December 31, 2014, which reduced the carrying value of its Three Lions investment to $0. Also, the Company was required to issue a cash collateralized bank letter of credit on April 12, 2013 in the amount of $.2 million with an expiration date of April 15, 2015, to guarantee payments on

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an office lease obtained by Three Lions. In connection with the liquidation of Three Lions, the Company lost its cash collateralized bank letter of credit and, accordingly, it has recorded loss of $.2 million for the year ended December 31, 2014. The Company’s investment, and guarantee, related to Three Lions totaled $8.7 million and represented the Company’s maximum exposures to loss.

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^™ 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.

3. Long-term Investment

The Company holds an investment in an available-for-sale equity security with a fair value of approximately $7,000 and $15,000 at September 30, 2015, and December 31, 2014, respectively, which is included in other assets in the accompanying consolidated balance sheets. The cost basis in this available-for-sale security was approximately $19,000 at September 30, 2015, and December 31, 2014. Total unrealized (losses) gains in accumulated other comprehensive income totaled $(11,000) and $(4,000) at September 30, 2015, and December 31, 2014. This investment is recorded at fair value using quoted prices in active markets for identical assets or liabilities (Level 1). Because of this active market and because this investment increased approximately 28.6% from approximately $7,000 at September 30, 2015, to approximately $9,000 at November 6, 2015, the Company does not consider these losses to be other-than-temporary.

4. Loss Per Share Disclosure

The Company calculates its earnings per share in accordance with ASC 260-10, “Earnings Per Share.” There were 74,501,559 weighted average shares outstanding for the three and nine months ended September 30, 2015 and 2014. There were no dilutive shares outstanding during any of the periods.

5. Income Taxes

The Company had a provision for income taxes for the nine months ended September 30, 2015 and 2014 that consisted of the following (in thousands):

The Company’s provision for income taxes for the nine months ended September 30, 2015, included adjustments to reverse federal and state deferred taxes relating to a prior period totaling approximately $4,700 and $800, respectively. The Company does not consider these adjustments to be material.

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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 $45.0 million and $38.2 million is required at September 30, 2015, and December 31, 2014, respectively. The tax effects of temporary differences that gave rise to deferred tax assets at September 30, 2015, and December 31, 2014, were as follows (in thousands):

As of September 30, 2015, the Company had federal NOLs totaling approximately $84.4 million and post-apportionment state NOLs totaling approximately $153.8 million. The New York State post-apportionment NOLs included above total $121.8 million. The federal NOLs carry forward for 20 years and begin to expire in 2021 through 2036. The state post-apportioned NOLs are from various states and begin to expire in 2015 through 2036.

The Company also has pre-apportionment NOLs from New York City totaling $118.9 million as of September 30, 2015. 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 2036.

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:

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6. Related-Party Transactions

The Company earned $37,500 and $112,500 during the three and nine months ended September 30, 2014, respectively, from Three Lions, a former VIE of the Company, related to accounting services. There was approximately $17,000 for amounts earned from Three Lions in accounts receivable at December 31, 2014. Since, on January 30, 2015, Three Lions was dissolved with the filing of its Certificate of Cancellation with the state of Delaware, there was no amount in accounts receivable from Three Lions at September 30, 2015.

The Company also earned $36,000 and $108,000 during the three and nine months ended September 30, 2015, respectively, and during the three and nine months ended September 30, 2014, respectively, from Wild Oats Marketing, LLC, a company controlled by the Company’s largest shareholder, related to accounting and administrative services. Of these amounts, $12,000 was in accounts receivable at September 30, 2015 and December 31, 2014.

Beginning in January 2015, the Company began providing accounting services to VodkaCo, LLC, (“VodkaCo) another company controlled by the Company’s largest shareholder. The Company earned approximately $18,000 and $52,000 from this arrangement during the three and nine months ended September 30, 2015, respectively. At September 30, 2015, the Company had $24,000 in accounts receivable from VodkaCo.

Although the Company’s board members received no compensation for their services during the three and nine months ended September 30, 2015 and during the three and nine months ended September 30, 2014, the Company had a payable accrued totaling approximately $15,000 at September 30, 2015, and December 31, 2014, due to its board members for services rendered prior to the Company’s decision in August 2012 to suspend their compensation arrangements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of operations of the Company for the three and nine months ended September 30, 2015, as compared to the same period in the previous year. This discussion should be read in conjunction with the condensed consolidated financial statements of the Company and related Notes included elsewhere in this Form 10-Q.

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 included in the 2014 10-K, and below in Part II – Other Information, for purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995.

General

Prior to August 2001, Simon Worldwide, Inc. (the “Company”) was a multi-national, full service promotional marketing company. In August 2001, McDonald’s Corporation (“McDonald’s”), the Company’s principal customer, terminated its 25-year relationship with the Company as a result of the embezzlement by a former Company employee of 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 no longer having a business. 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. 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.

The Company is managed by the Chief Executive Officer, Greg Mays, and Chief Financial Officer, Anthony Espiritu, together with an acting general counsel. 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 on Form 8-K that it, together with Richard Beckman, Joel Katz and OA3, LLC (“OA3”), had entered into the limited liability company agreement (the “LLC Agreement”) of Three Lions Entertainment, LLC (“Three Lions”) on March 18, 2013.

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Pursuant 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 was party to a Pledge Agreement, dated May 7, 2014, with SunTrust Bank (“SunTrust”) wherein the Company pledged all of its equity interests in Three Lions (and all proceeds of such interests) to SunTrust as security for Three Lions’ obligations under a revolving credit facility that Three Lions obtained from SunTrust. The Company’s pledge of its equity interests in Three Lions terminated only upon the payment in full and termination of Three Lions’ obligations under the revolving credit facility. Three Lions paid in full the revolving credit facility on December 18, 2014.

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^™ 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.

Outlook

The Company has not had an operating business since 2002. Since 2002, its Board of Directors has considered various alternative courses of action, including possibly acquiring or combining with one or more operating businesses, and has reviewed and analyzed a number of proposed transactions. In March 2013, the Company invested its 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, the Company consummated a $5 million rights offering of its common stock to its existing shareholders to fund its remaining $3.5 million capital contribution to Three Lions and to provide working capital for the Company until Three Lions was projected to be able to provide it with distributions to help pay its operating costs. As a result of these transactions, since March 2013, the Company’s business had 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^™ 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 the Company or to the other members of Three Lions in the liquidation.

Accordingly, the Company has suffered the loss of its entire $8.5 million capital investment in Three Lions. The Company also lost its $199,583 cash collateralized bank letter of credit that it provided to support payments on an office lease obtained by Three Lions, and the Company incurred additional legal and other professional fees and associated costs in connection with Three Lions’ liquidation totaling approximately $30,000. These losses have had and will continue to have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

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The Company’s investment in Three Lions constituted its primary asset on its financial statement and it has no other assets with the potential of generating positive cash flow. Considering the Company’s current cash position of $0.3 million at September 30, 2015, its average historical spending to support continuing operations, and a short-term funding commitment from its largest shareholder, the Company’s management believes it has sufficient capital resources and liquidity to continue to operate in a manner consistent with its recent operations through at least December 31, 2015. However, given the Company’s lack of an operating business or other revenue generating opportunities, the Company’s management believes that it will deplete its remaining cash resources in a little over three months. There can be no assurances that the Company will be able to secure financing or an operating business before its remaining cash is depleted. To the extent that the Company is unable to identify and obtain an alternate source of funds, it will likely be forced to liquidate.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2015, Compared to Three Months Ended September 30, 2014

The Company generated no revenue or gross profits during the three months ended September 30, 2015 and 2014.

General and administrative expenses totaled $.2 million during the three months ended September 30, 2015, which is consistent with the $.2 million during the three months ended September 30, 2014.

Other income totaled $92,000 during the three months ended September 30, 2015, compared to $74,000 during the three months ended September 30, 2014. This increase was primarily due to $18,000 earned in the current period for accounting services the Company began providing in January 2015 to a company controlled by an affiliate of the Company’s largest shareholder and approximately $38,000 received related to a previously impaired investment. These increases were partially offset due to the liquidation and dissolution of Three Lions for which the Company was providing accounting services totaling approximately $38,000 in the prior period. The current arrangement and a second arrangement where the Company provides limited accounting and administrative services to another company controlled by an affiliate of the Company’s largest shareholder entail providing these services through an undetermined end date, including payments totaling approximately $54,000 expected for the fourth quarter. The Company does not consider these arrangements to be part of its recurring operations.

Other expense totaled $200,000 during the three months ended September 30, 2014, compared to $0 during the three months ended September 30, 2015. The decrease is due to a cash collateralized bank letter of credit the Company was required to issue on April 12, 2013 to guarantee payments on an office lease obtained by Three Lions. In connection with the liquidation of Three Lions, the Company lost its cash collateralized bank letter of credit and, accordingly, it recorded a loss of $200,000 during the three months ended September 30, 2014.

Equity in the losses of Three Lions decreased from $4.3 million during the three months ended September 30, 2014, to $0 during the three months ended September 30, 2015. The decrease is due to the voluntary liquidation and dissolution of Three Lions in accordance with Delaware law. 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.

Nine Months Ended September 30, 2015, Compared to Nine Months Ended September 30, 2014

The Company generated no revenue or gross profits during the nine months ended September 30, 2015 and 2014.

General and administrative expenses totaled $.8 million during the nine months ended September 30, 2015, which is consistent with the $.8 million during the nine months ended September 30, 2014.

Other income totaled $197,000 during the nine months ended September 30, 2015, compared to $221,000 during the nine months ended September 30, 2014. This decrease was primarily due to the liquidation and dissolution of Three Lions for which the Company was providing accounting services totaling $112,500 in the prior period. This decrease was partially offset due to approximately $52,000 earned in the current period for accounting services the Company began providing in January 2015 to a company controlled by an affiliate of the Company’s largest shareholder and approximately $38,000 received related to a previously impaired investment. The current arrangement and a second arrangement where the Company provides limited accounting and administrative services to another company controlled by an affiliate of the Company’s

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largest shareholder entail providing these services through an undetermined end date, including payments totaling approximately $54,000 expected for the fourth quarter. The Company does not consider these arrangements to be part of its recurring operations.

Other expense totaled $200,000 during the nine months ended September 30, 2014, compared to $0 during the nine months ended September 30, 2015. The decrease is due to a cash collateralized bank letter of credit the Company was required to issue on April 12, 2013 to guarantee payments on an office lease obtained by Three Lions. In connection with the liquidation of Three Lions, the Company lost its cash collateralized bank letter of credit and, accordingly, it recorded a loss of $200,000 during the nine months ended September 30, 2014.

Equity in the losses of Three Lions decreased from $6.0 million during the nine months ended September 30, 2014, to $0 during the nine months ended September 30, 2015. The decrease is due to the voluntary liquidation and dissolution of Three Lions in accordance with Delaware law. 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.

LIQUIDITY AND CAPITAL RESOURCES

Working capital was $.4 million and $1.2 million at September 30, 2015, and September 30, 2014, respectively.

Net cash used in operating activities during the nine months ended September 30, 2015, totaled $.7 million primarily due to a net loss of $.6 million and a net change in working capital items. Net cash used in operating activities during the nine months ended September 30, 2014, totaled $.5 million primarily due to a net loss of $6.7 million and a net change in working capital items partially offset by equity in the losses of Three Lions of $6.0 million.

There were no investing activities during the nine months ended September 30, 2015 and 2014.

There were no financing activities during the nine months ended September 30, 2015 and 2014.

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^™ 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.

With no revenues from operations, the Company closely monitors and controls its expenditures within a reasonably predictable range. Cash used by operating activities was $.7 million and $.5 million for the nine months ended September 30, 2015 and 2014, 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 September 30, 2015, to maintain its scaled back operations and a short-term funding commitment from the Company’s largest shareholder, management believes it has sufficient capital resources and liquidity to operate the Company through at least December  31, 2015.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The disclosure required by this Item is not material to the Company because the Company does not currently have any exposure to market rate sensitive instruments, as defined in this Item.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, 2015, the Company evaluated the effectiveness and design and operation of its disclosure controls and procedures. 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 Anthony Espiritu, the principal financial officer of the Company, reviewed and participated in this evaluation. Based on this evaluation, the principal executive and principal financial officers of the Company concluded that the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the quarter ended September 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

In addition to the other information set forth in this report and in our other reports and statements that we file with the SEC, including our quarterly reports on Form 10-Q, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in our 2014 10-K, which could materially affect our business, financial condition and future results. Except for the additional risk factor set forth below, we are not aware of any material changes from the risk factors set forth in our 2014 10-K.

Public company reporting requirements applicable to us strain our resources, increase our costs and may distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner, thus our Board of Directors may recommend that we deregister from the Exchange Act, if possible.

As a public company, we are required to comply with laws, regulations and requirements, including certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 and related regulations of the SEC. Complying with these statutes, regulations and requirements accounts for a substantial portion of our general and administrative expenses and occupies a significant amount of the time of our Board of Directors and management.

As our remaining limited cash is expended, our ability to continue to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired, and we may be subject to sanctions or investigation by regulatory authorities. In addition, failure to comply with Section 404 of the Sarbanes-Oxley Act of 2002 or a report of a material weakness may have a material adverse effect on our stock price.

Because of the cost of compliance, our Board of Directors may in the near future recommend that we deregister from the Exchange Act, if possible, if in its best judgment the costs of the requirements of being a public company outweigh the benefits to stockholders and if we are eligible to deregister. If we deregister, the market for trading in our common stock, which is currently very limited, is expected to become even less liquid. Moreover, information regarding our company will become less readily available. Accordingly, there is – and is expected to continue to be – almost no trading market for our stock, and there can be no assurance that even such limited trading market will continue or that you will be able to sell your shares at the desired price or at any price.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

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SIGNATURE

Pursuant to the requirements 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.

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