XBRL Proof

XBRL File

 
Document - Document and Entity Information
Document - Document and Entity Information (USD $) 12 Months Ended  
( custom:DocumentAndEntityInformationAbstract [Extension] )    
  Dec. 31, 2015 Feb. 28, 2017
     
     
     
Entity Registrant Name Capital Art, Inc.  
( dei:EntityRegistrantName )    
Entity Central Index Key 0001527844  
( dei:EntityCentralIndexKey )    
Document Type 10-K  
( dei:DocumentType )    
Document Period End Date 2015-12-31  
( dei:DocumentPeriodEndDate )    
Amendment Flag false  
( dei:AmendmentFlag )    
Current Fiscal Year End Date --12-31  
( dei:CurrentFiscalYearEndDate )    
Is Entity a Well-known Seasoned Issuer? No  
( dei:EntityWellKnownSeasonedIssuer )    
Is Entity a Voluntary Filer? No  
( dei:EntityVoluntaryFilers )    
Is Entity's Reporting Status Current? No  
( dei:EntityCurrentReportingStatus )    
Entity Filer Category Smaller Reporting Company  
( dei:EntityFilerCategory )    
Entity Public Float   35,036,149
( dei:EntityPublicFloat )    
Entity Common Stock, Shares Outstanding   325,570,524
( dei:EntityCommonStockSharesOutstanding )    
Document Fiscal Period Focus FY  
( dei:DocumentFiscalPeriodFocus )    
Document Fiscal Year Focus 2015  
( dei:DocumentFiscalYearFocus )    
(End Document - Document and Entity Information)
 
Statement - Consolidated Balance Sheets
Statement - Consolidated Balance Sheets (USD $)      
( us-gaap:StatementOfFinancialPositionAbstract )      
  Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2013
       
       
       
ASSETS      
( us-gaap:AssetsAbstract )      
    Current Assets:      
    ( us-gaap:AssetsCurrentAbstract )      
        Cash 32,570 340,523 20,919
        ( us-gaap:Cash )      
        Accounts receivable 112,460 13,691  
        ( us-gaap:AccountsReceivableNetCurrent )      
        Inventory 84,550 59,034  
        ( us-gaap:InventoryNet )      
        Stock subscription receivable 0 300,000  
        ( us-gaap:CommonStockShareSubscribedButUnissuedSubscriptionsReceivable )      
        Due from related parties 0 93,316  
        ( us-gaap:DueFromRelatedPartiesCurrent )      
        Prepaid expenses and other, net 41,061 9,613  
        ( us-gaap:PrepaidExpenseAndOtherAssetsCurrent )      
        Total current assets 270,641 816,177  
        ( us-gaap:AssetsCurrent )      
        Archival images, and property and equipment, net 3,058,983 3,341,552  
        ( us-gaap:PropertyPlantAndEquipmentNet )      
        Due from related party 91,000 0  
        ( us-gaap:DueFromRelatedPartiesNoncurrent )      
        Intangible assets, net 413,250 0  
        ( us-gaap:IntangibleAssetsCurrent )      
        Security deposits 13,581 6,356  
        ( us-gaap:SecurityDeposit )      
        TOTAL ASSETS 3,847,455 4,164,085  
        ( us-gaap:Assets )      
        LIABILITIES AND SHAREHOLDERS' EQUITY      
        ( us-gaap:LiabilitiesAndStockholdersEquityAbstract )      
            Current Liabilities:      
            ( us-gaap:LiabilitiesCurrentAbstract )      
                Accounts payable 244,977 108,694  
                ( us-gaap:AccountsPayableCurrent )      
                Accrued liabilities 460,708 650,031  
                ( us-gaap:AccruedLiabilitiesCurrent )      
                Payable to Globe Photo, Inc., short-term portion 120,000 0  
                ( us-gaap:OtherLoansPayableCurrent )      
                Due to related parties 46,084 64,274  
                ( us-gaap:DueToRelatedPartiesCurrent )      
                Note payable - short-term 150,000 0  
                ( us-gaap:ShortTermBorrowings )      
                Notes payable to related parties - current 289,743 41,000  
                ( us-gaap:NotesPayableRelatedPartiesClassifiedCurrent )      
                Total current liabilities 1,311,512 863,999  
                ( us-gaap:LiabilitiesCurrent )      
                Payable to Globe Photo, Inc., less short-term portion 10,000 0  
                ( us-gaap:OtherLoansPayableLongTerm )      
                Notes payable - net of current portion 120,000 0  
                ( us-gaap:LongTermDebtNoncurrent )      
                Related party notes payable - long term 0 100,000  
                ( us-gaap:NotesPayableRelatedPartiesNoncurrent )      
                Embedded derivative - put option 55,000 0 0
                ( us-gaap:EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability )      
                Total liabilities 1,496,512 963,999  
                ( us-gaap:Liabilities )      
                Commitments and contingencies  
                ( us-gaap:CommitmentsAndContingencies )      
                Shareholders' equity:      
                ( us-gaap:StockholdersEquityAbstract )      
                    Preferred stock, $0.0001 par value; 50,000,000 shares authorized; none issued and outstanding at December 31, 2015 and 2014 0 0  
                    ( us-gaap:PreferredStockValue )      
                    Common Stock, $0.0001 par value; 450,000,000 shares authorized; 325,341,224 and 311,973,283 shares issued and outstanding at December 31, 2015 and 2014 32,534 31,197  
                    ( us-gaap:CommonStockValue )      
                    Additional paid-in capital 4,051,874 3,239,961  
                    ( us-gaap:AdditionalPaidInCapital )      
                    Common stock subscribed 0 300,000  
                    ( custom:CommonStockSubscribed [Extension] )      
                    Retained deficit (1,733,465) (371,072)  
                    ( us-gaap:RetainedEarningsAccumulatedDeficit )      
                    Total Shareholders' equity 2,350,943 3,200,086 501,760
                    ( us-gaap:StockholdersEquity )      
                    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,847,455 4,164,085  
                    ( us-gaap:LiabilitiesAndStockholdersEquity )      
(End Statement - Consolidated Balance Sheets)
 
Statement - Consolidated Balance Sheets (Parenthetical)
Statement - Consolidated Balance Sheets (Parenthetical) (USD $)    
( us-gaap:StatementOfFinancialPositionAbstract )    
  Dec. 31, 2015 Dec. 31, 2014
     
     
     
Preferred stock, par value 0.0001 0.0001
( us-gaap:PreferredStockParOrStatedValuePerShare )    
Preferred stock, shares authorized 50,000,000 50,000,000
( us-gaap:PreferredStockSharesAuthorized )    
Preferred stock, shares issued 0 0
( us-gaap:PreferredStockSharesIssued )    
Preferred stock, shares outstanding 0 0
( us-gaap:PreferredStockSharesOutstanding )    
Common stock, par value 0.0001 0.0001
( us-gaap:CommonStockParOrStatedValuePerShare )    
Common stock, shares authorized 450,000,000 450,000,000
( us-gaap:CommonStockSharesAuthorized )    
Common stock, shares issued 325,341,224 311,973,283
( us-gaap:CommonStockSharesIssued )    
Common stock, shares outstanding 324,341,224 311,973,283
( us-gaap:CommonStockSharesOutstanding )    
(End Statement - Consolidated Balance Sheets (Parenthetical))
 
Statement - Consolidated Statements of Operations and Comprehensive Loss
Statement - Consolidated Statements of Operations and Comprehensive Loss (USD $) 12 Months Ended
( us-gaap:IncomeStatementAbstract )  
  Dec. 31, 2015 Dec. 31, 2014
     
     
     
Revenues 857,569 254,926
( us-gaap:Revenues )    
Cost of revenues 376,164 173,841
( us-gaap:CostOfRevenue )    
Gross profit 481,405 81,085
( us-gaap:GrossProfit )    
Operating expenses:    
( us-gaap:OperatingExpensesAbstract )    
    Product development, sales and marketing 595,691 92,545
    ( us-gaap:BusinessDevelopment )    
    General and administrative 839,124 429,099
    ( us-gaap:GeneralAndAdministrativeExpense )    
    Depreciation and amortization expense 402,722 144,486
    ( us-gaap:DepreciationAndAmortization )    
    Total operating expenses 1,837,537 666,130
    ( us-gaap:OperatingExpenses )    
    Loss from operations (1,356,132) (585,045)
    ( us-gaap:OperatingIncomeLoss )    
    Other income (expense):    
    ( us-gaap:OtherIncomeAndExpensesAbstract )    
        Interest and other income 661 36
        ( us-gaap:InterestAndOtherIncome )    
        Gain on bargain purchase 0 214,035
        ( us-gaap:BusinessCombinationBargainPurchaseGainRecognizedAmount )    
        Interest expense (6,922) (9,353)
        ( us-gaap:InterestExpense )    
        Total other income (expense) (6,261) 204,718
        ( us-gaap:OtherNonoperatingIncomeExpense )    
        Net loss before income taxes (1,362,393) (380,327)
        ( us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest )    
        Income taxes 0 0
        ( us-gaap:IncomeTaxExpenseBenefit )    
        Net loss (1,362,393) (380,327)
        ( us-gaap:NetIncomeLoss )    
        Basic and diluted loss per common share 0.00 0.00
        ( us-gaap:EarningsPerShareBasicAndDiluted )    
        Weighted average basic and diluted shares outstanding 321,910,400 268,407,275
        ( us-gaap:WeightedAverageNumberOfShareOutstandingBasicAndDiluted )    
(End Statement - Consolidated Statements of Operations and Comprehensive Loss)
 
Statement - Consolidated Statement of Changes in Shareholders' Equity
Statement - Consolidated Statement of Changes in Shareholders' Equity (USD $)          
( us-gaap:StatementOfStockholdersEquityAbstract )          
  Common Stock Additional Paid-In Capital Common Stock Subscribed Retained Earnings / Accumulated Deficit <Total>
( us-gaap:StatementEquityComponentsAxis )          
           
( us-gaap:EquityComponentDomain )          
From Jan. 1, 2014 to Dec. 31, 2014          
           
Beginning balance, shares 256,400,226        
( us-gaap:SharesOutstanding )          
Beginning balance, value 25,640 466,865 0 9,255 501,760
( us-gaap:StockholdersEquity )          
Outstanding shares of CAPA at the time of the reverse merger, shares 42,348,057        
( custom:OutstandingSharesOfCapaAtTimeOfReverseMergerShares [Extension] )          
Outstanding shares of CAPA at the time of the reverse merger, value 4,235 2,113,168     2,117,403
( custom:OutstandingSharesOfCapaAtTimeOfReverseMergerValue [Extension] )          
Common shares issued for stock subscription receivable, shares          
( custom:CommonSharesIssuedForStockSubscriptionReceivableShares [Extension] )          
Common shares issued for stock subscription receivable, value          
( custom:CommonSharesIssuedForStockSubscriptionReceivableValue [Extension] )          
Common shares issued for cash in connection with private placement, shares          
( us-gaap:StockIssuedDuringPeriodSharesOther )          
Common shares issued for cash in connection with private placement, value          
( us-gaap:StockIssuedDuringPeriodValueOther )          
Common shares issued for services, shares 4,225,000        
( us-gaap:StockIssuedDuringPeriodSharesIssuedForServices )          
Common shares issued for services, value 422 210,828     211,250
( us-gaap:StockIssuedDuringPeriodValueIssuedForServices )          
Common shares issued to related party for finder's fee, shares          
( custom:CommonSharesIssuedToRelatedPartyForFindersFeeShares [Extension] )          
Common shares issued to related party for finder's fee, value          
( custom:CommonSharesIssuedToRelatedPartyForFindersFeeValue [Extension] )          
Common shares issued for settlement of accrued liabilities, shares          
( custom:CommonSharesIssuedForSettlementOfAccruedLiabilitiesShares [Extension] )          
Common shares issued for settlement of accrued liabilities, value          
( custom:CommonSharesIssuedForSettlementOfAccruedLiabilitiesValue [Extension] )          
Common shares issued for cash, shares 9,000,000        
( us-gaap:StockIssuedDuringPeriodSharesNewIssues )          
Common shares issued for cash, value 900 449,100     450,000
( us-gaap:StockIssuedDuringPeriodValueNewIssues )          
Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement, shares          
( us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets )          
Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement, value          
( us-gaap:StockIssuedDuringPeriodValuePurchaseOfAssets )          
Common shares subscribed     300,000   300,000
( custom:CommonSharesSubscribedValue [Extension] )          
Net loss       (380,327) (380,327)
( us-gaap:NetIncomeLoss )          
Ending balance, shares 311,973,283        
( us-gaap:SharesOutstanding )          
Ending balance, value 31,197 3,239,961 300,000 (371,072) 3,200,086
( us-gaap:StockholdersEquity )          
           
           
From Jan. 1, 2015 to Dec. 31, 2015          
           
Beginning balance, shares 311,973,283        
( us-gaap:SharesOutstanding )          
Beginning balance, value 31,197 3,239,961 300,000 (371,072) 3,200,086
( us-gaap:StockholdersEquity )          
Outstanding shares of CAPA at the time of the reverse merger, shares          
( custom:OutstandingSharesOfCapaAtTimeOfReverseMergerShares [Extension] )          
Outstanding shares of CAPA at the time of the reverse merger, value          
( custom:OutstandingSharesOfCapaAtTimeOfReverseMergerValue [Extension] )          
Common shares issued for stock subscription receivable, shares 6,000,000        
( custom:CommonSharesIssuedForStockSubscriptionReceivableShares [Extension] )          
Common shares issued for stock subscription receivable, value 600 299,400 (300,000)    
( custom:CommonSharesIssuedForStockSubscriptionReceivableValue [Extension] )          
Common shares issued for cash in connection with private placement, shares 1,820,000        
( us-gaap:StockIssuedDuringPeriodSharesOther )          
Common shares issued for cash in connection with private placement, value 182 90,818     91,000
( us-gaap:StockIssuedDuringPeriodValueOther )          
Common shares issued for services, shares 2,470,000        
( us-gaap:StockIssuedDuringPeriodSharesIssuedForServices )          
Common shares issued for services, value 247 165,753     166,000
( us-gaap:StockIssuedDuringPeriodValueIssuedForServices )          
Common shares issued to related party for finder's fee, shares 200,000        
( custom:CommonSharesIssuedToRelatedPartyForFindersFeeShares [Extension] )          
Common shares issued to related party for finder's fee, value 20 9,980     10,000
( custom:CommonSharesIssuedToRelatedPartyForFindersFeeValue [Extension] )          
Common shares issued for settlement of accrued liabilities, shares 2,525,000        
( custom:CommonSharesIssuedForSettlementOfAccruedLiabilitiesShares [Extension] )          
Common shares issued for settlement of accrued liabilities, value 253 125,997     126,250
( custom:CommonSharesIssuedForSettlementOfAccruedLiabilitiesValue [Extension] )          
Common shares issued for cash, shares 7,820,000        
( us-gaap:StockIssuedDuringPeriodSharesNewIssues )          
Common shares issued for cash, value 782 390,218 (300,000)   91,000
( us-gaap:StockIssuedDuringPeriodValueNewIssues )          
Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement, shares 352,941        
( us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets )          
Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement, value 35 119,965     120,000
( us-gaap:StockIssuedDuringPeriodValuePurchaseOfAssets )          
Common shares subscribed          
( custom:CommonSharesSubscribedValue [Extension] )          
Net loss       (1,362,393) (1,362,393)
( us-gaap:NetIncomeLoss )          
Ending balance, shares 325,341,224        
( us-gaap:SharesOutstanding )          
Ending balance, value 32,534 4,051,874 0 (1,733,465) 2,350,943
( us-gaap:StockholdersEquity )          
(End Statement - Consolidated Statement of Changes in Shareholders' Equity)
 
Statement - Consolidated Statements of Cash Flows
Statement - Consolidated Statements of Cash Flows (USD $) 12 Months Ended
( us-gaap:StatementOfCashFlowsAbstract )  
  Dec. 31, 2015 Dec. 31, 2014
     
     
     
Cash flows from operating activities:    
( us-gaap:NetCashProvidedByUsedInOperatingActivitiesAbstract )    
    Net loss (1,362,393) (380,327)
    ( us-gaap:NetIncomeLoss )    
Adjustments to reconcile net loss to net cash used in operating activities:    
( us-gaap:AdjustmentsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivitiesAbstract )    
    Depreciation and amortization 402,722 144,486
    ( us-gaap:DepreciationAndAmortization )    
    Stock-based and other compensation to non-employees 176,000 211,250
    ( us-gaap:ShareBasedCompensation )    
    Prepaid stock-based compensation to non-employee (25,000) 0
    ( custom:PrepaidStockbasedCompensationToNonemployee [Extension] )    
    Change in fair value of embedded derivative (20,000) 0
    ( us-gaap:EmbeddedDerivativeGainLossOnEmbeddedDerivativeNet )    
    Gain on bargain purchase 0 (214,035)
    ( us-gaap:BusinessCombinationBargainPurchaseGainRecognizedAmount )    
    Loss on sale of property included in cost of sales 2,942 0
    ( us-gaap:GainLossOnSaleOfPropertyPlantEquipment )    
Changes in assets and liabilities, net of reverse merger:    
( us-gaap:IncreaseDecreaseInOtherOperatingAssetsAndLiabilitiesNetAbstract )    
    Accounts receivable (98,769) 7,805
    ( us-gaap:IncreaseDecreaseInAccountsReceivable )    
    Inventory (15,516) 5,203
    ( us-gaap:IncreaseDecreaseInInventories )    
    Prepaid expenses and other (12,024) (3,485)
    ( us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets )    
    Accounts payable 136,283 64,999
    ( us-gaap:IncreaseDecreaseInAccountsPayable )    
    Accrued liabilities (63,073) (37,647)
    ( us-gaap:IncreaseDecreaseInAccruedLiabilities )    
Net cash used in operating activities (878,828) (201,751)
( us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations )    
Cash flows from investing activities:    
( us-gaap:NetCashProvidedByUsedInInvestingActivitiesAbstract )    
    Purchase of archival images, property and equipment (97,769) (174,862)
    ( us-gaap:PaymentsToAcquirePropertyPlantAndEquipment )    
    Cash paid to Globe Photo, Inc. for assets acquired (110,000) 0
    ( us-gaap:PaymentsForProceedsFromBusinessesAndInterestInAffiliates )    
    Security deposits (7,225) 0
    ( us-gaap:IncreaseDecreaseInSecurityDeposits )    
    Loan fees (8,000) 0
    ( us-gaap:PaymentsOfLoanCosts )    
    Cash acquired in reverse merger 0 177,730
    ( us-gaap:CashAcquiredFromAcquisition )    
Net cash (used in) provided by investing activities (222,994) 2,868
( us-gaap:NetCashProvidedByUsedInInvestingActivitiesContinuingOperations )    
Cash flows from financing activities:    
( us-gaap:NetCashProvidedByUsedInFinancingActivitiesAbstract )    
    Advances to related party (84) 27,487
    ( us-gaap:IncreaseDecreaseInAccountsReceivableRelatedParties )    
    Repayment or advances from related parties (18,190) 0
    ( us-gaap:PaymentsToFundLongtermLoansToRelatedParties )    
    Proceeds from advances from related parties 0  
    ( us-gaap:ProceedsFromCollectionOfLongtermLoansToRelatedParties )    
    Proceeds from sale of common stock 391,000 450,000
    ( us-gaap:ProceedsFromIssuanceOfCommonStock )    
    Proceeds from notes payable 270,000 0
    ( us-gaap:ProceedsFromNotesPayable )    
    Proceeds from notes payable to related parties 160,000 41,000
    ( us-gaap:ProceedsFromRelatedPartyDebt )    
    Repayment of notes payable to related parties (8,857) 0
    ( us-gaap:RepaymentsOfRelatedPartyDebt )    
Net cash provided by financing activities 793,869 518,487
( us-gaap:NetCashProvidedByUsedInFinancingActivitiesContinuingOperations )    
Net (decrease) increase in cash (307,953) 319,604
( us-gaap:CashPeriodIncreaseDecrease )    
Cash at beginning of year 340,523 20,919
( us-gaap:Cash )    
Cash at end of year 32,570 340,523
( us-gaap:Cash )    
SUPPLEMENTAL CASH FLOW INFORMATION:    
( us-gaap:SupplementalCashFlowInformationAbstract )    
    Cash paid for interest 19,918 9,019
    ( us-gaap:InterestPaid )    
NONCASH INVESTING & FINANCING ACTIVITIES:    
( us-gaap:CashFlowNoncashInvestingAndFinancingActivitiesDisclosureAbstract )    
    Common shares issued for settlement of accrued liabilities 126,250 0
    ( custom:CommonSharesIssuedForSettlementOfAccruedLiabilities [Extension] )    
    Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement 120,000 0
    ( custom:CommonSharesIssuedInConnectionAssetPurchaseAgreement [Extension] )    
    Common stock and payable for Globe intangible assets acquired 130,000 0
    ( custom:CommonStockAndPayableForGlobeIntangibleAssetsAcquired [Extension] )    
    Fair value of embedded derivative issued for Globe assets 75,000 0
    ( custom:FairValueOfEmbeddedDerivativeIssuedForGlobeAssets [Extension] )    
    Due from related party offset against note payable to related party 2,400 0
    ( custom:DueFromRelatedPartyOffsetAgainstNotePayableToRelatedParty [Extension] )    
    Accrued liability for addition of Frank Worth Collection to archival images and property & equipment 0 135,000
    ( custom:AccruedLiabilityForAdditionOfFrankWorthCollectionToArchivalImagesAndPropertyEquipment [Extension] )    
    Common stock subscribed and receivable 0 300,000
    ( custom:CommonStockSubscribedAndReceivable [Extension] )    
SUPPLEMENTAL CASH FLOW INFORMATION - REVERSE MERGER AND GLOBE ASSET PURCHASE AGREEMENT:    
( custom:SupplementalCashFlowInformationReverseMergerAndGlobeAssetPurchaseAgreement [Extension] )    
    Fair value of current assets acquired, excluding cash 10,000 18,680
    ( custom:FairValueOfCurrentAssetsAcquiredExcludingCash [Extension] )    
    Fair value of archival images and intangibles acquired 435,000 2,635,000
    ( custom:FairValueOfArchivalImagesAndIntangiblesAcquired [Extension] )    
    Fair value of related party receivables acquired, net 0 68,746
    ( custom:FairValueOfRelatedPartyReceivablesAcquiredNet [Extension] )    
    Fair value of liabilities assumed 0 568,718
    ( custom:FairValueOfLiabilitiesAssumed [Extension] )    
(End Statement - Consolidated Statements of Cash Flows)
 
Disclosure - 1. Organization and Business Operations
Disclosure - 1. Organization and Business Operations (USD $) 12 Months Ended
( us-gaap:AccountingPoliciesAbstract )  
  Dec. 31, 2015
   
   
   
Organization and Business Operations

Capital Art, Inc. (formerly Movie Star News, LLC) (the “Company”) sells and manages classic and contemporary, limited edition photographic images and reproductions, with a focus on iconic celebrity images. The Company also makes available its images for publications and merchandizing. The Company aims to become a leading global photography marketing and distribution company by acquiring rights and ownership to collections of rare iconic negatives and photographs, and to establish worldwide wholesale and retail sales channels.

 

Movie Star News, LLC (“MSN”) was organized in the state of Nevada on August 29, 2012 as a limited liability company to acquire the assets of Kramer Productions, Inc. d/b/a Movie Star News, a New York institution since 1939 that was credited for creating the concept of “pin-up art”. The acquisition resulted in MSN holding one of the largest and most diverse collections of Hollywood photographs in the world of over 3 million Hollywood-related posters, vintage photographs and original negatives.

 

Capital Art, Inc. (“CAPA”), formed in the state of Delaware on April 26, 2007 along with its wholly owned subsidiary, Capital Art, LLC (collectively “CAPA” or “pre-merger CAPA”) formed in the state of California on January 24, 2011, owned rare iconic celebrity images, including the rights to the Frank Worth Collection. The Frank Worth Collection comprises an extensive collection of Marilyn Monroe, James Dean and other iconic photographs, many rare and never seen that were accumulated over a period of 60 years.

 

On July 22, 2015, the Company entered into an Asset Purchase Agreement with Globe Photos, Inc., a New York corporation, to purchase substantially all of the assets of Globe Photos, Inc., which principally comprise photographer contracts granting the Company the right to exploit copyrights, digital and tangible photographs, and related copyrights and trademarks, of Globe Photo, Inc. On July 24, 2015, the Company formed Globe Photo, LLC, a wholly owned subsidiary of CAPA, to license the Company’s extensive photograph image archive to third parties worldwide for a fee. See Note 4 – Globe Photo Asset Purchase Agreement.

 

Reverse Merger

 

On October 8, 2014, CAPA entered into an Asset Purchase Agreement with Movie Star News, LLC. The Agreement was effectively a contract to merge the three companies to combine assets of rare images. No consideration was transferred in connection with the agreement.

 

After giving effect to the acquisition and the issuance 256,400,226 shares of Capital Art, Inc. common stock to the former members of MSN, combined with 42,348,057 shares of common stock of pre-merger CAPA, the combined company had 298,748,283 shares of common stock issued and outstanding, resulting in the shareholders of pre-merger CAPA collectively owning approximately 14%, and the former MSN members owning approximately 86%, of the outstanding common stock of the Company. MSN was determined to be the accounting acquirer since its former members has majority control of the common stock, the majority members of the board of directors, and comprise the executive officers of the Company after the merger was to be consummated. Thus, for accounting purposes the merger has been accounted for as a reverse acquisition with MSN as the accounting acquirer (legal acquiree) and CAPA as the accounting acquiree (legal acquirer and the registrant).

 

In accordance with reverse acquisition accounting, the historical consolidated financial statements of the registrant will become those of MSN, with the equity of MSN retroactively adjusted to reflect the equity structure of MSN treated for accounting purposes as the acquirer. The results of CAPA are included from October 8, 2014 and thereafter. Thus, the footnote discussions in the accompanying consolidated financial statement relates to the historical business and operations solely of MSN, unless indicated. As of the acquisition date, MSN allocated the deemed purchase price consideration to the tangible assets acquired and liabilities assumed from CAPA at their estimated fair values, with a gain on bargain purchase recorded in the consolidated statements of operations and comprehensive loss. See Note 3 – Reverse Merger.

 

The following unaudited pro forma information is presented to reflect the operations of the Company as if the reverse merger had been completed on January 1, 2014.

 

(Unaudited)  December 31,
2014
 
     
     
Supplement pro forma combined results of operations:     
      
Net sales  $389,018 
Net loss   (1,062,089)
Basic and diluted loss per common share  $ 

 

Going Concern

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of December 31, 2015 the Company had $32,570 cash on hand. At December 31, 2015 the Company has a retained deficit of $1,733,465. For the twelve months ended December 31, 2015 the Company had a net loss of $1,362,393 and cash used in operations of $878,828. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Over the next twelve months the Company intends to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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(End Disclosure - 1. Organization and Business Operations)
 
Disclosure - 2. Significant Accounting Policies
Disclosure - 2. Significant Accounting Policies (USD $) 12 Months Ended
( us-gaap:AccountingPoliciesAbstract )  
  Dec. 31, 2015
   
   
   
Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements represent the results of operations, financial position and cash flows of Capital Art, Inc. prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America. The consolidated financial statements include the financial statements of the Company, and its 100% owned subsidiaries Capital Art, LLC and Globe Photos, LLC. All inter-company balances and transactions have been eliminated.

 

Use of Estimates

 

The 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 assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Fair Value of Financial Instruments

 

The Company measures fair value in accordance with Accounting Standards Codification (“ASC”) 820 – Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

 

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

 

Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

 

Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

 

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

 

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of December 31, 2015, or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at December 31, 2015 and 2014. The fair value of the assets acquired from Globe was determined on a nonrecurring basis under level 3 inputs. See Note 4 – Globe Photo Asset Purchase Agreement.

 

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. On October 8, 2014 CAPA entered into an Asset Purchase Agreement with MSN. For accounting purposes the merger has been accounted for as a reverse acquisition. The fair value of assets acquired and liabilities assumed were based on historical values due to their relatively short maturities. The estimated fair value of the Frank Worth Collection acquired in the reverse merger was determined under Level 3 inputs. See Note 3 – Reverse Merger, for the Company’s determination of fair value of assets acquired and liabilities assumed in connection with the reverse merger.

 

The Company’s derivative liability is measured at fair value on a recurring basis. See Note 4 – Globe Photo Asset Purchase Agreement.

 

Accounts receivable, net

 

The Company sells its products through various means, including distributors, auction houses, and via the internet. The Company also licenses its images to third parties for which royalty income is received by the Company. The Company continually monitors the collectability of its trade accounts receivables based on a combination of factors, including the aging of the accounts receivable, historical experience, and other currently available evidence and provides for an allowance for doubtful accounts equal to estimated uncollectible amounts based on historical collection experience and a review of the current status of trade accounts receivable. No allowance for uncollectible accounts or bad debt expense has been recorded for the years ended December 31, 2015 and 2014.

 

Inventory

 

The Company’s inventory is comprised of rare photos of movie stars and other famous people, and is stated at the lower of cost or net realizable value. Direct labor and raw material costs associated with the process of making the photos available for sale are also included in inventory at cost. These costs are expensed to cost of sales pro-ratably as sold.

 

Archival Images, and Property and Equipment

 

Archival images, and property and equipment are recorded at cost for purchases over $500, and depreciated using the straight-line method over the estimated useful lives ranging from three to ten years. The Company capitalizes direct costs associated with improvements to archival images, and property and equipment in accordance with ASC 360 – Property, Plant, and Equipment. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the term of the related lease. Expenditures for ordinary repairs and maintenance are expensed as incurred.

 

Intangible Assets

 

Intangible assets, consisting of content provider and photographic agreements, and copyrights, are accounted for in accordance with ASC 350 Intangibles - Goodwill and Other. Intangible assets that have finite lives are amortized using the straight-line method over their estimated useful lives of ten years.

 

Impairment of Long-Lived Assets

 

Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In such situations, long-lived assets are considered impaired when future undiscounted cash flows resulting the use of the asset and its eventual disposition are less than the asset’s carrying amount. In such situations, the asset is written down to the present value of the estimated future cash flows. Factors that are considered when evaluating long-lived assets for impairment include a current expectation that it is more likely than not that the long-lived asset will be sold significantly before the end of its useful life, a significant decrease in the market price of the long-lived asset, and a change in the extent of manner in which the long-lived asset is being used. Based on management’s assessment there were no impairments at December 31, 2015 and 2014.

 

Derivative Financial Instruments

 

The Company accounts for derivative instruments in accordance with the provisions of ASC 815 - Derivatives Hedging: Embedded Derivatives. ASC 815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities.

 

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms in agreements are reviewed to determine whether or not they contain embedded derivatives that are required under ASC 815 to be accounted for and separated from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with the corresponding changes in fair value recorded in current period operating results.

 

Revenue Recognition

 

The Company recognizes revenue related to product sales when (i) the seller’s price is substantially fixed, (ii) shipment has occurred causing the buyer to be obligated to pay for product, (iii) the buyer has economic substance apart from the seller, and (iv) there is no significant obligation for future performance to directly bring about the resale of the product by the buyer as required by ASC 605 – Revenue Recognition. Cost of sales, rebates and discounts are recorded at the time of revenue recognition or at each financial reporting date.

 

The Company’s other revenue represent payments based on net sales from brand licensees for content reproduction rights. These license agreements are held in conjunction with third parties that are responsible for collecting fees due and remitting to the Company its share after expenses. Revenue from licensed products is recognized when realized or realizable based on royalty reporting received from licensees. Revenues from royalties as of December 31, 2015 and 2014 were insignificant.

 

Shipping and Handling

 

The Company records shipping and handling expenses in the period in which they are incurred and are included in cost of revenues.

 

Stock-based Compensation

 

The Company recognizes stock-based compensation issued to employees in accordance with ASC 718 – Compensation: Stock Compensation, based on the fair value of the equity instrument in exchange for employee services and the resulting recognition of compensation expense.

 

The Company’s accounts for stock-based payment transactions with nonemployees for services in accordance with ASC 50-550 Equity: Equity-based Payments to Non-Employees. If the fair value of the services received in a stock-based payment with nonemployees is more reliably measureable than the fair value of the equity instrument issued, the fair value of the services received is used to measure the transaction. Conversely, if the fair value of the equity instruments issued in a stock-based transaction with nonemployees is more reliably measureable than the fair value of the consideration received, the transaction is measured at the fair value of the equity instruments issued. The Company recognizes an increase in equity or a liability, depending on whether the equity instruments granted have satisfied the equity or liability classification criteria.

 

Advertising

 

The expenses the cost of advertising, including promotional expenses, as incurred. Advertising expenses for the twelve months ended December 31, 2015 and 2014 was $10,811 and $11,076, respectively.

 

Income Taxes

 

The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company had no uncertain tax positions as of December 31, 2015 and 2014.

 

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized.

 

Until the merger date, MSN, a Nevada Limited Liability Company, was taxed as a limited liability company and, as such, any profit or loss from operations flowed directly to the members who were responsible for payment of any federal and state income tax. MSN was only required for payment of minimum business and filing income tax costs. The Company has not included any pro forma income tax information as if the Company were a tax paying entity prior to the reverse merger date October 8, 2014, any pro forma tax provision on the loss before income taxes would be offset by a valuation allowance for the related deferred tax asset as it would be more likely than not that the future tax benefits will not be realized.

 

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of December 31, 2015 and 2014, the Company had no accrued interest or penalties related to uncertain tax positions. Pre-merger CAPA had not previously filed federal and state income tax returns for tax years 2011 through 2013. The returns have been since filed, but not yet cleared by the Internal Revenue Service. Management determined a liability contingency for income taxes existed as of the merger date existed for $91,000. The liability is to be reimbursed by a related party of pre-merger CAPA. See Note 3 – Reverse Merger.

 

Concentrations of Credit Risk and Financial Instruments

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.

 

The Company’s cash balances are placed at financial institutions, which at times, may exceed federally insured limits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash.

 

On August 15, 2014, pre-merger CAPA entered into a four-month agreement for strategic management services with a consultant. In connection with the agreement, the consultant is to receive compensation limited edition photographs for aggregate retail fair value of $250,000. The Company evaluated the transaction under the guidance in ASC 845-Nonmonetary Transactions. ASC 845 requires fair value of nonmonetary exchanges be recorded based on fair value inherent in the transaction. The Company determined the aggregate retail fair value of the prints totaling $250,000 represented the fair value of the reciprocal transfer between the Company and the consultant. See Note 9 – Accrued Liabilities. The Company delivered the limited edition prints to the consultant in March 2015, which accounted for 29% of total revenues for the twelve months ended December 31, 2015.

 

On May 11, 2015 the Company entered into an exclusive marketing agreement with a distributor to distribute the Company’s vintage original fine art prints to fine art dealers and collector auction houses, as well as private third party collectors. Under the terms of the agreement the distributor is to receive 50% of the gross receipts from sales generated by the distributor. This distributor accounted for 27% of total revenues for the twelve months ended December 31, 2015. No distributor or customer accounted for over 10% of total revenues for the twelve months ended December 31, 2014. As of December 31, 2015, one distributor accounted for 68% total accounts receivable. Accounts receivable balances as of December 31, 2014 were not material to the Company’s consolidated financial statements. There is significant financial risk associated with a dependence upon a small number of distributors and customers which could have an adverse effect on the Company’s future consolidated financial statements if these distributors were to leave. The Company’s intends to continue its investment in sales and marketing in order to increase distribution and demand for its products and adding content to its product lines, along with adding additional channels of distribution.

 

Basic and Diluted Income and Loss per Share

 

The Company computes income and loss per share in accordance with ASC 260 - Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statements of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. Diluted EPS excludes all dilutive potential shares if their effect is antidilutive. During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are antidilutive.

 

A reconciliation of weighted-average basic shares outstanding to weighted-average diluted shares outstanding follows:

 

   Twelve Months Ended December 31, 
   2015   2014 
         
Basic weighted average common shares outstanding   321,910,400    268,407,275 
           
Effect of dilutive securities        
           
Diluted weighted average common and potential common shares outstanding   321,910,400    268,407,275 

 

At December 31, 2015, 2,623,333 shares are reserved in connection with the Frank Worth Estate agreement entered into on November 12, 2014, shares reserved in connection with management consulting agreement for 2015 services, and fixed priced agreement entered into a website development consultant on January 2, 2015. See Note 13 – Shareholders’ Equity. These were excluded from the calculation of diluted earnings per share as their effect was anti-dilutive.

 

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 – Revenues from Contracts with Customers, which introduces a new five-step framework for revenue recognition. The core principle of the standard is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled for those goods or services. The ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. On August 12, 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) - Deferral of Effective Date, which defers the effective date of ASU 2014-09 to January 1, 2018 with early adoption beginning January 1, 2017. Management is currently evaluating the impact of the new revenue recognition standards and does not believe the adoption of ASU 2014-09 will have a material impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-08 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing its procedures for determining revenues derived from principal versus agents in connection with the impact of adopting this new accounting standard on the Company’s consolidated financial statements and does not believe that the adoption of ASU 2016-08 will have a material impact on the Company’s consolidated financial statements.

 

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The amendments in ASU 2016-10 clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing the potential impact of adopting this new accounting standard on the Company’s consolidated financial statements in connection with revenues recognized from licensing its vast archive of photographic images.

 

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-12 do not change the core principle of the guidance in Topic 606, but instead affect only the narrow aspects noted in Topic 606. ASU 2016-12 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management evaluated ASU 2016-12 and does not believe the adoption of ASU 2016-12 will have a material impact on the Company’s consolidated financial statements.

 

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements–Going Concern, (Subtopic 204-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires management to evaluate each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Management has evaluated ASU 2014-15 and does not believe the adoption of ASU-2014-15 will have a material effect on the consolidated financial statements.

 

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. ASU No. 2015-11 clarifies that inventory should be held at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose and transport such inventory. ASU No. 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU No. 2015-11 is required to be applied prospectively and early adoption is permitted. Management considered and evaluated ASU 2015-11 and does not believe the adoption of ASU 2015-11 will have a material effect on the consolidated financial statements for future reporting periods.

 

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities to present deferred tax assets and liabilities as non-current in a classified balance sheet, instead of separating into current and non-current amounts. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, on a prospective or retrospective basis. Early adoption is permitted for all companies in any interim or annual period. Management evaluated ASU 2015-17 and does not believe the adoption of this new accounting standard will have a material effect on the consolidated financial statements for future reporting periods.

 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 will be effective for the Company beginning on January 1, 2018, and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. Management is currently evaluating the potential impact of adopting this new accounting standard on the Company’s consolidated financial statements.

 

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning on January 1, 2017. Early adoption is permitted, including in an interim period. Management evaluated ASU 2016-05 and does not believe the adoption of this new accounting standard will have a material impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. ASU 2016-06 will be effective for the Company beginning on January 1, 2017. Management evaluated ASU 2016-06 and does not believe the adoption of this this new accounting standard will have a material impact on the Company’s consolidated financial statements effective January 1, 2017.

 

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for related income taxes consequences and certain classifications within the statement of cash flows. ASU 2016-09 is effective for the Company beginning on January 1, 2017. Management evaluated the impact of adopting ASU 2016-09 and does not believe the new accounting standard will have a material impact on the Company’s consolidated financial statements.

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(End Disclosure - 2. Significant Accounting Policies)
 
Disclosure - 3. Reverse Merger
Disclosure - 3. Reverse Merger (USD $) 12 Months Ended
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  Dec. 31, 2015
   
   
   
Reverse Merger

The Company determined the fair value of consideration effectively transferred in connection with the reverse merger in accordance with ASC 805, whereas as the accounting acquirer (MSN) is required to calculate a hypothetical amount of consideration it would have transferred to the accounting acquiree (CAPA) to obtain the same percentage ownership interest in the combined entity that results from the transaction. Under reverse acquisition accounting, as the accounting acquirer, MSN is deemed (for accounting purposes only) to have issued 42,348,057 shares with an aggregate value at the merger date of $2,117,403 based on estimated fair value of $0.05 per share.

 

The Company determined the fair value of its common stock in accordance with the guidance in ASC 820 - Fair Value Measurement. ASC 820 states fair value is based on market prices or market inputs, not based on entity-specific measurements. In conducting its analysis of the fair value of the Company’s common stock, the Company noted that CAPA stock is traded on the OTC market, but is not widely traded, thus the Company determined that the OTC market is not a reliable measure of the fair value of the Company’s common stock. Instead the Company determined fair value of its common stock based on recent substantial sales and determined the fair value of its common stock to be $0.05 per share.

 

The total purchase price allocation was allocated to identifiable tangible assets deemed acquired, and liabilities assumed, of CAPA in the merger, based on their estimated fair values. The estimated fair values were determined from information that was available at the merger date. The Company believes that the information available provided a reasonable basis for estimating the fair values. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:

 

   Amount 
Asset consideration allocation:     
Cash  $177,730 
Accounts receivable   17,180 
Fair value of related party receivables acquired, net   68,746 
Prepaid expenses and other   1,500 
Frank Worth Collection   2,635,000 
Accounts payable   (16,788)
Stock-based compensation due non-employees   (165,625)
Fair value of limited edition prints due to consultant   (250,000)
Royalties due Frank Worth Estate   (37,500)
Contingent liability for income taxes   (91,000)
Other accrued liabilities   (7,805)
Gain on bargain purchase   (214,035)
Total acquisition consideration  $2,117,403 

 

The excess of fair value of acquired net assets over the acquisition consideration resulted in a gain on a bargain purchase. In accordance with ASC 805, the Company reassessed whether all acquired assets and assumed liabilities have been identified and recognized, and performed re-measurements to verify that the consideration effectively transferred, assets acquired, and liabilities assumed have been properly valued, and determined a gain on bargain purchase of $214,035 in connection with the reverse merger.

 

In determining the acquisition date estimated fair value of the Frank Worth Collection, which comprises of rare photographs and negatives of famous people, such as Marilyn Monroe and James Dean, the Company retained an independent third party valuation expert that specializes in appraising photographer’s estates and photographic archives of both fine art photographers and commercial photographers. Based on this appraisal, management determined the fair market value of the images in an orderly liquidation value, less 15% seller’s fee, to be $2,635,000.

 

In connection with the reverse merger, the Company determined a liability contingency for income taxes existed as of the merger date. The liability is to be reimbursed by a related party of pre-merger CAPA. This contingency has been accounted in accordance with ASC 805, which states that a liability from a contingency recognized as of the acquisition date is in the scope of ASC 450 – Contingencies, is not acquired or assumed in a business combination, shall continue to be recognized by the acquirer at its acquisition-date fair value. At of the merger date, contingent liability for income taxes totaled $91,000 which has been accounted for in accrued liabilities and due from related party in the total acquisition consideration.

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(End Disclosure - 3. Reverse Merger)
 
Disclosure - 4. Globe Photo Asset Purchase Agreement
Disclosure - 4. Globe Photo Asset Purchase Agreement (USD $) 12 Months Ended
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  Dec. 31, 2015
   
   
   
Globe Photo Asset Purchase Agreement

On July 22, 2015, the Company entered into an Asset Purchase Agreement with Globe Photos, Inc. (“Globe”), a New York corporation, to purchase of substantially all of the assets of Globe, which principally comprises of photographer contracts granting the Company the right to exploit copyrights, digital and tangible photographs, and related copyrights and trademarks, of Globe Photo for total purchase price of $400,000 payable in $250,000 cash and $150,000 payable in the common stock of the Company.

 

Per the agreement, $180,000 in cash was held in reserve by the Company against Globe’s full performance and compliance with all terms of the agreement. This amount is to be released to Globe at the rate of $10,000 per month beginning August 22, 2015. As of December 31, 2015, the total reserve payable to Globe Photos, Inc. is $130,000.

 

The Agreement called for the Common stock to be transferred to Globe sixty (60) days after closing subject to satisfaction of successful termination of certain subagent agreements by Globe. Globe retained these certain subagent agreements, but was not able to successfully terminate these agreements. As such, the amount payable in common stock of the Company was reduced by $30,000, thereby reducing the total purchase price of the assets acquired from $400,000 to $370,000. Under the terms of the Agreement the Company issued 352,941 shares of its common stock based on the closing price of the Company’s common shares as traded on the OTC market on the measurement date July 22, 2015 of $0.34 per share for total of $120,000.

 

The Company evaluated the Asset Purchase Agreement in accordance with ASC 805 – Business Combinations which notes the threshold requirements of a business combination that includes the expanded definition of a “business” and defines elements that are to be present to be determined whether an acquisition of a business occurred. No “activities” of Globe were acquired. Instead, the Company obtained control of a set of inputs (the acquired assets). Thus the Company determined agreement is an acquisition of assets, not an acquisition of a business in accordance with ASC 805. The total purchase price of $370,000 in connection with the assets acquired is included in archival images, and property and equipment, net, in the consolidated balance sheet.

 

As a form of liquidity protection, Globe shall have limited put options in connection with the common stock beginning eighteen (18) months after the closing date, whereas the Company shall have up to fifteen (15) successive monthly options, with no less than thirty (30) days notice for each, which requires the Company to repurchase from Globe up to 1/15th of the shares of common stock in Globe’s possession that were granted in connection with the agreement, at a price per share equity to the market price per share ($0.34) on the effective date of the original share transfer to Globe. The exercise of any put option is not conditioned upon exercise of any prior put option.

 

In accordance with ASC 815 – Derivatives and Hedging: Embedded Derivatives, the Company determined the put options are an embedded derivative subject to bifurcation. The put options are a hybrid instrument that are not legally detachable or a mandatorily redeemable financial instrument. If exercised by Globe Photos, the put options embody an unconditional obligation by the Company to buy back its shares for cash at $0.34 per share, the market value of the Company’s common shares on the original transfer date of August 22, 2015. Globe may exercise this right beginning January 22, 2017 up to fifteen months subsequent that date. Using the Black-Scholes Valuation Model, the Company determined the fair value of the embedded derivative on August 22, 2015, the date of transfer of the common stock to Globe, to be $75,000. The Company’s stock price on August 22, 2015 was $0.34, risk-free discount rate of 1.01% and volatility of 100% was used to obtain fair value.

 

Management determined the assets acquired from Globe for net purchase price of $370,000 and $75,000 related to the embedded derivative, for total of $445,000. Based on its analysis of industry historical values of archival celebrity images and licensing and experience in the industry, Management’s allocation of the assets acquired in connection with the Globe APA is assigned as follows:

 

Inventory  $10,000 
Intangible assets – content provider and photographic agreements   400,000 
Copyrights   35,000 
    Total fair value of purchased assets  $445,000 

 

In accordance with ASC 350 – Intangibles – Goodwill and Other, the Company determined the content provider and photographic agreements and copyrights acquired from Globe have finite useful lives with estimated useful life of 10 years. See Note 8 – Intangible Assets.

 

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(End Disclosure - 4. Globe Photo Asset Purchase Agreement)
 
Disclosure - 5. Fair Value of Financial Instruments
Disclosure - 5. Fair Value of Financial Instruments (USD $) 12 Months Ended
( us-gaap:FairValueDisclosuresAbstract )  
  Dec. 31, 2015
   
   
   
Fair Value of Financial Instruments

The Company’s derivative liability measured at fair value on a recurring basis was determined using the following inputs:

 

   Fair Value Measurements at December 31, 2015 
       Quoted Prices in Active Markets for Identical Assets   Significant Other Observable Inputs   Significant Unobservable Inputs 
   Total   (Level 1)   (Level 2)   (Level 3) 
                     
Embedded derivative liability  $55,000   $   $   $55,000 

 

As of December 31, 2015, the Company’s stock price was $0.51, risk-free discount rate of 1.30% and volatility of 100%, thus the Company included an unrealized gain totaling $20,000 in the consolidated statements of operations and comprehensive loss for twelve months ended December 31, 2015.

 

A reconciliation of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:

 

   Fair Value Measurements Using 
   Significant Unobservable Inputs 
   (Level 3) 
    Embedded Derivative Liability 
    December 31,    December 31, 
    2015    2014 
           
Balance beginning of period  $0   $ 
Embedded derivative in connection with the issuance of put option   75,000     
Total unrealized income (loss) included in earnings   (20,000)    
Balance end of period  $55,000   $ 

 

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(End Disclosure - 5. Fair Value of Financial Instruments)
 
Disclosure - 6. Archival Images, and Property and Equipment
Disclosure - 6. Archival Images, and Property and Equipment (USD $) 12 Months Ended
( us-gaap:PropertyPlantAndEquipmentAbstract )  
  Dec. 31, 2015
   
   
   
Archival Images, and Property and Equipment

Archival images, and property and equipment as of December 31, 2015 and 2014 comprise of the following:

 

   December 31,   Estimated Useful 
   2015   2014   Lives 
Frank Worth Collection  $2,770,000   $2,770,000    10 years 
Other archival images   730,076    676,215    10 years 
Leasehold improvements   12,446    12,446    7 years 
Computer and other equipment   53,332    40,204    3 – 5 years 
Furniture and fixtures   83,666    56,416    7 years 
    3,649,520    3,555,281      
Less accumulated deprecation   (590,537)   (213,729)     
Total archival images, property and equipment, net  $3,058,983   $3,341,552      

 

 

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(End Disclosure - 6. Archival Images, and Property and Equipment)
 
Disclosure - 7. Frank Worth Collection
Disclosure - 7. Frank Worth Collection (USD $) 12 Months Ended
( us-gaap:InvestmentsAllOtherInvestmentsAbstract )  
  Dec. 31, 2015
   
   
   
Frank Worth Collection

On November 12, 2014, the Frank Worth Estate agreed to accept $155,000 and 200,000 common shares, with a fair value of $0.05 per share ($10,000), of the Company’s common stock in exchange for sole and exclusive, world-wide, royalty free rights to all negatives, prints, products and other materials the Company possesses including the use of the Frank Worth seal, Frank Worth’s name, likeness, publications and biography plus merchandising and selling rights. $30,000 due under the agreement for royalties was paid in January 2015. The remainder of $125,000 and 200,000 ($10,000) shares of common stock were due and payable on or before May 31, 2015, which is being held by the Company until a dispute between the Estate and an unrelated party of the Company is settled. As of December 31, 2015 and 2014, $135,000 has been provided for in accrued liabilities in the Company’s consolidated balance sheets. See Note 9 – Accrued Liabilities. Effective October 26, 2016, all liabilities with the Frank Worth Estate were settled by the Company. See Note 16 – Subsequent Events.

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(End Disclosure - 7. Frank Worth Collection)
 
Disclosure - 8. Intangible Assets
Disclosure - 8. Intangible Assets (USD $) 12 Months Ended
( us-gaap:GoodwillAndIntangibleAssetsDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Intangible Assets

Identifiable intangible assets comprise of the following at December 31, 2015 and 2014:

 

   December 31, 2015   December 31, 2014 
   Gross Carrying   Accumulated   Gross Carrying   Accumulated 
   Amount   Amortization   Amount   Amortization 
Intangible assets with determinable lives:                
                 
Content provider and photographic agreements  $400,000   $20,000   $   $ 
Copyrights   35,000    1,750         
Total  $435,000   $21,750   $   $ 

  

Amortization expense in connection with the photographic agreements and copyrights for the twelve months ended December 31, 2015 was $21,750, and is included in depreciation and amortization expense in the consolidated statements of operations and comprehensive loss. Estimated amortization expense over the next five years is $43,500 per year.

 

( us-gaap:IntangibleAssetsDisclosureTextBlock )  
(End Disclosure - 8. Intangible Assets)
 
Disclosure - 9. Accrued Liabilities
Disclosure - 9. Accrued Liabilities (USD $) 12 Months Ended
( us-gaap:PayablesAndAccrualsAbstract )  
  Dec. 31, 2015
   
   
   
Accrued Liabilities

Accrued liabilities at December 31, 2015 and 2014 comprise of the following:

 

   December 31, 
   2015   2014 
Accrued payroll and related  $3,518   $8,242 
Accrued management fee due to related party       5,781 
Due to Frank Worth Estate (Note 7)   135,000    135,000 
Interest payable   4,176    748 
Due to consultants for website development   102,000     
Accrued royalties due to Frank Worth Estate       30,000 
Fair value of limited edition prints due to consultant       250,000 
Stock-based compensation due to non-employees   104,167    126,250 
Contingent liability for taxes assumed in reverse merger   91,000    91,000 
Other   20,847    3,010 
Total accrued liabilities  $460,708   $650,031 

 

On August 15, 2014, pre-merger CAPA entered into a four-month agreement for strategic management services with a consultant. In connection with the agreement, the consultant is to receive compensation of 5,500,000 shares of the Company’s common stock (See Note 13 – Shareholders’ Equity) and limited edition photographs for aggregate retail fair value of $250,000. The Company evaluated the transaction under the guidance in ASC 845-Nonmonetary Transactions. ASC 845 requires fair value of nonmonetary exchanges be recorded based on fair value inherent in the transaction. The Company determined the aggregate retail fair value of the prints totaling $250,000 represented the fair value of the reciprocal transfer between the Company and the consultant. The prints were earned upon execution of the agreement, and were delivered in March 2015, and included in revenues in the Company’s consolidated statements of operations and comprehensive loss as of December 31, 2015.

 

In connection with the reverse merger on October 8, 2014, the Company determined a liability contingency for income taxes existed as of the merger date. The liability is to be reimbursed by a related party of pre-merger CAPA. This contingency has been accounted in accordance with ASC 805, which states that a liability from a contingency recognized as of the acquisition date is in the scope of ASC 450 – Contingencies, is not acquired or assumed in a business combination, shall continue to be recognized by the acquirer at its acquisition-date fair value. As of December 31, 2015 and 2014, contingent liability for income taxes totaled $91,000 which has been accounted for in accrued liabilities and due from related party.

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(End Disclosure - 9. Accrued Liabilities)
 
Disclosure - 10. Note Payable
Disclosure - 10. Note Payable (USD $) 12 Months Ended
( us-gaap:DebtDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Note Payable

On September 28, 2015, the Company entered into an unsecured promissory note agreement for working capital purposes with an unrelated party for total proceeds of $150,000. The note matures on September 28, 2016. Effective September 28, 2016, the note was extended to March 31, 2017 and is secured by approximately 240,000 vintage photographs. See Note 16 – Subsequent Events. Interest accrues at the rate of 10% per annum and is payable monthly beginning October 28, 2015. Interest paid under the unsecured promissory note agreement totaled $3,750 for the twelve months ended December 31, 2015. Accrued interest payable due under the unsecured note agreement was $154 at December 31, 2015.

 

In December 2015, the Company entered into a secured promissory note agreement with an unrelated party for working capital purposes for total proceeds of $120,000. The note matures on December 31, 2017 and bears interest at the rate of 10% per annum, and is payable on the 1st day of each month commencing in February 2016. On February 15, 2016, the Company entered into an additional promissory note agreement with the unrelated party for additional proceeds of $62,500. See Note 16 – Subsequent Events. The notes are secured by certain inventory and archival images of the Company in the amount up to $200,000. Accrued interest payable due under the unsecured note agreement was $665 at December 31, 2015.

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(End Disclosure - 10. Note Payable)
 
Disclosure - 11. Notes Payable to Related Parties
Disclosure - 11. Notes Payable to Related Parties (USD $) 12 Months Ended
( custom:NotesToFinancialStatementsAbstract [Extension] )  
  Dec. 31, 2015
   
   
   
Notes Payable to Related Parties

Effective July 21, 2015, the Company entered into a promissory note agreement with related party Dino Satallante, a beneficial interest shareholder of the Company, for total proceeds of $160,000. The Company utilized $80,000 of the proceeds for payments due in connection with the Globe Photo assets acquired. The remainder of the proceeds was used for working capital purposes. The note matures on July 20, 2016, with monthly interest only payments commencing July 22, 2015. Interest accrues at the rate of 12% per annum. The note is secured by the Globe Photo Assets. Total interest expense in connection with the secured promissory note agreement for the twelve months ended December 31, 2015 is $8,627. Per the terms of the agreement the Company incurred loan fees totaling $8,000 to be amortized over the term of the loan. For the twelve months ended December 31, 2015, amortization expense in connection with the loan fees totaled $3,576. Effective July 20, 2016 the note was extended to July 31, 2017. See Note 16 – Subsequent Events.

 

On August 1, 2013 the Company entered into an unsecured promissory note agreement with related party Dino Satallante for $100,000. The loan bears interest at 5%. The loan matured on July 14, 2014 and was extended to July 31, 2016. As of December 31, 2015 and 2014, $91,143 and $100,000 was outstanding under the unsecured promissory note agreement, respectively. Interest expense for the twelve months ended December 31, 2015 was $4,386. For the twelve months ended December 31, 2014 interest expense was $4,249. Effective July 31, 2016, the note agreement was extended to July 31, 2017. See Note 16 – Subsequent Events.

 

Effective September 11, 2014 the Company entered into two separate unsecured promissory note agreements for $20,500 each with two related parties, Dreamstar and Dino Satallante, both beneficial interest shareholders of the Company, for working capital purposes. The loans bear interest at 6% per annum. The loans matured on September 10, 2015, and were extended to December 31, 2016. Effective 31, 2015, the loans have been extended to December 31, 2017. See Note 16 – Subsequent Events. During the year ended December 31, 2015, $2,400 was repaid on the loan to Dreamstar. At December 31, 2015, $20,500 and $18,100 was outstanding to Dino Satallante and Dreamstar, respectively. Total interest expense in connection with the two unsecured promissory note agreements for the three months and twelve months ended December 31, 2015 $619 and $314, respectively. Interest expense for the three and twelve months ended December 31, 2014 was $584 and $2,423, respectively.

 

As of December 31, 2015 and 2014, interest payable in connection with the unsecured promissory note agreements with related parties was $3,357 and $748, respectively, and is included in accrued liabilities in the Company’s consolidated balance sheets.

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(End Disclosure - 11. Notes Payable to Related Parties)
 
Disclosure - 12. Related Party Transactions
Disclosure - 12. Related Party Transactions (USD $) 12 Months Ended
( us-gaap:RelatedPartyTransactionsAbstract )  
  Dec. 31, 2015
   
   
   
Related Party Transactions

Due From/To Related Parties

 

The following table summarizes amounts due to the Company from related parties for funds advanced by the Company on behalf of related parties and funds advanced from related parties for short-term working capital purposes as of December 31, 2015 and 2014. These amounts have been included in the consolidated balance sheets as current assets, net of long term portion, due from related parties and current liabilities due to related parties, respectively, and are due on demand.

 

   December 31, 
   2015   2014 
Due from related parties:          
Dino Satallante, beneficial interest shareholder  $   $1,350 
Sam Battistone, beneficial interest shareholder       966 
Klaus Moeller, related party of pre-merger CAPA and beneficial interest shareholder   91,000    91,000 
       Total due from related parties   91,000    93,316 
Less long-term portion   (91,000)    
        Total due from related parties, net of long-term portion  $   $93,316 
           
           
Due to related parties:          
ICONZ Art, LLC, beneficial interest shareholder  $   $2,014 
Klaus Moeller, related party of pre-merger CAPA       4,562 
MSN Holding Co., beneficial interest shareholder   12,999    28,272 
Premier Collectibles, beneficial interest shareholder   33,085    85 
Stuart Scheinman, beneficial    interest shareholder       29,341 
     Total due to related parties  $46,084   $64,274 

 

Credit Card Payable

 

As of December 31, 2015 and 2014, $37,790 and $7,235, respectively, was outstanding on a personal credit card in the name of a beneficial interest shareholder of the Company – Premier Collectibles. The liability is included in accounts payable in the consolidated balance sheets.

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(End Disclosure - 12. Related Party Transactions)
 
Disclosure - 13. Shareholders' Equity
Disclosure - 13. Shareholders' Equity (USD $) 12 Months Ended
( us-gaap:EquityAbstract )  
  Dec. 31, 2015
   
   
   
Shareholders' Equity

Preferred Stock

 

The Company is authorized to issue up to 50,000,000 shares of preferred stock authorized with a par value of $0.0001. The Board of Directors is authorized, subject to any limitations prescribed by law, without further vote or action by the Company’s stockholders, to issue from time to time shares of preferred stock in one or more series. Each series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by the board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, and conversion rights. As of December 31, 2015, there were no shares of Preferred Stock issued and outstanding.

 

Stock Purchase Agreement

 

On August 14, 2014 pre-merger CAPA entered into a Stock Purchase Agreement with an investor for sale of 20,000,000 of the Company’s common stock at $0.05 per share, for total of $1,000,000 payable in installments in August 2014 through December 31, 2014. As of December 31, 2014, 6,000,000 ($300,000) common shares remained outstanding under the terms of the agreement, which has been included in the consolidated balance sheets in current assets – stock subscription receivable and equity – common stock subscribed. As of December 31, 2015, $300,000 was received in connection with the outstanding stock subscription receivable for 6,000,000 shares.

 

Private Placement

 

In March 2015, a beneficial shareholder of the Company closed a private placement comprising of individuals related to the former president for 1,820,000 shares of common stock at a $0.05 per share for aggregate proceeds of $91,000.

 

In connection with the private placement, the beneficial shareholder received 200,000 shares of the Company’s common stock in lieu of cash for payment of finder’s fee total stock-based compensation of $10,000 based on fair value of the Company’s common stock of $0.05 per share.

 

Stock-based and Other Compensation to Non-Employees

 

On February 1, 2014, pre-merger CAPA executed a consulting agreement for services. The agreement specifies issuance of 500,000 shares of common stock at execution of the agreement and 3,500,000 shares upon introduction of a strategic business partner. As of December 31, 2014 875,000 shares of common stock with a fair value of $43,750 were unissued and included in accrued liabilities in the Company’s consolidated balance sheets. The shares were issued as of December 31, 2015.

 

On August 15, 2014, pre-merger CAPA entered into a four-month agreement for strategic management services with a consultant. In connection with the agreement, the consultant is to receive compensation of 5,500,000 shares of the Company’s common stock payable in four equal installments. As of December 31, 2014, 1,650,000 shares of common stock with a fair value of $82,500 were unissued and included in accrued liabilities in the Company’s consolidated balance sheets. The shares were issued as of December 31, 2015.

 

In November 2014, the Company entered into a fixed price agreement with a consultant for website development services for total contract price of $193,000 payable in cash of $40,000 and 510,000 shares of the Company’s common stock with a stated fair value of $0.30 per share. As of December 31, 2015, 170,000 shares of common stock with fair value of $51,000 were issued. 340,000 shares of common stock were unissued for $102,000 which is included in accrued liabilities in the Company’s consolidated balance sheets. See Note 9 – Accrued Liabilities. This consultant ceased business operations in December 2016 prior to fulfilling their obligations under the agreement. As of December 31, 2015, 170,000 shares of these common shares had been issued. Subsequently, the Company issued an additional 229,300 shares, leaving, leaving 340,000 shares unissued. The Company owes no further obligations on this matter.

 

On January 1, 2015 the Company entered in a 12-month agreement for non-exclusive investment banking advisory services for total consideration of 2,000,000 shares of the Company’s common stock. The agreement was subsequently extended additional 6-months with no other changes to the terms of the original agreement. The shares are payable within 14 days of the effective date of the agreement and deemed earned in full upon execution of the agreement. The shares were issued in May 2015 in connection with the agreement with a fair value determined by the Company of $0.05 per share, for total $100,000. The agreement may be renewed for an additional 12-month term whereby the Company at its discretion shall pay the investment banking advisor $400,000 cash or an equivalent amount in the Company’s common stock based upon the thirty day volume weighted average price for thirty trading days prior to renewal.

 

On June 9, 2015 the Company entered into a management consulting agreement for total monthly compensation of $17,500. In addition, the consultant received 300,000 shares of common stock at fair value of $0.05 per share, for total $15,000. Effective January 1, 2016, the Company entered into a revised agreement with the consultant for compensation to be paid at the rate of $110 per hour. The Company also granted the consultant an additional 2,083,333 shares of common stock at fair value of $0.05 per share for 2015 services rendered by the consultant. The Company provided for the fair value as of December 31, 2015 and recorded $104,167, which is included in accrued liabilities in the consolidated balance sheets and general and administrative expenses in the consolidated statements of operations and comprehensive loss.

 

Shares Reserved

 

The Company is required to reserve and keep available of its authorized, but unissued shares of common stock an amount sufficient to effect shares due in connection with the Stock Purchase Agreement and Stock-Based Compensation to Non-Employees. As of December 31, 2015, shares reserved for future issuance comprised of the following:

 

   Shares 
   Reserved 
Shares to be issued to consultants   2,423,333 
Shares to be issued to Frank Worth Estate   200,000 
    2,623,333 

 

These shares were excluded from the calculation of diluted earnings per share as their effect was anti-dilutive.  

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(End Disclosure - 13. Shareholders' Equity)
 
Disclosure - 14. Commitments and Contingencies
Disclosure - 14. Commitments and Contingencies (USD $) 12 Months Ended
( us-gaap:CommitmentsAndContingenciesDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Commitments and Contingencies

Operating Lease Agreements

 

On September 6, 2012 the Company entered into a 25-month operating lease agreement for approximately 4,606 square foot warehouse and office facilities located in Las Vegas, NV. Monthly base rent due under the agreement is $3,270, plus common area maintenance fees. The agreement calls for 3% annual increase in base rental payments. On October 10, 2014, the Company entered into a First Amendment to Lease agreement extending the lease term for 60-months, beginning November 1, 2014. All other terms of the agreement remain unchanged.

 

As of December 31, 2015, future minimum payments due under the 60-month operating lease agreement are as follows:

 

 2016   $40,623 
 2017    41,841 
 2018    43,096 
 2019    36,807 
 Total future minimum payments   $162,367 

 

The Company leases various corporate housing from unrelated third parties for terms that range from month-to-month to one year. The Company also rents office space on a month-to-month basis in New York at rate of $850 per month.

 

Total rent expense for the twelve months ended December 31, 2015 and 2014 was $59,680 and $49,074, respectively, in connection with the operating lease agreements.

 

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(End Disclosure - 14. Commitments and Contingencies)
 
Disclosure - 15. Income Taxes
Disclosure - 15. Income Taxes (USD $) 12 Months Ended
( us-gaap:IncomeTaxDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Income Taxes

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes as of December 31, 2015 and 2014 are as follows:

 

   December 31, 
   2015   2014 
Deferred tax assets:          
Net operating loss  $640,000   $178,000 
   Accrued liabilities   86,000    87,000 
    726,000    265,000 
Deferred tax liabilities:          
Embedded derivative   (9,000)    
Deprecation and amortization   (149,000)   (9,000)
       Total deferred tax asset   568,000    256,000 
           
        Less valuation allowance   (568,000)   (256,000)
             Net deferred tax asset  $   $ 

 

Provision for income tax provision (benefit) as of December 31, 2015 and 2014 consist of the following:

 

   December 31, 
   2015   2014 
Deferred:        
   Federal  $568,000   $256,000 
   State        
       Total deferred tax asset   568,000    256,000 
           
        Less valuation allowance   (568,000)   (256,000)
             Net deferred tax asset  $   $ 

 

The income tax provision (benefit) differs from the amount of income tax determined by applying the U.S. federal tax rate to pretax income as of December 31, 2015 and 2014 as follows:

 

   December 31, 
   2015   2014 
Effective tax rate (benefit):          
Federal   (34.0)%   (34.0)%
State        
Permanent differences   18.8    24.8 
Other   38.1    18.6 
Change in valuation allowance   (22.9)   (9.4)
    -%   -%

  

A full valuation allowance of $568,000 and $256,000 has been applied against the Company’s net deferred tax assets as of December 31, 2015 and 2014, respectively, due to projected losses and because is not more likely than not that the Company will realize future benefits associated with these deferred tax assets.

 

The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used in any given year in the event of specified occurrences, including significant ownership changes. As a result of these provisions, utilization of net operating losses would be limited in the event of any future significant ownership change. Such a limitation could result in the expiration of the net operating loss carryforwards before utilization. The Company had such an ownership change related to the reverse merger transaction.

 

As of December 31, 2015 and 2014, the Company had gross federal net operating loss carryforwards of approximately $1,939,000 and $968,000, respectively, which was reduced to $1,494,000 and $523,000, respectively, due to such ownership change. The Company expects the limitation placed on the federal net operating loss carryforwards prior to the ownership change will likely expire unused.

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(End Disclosure - 15. Income Taxes)
 
Disclosure - 16. Subsequent Events
Disclosure - 16. Subsequent Events (USD $) 12 Months Ended
( us-gaap:SubsequentEventsAbstract )  
  Dec. 31, 2015
   
   
   
Subsequent Events

Management has evaluated subsequent events, as defined by ASC 855, Subsequent Events, through the date on which the financial statements were available to be issued.

 

Stock-based and Other Compensation to Non-Employees

 

Effective January 1, 2016, the Company entered into a revised agreement with the consultant for compensation to be paid at the rate of $110 per hour. The Company also granted the consultant an additional 2,083,333 shares of common stock at fair value of $0.05 per share for 2015 services rendered by the consultant. The Company provided for the fair value as of December 31, 2015 and recorded $104,167, which is included in accrued liabilities in the consolidated balance sheets and general and administrative expenses in the consolidated statements of operations and comprehensive loss. See Note 13 – Shareholders’ Equity.

 

Notes Payable

 

On September 28, 2015, the Company entered into an unsecured promissory note agreement for working capital purposes with an unrelated party for total proceeds of $150,000. See Note 10 – Notes Payable. The note matured on September 28, 2016. Effective September 28, 2016 the note was extended to March 31, 2017 and is secured by an interest in approximately 240,000 vintage photographs. Interest continues to accrue at the rate of 10% per annum and is payable monthly. In event of default, interest increases to 25% per annum.

 

In December 2015, the Company entered into a secured promissory note agreement with an unrelated party for working capital purposes for total proceeds of $120,000. The note is secured by certain inventory of the Company in the amount up to $200,000. See Note 10 – Notes Payable. Effective February 15, 2016, the Company entered into an additional secured promissory note agreement with the unrelated party for $62,500. Interest accrues at the rate of 10% per annum and is payable the first of each month.

 

In April 2016 the Company entered into two promissory note agreements with unrelated parties for working capital purposes for total proceeds of $75,000. The promissory notes mature in December 2017 and bear interest at the rate of 6% per annum.

 

On April 7, 2016 an unrelated party advanced the Company $75,000 for purchase of a Marilyn Monroe archive. The advance is secured by the archive for which it was used and is to be repaid on or before April 2017 for total of $100,000 to satisfy the terms of the advance.

 

Proceeds from Auctions of Royalty Rights

 

On March 8, 2016, the Company entered into a Listing Agreement with Royalty Network, LLC, doing business as Royalty Exchange for auction of a 50% ownership of photographic copyrights of certain celebrity archival images owned by the Company. In addition, the sale also assigns the winning bidder the right to receive 50% of the future share of income derived from the assigned images.

 

In the second, third and fourth quarters of 2016 to the date the consolidated financial statements are available to be issued, the Company received gross proceeds of $76,000, $282,500, and $37,500, respectively, less 12.5% auction broker fee, from five separate auctions of these rights. The Company retains all exclusive licensing authority over the images and may exercise a buyback option to buy back the 50% ownership of the rights for two times the original auction proceeds for combined total of $792,000 for one to two year periods ranging from August 12, 2017 through November 18, 2018

 

Archive Acquisition Agreements

 

On March 23, 2016 the Company entered in an agreement to purchase a celebrity photograph archive from Photoshot License Limited, a UK corporation, for total purchase price of $55,000. In addition, the Company paid a finder’s fee of $10,000 to a consultant in connection with the purchase of the archives. Per the terms of the agreement, the photographs may only be sold as a physical asset and CAPA does not have the right to license the images.

 

Effective June 1, 2016 the Company entered into three separate non-exclusive license agreements use of licensed images and trademarks through December 31, 2019. Under the terms of the agreements, the Company is required pay royalty of 10% on net sales. The agreements call for combined annual guaranteed minimum royalties per year of $150,000 based on combined minimum sales of $1,500,000 per year. The Company was required to pay advances related to 50% of the first year’s royalties totaling $75,000 upon execution of the agreements. The remainder of the first year’s combined minimum royalties is due on or before February 1, 2017.

 

Related Party Transactions

 

In February and March 2016, Stuart Scheinman, beneficial interest shareholder advanced $16,500 for short-term working capital purposes.

 

On April 4, 2016, the Company entered into a promissory note agreement with Premier Collectibles, a beneficial interest shareholder for total proceeds of $65,000 to be used for acquisition of archive agreement. The promissory note bears interest at the rate of 8% per annum, is secured by the archive collection which the proceeds were used and matures on or before April 16, 2017.

 

On April 15, 2016, the Company entered into a promissory note agreement with a beneficial interest shareholder for total proceeds of $50,000. The promissory note bears interest at the rate of 6% per annum and matures on December 15, 2017. The Company entered into two additional promissory note agreements with the beneficial shareholder for two additional loans of $50,000 for working capital purposes on October 3, 2016 and December 2, 2016. The promissory notes bear 6% per annum and mature on December 31, 2017.

 

Effective July 21, 2015, the Company entered into a promissory note agreement with related party Dino Satallante, a beneficial interest shareholder of the Company, for total proceeds of $160,000. The Company utilized $80,000 of the proceeds for payments due in connection with the Globe Photo assets acquired. The remainder of the proceeds was used for working capital purposes. The note matured on July 20, 2016. Effective July 20, 2016 the note was extended to July 31, 2017. See Note 11 – Notes Payable to Related Parties.

 

Effective September 11, 2014 the Company entered into two separate unsecured promissory note agreements for $20,500 each with two related parties, Dreamstar and Dino Satallante, both beneficial interest shareholders of the Company, for working capital purposes. The loans bear interest at 6% per annum. The loans matured on September 10, 2015, and were extended to December 31, 2016. Effective December 31, 2016, the loans have been extended to December 31, 2017. All other terms of the loans remain unchanged. See Note 11 – Notes Payable to Related Parties.

 

On August 1, 2013 the Company entered into an unsecured promissory note agreement with related party Dino Satallante for $100,000. The loan bears interest at 5%. The loan matured on July 14, 2014 and was extended to July 31, 2016. Effective July 31, 2017, the note agreement was extended to July 31, 2017. All other terms remain unchanged.

 

Frank Worth Collection

 

On July 6, 2016, Stuart Harris, as an individual and as Executor of the Estate of Frank Worth (“Claimant”) filed a Statement of Claim with the American Arbitration Association against the Company for breach of the Frank Worth Reproduction Rights Agreement entered into on November 18, 2011 (“the Frank Worth Reproduction Rights Agreement”) for royalties allegedly due. The Frank Worth Reproduction Rights Agreement called for royalty payments to be paid to Claimant by the Company for the exclusive global reproduction rights to all negatives, prints, products and other materials from the Frank Worth collection. However, on November 12, 2014, Claimant had previously agreed to accept $155,000 and 200,000 shares of the Company’s common stock in exchange for sole and exclusive, world-wide, royalty free rights to all negatives, prints, products and other materials the Company possesses including the use of the Frank Worth seal, Frank Worth’s name, likeness, publications and biography plus merchandising and selling rights. The Company paid $30,000 to the Claimant in January 2015 in connection with November 12, 2014 agreement. See Note 7 – Frank Worth Collection. The Statement of Claim also sought an award for breach of the November 12, 2014 agreement.

 

The Company made no further payments under the November 12, 2014 agreement due to Claimant selling the rights to 38 key images to Apsara, Inc. in 2007 and failing to disclose such prior sale to the Company. The Company also brought a counterclaim for breach of the November 12, 2014 agreement against Claimant for failure to disclose the previous sale of 38 key images which the Company had purchase the world-wide, royalty free rights under the Frank Worth Reproduction Rights Agreement and the subsequent November 12, 2014 agreement.

 

On October 18, 2016, an arbitration hearing was held on this matter. On October 28, 2016, the arbitrator issued an amended award, finding the 2011 Agreement to remain valid, but also recognizing the Company’s demand for clean title to the 38 Key images. Thus, the Company was ordered to pay Claimant $70,000 as final payment due under the November 12, 2014 agreement, payable to the Claimant no later than February 23, 2017. The Company was granted an award for delivery of clean title of the 38 Key images no later than February 23, 2017. In the event, Claimant provides such clean title by such deadline, the parties have the option to comply with the 2011 agreement and enter into negotiations for a new royalty agreement on the 38 Key images. But in the event Claimant does not deliver clean title, the Company shall retain possession of the entire collection, including the 38 Key images with no further obligation to pay royalties. Claimant failed to deliver clean title by February 23, 2017.

 

In the interim, the Company learned that Claimant is the subject of an action in a California Probate Court action challenging his actions as Executor of the Estate after March 2008. At that time Claimant was discharged as Executor of the Estate and he had no legal authority from that point on to represent the interests of the Estate, including entering into the agreements that were the subject of the Arbitration. That information has led the Company to secure the $70,000 final payment until such time as the California Probate Court determines the appropriate recipient.

 

On February 28, 2017, the parties agreed to dismiss this action with prejudice.

 

Stock-based and Other Compensation to Non-Employees

 

On January 2, 2015 the Company entered into a fixed price agreement with a consultant for website development services for total contract price of $193,000 payable in cash of $40,000 and 510,000 shares of the Company’s common stock with a stated fair value of $0.30 per share. As of December 31, 2015, 170,000 shares of common stock with fair value of $51,000 were issued. 340,000 shares of common stock were unissued for $102,000 which is included in accrued liabilities in the Company’s consolidated balance sheets. On October 1, 2016, the Company issued 229,300 ($68,790) shares of common stock as progress payment towards the fixed price agreement. Effective December 15, 2016, the consultant notified the Company that they have ceased operations. The Company has no further obligation for issuance of the remainder of common stock under the agreement.

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(End Disclosure - 16. Subsequent Events)
 
Disclosure - 2. Significant Accounting Policies (Policies)
Disclosure - 2. Significant Accounting Policies (Policies) (USD $) 12 Months Ended
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  Dec. 31, 2015
   
   
   
Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements represent the results of operations, financial position and cash flows of Capital Art, Inc. prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America. The consolidated financial statements include the financial statements of the Company, and its 100% owned subsidiaries Capital Art, LLC and Globe Photos, LLC. All inter-company balances and transactions have been eliminated.

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Use of Estimates

Use of Estimates

 

The 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 assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

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Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company measures fair value in accordance with Accounting Standards Codification (“ASC”) 820 – Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

 

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

 

Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

 

Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

 

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

 

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of December 31, 2015, or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at December 31, 2015 and 2014. The fair value of the assets acquired from Globe was determined on a nonrecurring basis under level 3 inputs. See Note 4 – Globe Photo Asset Purchase Agreement.

 

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. On October 8, 2014 CAPA entered into an Asset Purchase Agreement with MSN. For accounting purposes the merger has been accounted for as a reverse acquisition. The fair value of assets acquired and liabilities assumed were based on historical values due to their relatively short maturities. The estimated fair value of the Frank Worth Collection acquired in the reverse merger was determined under Level 3 inputs. See Note 3 – Reverse Merger, for the Company’s determination of fair value of assets acquired and liabilities assumed in connection with the reverse merger.

 

The Company’s derivative liability is measured at fair value on a recurring basis. See Note 4 – Globe Photo Asset Purchase Agreement.

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Accounts receivable, net

Accounts receivable, net

 

The Company sells its products through various means, including distributors, auction houses, and via the internet. The Company also licenses its images to third parties for which royalty income is received by the Company. The Company continually monitors the collectability of its trade accounts receivables based on a combination of factors, including the aging of the accounts receivable, historical experience, and other currently available evidence and provides for an allowance for doubtful accounts equal to estimated uncollectible amounts based on historical collection experience and a review of the current status of trade accounts receivable. No allowance for uncollectible accounts or bad debt expense has been recorded for the years ended December 31, 2015 and 2014.

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Inventory

Inventory

 

The Company’s inventory is comprised of rare photos of movie stars and other famous people, and is stated at the lower of cost or net realizable value. Direct labor and raw material costs associated with the process of making the photos available for sale are also included in inventory at cost. These costs are expensed to cost of sales pro-ratably as sold.

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Archival Images, and Property and Equipment

Archival Images, and Property and Equipment

 

Archival images, and property and equipment are recorded at cost for purchases over $500, and depreciated using the straight-line method over the estimated useful lives ranging from three to ten years. The Company capitalizes direct costs associated with improvements to archival images, and property and equipment in accordance with ASC 360 – Property, Plant, and Equipment. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the term of the related lease. Expenditures for ordinary repairs and maintenance are expensed as incurred.

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Intangible Assets

Intangible Assets

 

Intangible assets, consisting of content provider and photographic agreements, and copyrights, are accounted for in accordance with ASC 350 Intangibles - Goodwill and Other. Intangible assets that have finite lives are amortized using the straight-line method over their estimated useful lives of ten years.

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Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

 

Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In such situations, long-lived assets are considered impaired when future undiscounted cash flows resulting the use of the asset and its eventual disposition are less than the asset’s carrying amount. In such situations, the asset is written down to the present value of the estimated future cash flows. Factors that are considered when evaluating long-lived assets for impairment include a current expectation that it is more likely than not that the long-lived asset will be sold significantly before the end of its useful life, a significant decrease in the market price of the long-lived asset, and a change in the extent of manner in which the long-lived asset is being used. Based on management’s assessment there were no impairments at December 31, 2015 and 2014.

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Derivative Financial Instruments

Derivative Financial Instruments

 

The Company accounts for derivative instruments in accordance with the provisions of ASC 815 - Derivatives Hedging: Embedded Derivatives. ASC 815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities.

 

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms in agreements are reviewed to determine whether or not they contain embedded derivatives that are required under ASC 815 to be accounted for and separated from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with the corresponding changes in fair value recorded in current period operating results.

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Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue related to product sales when (i) the seller’s price is substantially fixed, (ii) shipment has occurred causing the buyer to be obligated to pay for product, (iii) the buyer has economic substance apart from the seller, and (iv) there is no significant obligation for future performance to directly bring about the resale of the product by the buyer as required by ASC 605 – Revenue Recognition. Cost of sales, rebates and discounts are recorded at the time of revenue recognition or at each financial reporting date.

 

The Company’s other revenue represent payments based on net sales from brand licensees for content reproduction rights. These license agreements are held in conjunction with third parties that are responsible for collecting fees due and remitting to the Company its share after expenses. Revenue from licensed products is recognized when realized or realizable based on royalty reporting received from licensees. Revenues from royalties as of December 31, 2015 and 2014 were insignificant.

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Shipping and Handling

Shipping and Handling

 

The Company records shipping and handling expenses in the period in which they are incurred and are included in cost of revenues.

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Stock-based Compensation

Stock-based Compensation

 

The Company recognizes stock-based compensation issued to employees in accordance with ASC 718 – Compensation: Stock Compensation, based on the fair value of the equity instrument in exchange for employee services and the resulting recognition of compensation expense.

 

The Company’s accounts for stock-based payment transactions with nonemployees for services in accordance with ASC 50-550 Equity: Equity-based Payments to Non-Employees. If the fair value of the services received in a stock-based payment with nonemployees is more reliably measureable than the fair value of the equity instrument issued, the fair value of the services received is used to measure the transaction. Conversely, if the fair value of the equity instruments issued in a stock-based transaction with nonemployees is more reliably measureable than the fair value of the consideration received, the transaction is measured at the fair value of the equity instruments issued. The Company recognizes an increase in equity or a liability, depending on whether the equity instruments granted have satisfied the equity or liability classification criteria.

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Advertising

Advertising

 

The expenses the cost of advertising, including promotional expenses, as incurred. Advertising expenses for the twelve months ended December 31, 2015 and 2014 was $10,811 and $11,076, respectively.

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Income Taxes

Income Taxes

 

The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company had no uncertain tax positions as of December 31, 2015 and 2014.

 

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized.

 

Until the merger date, MSN, a Nevada Limited Liability Company, was taxed as a limited liability company and, as such, any profit or loss from operations flowed directly to the members who were responsible for payment of any federal and state income tax. MSN was only required for payment of minimum business and filing income tax costs. The Company has not included any pro forma income tax information as if the Company were a tax paying entity prior to the reverse merger date October 8, 2014, any pro forma tax provision on the loss before income taxes would be offset by a valuation allowance for the related deferred tax asset as it would be more likely than not that the future tax benefits will not be realized.

 

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of December 31, 2015 and 2014, the Company had no accrued interest or penalties related to uncertain tax positions. Pre-merger CAPA had not previously filed federal and state income tax returns for tax years 2011 through 2013. The returns have been since filed, but not yet cleared by the Internal Revenue Service. Management determined a liability contingency for income taxes existed as of the merger date existed for $91,000. The liability is to be reimbursed by a related party of pre-merger CAPA. See Note 3 – Reverse Merger.

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Concentrations of Credit Risk and Financial Instruments

Concentrations of Credit Risk and Financial Instruments

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.

 

The Company’s cash balances are placed at financial institutions, which at times, may exceed federally insured limits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash.

 

On August 15, 2014, pre-merger CAPA entered into a four-month agreement for strategic management services with a consultant. In connection with the agreement, the consultant is to receive compensation limited edition photographs for aggregate retail fair value of $250,000. The Company evaluated the transaction under the guidance in ASC 845-Nonmonetary Transactions. ASC 845 requires fair value of nonmonetary exchanges be recorded based on fair value inherent in the transaction. The Company determined the aggregate retail fair value of the prints totaling $250,000 represented the fair value of the reciprocal transfer between the Company and the consultant. See Note 9 – Accrued Liabilities. The Company delivered the limited edition prints to the consultant in March 2015, which accounted for 29% of total revenues for the twelve months ended December 31, 2015.

 

On May 11, 2015 the Company entered into an exclusive marketing agreement with a distributor to distribute the Company’s vintage original fine art prints to fine art dealers and collector auction houses, as well as private third party collectors. Under the terms of the agreement the distributor is to receive 50% of the gross receipts from sales generated by the distributor. This distributor accounted for 27% of total revenues for the twelve months ended December 31, 2015. No distributor or customer accounted for over 10% of total revenues for the twelve months ended December 31, 2014. As of December 31, 2015, one distributor accounted for 68% total accounts receivable. Accounts receivable balances as of December 31, 2014 were not material to the Company’s consolidated financial statements. There is significant financial risk associated with a dependence upon a small number of distributors and customers which could have an adverse effect on the Company’s future consolidated financial statements if these distributors were to leave. The Company’s intends to continue its investment in sales and marketing in order to increase distribution and demand for its products and adding content to its product lines, along with adding additional channels of distribution.

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Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 – Revenues from Contracts with Customers, which introduces a new five-step framework for revenue recognition. The core principle of the standard is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled for those goods or services. The ASU also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. On August 12, 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) - Deferral of Effective Date, which defers the effective date of ASU 2014-09 to January 1, 2018 with early adoption beginning January 1, 2017. Management is currently evaluating the impact of the new revenue recognition standards and does not believe the adoption of ASU 2014-09 will have a material impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-08 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing its procedures for determining revenues derived from principal versus agents in connection with the impact of adopting this new accounting standard on the Company’s consolidated financial statements and does not believe that the adoption of ASU 2016-08 will have a material impact on the Company’s consolidated financial statements.

 

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The amendments in ASU 2016-10 clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing the potential impact of adopting this new accounting standard on the Company’s consolidated financial statements in connection with revenues recognized from licensing its vast archive of photographic images.

 

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-12 do not change the core principle of the guidance in Topic 606, but instead affect only the narrow aspects noted in Topic 606. ASU 2016-12 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management evaluated ASU 2016-12 and does not believe the adoption of ASU 2016-12 will have a material impact on the Company’s consolidated financial statements.

 

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements–Going Concern, (Subtopic 204-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires management to evaluate each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Management has evaluated ASU 2014-15 and does not believe the adoption of ASU-2014-15 will have a material effect on the consolidated financial statements.

 

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. ASU No. 2015-11 clarifies that inventory should be held at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose and transport such inventory. ASU No. 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU No. 2015-11 is required to be applied prospectively and early adoption is permitted. Management considered and evaluated ASU 2015-11 and does not believe the adoption of ASU 2015-11 will have a material effect on the consolidated financial statements for future reporting periods.

 

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities to present deferred tax assets and liabilities as non-current in a classified balance sheet, instead of separating into current and non-current amounts. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, on a prospective or retrospective basis. Early adoption is permitted for all companies in any interim or annual period. Management evaluated ASU 2015-17 and does not believe the adoption of this new accounting standard will have a material effect on the consolidated financial statements for future reporting periods.

 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 will be effective for the Company beginning on January 1, 2018, and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. Management is currently evaluating the potential impact of adopting this new accounting standard on the Company’s consolidated financial statements.

 

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning on January 1, 2017. Early adoption is permitted, including in an interim period. Management evaluated ASU 2016-05 and does not believe the adoption of this new accounting standard will have a material impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. ASU 2016-06 will be effective for the Company beginning on January 1, 2017. Management evaluated ASU 2016-06 and does not believe the adoption of this this new accounting standard will have a material impact on the Company’s consolidated financial statements effective January 1, 2017.

 

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for related income taxes consequences and certain classifications within the statement of cash flows. ASU 2016-09 is effective for the Company beginning on January 1, 2017. Management evaluated the impact of adopting ASU 2016-09 and does not believe the new accounting standard will have a material impact on the Company’s consolidated financial statements.

( us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock )  
(End Disclosure - 2. Significant Accounting Policies (Policies))
 
Disclosure - 1. Organization and Business Operations (Tables)
Disclosure - 1. Organization and Business Operations (Tables) (USD $) 12 Months Ended
( us-gaap:AccountingPoliciesAbstract )  
  Dec. 31, 2015
   
   
   
Pro forma information
(Unaudited)  December 31,
2014
 
     
     
Supplement pro forma combined results of operations:     
      
Net sales  $389,018 
Net loss   (1,062,089)
Basic and diluted loss per common share  $ 
( us-gaap:BusinessAcquisitionProFormaInformationTextBlock )  
(End Disclosure - 1. Organization and Business Operations (Tables))
 
Disclosure - 2. Significant Accounting Policies (Tables)
Disclosure - 2. Significant Accounting Policies (Tables) (USD $) 12 Months Ended
( us-gaap:AccountingPoliciesAbstract )  
  Dec. 31, 2015
   
   
   
Reconciliation of weighted-average diluted shares
   Twelve Months Ended December 31, 
   2015   2014 
         
Basic weighted average common shares outstanding   321,910,400    268,407,275 
           
Effect of dilutive securities        
           
Diluted weighted average common and potential common shares outstanding   321,910,400    268,407,275 
( us-gaap:ScheduleOfWeightedAverageNumberOfSharesTableTextBlock )  
(End Disclosure - 2. Significant Accounting Policies (Tables))
 
Disclosure - 3. Reverse Merger (Tables)
Disclosure - 3. Reverse Merger (Tables) (USD $) 12 Months Ended
( us-gaap:BusinessCombinationsAbstract )  
  Dec. 31, 2015
   
   
   
Summary of estimated fair value of assets acquired and liabilities assumed
   Amount 
Asset consideration allocation:     
Cash  $177,730 
Accounts receivable   17,180 
Fair value of related party receivables acquired, net   68,746 
Prepaid expenses and other   1,500 
Frank Worth Collection   2,635,000 
Accounts payable   (16,788)
Stock-based compensation due non-employees   (165,625)
Fair value of limited edition prints due to consultant   (250,000)
Royalties due Frank Worth Estate   (37,500)
Contingent liability for income taxes   (91,000)
Other accrued liabilities   (7,805)
Gain on bargain purchase   (214,035)
Total acquisition consideration  $2,117,403 
( us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock )  
(End Disclosure - 3. Reverse Merger (Tables))
 
Disclosure - 4. Globe Photo Asset Purchase Agreement (Tables)
Disclosure - 4. Globe Photo Asset Purchase Agreement (Tables) (USD $) 12 Months Ended
( us-gaap:BusinessCombinationsAbstract )  
  Dec. 31, 2015
   
   
   
Fair value of purchased assets
Inventory  $10,000 
Intangible assets – content provider and photographic agreements   400,000 
Copyrights   35,000 
    Total fair value of purchased assets  $445,000 
( us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsTableTextBlock )  
(End Disclosure - 4. Globe Photo Asset Purchase Agreement (Tables))
 
Disclosure - 5. Fair Value of Financial Instruments (Tables)
Disclosure - 5. Fair Value of Financial Instruments (Tables) (USD $) 12 Months Ended
( us-gaap:FairValueDisclosuresAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of derivative fair on recurring basis
   Fair Value Measurements at December 31, 2015 
       Quoted Prices in Active Markets for Identical Assets   Significant Other Observable Inputs   Significant Unobservable Inputs 
   Total   (Level 1)   (Level 2)   (Level 3) 
                     
Embedded derivative liability  $55,000   $   $   $55,000 
( us-gaap:FairValueAssetsMeasuredOnRecurringBasisTextBlock )  
Schedule of Level 3 Significant Inputs
   Fair Value Measurements Using 
   Significant Unobservable Inputs 
   (Level 3) 
    Embedded Derivative Liability 
    December 31,    December 31, 
    2015    2014 
           
Balance beginning of period  $0   $ 
Embedded derivative in connection with the issuance of put option   75,000     
Total unrealized income (loss) included in earnings   (20,000)    
Balance end of period  $55,000   $ 
( us-gaap:FairValueAssetsMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock )  
(End Disclosure - 5. Fair Value of Financial Instruments (Tables))
 
Disclosure - 4. Basic and Diluted Income and Loss Per Share (Tables)
Disclosure - 4. Basic and Diluted Income and Loss Per Share (Tables) (USD $) 12 Months Ended
( us-gaap:EarningsPerShareAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of antidilutive shares
   Shares 
   Reserved 
Shares to be issued to consultants   2,423,333 
Shares to be issued to Frank Worth Estate   200,000 
    2,623,333 
( us-gaap:ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock )  
(End Disclosure - 4. Basic and Diluted Income and Loss Per Share (Tables))
 
Disclosure - 6. Archival Images, and Property and Equipment (Tables)
Disclosure - 6. Archival Images, and Property and Equipment (Tables) (USD $) 12 Months Ended
( us-gaap:PropertyPlantAndEquipmentAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of archival images, property and equipment
   December 31,   Estimated Useful 
   2015   2014   Lives 
Frank Worth Collection  $2,770,000   $2,770,000    10 years 
Other archival images   730,076    676,215    10 years 
Leasehold improvements   12,446    12,446    7 years 
Computer and other equipment   53,332    40,204    3 – 5 years 
Furniture and fixtures   83,666    56,416    7 years 
    3,649,520    3,555,281      
Less accumulated deprecation   (590,537)   (213,729)     
Total archival images, property and equipment, net  $3,058,983   $3,341,552      
( us-gaap:PropertyPlantAndEquipmentTextBlock )  
(End Disclosure - 6. Archival Images, and Property and Equipment (Tables))
 
Disclosure - 8. Intangible Assets (Tables)
Disclosure - 8. Intangible Assets (Tables) (USD $) 12 Months Ended
( us-gaap:GoodwillAndIntangibleAssetsDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of intangible assets
   December 31, 2015   December 31, 2014 
   Gross Carrying   Accumulated   Gross Carrying   Accumulated 
   Amount   Amortization   Amount   Amortization 
Intangible assets with determinable lives:                
                 
Content provider and photographic agreements  $400,000   $20,000   $   $ 
Copyrights   35,000    1,750         
Total  $435,000   $21,750   $   $ 
( us-gaap:ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock )  
(End Disclosure - 8. Intangible Assets (Tables))
 
Disclosure - 9. Accrued Liabilities (Tables)
Disclosure - 9. Accrued Liabilities (Tables) (USD $) 12 Months Ended
( us-gaap:PayablesAndAccrualsAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of accrued liabilties
   December 31, 
   2015   2014 
Accrued payroll and related  $3,518   $8,242 
Accrued management fee due to related party       5,781 
Due to Frank Worth Estate (Note 7)   135,000    135,000 
Interest payable   4,176    748 
Due to consultants for website development   102,000     
Accrued royalties due to Frank Worth Estate       30,000 
Fair value of limited edition prints due to consultant       250,000 
Stock-based compensation due to non-employees   104,167    126,250 
Contingent liability for taxes assumed in reverse merger   91,000    91,000 
Other   20,847    3,010 
Total accrued liabilities  $460,708   $650,031 
( us-gaap:ScheduleOfAccruedLiabilitiesTableTextBlock )  
(End Disclosure - 9. Accrued Liabilities (Tables))
 
Disclosure - 12. Related Party Transactions (Tables)
Disclosure - 12. Related Party Transactions (Tables) (USD $) 12 Months Ended
( us-gaap:RelatedPartyTransactionsAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of related party transactions
   December 31, 
   2015   2014 
Due from related parties:          
Dino Satallante, beneficial interest shareholder  $   $1,350 
Sam Battistone, beneficial interest shareholder       966 
Klaus Moeller, related party of pre-merger CAPA and beneficial interest shareholder   91,000    91,000 
       Total due from related parties   91,000    93,316 
Less long-term portion   (91,000)    
        Total due from related parties, net of long-term portion  $   $93,316 
           
           
Due to related parties:          
ICONZ Art, LLC, beneficial interest shareholder  $   $2,014 
Klaus Moeller, related party of pre-merger CAPA       4,562 
MSN Holding Co., beneficial interest shareholder   12,999    28,272 
Premier Collectibles, beneficial interest shareholder   33,085    85 
Stuart Scheinman, beneficial    interest shareholder       29,341 
     Total due to related parties  $46,084   $64,274 
( us-gaap:ScheduleOfRelatedPartyTransactionsTableTextBlock )  
(End Disclosure - 12. Related Party Transactions (Tables))
 
Disclosure - 13. Shareholders' Equity (Tables)
Disclosure - 13. Shareholders' Equity (Tables) (USD $) 12 Months Ended
( us-gaap:EquityAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of antilutive shares
   Shares 
   Reserved 
Shares to be issued to consultants   2,423,333 
Shares to be issued to Frank Worth Estate   200,000 
    2,623,333 
( us-gaap:ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock )  
(End Disclosure - 13. Shareholders' Equity (Tables))
 
Disclosure - 14. Commitments and Contingencies (Tables)
Disclosure - 14. Commitments and Contingencies (Tables) (USD $) 12 Months Ended
( us-gaap:CommitmentsAndContingenciesDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Schedule of future minimum operatinng lease payments
 2016   $40,623 
 2017    41,841 
 2018    43,096 
 2019    36,807 
 Total future minimum payments   $162,367 
( us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock )  
(End Disclosure - 14. Commitments and Contingencies (Tables))
 
Disclosure - 15. Income Taxes (Tables)
Disclosure - 15. Income Taxes (Tables) (USD $) 12 Months Ended
( us-gaap:IncomeTaxDisclosureAbstract )  
  Dec. 31, 2015
   
   
   
Deferred tax assets and liabilties
   December 31, 
   2015   2014 
Deferred tax assets:          
Net operating loss  $640,000   $178,000 
   Accrued liabilities   86,000    87,000 
    726,000    265,000 
Deferred tax liabilities:          
Embedded derivative   (9,000)    
Deprecation and amortization   (149,000)   (9,000)
       Total deferred tax asset   568,000    256,000 
           
        Less valuation allowance   (568,000)   (256,000)
             Net deferred tax asset  $   $ 
( us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock )  
Schedule of provision for income tax provision (benefit)
   December 31, 
   2015   2014 
Deferred:        
   Federal  $568,000   $256,000 
   State        
       Total deferred tax asset   568,000    256,000 
           
        Less valuation allowance   (568,000)   (256,000)
             Net deferred tax asset  $   $ 
( us-gaap:ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock )  
Schedule of effective income tax rate
   December 31, 
   2015   2014 
Effective tax rate (benefit):          
Federal   (34.0)%   (34.0)%
State        
Permanent differences   18.8    24.8 
Other   38.1    18.6 
Change in valuation allowance   (22.9)   (9.4)
    -%   -%
( us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock )  
(End Disclosure - 15. Income Taxes (Tables))
 
Disclosure - 1. Organization and Business Operations (Details)
Disclosure - 1. Organization and Business Operations (Details) (USD $) 12 Months Ended
( us-gaap:BusinessAcquisitionProFormaInformationAbstract )  
  Dec. 31, 2014
   
   
   
Pro forma net sales 389,018
( us-gaap:BusinessAcquisitionsProFormaRevenue )  
Pro forma net loss (1,062,089)
( us-gaap:BusinessAcquisitionsProFormaNetIncomeLoss )  
Pro forma basic and diluted loss per common share 0
( us-gaap:BusinessAcquisitionProFormaEarningsPerShareBasic )  
(End Disclosure - 1. Organization and Business Operations (Details))
 
Disclosure - 1. Organization and Business Operations (Details Narrative)
Disclosure - 1. Organization and Business Operations (Details Narrative) (USD $) 12 Months Ended      
( us-gaap:AccountingPoliciesAbstract )        
  Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2013
           
           
           
Cash     32,570 340,523 20,919
( us-gaap:Cash )          
Retained deficit     (1,733,465) (371,072)  
( us-gaap:RetainedEarningsAccumulatedDeficit )          
Net loss (1,362,393) (380,327)      
( us-gaap:NetIncomeLoss )          
Cash used in operations (878,828) (201,751)      
( us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations )          
(End Disclosure - 1. Organization and Business Operations (Details Narrative))
 
Disclosure - 2. Significant Accounting Policies (Details)
Disclosure - 2. Significant Accounting Policies (Details) (USD $) 12 Months Ended
( us-gaap:AccountingPoliciesAbstract )  
  Dec. 31, 2015 Dec. 31, 2014
     
     
     
Basic weighted average common shares outstanding 321,910,400 268,407,275
( us-gaap:WeightedAverageNumberOfSharesOutstandingBasic )    
Effect of dilutive securities 0 0
( us-gaap:WeightedAverageNumberDilutedSharesOutstandingAdjustment )    
Diluted weighted average common and potential common shares outstanding 321,910,400 268,407,275
( us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding )    
(End Disclosure - 2. Significant Accounting Policies (Details))
 
Disclosure - 2. Significant Accounting Policies (Details Narrative)
Disclosure - 2. Significant Accounting Policies (Details Narrative) (USD $) 12 Months Ended  
( us-gaap:AccountingPoliciesAbstract )    
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015
( us-gaap:ConcentrationRiskByBenchmarkAxis )          
  Accounts Receivable [Member] Sales Revenue, Net [Member]      
( us-gaap:ConcentrationRiskBenchmarkDomain )          
Advertising costs     10,811 11,076  
( us-gaap:AdvertisingExpense )          
Income tax liability         91,000
( us-gaap:AccruedIncomeTaxes )          
Concentration risk percentage 0.68 0.27      
( us-gaap:ConcentrationRiskPercentage1 )          
Shars reserved for future issuance         2,623,333
( us-gaap:CommonStockCapitalSharesReservedForFutureIssuance )          
(End Disclosure - 2. Significant Accounting Policies (Details Narrative))
 
Disclosure - 3. Reverse Merger (Details)
Disclosure - 3. Reverse Merger (Details) (CAPA [Member], USD $)  
( us-gaap:BusinessCombinationsAbstract )  
  Dec. 31, 2015
( us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsAxis )  
   
( us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsDomain )  
Asset consideration allocation:  
( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsAbstract )  
    Cash 177,730
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents )  
    Accounts receivable 17,180
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables )  
    Fair value of related party receivables acquired, net 68,746
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsOther )  
    Prepaid expenses and other 1,500
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets )  
    Frank Worth Collection 2,635,000
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory )  
    Accounts payable (16,788)
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable )  
    Stock-based compensation due non-employees (165,625)
    ( custom:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesStockBasedCompensation [Extension] )  
    Fair value of limited edition prints due to consultant (250,000)
    ( custom:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesDueToConsultant [Extension] )  
    Royalties due Frank Worth Estate (37,500)
    ( custom:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesRoyaltiesPayable [Extension] )  
    Contingent liability for income taxes (91,000)
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedDeferredTaxLiabilities )  
    Other accrued liabilities (7,805)
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther )  
    Gain on bargain purchase (214,035)
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedFinancialLiabilities )  
    Total acquisition consideration 2,117,403
    ( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet )  
(End Disclosure - 3. Reverse Merger (Details))
 
Disclosure - 3. Reverse Merger (Details Narrative)
Disclosure - 3. Reverse Merger (Details Narrative) (USD $) 12 Months Ended      
( us-gaap:BusinessCombinationsAbstract )        
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014
( us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsAxis )            
  CAPA [Member]     CAPA [Member]    
( us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsDomain )            
Shares issued for acquisition, shares 42,348,057          
( us-gaap:StockIssuedDuringPeriodSharesAcquisitions )            
Shares issued for acquisition, value 2,117,403          
( us-gaap:StockIssuedDuringPeriodValueAcquisitions )            
Gain on bargain purchase 214,035 0 214,035      
( us-gaap:BusinessCombinationBargainPurchaseGainRecognizedAmount )            
Fair market value of images received       2,635,000 3,649,520 3,555,281
( us-gaap:PropertyPlantAndEquipmentGross )            
Accrued income taxes       91,000 91,000  
( us-gaap:AccruedIncomeTaxes )            
(End Disclosure - 3. Reverse Merger (Details Narrative))
 
Disclosure - 4. Globe Photo Asset Purchase Agreement (Details)
Disclosure - 4. Globe Photo Asset Purchase Agreement (Details) (GlobePhotosMember, USD $)  
( us-gaap:BusinessCombinationsAbstract )  
  Dec. 31, 2015
( us-gaap:BusinessAcquisitionAxis )  
   
( us-gaap:BusinessAcquisitionAcquireeDomain )  
Inventory 10,000
( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory )  
Intangible assets – content provider and photographic agreements 400,000
( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles )  
Copyrights 35,000
( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIndefiniteLivedIntangibleAssets )  
Total fair value of purchased assets 445,000
( us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAssets )  
(End Disclosure - 4. Globe Photo Asset Purchase Agreement (Details))
 
Disclosure - 4. Globe Photo Asset Purchase Agreement (Details Narrative)
Disclosure - 4. Globe Photo Asset Purchase Agreement (Details Narrative) (USD $) 12 Months Ended        
( us-gaap:BusinessCombinationsAbstract )          
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2013
( us-gaap:BusinessAcquisitionAxis )            
  Globe Photos, Inc. [Member]   Globe Photos, Inc. [Member]      
( us-gaap:BusinessAcquisitionAcquireeDomain )            
Purchase price 445,000          
( us-gaap:BusinessCombinationConsiderationTransferred1 )            
Reserve payable     130,000      
( us-gaap:OtherLoansPayable )            
Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement, shares 352,941          
( us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets )            
Common shares issued in connection with Globe Photo, Inc. Asset Purchase Agreement, value 120,000 120,000        
( us-gaap:StockIssuedDuringPeriodValuePurchaseOfAssets )            
Embedded derivative     75,000 55,000 0 0
( us-gaap:EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability )            
(End Disclosure - 4. Globe Photo Asset Purchase Agreement (Details Narrative))
 
Disclosure - 5. Fair Value of Financial Instruments (Details - fair value)
Disclosure - 5. Fair Value of Financial Instruments (Details - fair value) (USD $)              
( us-gaap:FairValueDisclosuresAbstract )              
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2013
( us-gaap:FairValueByFairValueHierarchyLevelAxis )              
  Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
  Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
   
( us-gaap:FairValueMeasurementsFairValueHierarchyDomain )              
Embedded derivative 55,000 0 0 55,000 0 0 0
( us-gaap:EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability )              
(End Disclosure - 5. Fair Value of Financial Instruments (Details - fair value))
 
Disclosure - 5. Fair Value of Financial Instruments (Details - Level 3)
Disclosure - 5. Fair Value of Financial Instruments (Details - Level 3) (USD $) 12 Months Ended              
( us-gaap:FairValueDisclosuresAbstract )                
  Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2013
( us-gaap:FairValueByFairValueHierarchyLevelAxis )                  
  Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
  Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
  Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
   
( us-gaap:FairValueMeasurementsFairValueHierarchyDomain )                  
Beginning balance 0 0 55,000 0 0 55,000 0 0 0
( us-gaap:EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability )                  
Embedded derivative in connection with put options 75,000 0              
( us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputsReconciliationIssues )                  
Total unrealized income (loss) included in earnings (20,000) 0              
( us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputsReconciliationGainLossIncludedInEarnings )                  
Ending balance 55,000 0 55,000 0 0 55,000 0 0 0
( us-gaap:EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability )                  
(End Disclosure - 5. Fair Value of Financial Instruments (Details - Level 3))
 
Disclosure - 6. Archival Images, and Property and Equipment (Details)
Disclosure - 6. Archival Images, and Property and Equipment (Details) (USD $) 12 Months Ended          
( us-gaap:PropertyPlantAndEquipmentAbstract )            
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015
( us-gaap:FiniteLivedIntangibleAssetsByMajorClassAxis )                    
  Other archival images[Member] Leasehold Improvements [Member] Computer and other equipment [Member] Furniture and fixtures [Member] Artistic-Related Intangible Assets [Member] Furniture and fixtures [Member] Other archival images[Member] Leasehold Improvements [Member] Computer and other equipment [Member] Artistic-Related Intangible Assets [Member]
( us-gaap:FiniteLivedIntangibleAssetsMajorClassNameDomain )                    
Property and equipment gross           83,666 730,076 12,446 53,332 2,770,000
( us-gaap:PropertyPlantAndEquipmentGross )                    
Less accumulated deprecation                    
( us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment )                    
Total archival images, property and equipment, net                    
( us-gaap:PropertyPlantAndEquipmentNet )                    
Estimated useful lives 10 years 7 years 3-5 years 7 years 10 years          
( us-gaap:PropertyPlantAndEquipmentEstimatedUsefulLives )                    
 
Table continued from above
 
Disclosure - 6. Archival Images, and Property and Equipment (Details) (USD $)              
( us-gaap:PropertyPlantAndEquipmentAbstract )              
  Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014
( us-gaap:FiniteLivedIntangibleAssetsByMajorClassAxis )              
    Furniture and fixtures [Member] Computer and other equipment [Member] Leasehold Improvements [Member] Artistic-Related Intangible Assets [Member] Other archival images[Member]  
( us-gaap:FiniteLivedIntangibleAssetsMajorClassNameDomain )              
Property and equipment gross 3,649,520 56,416 40,204 12,446 2,770,000 676,215 3,555,281
( us-gaap:PropertyPlantAndEquipmentGross )              
Less accumulated deprecation (590,537)           (213,729)
( us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment )              
Total archival images, property and equipment, net 3,058,983           3,341,552
( us-gaap:PropertyPlantAndEquipmentNet )              
Estimated useful lives              
( us-gaap:PropertyPlantAndEquipmentEstimatedUsefulLives )              
(End Disclosure - 6. Archival Images, and Property and Equipment (Details))
 
Disclosure - 7. Frank Worth Collection (Details Narrative)
Disclosure - 7. Frank Worth Collection (Details Narrative) (USD $) 12 Months Ended      
( us-gaap:InvestmentsAllOtherInvestmentsAbstract )        
  Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014
( us-gaap:InvestmentsInAndAdvancesToAffiliatesCategorizationAxis )          
  Frank Worth Collection [Member] Frank Worth Collection [Member] Frank Worth Collection [Member]    
( us-gaap:InvestmentsInAndAdvancesToAffiliatesCategorizationDomain )          
Common shares issued in connection with acquisition, shares   200,000      
( us-gaap:StockIssuedDuringPeriodSharesAcquisitions )          
Common shares issued in connection with acquisition, value   10,000      
( us-gaap:StockIssuedDuringPeriodValueAcquisitions )          
Cash paid for acquisition   155,000      
( us-gaap:PaymentsForPreviousAcquisition )          
Royalties paid 30,000        
( us-gaap:PaymentsForRoyalties )          
Accrued liabilities, stock and cash due for acquisition     135,000 460,708 650,031
( us-gaap:AccruedLiabilitiesCurrent )          
(End Disclosure - 7. Frank Worth Collection (Details Narrative))
 
Disclosure - 8. Intangible Assets (Details)
Disclosure - 8. Intangible Assets (Details) (USD $)            
( us-gaap:GoodwillAndIntangibleAssetsDisclosureAbstract )            
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014
( us-gaap:FiniteLivedIntangibleAssetsByMajorClassAxis )            
  Copyrights [Member] Content provider and photographic agreements [Member]   Content provider and photographic agreements [Member] Copyrights [Member]  
( us-gaap:FiniteLivedIntangibleAssetsMajorClassNameDomain )            
Intangible assets, gross 35,000 400,000 435,000 0 0 0
( us-gaap:FiniteLivedIntangibleAssetsGross )            
Accumulated amortization 1,750 20,000 21,750 0 0 0
( us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization )            
(End Disclosure - 8. Intangible Assets (Details))
 
Disclosure - 8. Intangible Assets (Details Narrative)
Disclosure - 8. Intangible Assets (Details Narrative) (USD $) 12 Months Ended  
( us-gaap:GoodwillAndIntangibleAssetsDisclosureAbstract )    
  Dec. 31, 2015 Dec. 31, 2015
     
     
     
Amortization expense 21,750  
( us-gaap:AdjustmentForAmortization )    
Amortization expense due current   43,500
( us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseNextTwelveMonths )    
Amortization expense year two   43,500
( us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo )    
Amortization expense year three   43,500
( us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearThree )    
Amortization expense year four   43,500
( us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFour )    
Amortization expense year five   43,500
( us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFive )    
(End Disclosure - 8. Intangible Assets (Details Narrative))
 
Disclosure - 9. Accrued Liabilities (Details)
Disclosure - 9. Accrued Liabilities (Details) (USD $)    
( us-gaap:PayablesAndAccrualsAbstract )    
  Dec. 31, 2015 Dec. 31, 2014
     
     
     
Accrued payroll and related 3,518 8,242
( us-gaap:EmployeeRelatedLiabilitiesCurrent )    
Accrued management fee due to related party 0 5,781
( us-gaap:ManagementFeePayable )    
Due to Frank Worth Estate 135,000 135,000
( custom:DueToFrankWorthEstate [Extension] )    
Interest payable 4,176 748
( us-gaap:InterestPayableCurrent )    
Due to consultants for website development 102,000 0
( us-gaap:AccruedProfessionalFeesCurrent )    
Accrued royalties due to Frank Worth Estate 0 30,000
( us-gaap:AccruedRoyaltiesCurrent )    
Fair value of limited edition prints due to consultant 0 250,000
( custom:FairValueOfLimitedEditionPrintsDueToConsultant [Extension] )    
Stock-based compensation due to non-employees 104,167 126,250
( us-gaap:DeferredCompensationShareBasedArrangementsLiabilityCurrent )    
Contingent liability for taxes assumed in reverse merger 91,000 91,000
( us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent )    
Other 20,847 3,010
( us-gaap:OtherAccruedLiabilitiesCurrent )    
Total accrued liabilities 460,708 650,031
( us-gaap:AccruedLiabilitiesCurrent )    
(End Disclosure - 9. Accrued Liabilities (Details))
 
Disclosure - 10. Note Payable (Details Narrative)
Disclosure - 10. Note Payable (Details Narrative) (USD $) 12 Months Ended        
( us-gaap:DebtDisclosureAbstract )          
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014
( us-gaap:LongtermDebtTypeAxis )            
  Secured Promissory Note [Member] Unsecured Debt [Member] Secured Promissory Note [Member] Unsecured Debt [Member]    
( us-gaap:LongtermDebtTypeDomain )            
Debt face amount     182,500 150,000    
( us-gaap:DebtInstrumentFaceAmount )            
Proceeds from note payable 182,500 150,000        
( us-gaap:ProceedsFromUnsecuredNotesPayable )            
Debt maturity date 2017-12-31 2017-03-31        
( us-gaap:DebtInstrumentMaturityDate )            
Debt interest rate     0.10 0.10    
( us-gaap:DebtInstrumentInterestRateStatedPercentage )            
Interest expense   3,750        
( us-gaap:InterestExpenseDebt )            
Accrued interest     665 154 4,176 748
( us-gaap:InterestPayableCurrent )            
(End Disclosure - 10. Note Payable (Details Narrative))
 
Disclosure - 11. Notes Payable to Related Parties (Details Narrative)
Disclosure - 11. Notes Payable to Related Parties (Details Narrative) (USD $) 12 Months Ended
( custom:NotesPayableToRelatedPartiesDetailsNarrativeAbstract [Extension] )  
  Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014
( us-gaap:LongtermDebtTypeAxis )                    
  Secured Promissory Note [Member] Dino Satallante [Member] Dino Satallante [Member]
Unsecured Debt [Member]
Dino Satallante [Member]
Unsecured Debt -2 [Member]
Dreamstar [Member]
Unsecured Debt -2 [Member]
  Dreamstar [Member]
Unsecured Debt -2 [Member]
Dino Satallante [Member]
Unsecured Debt -2 [Member]
Dino Satallante [Member]
Unsecured Debt [Member]
 
( us-gaap:LongtermDebtTypeDomain )                    
Proceeds from related party   160,000 100,000     160,000 20,500 20,500   41,000
( us-gaap:ProceedsFromRelatedPartyDebt )                    
Repayment of related party debt         2,400 8,857       0
( us-gaap:RepaymentsOfRelatedPartyDebt )                    
Debt maturity date 2017-12-31 2017-07-31 2017-07-31 2017-12-31 2017-12-31          
( us-gaap:DebtInstrumentMaturityDate )                    
Debt interest rate                    
( us-gaap:DebtInstrumentInterestRateStatedPercentage )                    
Interest expense   8,627 4,386 619 2,423       4,249  
( us-gaap:InterestExpenseDebt )