LiveXLive Media, Inc. (LIVX) 2016年年度報告「NASDAQ」.pdf

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1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-KxxANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 31,2016ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Forthetran

2、sitionperiodfrom_to_ Commission File No.333-167219LOTON,CORP.(Exactnameofregistrantasspecifiedinitscharter)Nevada90-0657263(Stateorotherjurisdictionofincorporationororganization)(I.R.S.EmployerIdentificationNo.)269 South Beverly DriveBeverly Hills,California90212(Addressofprincipalexecutiveoffices)(

3、ZipCode)RegistrantsTelephoneNumber,IncludingAreaCode(310)601-2500SecuritiesRegisteredPursuanttoSection12(b)oftheAct:NoneSecuritiesRegisteredPursuanttoSection12(g)oftheAct:NoneIndicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesNoxIndicatebycheckmarki

4、ftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesxNoIndicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934during the preceding 12 months(or for such shorter period that the Registrant was req

5、uired to file such reports),and(2)hasbeensubject to suchfilingrequirementsforthepast90days.YesxNoIndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(223.405ofthisc

6、hapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).YesxNoIndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-K(229.405ofthischapter)isnotcontainedherein,andwillnotbecontained,tothebestofregistrantsknowledge,indefi

7、nitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.xIndicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfil

8、er”and“smallerreportingcompany”inRule12b-2oftheExchangeAct.LargeacceleratedfilerAcceleratedfilerNon-acceleratedfilerSmallerreportingcompanyx(Donotcheckifasmallerreportingcompany)Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).YesNoxTheaggregatemarketvalueofthevot

9、ingstockheldbynon-affiliatesoftheregistrant,computedbyreferencetotheclosingpriceasofthelastbusinessdayoftheregistrantsmostrecentlycompletedsecondfiscalquarterendedSeptember30,2015,wasapproximately$53,009,978.Forthesolepurposeofmakingthiscalculation,(i)theterm“non-affiliate”hasbeeninterpretedtoexclud

10、edirectors,corporateofficersandholdersof10%ormoreoftheregistrantscommonstock,and(ii)inlightoftheverylimitedtradingoftheregistrantscommonstock,suchaggregatemarketvaluewasdeterminedbasedonthethenmostrecentpricepershareatwhichtheregistrantsolditscommonstockinaprivateplacementduringthequarterendedSeptem

11、ber30,2015.AsofJuly11,2016,theregistranthadoutstanding45,792,138sharesofcommonstock,$0.001parvalue.TABLE OF CONTENTSPART 1ITEM 1Business5ITEM 1ARiskFactors9ITEM 1BUnresolvedStaffComments22ITEM 2Properties22ITEM 3LegalProceedings22ITEM 4MineSafetyDisclosures23PART IIITEM 5MarketforRegistrantsCommonEq

12、uity,RelatedStockholderMatterandIssuerPurchasesofEquitySecurities24ITEM 6SelectedFinancialData25ITEM 7ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations26ITEM 7AQuantitativeandQualitativeDisclosuresAboutMarketRisk29ITEM 8FinancialStatementsandSupplementaryData30ITEM 9ChangesI

13、nandDisagreementswithAccountantsonAccountingandFinancialDisclosure31ITEM 9AControlsandProcedures31ITEM 9BOtherInformation32PART IIIITEM 10Directors,ExecutiveOfficersandCorporateGovernance34ITEM 11ExecutiveCompensation36ITEM 12SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockhold

14、erMatters39ITEM 13CertainRelationshipsandRelatedTransactions,andDirectorIndependence40ITEM 14PrincipalAccountingFeesandServices41PART IVITEM 15Exhibits,FinancialStatementSchedules43Signatures462EXPLANATORY NOTE NO.1OnApril30,2014,Loton,Corp(the“Company,”we,”“us”,“our”orthe“Registrant”)filedwiththeSe

15、curitiesandExchangeCommission(the“SEC”)itsCurrentReportonForm8-K(asamendedonJune30,2014,the“Merger8-K”),withrespecttoourentryintoanAgreementandPlanofMerger(the“MergerAgreement”),byandamongtheCompany,LotonAcquisitionSubI,Inc.,aDelawarecorporation(“AcquisitionSub”),andKOKO(Camden)Holdings(US),Inc.(“KO

16、KOParent”),aDelawarecorporationandwholly-ownedsubsidiaryofJJATCorp.(“JJAT”),aDelawarecorporationwholly-ownedbyMr.RobertEllin,ourExecutiveChairman,President,directorandcontrollingshareholder,andhisaffiliates(the“Merger”).AsaresultoftheMerger,ourprimarybusinessatsuchtimebecamethatofKOKOParentbecameour

17、wholly-ownedsubsidiaryandourprimarybusinessbecamethatofKOKOParentanditssubsidiaries,KOKO(Camden)Limited,aprivatelimitedcompanyregisteredinEnglandandWales(“KOKOUK”),whichowns50%ofOBARCamdenHoldingsLimited,aprivatelimitedcompanyregisteredinEnglandandWales(“OCHL”),whichinturnwholly-ownsitsoperatingsubs

18、idiaryOBARCamdenLimited,aprivatelimitedcompanyregisteredinEnglandandWales(“OCL”).TheMerger8-KandourAnnualReportonForm10-KforthefiscalyearendedMarch31,2015,accountedfortheMergerasareverseacquisition,withOCHLdeemedtheaccountingacquirerandourCompanydeemedtheaccountingacquiree.Thereverseacquisitionwasde

19、emedacapitaltransactionandthenetassetsofOCHL(theaccountingacquirer)werecarriedforwardtous(thelegalacquirerandthereportingentity)attheircarryingvaluebeforetheacquisition.OnJuly11,2016,ourBoardofDirectorsdeterminedthattheMergerwaserroneouslyaccountedforasareverseacquisitionforaccountingpurposesandthat

20、OCHLwasimproperlyincludedinconsolidationasoursubsidiary.OuracquisitionofOCHLshouldhavebeenreflectedasaninvestmentaccountedforundertheequitymethodofaccounting.ThisdeterminationwasbasedonananalysisbyourmanagementthatwedidnothavesufficientcontrolofOCHLatthedateofthetransactioninaccordancewiththecurrent

21、accountingrules.Therefore,thisAnnualReportonForm10-K(this“AnnualReport”)containsourfinancialstatementsforthefiscalyearendedMarch31,2016andrestatedfinancialstatementsforthefiscalyearendedMarch31,2015(the“2015AnnualReport”)thatproperlypresenttheMergerandourinvestmentinOCHLontheequitybasisofaccounting,

22、andtocorrectthepriorperiodforothererrors.Inaddition,asaresultofsuchdetermination,ourBoardofDirectorsconcludedthatourfinancialstatementsincludedintheMerger8-K,the2015AnnualReportandineachofourQuarterlyReportsonForm10-QforthequartersendedJune30,September30andDecember31,2015,respectively,shouldnolonger

23、berelieduponbecauseofthiserror.AfterthefilingofthisAnnualReport,ourBoardofDirectorswilldetermineifanyofthesepriorreportsshouldberestated.CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSThisAnnualReportcontains“forward-lookingstatements,”asthattermisdefinedunderthePrivateSecuritiesLitigation

24、ReformActof1995(“PSLRA”),Section27AoftheSecuritiesActof1933,asamended(the“SecuritiesAct”),andSection21EoftheSecuritiesExchangeActof1934,asamended(the“ExchangeAct”).Forward-lookingstatementsincludestatementsaboutourexpectations,beliefsorintentionsregardingourproductdevelopmentefforts,business,financi

25、alcondition,resultsofoperations,strategiesorprospects.Youcanidentifyforward-lookingstatementsbythefactthatthesestatementsdonotrelatestrictlytohistoricalorcurrentmatters.Rather,forward-lookingstatementsrelatetoanticipatedorexpectedevents,activities,trendsorresultsasofthedatetheyaremade.Becauseforward

26、-lookingstatementsrelatetomattersthathavenotyetoccurred,thesestatementsareinherentlysubjecttorisksanduncertaintiesthatcouldcauseouractualresultstodiffermateriallyfromanyfutureresultsexpressedorimpliedbytheforward-lookingstatements.Manyfactorscouldcauseouractualactivitiesorresultstodiffermateriallyfr

27、omtheactivitiesandresultsanticipatedinforward-lookingstatements.Thesefactorsincludethosedescribedbelowandin“Item1A.RiskFactors”ofthisAnnualReport.Theseforward-lookingstatementsareonlypredictionsandreflectourviewsasofthedatetheyaremadewithrespecttofutureeventsandfinancialperformance.Risksanduncertain

28、ties,theoccurrenceofwhichcouldadverselyaffectourbusiness,includethefollowing:ourauditorshavingissuedagoingconcernopinion;ourabilitytoobtainadditionalfinancingtofundouroperations;ourdependenceoncertainkeypersonnel,namelyMr.Ellin,ourExecutiveChairman,Presidentandcontrollingstockholder,andourabilitytor

29、etain,assimilateandhireinthefuturequalifiedemployees;intensecompetitioninthelivemusicindustry,andourinabilitytomaintainorincreaseourcurrentrevenue;ourabilitytoachieveorsustainprofitabilityinthefuture;entertainmentandleisureeventsandfactorsadverselyaffectingourbusiness;nothavinggreaterthan50%ownershi

30、poftheKOKOnightclub;ourdirectorsandofficersnotholdingthemajorityofvotingrightstocontrolortosubmittostockholdersforapprovalmattersrelatedtotheoperations of OCHL,OCL or KOKO;our business being highly sensitive to public tastes and is dependent on our ability to maintain ourattractivenessandreputation;

31、ourbusinessdependingonrelationshipsbetweenkeypromoters,executives,agents,managers,artistsandclients;3unfavorableoutcomesinmateriallitigationmattersorgovernmentalinquiries,includinguncertaintyoftheongoingOCHLandOCLlitigationwithMr.Bengough;futureacquisitionsandustakingcertainactionsinconnectionwithsu

32、chtransactions;OCLcurrentlyoperatingintheLondonmarketandourabilitytoexpandinternationallywhichmayexposeustorisksnotfounddoingbusinessintheUnitedKingdom;OCLand/orLXLsabilitytoadequatelyprotectitsintellectualpropertyrightsorriskofbeingaccusedofinfringinguponintellectualpropertyrightsofthirdparties;exc

33、hangeratesfluctuations;riskofpersonalinjuriesandaccidentsinconnectionwithOCLslivemusicevents,whichcouldsubjectusorOCLtopersonalinjuryorotherclaimsandincreaseourexpenses,aswellasreduceattendanceatOCLslivemusicevents,causingadecreaseinourrevenue;activitiesorconduct,suchasillegaldruguse,atOCLspropertie

34、sortheeventsOCLproducesmayexposeOCLtoliability,causeOCLtolosebusinesslicensesorgovernmentapprovals,resultinthecancellationofallorapartofaneventorresultinadversepublicity;costsassociatedwith,andourabilitytoobtain,adequateinsurance;costsassociatedwithcapitalimprovements;OCLbeingsubjecttoextensivegover

35、nmentalregulation,andourabilitytocomplywiththeseregulations;ourabilitytoacquireanddeveloplivemusicfestivalstreamingrights,andanyinabilitytofundthesignificantup-frontcashrequirementsassociatedwithourlivemusicstreamingplatform;failuretodevelopandgrowLXLsuserbase,orifadengagementonourplatformdeclines;L

36、XLsabilitytocompeteeffectivelyforusersandadvertiserspend;LXLsproductsandservicescontainingundetectedsoftwareerrors;LXLsproductsandservicescontainingopensourcesoftware,andLXLlicensingsomeofitssoftwarethroughopensourceprojects,whichmayposeparticularriskstoLXLproprietarysoftware,products,andservices;OC

37、Ls,LXLsand/orourneedfor,andabilitytoobtain,additionalfinancing;ourdependenceinpartonthepromotionalsuccessofourmarketing,advertisingandpromotionalcampaigns;ourabilitytodealwithpotentialdifficultiesassociatedwithrapidgrowth;occurrenceofextraordinaryevents,suchasterroristattacks;continuedworldwidemacro

38、economicandgeopoliticalinstability;andoccurrenceofanynaturalorotherdisasters;Readersarecautionednottoplaceunduerelianceonforward-lookingstatementsbecauseoftherisksanduncertaintiesrelatedtothemandtotheriskfactors.Wedisclaimanyobligationtoupdatetheforward-lookingstatementscontainedinthisprospectustore

39、flectanynewinformationorfutureeventsorcircumstancesorotherwise.4PART I ITEM 1.BUSINESS Organizational HistoryWewereincorporatedintheStateofNevadaonDecember28,2009toprovide3Drendering,animationandarchitecturalvisualizationservicesusingadvancedcomputertechnologytoproducephotorealistic3Drendering,walk-

40、throughanimationand360-degreepanorama.Wearenowaholdingcompanyprimarilyengagedintheemergingliveanddigitalmusicspacecontent,includinglivemusicevents,throughLiveXLive,Corp.,ouroperatingsubsidiary.Asmorefullydescribedbelow,wehavethreedirectsubsidiaries,LiveXLive,Corp.,KOKO(Camden)Holdings(US),Inc.andKOK

41、O(Camden)UKLimited,theresultsofwhichweconsolidateforourfinancialreportingpurposes,andtwoindirectinvestmentsubsidiaries,ObarCamdenHoldingsLimited(“OCHL”)andObarCamden,Ltd.(“OCL”).OnApril28,2014,weenteredintoanAgreementandPlanofMerger(the“MergerAgreement”)withLotonAcquisitionSubI,Inc.,aDelawarecorpora

42、tionandourwhollyownedsubsidiary(“AcquisitionSub”),andKOKO(Camden)Holdings(US),Inc.(“KOKOParent”),aDelawarecorporationandawholly-ownedsubsidiaryofJJATCorp.(“JJAT”),aDelawarecorporationwholly-ownedbyMr.Ellinandhisaffiliates.PursuanttotheMergerAgreement,AcquisitionSubmergedwithandintoKOKOParentandKOKOP

43、arentbecameourwholly-ownedsubsidiary(the“Merger”).AsaresultoftheMerger,ourprimarybusinessatsuchtimebecamethatofKOKOParentanditssubsidiaries,KOKO(Camden)Limited,aprivatelimitedcompanyregisteredinEnglandandWales(“KOKOUK”)whichowns50%ofOBARCamdenHoldingsLimited,aprivatelimitedcompanyregisteredinEngland

44、andWales(“OCHL”)whichinturnwholly-ownsitsoperatingsubsidiaryOBARCamdenLimited,aprivatelimitedcompanyregisteredinEnglandandWales(“OCL”).UpontheclosingoftheMerger,pursuanttothetermsoftheMergerAgreement,JJATreceived29,000,000sharesofourcommonstock,representingapproximately77%ofourissuedandoutstandingco

45、mmonstockimmediatelyaftertheMerger.OnFebruary24,2015,weformedLiveXLive,Corp.(formerlyFestreamTV,Corp.),ourwholly-ownedDelawaresubsidiary,toengageintheemergingliveanddigitalmusicspace.Consolidated SubsidiariesLiveXLive,Corp.LiveXLive,Corp.(“LXL”),ourwholly-ownedsubsidiary,wasincorporatedunderthelawso

46、ftheStateofDelawareonFebruary24,2015.LXLsmissionistoaggregatelivemusicandcontentdrivenbylivemusicthroughmutuallybeneficialrelationshipswiththeworldstoptalent,musiccompanies,festivalsandpromotersandtoprovidefanswiththeopportunitytoseetheirfavoritefestivals,concertsandexperiencesonanyscreentheychoosea

47、crossallvideoplatformsanddevicesfrommobiletohome.KOKO(Camden)Holdings(US),Inc.KOKO(Camden)Holdings(US),Inc.wasincorporatedunderthelawsofDelawareonMarch17,2014,andwasformedforthepurposeoffacilitatingthepurchaseofObarCamdenHoldingsLimitedandrepresentstheonlytransactionsforwhichitisresponsible.KOKO(Cam

48、den)UK Limited KOKOCamdenUK,aprivatelimitedcompanyregisteredinEnglandandWalesonNovember7,2013,servesasanalteregoofKOKO Camden US,holds as an investment a 50%non-controlling interest in Obar Camden Holdings Limited,was established as a potential taxinstrumentalityfortheeventualacquisitionofa100%inter

49、estinObarCamdenHoldingsLimitedthateventuallyfailedtomaterialize.OtherthanaPromissoryNotemadebyMr.OliverBengoughtofundhisacquisitionofcertainminorityinterestsinObarCamdenHoldingsLimited,KOKOCamdenUKisinactiveandhasnootherassetsorliabilities.Investment Subsidiaries Obar Camden Holdings Limited ObarCam

50、denHoldingsLimited(OCHL)wasincorporatedonOctober17,2012asaprivatelimitedcompanyregisteredinEnglandandWales.OCHLwasformedbyObarCamdensstockholdersforthesolepurposeofacquiringsomeoralloftheregisteredsharesofObarCamden.OCHL is the parent of Obar Camden Ltd.,and is our directly 50%-owned subsidiary.From

51、 October 17,2012 to November 20,2012,the date of therecapitalization,OCHLwasinactiveandhadnoassetsorliabilities.OCHLwasformedbyOCLsstockholdersforthesolepurposeofacquiringalloftheregisteredandcontributedcapitalofOCL.OCHLis50%co-ownedbyMr.OllyBengough,whowasourformerChiefExecutiveOfficerandDirector.O

52、bar Camden Ltd.ObarCamdenLtd.(OCL),isourindirect,50%-ownedsubsidiary,thatwasincorporatedonNovember13,2003asaprivatelimitedcompanyregisteredinEnglandandWales.OCLengagesintheoperationsofthenightclubandlivemusicvenue“KOKO”inCamden,London,England.OCLis50%co-ownedbyMr.Bengough.5Business OverviewWeareahol

53、dingcompanyprimarily engagedintheemergingliveanddigitalmusicspace,includinglivemusicevents,throughLXL,ouroperatingsubsidiary.LXLintendstobetheworldsfirstpremiumlivemusicstreamingnetworkthatwilldeliveraroundtheclocklivemusictoviewersonanyconnecteddeviceasanauthenticandexperientialplatform.Theplatform

54、planstooffertheworldsleadingmusicfestivalswithmultidayandmultistagecoverage,uniqueconcerts,intimateperformancesandcuttingedgeprogramming.Weplantoextendtheliveexperiencetofansondesktop,laptop,mobile,tablets,consoles,connectedTVsandvirtualrealityplatforms.TheLiveXLivenetworkexpectstoprovidecompellinga

55、ndcuratedcontentthatshowcasestheentirespectrumofmusictoincludemusicinspiredfashion,food,andlifestylecontentandshowcaseinterviews,backstageaccessandbothfanandartistperspectives.Weintendtofeatureallgenresofmusicincludingrock,pop,indie,alternative,EDM,countryandfeaturemajorfestivalheadlinersaswellaseme

56、rgingartistsperformingatclubsandvenuesaroundtheglobe.LXL.LXLsmissionistoaggregatethousandsofhoursoflivemusicandcontentdrivenbylivemusicthroughmutuallybeneficiallyrelationshipswiththeworldstoptalent,musiccompanies,festivalsandpromoters.LXLplanstoshowcaseprofessionallyproduced,innovative,immersiveande

57、xperientiallivebroadcastsinHD.Fanswillhavetheopportunitytoseetheirfavoritefestivals,concertsandexperiencesonanyscreentheychooseacrossallvideoplatformsanddevicesfrommobiletothehome.ThesefanswillbeabletoviewconcertexperiencesfromanyconnecteddevicewithexclusiveaccessonlyLXLbringsfromthestagetobackstage

58、,insidedressingrooms,andplacespreviouslyofflimitstoanyonebutVIPsandartists.Inaddition,asaresultofour50%ownershipinOCHLandourindirect,50%-ownedownershipofOCL,weindirectlyengageintheoperationsofKOKO.KOKOprovidesliveshows,clubnights,corporateandothereventsatKOKOaswellasdigitalbroadcasts.Thevenuehasbeen

59、usedtorecordliveperformanceswhichhavebeenbroadcasttoaninternationalaudience.Business Objective Ourstrategyistoprovidethefirstindependentgloballivemusicandlifestylestreamingnetworkdeliveringaroundtheclocklivemusictoviewersonanyconnecteddeviceasanauthenticandexperientialplatformtogrowrevenue,earningsa

60、ndcashflow.LXLwillprovideconsumerswiththeopportunitytoviewthemostsoughtafterlivemusicaroundtheglobeviaanydistributionchannelona24/7/365basis.Theplatformwilloffertheworldsleadingmusicfestivalswithmulti-dayandmulti-stagecoverage,uniqueconcerts,intimateperformancesandcuttingedgeprogramming.TheLXLnetwor

61、kplanstoprovidecompellingandcuratedcontentthatshowcasestheentirespectrumofmusictoincludemusicinspiredfashion,food,andlifestylecontentandshowcaseinterviews,backstageaccessandbothfanandartistperspectives.Wewillextendtheliveexperiencetofansondesktop,laptop,mobile,tablets,consoles,connectedTVsandvirtual

62、realityplatforms.LXLwillfeatureallgenresofmusicincludingrock,pop,indie,alternative,EDM,countryand feature major festival headliners as well as emerging artists performing at clubs and venues around the globe.LXL is also developing key strategicrelationshipsintechnology,distribution,advertising,mobil

63、eandvirtualrealitytoaugmentitsnetworkdeliverystrategy.LXLanticipatesgeneratingitsrevenuesfromsubscriptionfeesfromusersandfromadvertisingsales.Inaddition,weplantoleverageKOKOssuccessandbrandinliveentertainmentandrelationshipswithfans,artistsandadvertiserstocaptureoriginatedcontent,createowned/co-owne

64、dbrandedactivityanddevelopnewandcomplimentarybrandextensionsandintellectualproperty.Wewillneedadditionalcapitaltodrivethisprocessandaddresspresentworkingcapitalexpenditures.Competition LiveXLiveLivestreamedmusicistheonlyremainingmediagenrewithoutadominantbrand.WhilesportshasESPN,long-formcontenthasH

65、BO,andnewshasCNN,thereisatremendousamountofhighqualitylivemusiccontentavailablewithoutahome.LXLispartneringwithrightsholdersandtheirinfluencers(agencies,promoters,venues,artistsandrecordlabels)tobuildoptimaldigitalstrategiestherebyincreasingrevenuesforparticipantsinthemusicworld.LXLexpectstocompetef

66、orthetimeandattentionofitsuserswithothercontentprovidersonthebasisofanumberoffactors,includingqualityofexperience,relevance,acceptanceanddiversityofcontent,easeofuse,price,accessibility,perceptionsofadload,brandawarenessandreputation.LXLalsoexpectstocompeteforusersonthebasisofitspresenceandvisibilit

67、yascomparedwithotherprovidersthatdelivercontentthroughtheinternet,mobiledevicesandconsumerproducts.LXLscompetitorswillinclude(i)broadcastradioproviders,includingterrestrialradioproviderssuchasClearChannelandCBSandsatelliteradioproviderssuchasSiriusXM,(ii)interactiveon-demandaudiocontentandpre-record

68、edentertainment,suchasApplesiTunesMusicStoreandAppleMusic,RDIO,Rhapsody,Spotify,Pandora,TidalandAmazonthatallowlistenerstostreammusicorselecttheaudiocontentthattheystreamorpurchaseand(iii)otherformsofentertainment,includingFacebook(includingInstagram),Google,Twitter(includingPeriscope),Yahoo,andMeer

69、katwhichofferavarietyofInternetandmobiledevice-basedproducts,servicesandcontent.Totheextentexistingorpotentialuserschoosetowatchsatelliteorcabletelevision,streamvideofromon-demandservicessuchasHulu,VEVOorYouTubeorplayinteractivevideogamesontheirhome-entertainmentsystem,computerormobilephonerathertha

70、nusetheLXLservice,thesecontentservicesposeacompetitivethreat.6Our Investment Interest in KOKOWithregardstoOCHLandourinvestmentinterestinKOKO,competitionintheliveentertainmentindustryisintense.WebelievethatKOKOcompetesprimarilyonthebasisofitsabilitytodeliverqualitymusiceventsandprovideenhancedfananda

71、rtistexperiences.WebelievethatKOKOsprimarystrengthsinclude:thequalityofservicedeliveredtoartists,fansandcorporatesponsors;atrackrecordinproducinglivemusicconcerts,clubnightsandcorporateeventsatKOKO;andatrackrecordinproducinglivemusicconcerts,clubnightsandcorporateeventsatKOKO;andartistrelationships.

72、AlthoughwebelievethatKOKOsproductsandservicescurrentlycompetefavorablywithrespecttosuchfactors,wecannotprovideanyassurancethatKOKOcanmaintainitscompetitivepositionagainstcurrentandpotentialcompetitors,especiallythosewithsignificantlygreaterbrandrecognition,orfinancial,marketing,support,technicalando

73、therresources.InthemarketsinwhichKOKOproducesmusicconcerts,itfacescompetitionfrombothpromotersandothervenueoperators.Webelievethatbarrierstoentryintothepromotionservicesbusinessarelowandthatcertainlocalpromotersareincreasinglyexpandingthegeographicscopeoftheiroperations.KOKOsmaincompetitorsinthelive

74、musicindustryincludeallotherlivemusicvenuesinLondonincludingwithoutlimitationtheForum,ElectricBrixton,theElectricBallroom,theVillageUndergroundandtheShepherdsBushEmpire.SomeofKOKOscompetitorsinthelivemusicindustrymayhavegreaterfinancialresourcesthanwedowhichmayenablethemtogainagreatercompetitiveadva

75、ntageinrelationtous.Material Contracts Impacting Our Investment Interest in KOKOThe OCHL Shareholders AgreementOnFebruary12,2014,(1)Mr.Bengough,and(2)KOKOUK,Mr.Ellin,TrinadMasterFund(collectively,the“EllinParties”)and(3)OCHLenteredintoaShareholdersAgreement(the“OCHLShareholdersAgreement”)pursuanttow

76、hich,amongstotherterms,thepartiesagreedthateachofMr.EllinandMr.BengoughshallconstitutetheBoardofDirectorsofOCHLandeachshallberestrictedfromtakingactionsonbehalfofOCHLwithoutthewrittenconsentoftheotherindividual,including,butnotlimitedto,changesinthenatureofthebusiness,amendmentstogoverningdocuments,

77、restructuringorrecapitalizations,issuancesofstock,purchasesofmaterialassets,entryintomaterialcontracts,incurringorguaranteeingdebt,removalofanydirectororrestructuretheboardofOCHL.BecauseOCHListhesoleparentofOCL,ourabilitytomanageOCHLandOCLissubjecttothetermsoftheOCHLShareholderAgreementandMr.Bengoug

78、hsconsentisrequiredformostmaterialactionstobetakenbyOCHLandOCL,solongastheOCHLShareholdersAgreementremainsineffect.EachofMr.BengoughandMr.EllinareentitledtoserveontheboardofOCHLsolongastheOCHLShareholdersAgreementisineffect,andtheboardcannottakeactionwithouttheconsentofbothboardmembers.Pursuanttothe

79、OCHLShareholderAgreement,anycashdistributionsbyOCHLmustbedistributedproratatoeachofKOKOUKandMr.Bengough.Finally,theOCHLShareholderAgreementrestrictsthetransferofsharesinOCHLorOCLbyKOKOUKorMr.Bengoughandgrantseacharightoffirstrefusalandtherighttohavetheproposedsharesvaluedbyanindependentaccountingfir

80、mandsoldtotheotherpartyatapricedeterminedbyvaluationratherthanthepricenecessarilyofferedbytheprospectivepurchaser.Variation to Shareholders AgreementOn April 24,2014,the OCHL Shareholders Agreement was amended pursuant to the terms of the Variation to Shareholders Agreement(“VariationAgreement”)amon

81、gMr.Bengough,KOKOUK,theEllinParties,OCHL,OCL,JJATandourCompanywhich,amongstotherterms,(1)joinedOCL,JJATandtheCompanyaspartiestotheOCHLShareholdersAgreement,and(2)Mr.BengoughalsoagreedtotransferallofhisinterestsinOCHLinexchangefor29,000,000sharesofourcommonstocktobeissuedinaprivateplacementtransactio

82、n,whichwouldconstitutenolessthan42.5%ofouroutstandingcapitalstockonafullydilutedbasis(butbeforeourfutureissuanceofupto3,200,000sharesofourcommonstocktoouradvisors,consultantsandkeyemployeesasapprovedbyourBoardofDirectors)andpursuanttotheOCHLShareholdersAgreement,subjecttoMr.Bengoughsreceiptofsatisfa

83、ctorytaxclearancesunderthetaxlawsoftheUnitedKingdom.WeagreedtoindemnifyMr.BengoughfromanyadversetaxexpensesandcostsrequiredtobepaidbyMr.Bengoughinconnectionwiththe transfer of his interests in OCHL.To date,the parties to the Variation Agreement have been unable to reach an agreement on mutually acce

84、ptabledocumentationtoeffecttheshareexchangedescribedabove.Wearepresentlycontinuingtoco-operatewithMr.BengoughinleadingOCHLsday-to-daybusiness.7TheVariationAgreementandtherelatedOCHLShareholdersAgreementremaininfullforceandeffect,subjecttoanycourtmandatedchangesorordersmadewithrespecttothePetition(fo

85、radetaileddiscussionofthePetition,seeItem3.LegalProceedings).PursuanttothetermsoftheOCHLShareholdersAgreementandVariationAgreement,eachofMr.EllinandMr.BengoughconstitutetheBoardofDirectorsofOCHLandeachofMr.BengoughandMr.EllinarerestrictedfromtakingactionsonbehalfofOCHLwithoutthewrittenconsentoftheot

86、herindividual.EmployeesAsofMarch31,2016,wehad4full-timeemployeesincludingourexecutiveassistant,andaconsultantthatservesasLXLsChiefRevenueOfficer.Otherthanasnotedhere,wepresentlyhavenoemployeesapartfromourmanagement.Ourofficersanddirectorsareengagedinoutsidebusinessactivitiesandanticipatethattheywill

87、devotetoourbusinesslimitedtimeuntilfundingandcapitalresourcesareavailabletoimplementourplanofoperations.AsofMarch31,2016,OCL,our50%ownedinvestment,hadapproximately60full-timeemployeesincluding8salariedpositionsforoperations,salesandmarketing,andadministration.OCLsweeklystaffingneedsvarythroughoutthe

88、yeardependinguponthenumberandtypeofeventsappearingatKOKOandconsistprincipallyofpersonnelassociatedwithrunningthebarandcoatroom.OCLalsohiresthirdpartyprovidersforKOKOsecurity,cleaningandtechnicalcrews.Going Concern Wearedependentuponthereceiptofcapitalinvestmentandotherfinancingtofundourongoingoperat

89、ionsandtoexecuteourbusinessplan.Ifcontinuedfundingandcapitalresourcesareunavailableatreasonableterms,wemaynotbeabletoimplementourplanofoperations.Wemayberequiredtoobtainalternativeoradditionalfinancing,fromfinancialinstitutionsorotherwise,inordertomaintainandexpandourexistingoperations.Thefailurebyu

90、stoobtainsuchfinancingwouldhaveamaterialadverseeffectuponourbusiness,financialconditionandresultsofoperations.Ourfinancialstatementshavebeenpreparedonagoingconcernbasis,whichcontemplatestherealizationofassetsandthesatisfactionofliabilitiesinthenormalcourseofbusiness.Ourindependentregisteredpublicacc

91、ountingfirmhasincludedanexplanatoryparagraphintheirreportinourauditedfinancialstatementsforthefiscalyearendedMarch31,2016totheeffectthatourlossesfromoperationsandournegativecashflowsfromoperationsraisesubstantialdoubtaboutourabilitytocontinueasagoingconcern.Ourfinancialstatementsdonotincludeanyadjus

92、tmentsthatmightbenecessaryshouldwebeunabletocontinueasagoingconcern.Wemayberequiredtoceaseoperationswhichcouldresultinourstockholderslosingalloralmostalloftheirinvestment.Management Agreement OnSeptember23,2011,weenteredintoaManagementAgreement(the“ManagementAgreement”)withTrinadManagement,LLC(“Trin

93、adManagement”).PursuanttotheManagementAgreement,TrinadManagementhasagreedtoprovidecertainmanagementservicestousforaperiodof3years,including,withoutlimitation,thesourcing,structuringandnegotiationofbusinesscombinationtransactionsinvolvingus.UndertheManagementAgreement,wecompensateTrinadManagementfori

94、tsservicestouswith(i)afeeequalto$2,080,000,with$90,000payableinadvanceofeachconsecutive3-monthperiodduringthetermoftheManagementAgreementandwith$1,000,000dueattheendofthe3-yeartermunlesstheManagementAgreementisotherwiseterminatedearlierinaccordancewithitsterms,and(ii)issuedawarranttopurchase1,125,00

95、0sharesofourcommonstockatanexercisepriceof$0.15pershare.ThewarrantmaybeexercisedinwholeorinpartbyTrinadManagementatanytimeforaperiodof10yearsfromthedateoftheManagementAgreement.Thepaymentofthe$1,000,000feehasbeenaccruedandreflectedasaliabilityasofMarch31,2016and2015.TrinadManagementcontinuestoprovid

96、eserviceat$30,000permonthonamonth-to-monthbasis.PropertiesOurprincipalexecutiveofficesaresubleasedfromTrinadManagementLLCfornocosttouswherewemaintaina1,840sq.ft.officespace.Weanticipatetocontinuetosubleasesuchspaceatnocosttousfortheforeseeablefuture.Webelievethatsuchpropertyisingoodconditionandissui

97、tablefortheconductofourbusiness.Wecurrentlyhavenopolicywithrespecttoinvestmentsorinterestsinrealestate,realestatemortgagesorsecuritiesof,orinterestsin,personsprimarilyengagedinrealestateactivities.8 ITEM 1A.RISK FACTORS An investment in shares of our common stock is highly speculative and involves a

98、 high degree of risk.We face a variety of risks that may affect our operationsor financial results and many of those risks are driven by factors that we cannot control or predict.Before investing in our common stock you should carefullyconsider the risks described below,together with the financial a

99、nd other information contained in this Annual Report,including the consolidated financialstatements and the notes thereto and“Managements Discussion and Analysis of Financial Condition and Results of Operations.”The occurrence of any of theevents discussed below could significantly and adversely aff

100、ect our business,prospects,results of operations,financial condition,and cash flows.In that case,thetrading price of our common stock would likely decline and you may lose all or a part of your investment.Only those investors who can bear the risk of loss oftheir entire investment should invest in o

101、ur common stock.RISKS RELATING TO OUR BUSINESS Because our auditors have issued a going concern opinion,there is a substantial uncertainty that we will continue operations,in which case you could loseyour investment.Ourauditorshaveissuedagoingconcernopinionintheirreportonourfinancialstatementsforthe

102、fiscalyearsendedMarch31,2016and2015.Ourhistoricaloperatinglossesraisesubstantialdoubtaboutourabilitytocontinueasagoingconcern.Ifwedonotachieveprofitabilityanddonothaveothersourcesoffinancingforourbusiness,wemayhavetocurtailorceaseourbusinessplansandoperations,whichcouldcauseinvestorstolosetheentirea

103、mountoftheirinvestment.WehadnorevenuesfortheyearendedMarch31,2016,andouroperatingexpenseswere$3,979,000andweincurredanetlossof$3,746,944.OuraccumulateddeficitasofMarch31,2016was$13,846,171andwehavehadrecurringlossesfromoperations.Weanticipateincurringadditionallossesuntilsuchtimewecangeneratesignifi

104、cantrevenues,and/orreduceoperatingcosts.Wehavenotyetestablishedrevenuessufficienttocoverourcurrentlevelofoperatingcostsforatleastthenext12monthsandallowustocontinueasagoingconcern.Ourabilitytomeetourtotalliabilitiesof$4,987,584asofMarch31,2016,andtocontinueasagoingconcern,isdependentonusobtainingade

105、quatecapitaltofundoperatinglossesuntilwebecomeprofitable.Wecangivenoassurancesthatanyadditionalcapitalthatweareabletoobtain,ifany,willbesufficienttomeetourneeds,orthatanysuchfinancingwillbeobtainedonacceptableterms.Ifweareunabletoobtainadequatecapital,wecouldbeforcedtoceaseoperationsorsubstantiallyc

106、urtailourcommercialactivities.AsofMarch31,2016,wehadcashintheamountof$36,898andaccumulateddeficitof$13,846,171instockholdersequity.Asaresultofourgoingconcernqualification,thereisanincreasedriskthatyoucouldlosetheentireamountofyourinvestmentinourcompany.We may not be able to obtain additional financi

107、ng to fund our operations.Wewillneedtoraiseadditionalfundsinthefuture.Therecanbenoassurancethatsufficientequityand/ordebtfinancingwillbeavailableatallor,ifavailable,thatsuchfinancingwillbeattermsandconditionsacceptabletous.Shouldwefailtoobtainadditionaldebtfinancingorraiseadditionalcapital,wemaynotb

108、eabletoachieveourlongertermbusinessobjectivesandmayfaceotherseriousadverseconsequences.Ifweraiseadditionalfundsbyissuingequitysecuritiesorconvertibledebt,investorsmayexperiencesignificantdilutionoftheirownershipinterest,andthenewly-issuedsecuritiesmayhaverightsseniortothoseoftheholdersofourcommonsto

109、ck.Ifweraiseadditionalfundsbyobtainingloansfromthirdparties,thetermsofthosefinancingarrangementsmayincludenegativecovenantsorotherrestrictionsonourbusinessthatcouldimpairouroperationalflexibilityandmayrequireustoprovidecollateraltosecuretheloan.Inaddition,inaliquidation,debtholderswillbeentitledtore

110、paymentbeforeanyproceedscanbepaidtoourequityholders.Unfavorable outcomes in legal proceedings may adversely affect our business and operating results.Ourresultsmaybeaffectedbytheoutcomeofcurrentandanyfuturelitigation.Unfavorablerulingsinsuchlegalproceedingsmayhaveanegativeimpactonusthatmaybegreatero

111、rsmallerdependingonthenatureoftherulings.Forexample,anunfavorablerulingagainstusinthecurrentcasewithrespecttothePetitionfiledbyMr.Bengough,oradeterminationbythejudgepresidingoverthePetitiontoforceOCLintobankruptcyproceedings,wouldhaveamaterialadverseimpactonourfinancialresults,businessandoperations.

112、SeeItem3.LegalProceedingsforadetaileddiscussionofthePetition.Inaddition,fromtimetotimeinthefuturewemaybesubjecttovariousclaims,investigations,legalandadministrativecasesandproceedings(whethercivilor criminal)or lawsuits by governmental agencies or private parties,as further described in the immediat

113、ely preceding risk factor.If the results of theseinvestigations,proceedingsorsuitsareunfavorabletousorifweareunabletosuccessfullydefendagainstthird-partylawsuits,wemayberequiredtopaymonetarydamagesormaybesubjecttofines,penalties,injunctionsorothercensurethatcouldhaveamaterialadverseeffectonourbusine

114、ss,financialconditionand operating results.Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit orcounterclaim,wemayhavetodevotesignificantfinancialandmanagementresourcestoaddresstheseissues,whichcouldharmourbusiness,financial

115、conditionandoperatingresults.9We are heavily dependent on certain key personnel,namely Mr.Ellin,our Executive Chairman,President and controlling stockholder,who has extensiveknowledge with respect to our business and thus,the loss of Mr.Ellin may adversely affect our business.Weareheavilydependentup

116、ontheexpertiseofourkeyofficeranddirector,Mr.Ellin,whohasextensiveknowledgeaboutourbusinessandouroperations,andthelossofMr.Ellinwouldlikelyhaveamaterialadverseeffectonourbusinessandoperations.Wedonotmaintainkey-personinsurancepolicyforMr.Ellin.Ourfuturesuccessalsodependsonourabilitytocontinuetoattrac

117、t,retainandmotivatehighlyskilledemployeesintheentertainment,medialandliveeventsindustries.Inaddition,aswecontinuetodevelopthebusinessofLXL,itwillneedtohireadditionalpersonnel.Competitionforpersonnelwiththerequiredknowledge,skillandexperiencesisintense,andwemaynotbeabletoattract,assimilateorretainsuc

118、hpersonnel.WecurrentlydonothaveanemploymentagreementwithMr.Ellinasdescribedherein(seeItem11.ExecutiveCompensationEmploymentAgreements).Theinabilitytoattractandretainthenecessarymanagerial,technicalandsalesandmarketingpersonnel,orassimilateorretainotherhighlyqualifiedemployeesinthefuture,couldhaveama

119、terialadverseeffectonourbusiness,resultsofoperationsandfinancialcondition.We face intense competition in the live music industry,and we may not be able to maintain or increase our current revenue,which could adversely affect ourbusiness,financial condition and results of operations.Ourbusinessisinah

120、ighlycompetitiveindustry,andwemaynotbeabletomaintainorincreaseourcurrentrevenueduetosuchcompetition.Thelivemusicindustrycompeteswithotherformsofentertainmentforconsumersdiscretionaryspendingandwithinthisindustrywecompetewithothervenuestobookartists,and,inthemarketsinwhichwepromotemusicconcerts;wefac

121、ecompetitionfromotherpromotersandvenueoperators.Ourcompetitorscompetewithusforkeyemployeeswhohaverelationshipswithpopularmusicartistsandthathaveahistoryofbeingabletobooksuchartistsforconcertsandtours.Thesecompetitorsmayengageinmoreextensivedevelopmentefforts,undertakemorefar-reachingmarketingcampaig

122、ns,adoptmoreaggressivepricingpoliciesandmakemoreattractiveofferstoexistingandpotentialartists.Ourcompetitorsmaydevelopservices,advertisingoptionsormusicvenuesthatareequalorsuperiortothoseweprovideorthatachievegreatermarketacceptanceandbrandrecognitionthanweachieve.Itispossiblethatnewcompetitorsmayem

123、ergeandrapidlyacquiresignificantmarketshare.Othervariablesthatcouldadverselyaffectourfinancialperformanceby,amongotherthings,leadingtodecreasesinoverallrevenue,thenumberofsponsors,eventattendance,ticketpricesandfeesorprofitmarginsinclude:unfavorablefluctuationsinoperatingcostswhichwemaybeunwillingor

124、unabletopassthroughtoourcustomers;competitorsofferingsthatmayincludemorefavorabletermsthanweofferinordertoobtainagreementsfornewvenuesorticketingarrangementsortoobtaineventsforthevenuestheyoperate;technologicalchangesandinnovationsthatweareunabletoadoptorarelateinadoptingthatoffermoreattractiveenter

125、tainmentalternativesthanweorotherliveentertainmentproviderscurrentlyoffer,whichmayleadtoareductioninattendanceatliveevents;otherentertainmentoptionsavailabletoouraudiencesthatwedonotoffer;generaleconomicconditionswhichcouldcauseourconsumerstoreducediscretionaryspending;unfavorablechangesinlaborcondi

126、tionswhichmayrequireustospendmoretoretainandattractkeyemployees;andunfavorableshiftsinpopulationandotherdemographicswhichmaycauseustoloseaudiencesaspeoplemigratetomarketswherewehaveasmallerpresence,orwhichmaycausesponsorstobeunwillingtopayforsponsorshipandadvertisingopportunitiesifthegeneralpopulati

127、onshiftsintoalessdesirableageorgeographicaldemographicfromanadvertisingperspective.Theoccurrenceofanyofsuchvariablesleadingtoanadverseeffectonourfinancialperformancecouldadverselyaffectourbusiness,financialconditionandresultsofoperationsWe incurred a net loss in the fiscal year ended March 31,2016 a

128、nd may experience future net losses.Weincurredanetlossofapproximately$3,600,000millioninthefiscalyearendedMarch31,2016andhadnegativecashflowsfromoperationsforthesameperiod.AsofMarch31,2016,wehadaccumulateddeficitof$13,846,171.Wemayfacereduceddemandforourlivemusicevents,ourstreamingplatformandrelated

129、servicesandotherfactorsthatcouldadverselyaffectourbusiness,financialconditionandresultsofoperationsinthefuture.Wealsoexpecttoincursubstantialdevelopment,marketingandgeneralandadministrativeexpensesrelatedtoouroperationsLXLand,todate,wehavedevotedmostofourfinancialresourcestodevelopment,marketingandg

130、eneralbusinessactivitiesofLXL.WeexpecttoincurlossesfromLXLsoperationsfortheforeseeablefutureandtheselossescouldincreaseaswecontinueourbusinessactivities,aswellascontinuetoattempttoincreasemarketingandengagementofLXL.Ifweareunabletogenerateprofitsandincreasedcashflow,includingfromLXLsongoingoperation

131、s,wemaynotbecomeprofitableinthefutureperiods.Evenifweachieveprofitabilityinthefuture,wemaynotbeabletosustainsuchprofitabilityinsubsequentperiods.10Our success depends,in significant part,on entertainment and leisure events and factors adversely affecting such events could have a material adverse eff

132、ecton our business,financial condition and results of operations.Adeclineinattendanceatorreductioninthenumberofliveentertainmentandleisureeventsmayhaveanadverseeffectonourrevenueandoperatingincome.In addition,during past economic slowdowns and recessions,many consumers reduced their discretionary sp

133、ending and advertisers reducedtheiradvertisingexpenditures.Theimpactofeconomicslowdownsonourbusinessisdifficulttopredict,buttheymayresultinreductionsinsponsorshipopportunitiesandourabilitytogeneraterevenue.Therisksassociatedwithourbusinessesmaybecomemoreacuteinperiodsofaslowingeconomyorrecession,whi

134、chmaybeaccompaniedbyadecreaseinattendanceatliveentertainmentandleisureevents.Ourbusinessdependsondiscretionaryconsumerandcorporatespending.Manyfactorsrelatedtocorporatespendinganddiscretionaryconsumerspending,includingeconomicconditionsaffectingdisposableconsumerincomesuchasemployment,fuelprices,int

135、erestandtaxratesandinflationcansignificantlyimpactouroperatingresults.Businessconditions,aswellasvariousindustryconditions,includingcorporatemarketingandpromotionalspendingandinterestlevels,canalsosignificantlyimpactouroperatingresults.Thesefactorscanaffectattendanceatourevents,premiumseatsales,spon

136、sorship,advertisingandhospitalityspending,concession and merchandise sales,as well as the financial results of sponsors of our venues,events and the industry.Negative factors such aschallengingeconomicconditions,publicconcernsoverterrorismandsecurityincidents,particularlywhencombined,canimpactcorpor

137、ateandconsumerspending,andonenegativefactorcanimpactourresultsmorethananother.Therecanbenoassurancethatconsumerandcorporatespendingwillnotbeadverselyimpactedbycurrenteconomicconditions,orbyanyfurtherorfuturedeteriorationineconomicconditions,therebypossiblyimpactingouroperatingresultsandgrowth.We own

138、 50%of KOKO.Weown50%ofthesharesofcapitalstockofOCHL.OCHListhesoleownerofOCLwhichownsandoperatesKOKO.As50%ownerofOCHL,wehavetherighttoappointhalfofthemembersoftheboardofdirectorsofOCHLand,asaresultoftheOCHLShareholdersAgreement,asamended,ofOCLaswell.FollowingtheMerger,theBoardofDirectorsofOCHLiscompr

139、isedofMessrs.EllinandBengoughandbothmanageOCHLpursuanttothetermsoftheOCHLShareholdersAgreementandtheVariationAgreement.PursuanttotheOCHLShareholderAgreementdiscussedaboveundertheheading“Material ContractsImpacting Our Business The OCHL Shareholder Agreement,”andtheVariationAgreement,discussedaboveun

140、dertheheading“Material Contracts ImpactingOur Business Variation to Shareholders Agreement,”wearesubjecttosharedcontrolofOCHLandthusofKOKOwithregardtothemanagementofKOKOsolongastheOCHLShareholderAgreementandtheVariationAgreementareineffectandwecontrol50%orlessofthesharesofcapitalstockofOCHL.Intheabs

141、enceofholdingamajorityofvotingrights,neitherwenortheotherownerof50%ofOCHL,Mr.Bengough,canunilaterallyimplementdecisionspertainingtotheoperationordispositionofKOKO.Wecontinuetoco-operateOCHLwithMr.Bengoughandwillseekexpansionthroughothermeanssuchasacquisitionofotherliveconcertoreventormediacompanies,

142、licensingopportunitiesandhiringskilledpersonnelintheconcertvenue,mediaandnight-cluboperationsindustries.WemaynotbeabletofullyleverageitsstrategiesortodirecttheexpansionoftheKOKObrandorenterintolicensingorpromotionalarrangements,ortoexploittheKOKOvenue,withouttheconsentofMr.Bengough.Our directors and

143、 officers do not hold the majority of voting rights to control or to submit to stockholders for approval matters related to the operations ofOCHL,OCL or KOKO.PursuanttotheOCHLShareholderAgreementandtheVariationAgreement,wearerestrictedfromtakingactionsonbehalfofOCHLwithoutthewrittenconsentofMr.Bengo

144、ugh,andMr.BengoughsconsentisrequiredformostmaterialactionstobetakenbyOCHLandOCL,solongastheOCHLShareholdersAgreementandtheVariationAgreementremainineffect.ThisseverelylimitsthepowerofourshareholderstovotetotakeactionswithrespecttoKOKOsbusiness.Therefore,ourmanagementneedstomakedecisionsrelatingtothe

145、operationsofKOKOinconsultationwithMr.BengoughandsubjecttothetermsoftheOCHLShareholdersAgreementandtheVariationAgreement.Our business is highly sensitive to public tastes and is dependent on our ability to maintain our attractiveness and reputation.Ourbusinessishighlysensitivetorapidlychangingpublict

146、astesandisdependentonourabilitytomaintaintheattractivenessofourvenueandreputationasaplacewhereshowscanbesuccessfullypromotedandperformed.11Our business depends on relationships between key promoters,executives,agents,managers,artists and clients and any adverse changes in these relationshipscould ad

147、versely affect our business,financial condition and results of operations.Thelivemusicbusinessisuniquelydependentuponpersonalrelationships,asexecutiveswithinlivemusiccompaniessuchasoursleveragetheirexistingnetworkofrelationshipswithartists,agents,promotersandmanagersinordertosecuretherightstolivemus

148、icperformancesandeventswhicharecriticaltooursuccess.Duetotheimportanceofthoseindustrycontactstoourbusiness,thelossofanyofOCLsorourofficersorotherkeypersonnelcouldadverselyaffectourbusiness.Wecangivenoassurancethatalloranyofthesekeyemployeesormanagerswillremainwithusorwillretaintheirassociationswithk

149、eybusinesscontacts,includingmusicalartists.Similarly,OCLdependsupontheMintGroupHoldingsLimited(“MintGroup”)formanagementservicesincludingoversightofoperational,financialandmarketingactivities.OCLscontractwiththeMintGroupisof1-yearduration.Itisgenerallyrenewedeachyearbutthereisnoassurancethatattheend

150、ofanygivenone-yearterm,itwillberenewed.Ifitwerenotrenewed,OCLwouldhavetohireemployeesorenteracontractwithadifferentserviceprovider.AsofMay20,2016,MintGroupterminatedsuchmanagementservicesagreementwithOCL.TheterminationoftheagreementoccurredinconnectionwiththefilingofthePetitionbyMr.Bengoughafternume

151、rousattemptsandextensiveeffortsbyustoamicablyresolvethedisputesbetweentheparties.AsmorefullydiscussedinItem3.LegalProceedingsbelow,inconnectionwiththeproceedingsunderlyingthePetition,MintGroupagreedtoresumeprovidingservicestoOCLpendingtheresolutionofthePetitionorearlierstoppageofsuchservices.Thereis

152、noassurancethatMintGroupwillcontinuetoprovideanyservicestoOCLorthatOCLwouldbeabletosuccessfullyfindanotherserviceproviderorwithinatimeperiodthatwouldnothaveamaterialadverseeffectuponourbusiness,financialconditionandresultsofoperations.Anotherimportantcomponentofoursuccessisourabilitytomaintainexisti

153、ngrelationshipsandtobuildnewrelationshipswiththird-partydistributionchannels,advertisers,sponsorsandserviceproviders.Anyadversechangeintheserelationshipsincludingtheinabilityofthesepartiestofulfilltheirobligationstoourbusinessesforanyreason,wouldadverselyaffectourbusiness,financialconditionandresult

154、sofoperations.We may enter into future acquisitions and take certain actions in connection with such transactions that could affect our results of operations and the price ofour common stock.Aspartofourgrowthstrategy,weexpecttoreviewacquisitionprospectsthatwouldoffergrowthopportunities.Intheeventoff

155、utureacquisitions,wecould,amongotherthings:useasignificantportionofouravailablecash;issueequitysecurities,whichwoulddilutecurrentstockholderspercentageownership;incursubstantialdebt;incurorassumecontingentliabilities,knownorunknown;incuramortizationexpensesrelatedtointangibles;andincurlargeaccountin

156、gwrite-offs.Suchactionsbyuscouldadverselyaffectourresultsofoperationsandthepriceofourcommonstock.OCL currently operates in the London market,but we plan to expand internationally which may expose us to risks not found doing business in the UnitedKingdom.OCLcurrentlyprovidesservicesintheUnitedKingdom

157、butweexpecttoexpandourpresenceinternationally.Weexpecttofaceadditionalrisksinthecaseofourexistingandfutureinternationaloperations,including:politicalinstability,adversechangesindiplomaticrelationsandunfavorableeconomicconditionsinourcurrentmarketandinnewmarketsintowhichwemayexpand;morerestrictiveoro

158、therwiseunfavorablegovernmentregulationofthemusicandliveentertainmentindustries,whichcouldresultinincreasedcompliancecostsand/orotherwiserestrictthemannerinwhichweprovideservicesandtheamountofrelatedfeeschargedforsuchservices;limitationsontheabilityofforeignsubsidiariestorepatriateprofitsorotherwise

159、remitearnings;adversetaxconsequences;anyfailuretocomplywithforeignlawsandregulationscouldsubjectustofinesandpenalties;operatinginforeigncountriessubjectsustoriskfromcurrencyfluctuations;expropriationsofpropertyandrisksofrenegotiationormodificationofexistingagreementswithgovernmentalauthorities;dimin

160、ishedabilitytolegallyenforceourcontractualrightsinforeigncountries;lowerlevelsofinternetusage,creditcardusageandconsumerspendingincomparisontothoseintheUnitedKingdom;anddifficultiesinmanagingoperationsandadaptingtoconsumerdesiresduetodistance,languageandculturaldifferences,includingissuesassociatedw

161、ith(i)businesspracticesandcustomsthatarecommonincertainforeigncountriesbutmightbeprohibitedbyU.S.orBritishlawandourinternalpoliciesandprocedures,and(ii)managementandoperationalsystemsandinfrastructures,includinginternalfinancialcontrolandreportingsystemsandfunctions,staffingandmanagingofforeignopera

162、tions,whichwemightnotbeabletodoeffectively,orifso,onacost-efficientbasis.12SinceMr.BengoughhasfailedtocloseontheexchangeagreementtotransferhissharesofOCHLtoKoKoUK,wewillneedtoseekexpansionthroughothermeanssuchasacquisitionofotherliveconcertoreventormediacompanies,seekingoutlicensingopportunitiesandh

163、iringskilledpersonnelintheconcertvenue,mediaandnight-cluboperationsindustries.Iftherevenuegeneratedbyinternationaloperationsisinsufficienttooffsetexpensesincurredinconnectionwiththemaintenanceandgrowthoftheseoperations,ourbusiness,financialconditionandresultsofoperationscouldbemateriallyandadversely

164、affected.Inaddition,inanefforttomakeinternationaloperationsinoneormoregivenjurisdictionsprofitableoverthelongterm,significantadditionalinvestmentsthatarenotprofitableovertheshorttermcouldberequiredoveraprolongedperiod.OCL and/or LXL may fail to adequately protect its intellectual property rights or

165、may be accused of infringing upon intellectual property rights of thirdparties.OCLand/orLXLmayfailtoadequatelyprotectitsintellectualpropertyrightsormaybeaccusedofinfringinguponintellectualpropertyrightsofthirdparties.WeregardourandOCL/LXLsintellectualpropertyrights,includingservicemarks,trademarks,d

166、omainnames,copyrights,tradesecretsandotherintellectualproperty(asapplicable)ascriticaltooursuccess.OCLandLXLrelyonacombinationoflawsandcontractualrestrictionswithemployees,customers,suppliers,affiliatesandotherstoestablishandprotecttheseproprietaryrights.Despitetheseprecautions,itmaybepossibleforath

167、irdpartytocopyorotherwiseobtainandusetradesecrets,trademarks,servicemarks,domainnames,orcopyrightedintellectualpropertywithoutauthorizationwhich,ifdiscovered,mightrequirelegalactiontocorrect.Inaddition,thirdpartiesmayindependentlyandlawfullydevelopsubstantiallysimilarintellectualproperties.OCLandLXL

168、havegenerallyregisteredandcontinuetoapplytoregister,orsecurebycontractwhenappropriate,ourtrademarksandservicemarksastheyaredevelopedandused.OCLandLXLconsidertheprotectionoftheirtrademarksandservicemarkstobeimportantforpurposesofbrandmaintenanceandreputation.WhileOCLandLXLvigorouslyprotecttheirtradem

169、arks,servicemarksanddomainnames,effectivetrademarkprotectionmaynotbeavailableormaynotbesoughtineverycountryinwhichOCLandLXLmayoperate,andcontractualdisputesmayaffecttheuseofmarksgovernedbyprivatecontract.Asweexpandinternationally,wemaybecomeawareofthirdpartiesinotherjurisdictionsthatalreadyownpriorr

170、ightstotheKOKOandLiveXLivetrademarks.Dependingonthecircumstances,wemaydeemitappropriate,forinstance,toacquirealicenseoraconsentfromanysuchpriormarkowners,orwemaydeterminetooperateunderadifferentmarkinthatjurisdiction.Also,OCLandLXLhavegenerallyalsoregisteredandcontinuetoreserveandregisterdomainnames

171、aswedeemappropriate.Noteveryvariationofadomainnamemaybeavailable,however,orOCLorLXLmaydeterminenottoregisterit,evenifavailable.OurorOCLsorLXLsfailuretoprotectourintellectualpropertyrightsinameaningfulmannerorchallengestorelatedcontractualrightscouldresultinerosionofbrandnamesandlimitourabilitytocont

172、rolmarketingonorthroughtheinternetusingourvariousdomainnamesorotherwise,whichcouldadverselyaffectourbusiness,financialconditionandresultsofoperations.Inaddition,litigationmaybenecessaryinthefuturetoenforceourintellectualpropertyrights,protecttradesecretsordeterminethevalidityandscopeofproprietaryrig

173、htsclaimedbyothers.Anylitigationofthisnature,regardlessofoutcomeormerit,couldresultinsubstantialcostsanddiversionofmanagementandtechnicalresources,anyofwhichcouldadverselyaffectourbusiness,financialconditionandresultsofoperations.Exchange rates may cause fluctuations in our results of operations tha

174、t are not related to our operations.Becauseweown,throughOCL,assetsoverseasandderiverevenuefromourinternationaloperations,wemayincurcurrencytranslationlossesorgainsduetochangesinthevaluesofforeigncurrenciesrelativetotheUnitedStatesDollar.Wecannotpredicttheeffectofexchangeratefluctuationsuponfutureope

175、ratingresults.There is the risk of personal injuries and accidents in connection with OCLs live music events,which could subject us or OCL to personal injury or otherclaims and increase our expenses,as well as reduce attendance at OCLs live music events,causing a decrease in our revenue.Thereareinhe

176、rentrisksinvolvedwithproducinglivemusicevents.Asaresult,personalinjuriesandaccidentshave,andmay,occurfromtimetotime,whichcouldsubjectustoclaimsandliabilitiesforpersonalinjuries.IncidentsinconnectionwithOCLslivemusiceventsatanyofourvenuescouldalsoresultinclaims,reducingoperatingincomeorreducingattend

177、anceatourevents,whichcouldcauseadecreaseinourrevenue.Whilewemaintaininsurancepoliciesthatprovidecoveragewithinlimitsthataresufficient,inmanagementsjudgment,toprotectusfrommaterialfinanciallossforpersonalinjuriessustainedbypersonsatOCLsvenuesoreventsoraccidentsintheordinarycourseofbusiness,therecanbe

178、noassurancethatsuchinsurancewillbeadequateatalltimesandinallcircumstances.13Activities or conduct,such as illegal drug use,at OCLs properties or the events OCL produces may expose OCL to liability,cause OCL to lose businesslicenses or government approvals,result in the cancellation of all or a part

179、of an event or result in adverse publicity.OCLissubjecttorisksassociatedwithactivitiesorconduct,suchasdruguseatoureventsorvenuethatareillegalorviolatethetermsofourOCLsbusinesslicenses.Illegalactivitiesorconductatanyofoureventsorvenuemayresultinnegativepublicity,adverseconsequences(includingillness,i

180、njuryordeath)tothepersonsengagedintheillegalactivityorothers,andlitigationagainstus.OCLhasdevelopedpoliciesandproceduresaimedatensuringthattheoperationofeacheventisconductedinconformancewithlocal,stateandfederallaws.Additionally,OCLhasanotolerancepolicyonillegaldruguseinorarounditsfacilities,andOCLc

181、ontinuallymonitorstheactionsofentertainers,fansandouremployeestoensurethatproperbehavioralstandardsaremet.However,suchpolicies,nomatterhowwelldesignedandenforced,cannotprovideabsoluteassurancethatthepoliciesobjectivesareachieved.Becauseoftheinherentlimitationsinallcontrolsystemsandpolicies,therecanb

182、enoassurancethatourpolicieswillpreventdeliberateactsbypersonsattemptingtoviolateorcircumventthem.Theconsequencesoftheseactsmayincreaseourcosts,resultinthelossorterminationoftheleaseforOCLsvenuebythepropertyowner,resultinourinabilitytogetthenecessarypermitsandlocationsforourevents,orleadtothecancella

183、tionofallorpartofanevent.TheseconsequencesmayalsomakeitmoredifficultforOCLtoobtainorretainsponsorships,lowerconsumerdemandforOCLsevents,subjectOCLtoliabilityclaims,divertmanagementsattentionfromOCLsbusinessandmakeaninvestmentinoursecuritiesunattractivetocurrentandpotentialinvestors.Theseoutcomescoul

184、dhavetheeffectofloweringourrevenue,profitabilityand/orourstockprice.Costs associated with,and our ability to obtain,adequate insurance could adversely affect our profitability and financial condition.Heightenedconcernsandchallengesregardingproperty,casualty,liability,businessinterruptionandotherinsu

185、rancecoveragehaveresultedfromterroristandrelatedsecurityincidentsalongwithvaryingweather-relatedconditionsandincidents.Asaresult,OCLmayexperienceincreaseddifficultyobtaininghighpolicylimitsofcoverageatreasonablerates,includingcoverageforactsofterrorismandweather-relatedpropertydamage.OCLhasamaterial

186、investmentinpropertyandequipmentatitsexistingvenueandmayhavematerialinvestmentsatfuturevenues,whicharelocatedinornearmajorcitiesandwhichholdeventstypicallyattendedbyalargenumberoffans.Theseoperational,geographicalandsituationalfactors,amongothers,mayresultinsignificantincreasesininsurancepremiumcost

187、sanddifficultiesobtainingsufficientlyhighpolicylimitswithdeductiblesthatwebelievetobereasonable.OCLcannotassurethatfutureincreasesininsurancecostsanddifficultiesobtaininghighpolicylimitswillnotadverselyimpactitsprofitability,therebypossiblyimpactingouroperatingresultsandgrowth.Wecannotguaranteethato

188、urinsurancepolicycoveragelimits,includinginsurancecoverageforproperty,casualty,liabilityandbusinessinterruptionlossesandactsofterrorism,wouldbeadequateunderthecircumstancesshouldoneormultipleeventsoccuratornearanyofourvenues,orthatourinsurerswouldhaveadequatefinancialresourcestosufficientlyorfullypa

189、yourrelatedclaimsordamages.Wecannotguaranteethatadequatecoveragelimitswillbeavailable,offeredatreasonablerates,orofferedbyinsurerswithsufficientfinancialsoundness.Theoccurrenceofsuchanincidentorincidentsaffectingourexistingvenueoranyoneormoreofourfuturevenuescouldhaveamaterialadverseeffectonourfinan

190、cialpositionandfutureresultsofoperationsifassetdamageand/orcompanyliabilityweretoexceedinsurancecoveragelimitsorifaninsurerwereunabletosufficientlyorfullypayourrelatedclaimsordamages.Costs associated with capital improvements could adversely affect our profitability and liquidity.Growthormaintenance

191、ofOCLsexistingrevenuedependsinpartonconsistentinvestmentinitsvenue.Therefore,OCLexpectstocontinuetomakesubstantialcapitalimprovementstomeetlong-termincreasingdemand,valueandrevenue.OCLfrequentlymayhaveanumberofsignificantcapitalprojectsunderway.Numerousfactors,manyofwhicharebeyondOCLscontrol,mayinfl

192、uencetheultimatecostsandtimingofvariouscapitalimprovements,including:availabilityoffinancingonfavorableterms;advancesintechnologyandrelatedchangesincustomerexpectations;unforeseenchangesindesign;increasesinthecostofmaterials,equipmentandlabor;fluctuationsinforeignexchangerates;litigation,accidentsor

193、naturaldisasters;nationalorregionaleconomicchanges;andadditionalvenueacquisitioncosts.14Theamountofcapitalexpenditurescanvarysignificantlyfromyeartoyear.Inaddition,actualcostscouldvarymateriallyfromourestimatesifthefactorslistedaboveandourassumptionsaboutthequalityofmaterials,equipmentorworkmanshipr

194、equiredorthecostoffinancingsuchexpendituresweretochange.Constructionisalsosubjecttogovernmentalpermittingprocesseswhich,ifchanged,couldmateriallyaffecttheultimatecost.OCL is subject to extensive governmental regulation,and our failure to comply with these regulations could adversely affect our busin

195、ess,financial conditionand results of operations.OCLsoperationsaresubjecttonationalstatutes,rules,regulations,policiesandprocedures,bothdomesticallyandinternationally,whicharesubjecttochangeatanytime,governingmatterssuchas:construction,renovationandoperationofourvenues;licensingandplanninglaws,inclu

196、dingthoserelatingtonoise,securityandplayingcopyrightedmusicandsoundrecordings;humanhealth,safetyandsanitationrequirements;theserviceoffoodandalcoholicbeverages;workingconditions,labor,minimumwageandhour,immigrationandemploymentlaws;compliancewiththeDDA,DDRandregardinganyoperationsintheUS,theADA;list

197、edbuildingregulation;compliancewithUnitedStatesFCPA,theUnitedKingdomsBriberyAct2010andsimilarregulationsinothercountries;advertisingregulation;hazardousandnon-hazardouswasteandotherenvironmentalprotectionlaws;salesandothertaxesandwithholdingoftaxes;privacylawsandprotectionofpersonallyidentifiableinf

198、ormation;marketingactivitiesviapost,telephone,textandonline;andthetimelyfilingofcorporatedocumentationwiththeCompanyRegistrar(includinginrelationtofinancialaccounts).OCLsfailuretocomplywiththeselawsandregulationscouldresultinfinesand/orproceedingsagainstusbygovernmentalagenciesand/orconsumers,whichi

199、fmaterial,couldadverselyaffectourbusiness,financialconditionandresultsofoperations.WhileOCLattemptstoconductitsbusinessandoperationsinamannerthatitbelievestobeincompliancewithsuchlawsandregulations,therecanbenoassurancethatalaworregulationwillnotbeinterpretedorenforcedinamannercontrarytoOCLscurrentu

200、nderstandingofthelaworregulation.Inaddition,thepromulgationofnewlaws,rulesandregulationscouldrestrictorunfavorablyimpactourbusiness,whichcoulddecreasedemandforservices,reducerevenue,increasecostsand/orsubjectustoadditionalliabilities.Our primary strategy for the growth of LXL is dependent upon our a

201、bility to acquire and develop live music festival streaming rights,and any inability to fundthe significant up-front cash requirements associated with our live music streaming platform could result in the inability to secure and retain such festivalrights.Inordertosecurelivemusicfestivalstreamingrig

202、hts,weareoftenrequiredtoadvancecashtothefestivalpromoterpriortothesaleofanyadvertisingorsponsorshipsorforthatfestival.Ifwedonothavesufficientcashonhandoravailablecapacitytoadvancethenecessarycashforanygivenfestival,wewouldnotbeabletoretaintherightsforthatfestivalandourlivemusicstreamingbusinesswould

203、benegativelyimpacted.If we fail to develop and grow LXLs user base,or if ad engagement on our platform declines,our revenue,business and operating results may be harmed.ThesizeofLXLsuserbaseiscriticaltooursuccess.LXLwillneedtodevelopandcultivateastronguserbase.Weexpecttogeneraterevenuebaseduponsubsc

204、riptionfeesfromourusersandadsthatwedisplay.Ifpeopledonotperceiveourproductsandservicestobeuseful,reliableandtrustworthy,wemaynotbeabletoattractuserstosubscribetoourservicesand/orincreasethefrequencyoftheirengagementwithourplatformandtheadsthatwedisplay.Anumberofconsumer-orientedwebsitesthatachievede

205、arlypopularityhavesinceseentheiruserbasesorlevelsofengagementdecline,insomecasesprecipitously.Thereisnoguaranteethatwewillnotexperienceasimilarerosionofouruserbase.Anumberoffactorscouldpotentiallynegativelyaffectusergrowthandengagement,includingif:usersengagewithotherproducts,servicesoractivitiesasa

206、nalternativetoours;influentialusers,suchasworldleaders,governmentofficials,celebrities,athletes,journalists,sportsteams,mediaoutletsandbrandsorcertainagedemographicsconcludethatanalternativeproductorserviceismorerelevant;weareunabletoconvincepotentialnewusersofthevalueandusefulnessofourproductsandse

207、rvices;thereisadecreaseintheperceivedqualityofourcontent;wefailtointroducenewandimprovedproductsorservicesorifweintroduceneworimprovedproductsorservicesthatarenotfavorablyreceivedorthatnegativelyaffectuserengagement;15technicalorotherproblemspreventusfromdeliveringourproductsorservicesinarapidandrel

208、iablemannerorotherwiseaffecttheuserexperience,includingissueswithconnectingtotheInternet;usershavedifficultyinstalling,updating,orotherwiseaccessingourproductsorservicesonmobiledevicesasaresultofactionsbyusorthirdpartiesthatwerelyontodistributeourproductsanddeliverourservices;usersbelievethattheirex

209、perienceisdiminishedasaresultofthedecisionswemakewithrespecttothefrequency,relevanceandprominenceofadsthatwedisplay;thereareuserconcernsrelatedtoprivacyandcommunication,safety,securityorotherfactors;thereareadversechangesinourproductsorservicesthataremandatedby,orthatweelecttomaketoaddress,legislati

210、on,regulatoryauthoritiesorlitigation,includingsettlementsorconsentdecrees;wefailtoprovideadequatecustomerservicetousers;orwedonotmaintainourbrandimageorourreputationisdamaged.Ifweareunabletodevelopandgrowouruserbase,orifthesemetricsdecline,ourproductsandservicescouldbelessattractivetopotentialnewuse

211、rs,aswellastoadvertisersandplatformpartners,whichwouldhaveamaterialandadverseimpactonourbusiness,financialconditionandoperatingresults.If LXL is unable to compete effectively for users and advertiser spend,our business and operating results could be harmed.CompetitionforusersofLXLsproductsandservice

212、sisintense.AlthoughLXLisdevelopinganewplatformforstreaminglivemusiceventsinrealtime,LXLfacesstrongcompetitioninitsbusiness.LXLwillcompeteagainstmanycompaniestoattractandengageusers,including,(i)broadcastradioproviders,includingterrestrialradioproviderssuchasClearChannelandCBSandsatelliteradioprovide

213、rssuchasSiriusXM,(ii)interactiveon-demandaudiocontentandpre-recordedentertainment,suchasApplesiTunesMusicStoreandAppleMusic,RDIO,Rhapsody,Spotify,Pandora,TidalandAmazonthatallowlistenerstostreammusicorselecttheaudiocontentthattheystreamorpurchaseand(iii)otherformsofentertainment,includingFacebook(in

214、cludingInstagram),Google,Twitter(includingPeriscope),Yahoo,andMeerkatwhichofferavarietyofInternetandmobiledevice-basedproducts,servicesandcontent.Totheextentuserschoosetowatchsatelliteorcabletelevision,streamvideofromon-demandservicessuchasHulu,VEVOorYouTubeorplayinteractivevideogamesontheirhome-ent

215、ertainmentsystem,computerormobilephoneratherthanusetheLXLservice,thesecontentservicesposeacompetitivethreat.WebelievethatLXLsabilitytocompeteeffectivelyforusersdependsuponmanyfactorsbothwithinandbeyondourcontrol,including:thepopularity,usefulness,easeofuse,performanceandreliabilityofourproductsandse

216、rvicescomparedtothoseofourcompetitors;thetimingandmarketacceptanceofourproductsandservices;theadoptionofourproductsandservicesdomesticallyandinternationally;ourability,andtheabilityofourcompetitors,todevelopnewproductsandservicesandenhancementstoexistingproductsandservices;thefrequencyandrelativepro

217、minenceoftheadsdisplayedbyusorourcompetitors;ourabilitytoestablishandmaintainrelationshipswithplatformpartnersthatintegratewithourplatform;changesmandatedby,orthatweelecttomaketoaddress,legislation,regulatoryauthoritiesorlitigation,includingsettlementsandconsentdecrees,someofwhichmayhaveadisproporti

218、onateeffectonus;ourabilitytoattract,retainandmotivatetalentedemployees,particularlyengineers,designersandproductmanagers;acquisitionsorconsolidationwithinourindustry,whichmayresultinmoreformidablecompetitors;andourreputationandthebrandstrengthrelativetoourcompetitors.LXLalsowillfacesignificantcompet

219、itionforadvertiserspend.WeexpectthesubstantialmajorityofLXLsadvertisingrevenuewillbegeneratedthroughfestivalsponsorshipsandadsontheLXLmobileappandwebsite,andLXLcompetesagainstonlineandmobilebusinesses,includingthosereferencedabove,andtraditionalmediaoutlets,suchastelevision,radioandprint,foradvertis

220、ingbudgets.LXLalsowillcompetewithadvertisingnetworks,exchanges,demandsideplatformsandotherplatforms,suchasGoogleAdSense,DoubleClickAdExchange,YahooAdExchange,AOLsAandMicrosoftMediaNetwork,formarketingbudgetsandinthedevelopmentofthetoolsandsystemsformanagingandoptimizingadvertisingcampaigns.Inorderto

221、growLXLsrevenueandimproveLXLsoperatingresults,LXLmustincreaseitsshareofspendingonadvertisingrelativetoitscompetitors,manyofwhicharelargercompaniesthatoffermoretraditionalandwidelyacceptedadvertisingproducts.Inaddition,someofLXLslargercompetitorshavesubstantiallybroaderproductorserviceofferingsandlev

222、eragetheirrelationshipsbasedonotherproductsorservicestogainadditionalshareofadvertisingbudgets.IfLXLisnotabletocompeteeffectivelyforusersandadvertisersspendourbusinessandoperatingresultswouldbemateriallyandadverselyaffected.16LXLs products and services may contain undetected software errors,which co

223、uld harm our business and operating results.LXLsproductsandservicesincorporatecomplexsoftwareandweencourageemployeestoquicklydevelopandhelpuslaunchnewandinnovativefeatures.Oursoftware,includinganyopensourcesoftwarethatisincorporatedintoourcode,maycontainerrors,bugsorvulnerabilities.Anyerrors,bugsorv

224、ulnerabilitiesdiscoveredinourcodeafterreleasecouldresultindamagetoourreputation,lossofusers,lossofplatformpartners,lossofadvertisersoradvertisingrevenueorliabilityfordamages,anyofwhichcouldadverselyaffectourbusinessandoperatingresults.LXLs products and services contain open source software,and LXL l

225、icenses some of its software through open source projects,which may pose particularrisks to LXL proprietary software,products,and services in a manner that could have a negative effect on our business.LXLusesopensourcesoftwareinitsproductsandservicesandwilluseopensourcesoftwareinthefuture.Thetermsof

226、manyopensourcelicensestowhichLXLissubjecthavenotbeeninterpretedbyU.S.orforeigncourts,andthereisariskthatopensourcesoftwarelicensescouldbeconstruedinamannerthatimposesunanticipatedconditionsorrestrictionsonLXLsabilitytoprovideordistributeitsproductsorservices.Additionally,LXLmayfromtimetotimefaceclai

227、msfromthirdpartiesclaimingownershipof,ordemandingreleaseof,theopensourcesoftwareorderivativeworksthatLXLdevelopedusingsuchsoftware,whichcouldincludeLXLproprietarysourcecode,orotherwiseseekingtoenforcethetermsoftheapplicableopensourcelicense.TheseclaimscouldresultinlitigationandcouldrequireLXLtomakei

228、tssoftwaresourcecodefreelyavailable,purchaseacostlylicenseorceaseofferingtheimplicatedproductsorservicesunlessanduntilLXLcanre-engineerthemtoavoidinfringement.Thisre-engineeringprocesscouldrequiresignificantadditionalresearchanddevelopmentresources,andLXLmaynotbeabletocompleteitsuccessfully.Inadditi

229、ontorisksrelatedtolicenserequirements,useofcertainopensourcesoftwarecanleadtogreaterrisksthanuseofthird-partycommercialsoftware,asopensourcelicensorsgenerallydonotprovidewarrantiesorcontrolsontheoriginofsoftware.Anyoftheseriskscouldbedifficulttoeliminateormanage,and,ifnotaddressed,couldhaveanegative

230、effectonourbusiness,financialconditionandoperatingresults.We will require substantial amounts of capital to develop,launch and operate LXL,and we cannot be certain that this capital will be available on reasonableterms when required,or at all.Wewillrequiresubstantialamountsofcapitaltodevelop,launcha

231、ndoperateLXL.Ourabilitytoobtainfinancing,ifandwhenrequired,willdependoninvestorandlenderdemand,ouroperatingperformance,theconditionofthecapitalmarketsandotherfactors,andwecannotassureyouthatadditionalfinancingwillbeavailabletousonfavorabletermswhenrequired,oratall.Ifweraiseadditionalfundsthroughthei

232、ssuanceofequity,equity-linkedordebtsecurities,thosesecuritiesmayhaverights,preferencesorprivilegesseniortotherightsofourcommonstock,andourexistingstockholdersmayexperiencedilution.Ifweareunabletoobtainadequatefinancingorfinancingontermssatisfactorytouswhenwerequireit,ourabilitytocontinuetosupportthe

233、operationorgrowthofourbusinesscouldbesignificantlyimpairedandouroperatingresultsmaybeharmed.Our revenue depends in part on the promotional success of our marketing campaigns,and there can be no assurance that such advertising,promotional andother marketing campaigns will be successful or will genera

234、te revenue or profits.Suchmarketingactivitiesinclude,amongothers,promotionofeventsandticketsales,premiumseatsales,hospitalityandotherservicesforoureventsandvenuesandadvertisingassociatedwithourdistributionofrelatedmerchandiseandapparel.Therecanbenoassurancethatthesemarketingoradvertisingeffortswillb

235、esuccessfulorwillgeneraterevenueorprofits.We are vulnerable to the potential difficulties associated with rapid growth.Webelievethatourfuturesuccessdependsonourabilitytomanagetherapidgrowththatweexpecttoachieveorganicallyandthroughacquisitionsandthedemandsandadditionalresponsibilitiesthatourgrowthwi

236、llplaceonourmanagement.Thefollowingfactorscouldpresentuswithdifficultiesinmanagingourgrowth:alackofsufficientexecutive-levelpersonnel;theinabilitytosuccessfullydevelop,expandandmonetizeourdigitalmusic,videoandothercontentofferings;anincreasedadministrativeburdenonouremployees;theinabilitytoattract,t

237、rain,manageandretainthequalifiedpersonnelnecessarytomanageandoperateagreaternumberofvenues,eventsandotherbusinessactivities;andtheinabilitytointegrateacquiredbusinesses.Ifwefailtoaddresstheseandotherchallengesassociatedwithouranticipatedgrowth,ourgrowthitselfmayfailtomaterialize,wemaygrowwithoutachi

238、evingprofitability,wemayhavedifficultywithourinternalcontrolsandproceduresandthequalityofoureventsandotherofferingsmaydecline,amongotherthings.Anyofthesecouldharmourbusinessandfinancialresults.17OCL and/or LXL may be adversely affected by the occurrence of extraordinary events,such as terrorist atta

239、cks.Theoccurrenceandthreatofextraordinaryevents,suchasterroristattacks,intentionalorunintentionalmass-casualtyincidents,naturaldisastersorsimilarevents,maysubstantiallydecreasetheuseofanddemandforourservicesandtheattendanceatlivemusicevents,whichmaydecreaseOCLsand/orLXLsrevenueorexposethemtosubstant

240、ialliability.Theterrorismandsecurityincidentsinthepast,militaryactionsinforeignlocationsandperiodicelevatedterrorismalerts have raised numerous challenging operating factors,including public concerns regarding air travel,military actions and additional national or localcatastrophicincidents,causinga

241、nationwidedisruptionofcommercialandleisureactivities.Followingpastterrorismactions,someartistsrefusedtotravelorbooktours,whichadverselyaffectedourbusiness.Theoccurrenceorthreatoffutureterroristattacks,militaryactionsbytheUnitedStatesorothers,contagiousdiseaseoutbreaks,naturaldisasterssuchasearthquak

242、esandseverefloodsorsimilareventscannotbepredicted,andtheiroccurrencecanbeexpectedtonegativelyaffecttheeconomiesoftheUnitedStates,theUnitedKingdomandotherforeigncountrieswherewemaydobusinessinthefuture.To service OCLs lease obligations and to fund potential acquisitions and capital expenditures,OCL w

243、ill require a significant amount of cash,which dependson many factors beyond our control.OCLsabilitytoserviceitsleaseobligationsandtofundpotentialacquisitionsandcapitalexpenditureswillrequireasignificantamountofcash,whichdependsonmanyfactorsbeyondourcontrol.Thisis,toanextent,subjecttogeneraleconomic

244、,financial,competitive,legislative,regulatoryandotherfactorsthatarebeyondourcontrol.WecannotassureyouthatOCLsbusinesswillgeneratesufficientcashfloworthatfutureborrowingswillbeavailabletoOCLinanamountsufficienttoenableOCLtopayitsleaseobligationsortofunditsotherliquidityneeds.IfOCLsfuturecashflowfromo

245、perationsandothercapitalresourcesareinsufficienttopayitsobligationsastheyoccurortofunditsliquidityneeds,itmaybeforcedtoreduceordelaybusinessactivitiesandcapitalexpenditures,sellassetsorobtainadditionalequitycapital.ThesemeasuresmightalsobeunsuccessfulorinadequateinpermittingOCLtomeetscheduledleaseob

246、ligations.Itmaybeunabletorestructureorrefinanceitsobligationsandobtaindebtorequityfinancingorsellassetsonsatisfactorytermsoratall.Capitalmarketshavebeenvolatileintherecentpast;adownturncouldnegativelyimpactourabilitytoaccesscapitalshouldtheneedarise.Asaresult,theinabilitytomeetOCLsleaseobligationsco

247、uldcauseittodefaultonthoseobligations.Anysuchdefaultscouldmateriallyharmourfinancialconditionandliquidity.RISKS RELATING TO OUR COMMON STOCKYou could lose all of your investment.Aninvestmentinoursharesofourcommonstockisspeculativeandinvolvesahighdegreeofrisk.Potentialinvestorsshouldbeawarethattheval

248、ueofaninvestmentinourCompanymaygodownaswellasup.Inaddition,therecanbenocertaintythatthemarketvalueofaninvestmentinourCompanywillfullyreflectitsunderlyingvalue.Youcouldloseyourentireinvestment.We cannot predict the prices at which our common stock may trade.Themarketpriceofourcommonstockmayfluctuates

249、ignificantlyduetoanumberoffactors,someofwhichmaybebeyondourcontrol,including:ourquarterlyorannualearnings,orthoseofothercompaniesinourindustry;actualoranticipatedfluctuationsinouroperatingresultsduetotheseasonalityofourbusinessandotherfactorsrelatedtoourbusiness;ourlossoforinabilitytoobtainsignifica

250、ntpopularartists;changesinaccountingstandards,policies,guidance,interpretationsorprinciples;announcementsbyusorourcompetitorsofsignificantcontracts,acquisitionsordivestitures;thepublicationbysecuritiesanalystsoffinancialestimatesorreportsaboutourbusiness;changesbysecuritiesanalystsofearningsestimate

251、sorreports,orourinabilitytomeetthoseestimatesorachieveanygoalsdescribedinthosereports;thedisclosureoffactsaboutourbusinessthatmaydifferfromthoseassumedbysecuritiesanalystsinpreparingtheirestimatesorreportsaboutus;mediareports,whetheraccurateorinaccurate;receptivityofthecapitalmarketstooureffortstoex

252、pandintothelivemusicfestivalstreamingbusiness;theoperatingandstockpriceperformanceofothercomparablecompanies;18overallmarketfluctuations;andgeneraleconomicconditions.Inparticular,therealizationofanyoftherisksdescribedinthisItem1A.RiskFactorscouldhaveasignificantandadverseimpactonthemarketpriceofourc

253、ommonstock.Inaddition,inthepast,somecompaniesthathavehadvolatilemarketpricesfortheirsecuritieshavebeensubjecttosecuritiesclassactionsuitsfiledagainstthem.Ifasuitweretobefiledagainstus,regardlessoftheoutcome,itcouldresultinsubstantiallegalcostsandadiversionofourmanagementsattentionandresources.Thisco

254、uldhaveamaterialadverseeffectonourbusiness,resultsofoperationsandfinancialcondition.You may experience dilution of your ownership interests because of the conversion or exercise of currently outstanding convertible securities or the futureissuance of additional shares of our common or preferred stoc

255、k or other securities that are convertible into or exercisable for our common or preferred stock.AsofMarch31,2016,wehadatotalof1,800,000warrantstopurchase1,800,000sharesofourcommonstock,whichareexercisableat$0.01,outstandingwiththewarrantsissuedtoTrinadManagementsubjecttocertainanti-dilutionprovisio

256、ns.Inaddition,wemayissueinthefutureourauthorizedbutpreviouslyunissuedcommonstockorotherequitysecurities,resultinginthedilutionoftheownershipinterestsofourpresentstockholdersandthepurchasersofoursharesofferedhereby.Weareauthorizedtoissueanaggregateof75,000,000sharesofourcommonstockand1,000,000shareso

257、f“blankcheck”preferredstock.Wemayalsoissueadditionalsharesofourcommonstockorothersecuritiesthatareconvertibleintoorexercisableforourcommonstockinconnectionwithhiringorretainingemployees,futureacquisitions,futuresalesofoursecuritiesforcapitalraisingpurposes,orforotherbusinesspurposes.Theconversionofs

258、uchnotes,theexerciseofsuchwarrantsand/orfutureissuanceofanyadditionalsharesofourcommonstockorsecuritiesconvertibleintosharesofourcommonstockmaycreatedownwardpressureonthetradingpriceofthecommonstock.Wewillneedtoraiseadditionalcapitalinthefuturetomeetourworkingcapitalneedsand/ordebtobligations,andthe

259、recanbenoassurancethatwewillnotberequiredtoissueadditionalshares,warrantsorotherconvertiblesecuritiesinthefutureinconjunctionwiththesecapitalraisingefforts,includingataprice(orexerciseprices)belowthepriceyoupaidforyourstockorbelowtheconversionpriceofsuchdebentureortheexercisepricesofsuchwarrants.Ina

260、ddition,wecontinuallyexploreacquisitionopportunitiesconsistentwithourstrategy.Theseacquisitionsmayinvolvethepaymentofcash,theincurrenceofdebtortheissuanceofcommonstockorothersecurities.Anysuchissuancecouldbeatavaluationlowerthanthetradingpriceofourcommonstockatthetime.Inaddition,futurefinancingtrans

261、actionsthroughthesaleofadditionalsharesofourcommonstockatorbelowmarketpricesmayadverselyaffectourstockprices.Thepriceofourcommonstockcouldalsobeaffectedbypossiblesalesofourcommonstockbyhedgingorarbitragetradingactivitythatmaydevelopinvolvingourcommonstock.Mr.Ellin,our Executive Chairman,President an

262、d controlling stockholder,and his affiliated entities own a substantial amount of our capital stock,and hemay make decisions that you do not consider to be in the best interests of our stockholders.AsofJune30,2016,Mr.Ellin,ourandExecutiveChairmanandPresident,beneficiallyownsapproximately42.4%ofourco

263、mmonstock.Asaresult,Mr.Ellinwouldhavetheabilitytosignificantly impacttheelection ofourBoardofDirectors,theadoptionoramendment ofprovisions inourCertificateofIncorporation,theapprovalofmergersandothersignificantcorporatetransactions,andtheoutcomeofissuesrequiringapprovalbyourstockholders.Thisconcentr

264、ationofownershipmayalsohavetheeffectofdelayingorpreventingachangeincontrolofourCompanythatmaybefavoredbyotherstockholders.Thiscouldpreventtransactionsinwhichstockholdersmightotherwiserecoverapremiumfortheirsharesovercurrentmarketprices.The ability of our Board of Directors to issue additional stock

265、may prevent or make more difficult certain transactions,including a sale or merger of ourCompany.OurBoardofDirectorsisauthorizedtoissueupto1,000,000sharesofpreferredstockwithpowers,rightsandpreferencesdesignatedbyit.Sharesofvotingorconvertiblepreferredstockcouldbeissued,orrightstopurchasesuchsharesc

266、ouldbeissued,tocreatevotingimpedimentsortofrustratepersonsseekingtoeffectatakeoverorotherwisegaincontrolofourCompany.TheabilityofourBoardofDirectorstoissuesuchadditionalsharesofpreferredstock,withrightsandpreferencesitdeemsadvisable,coulddiscourageanattemptbyapartytoacquirecontrolofourCompanybytende

267、rofferorothermeans.Suchissuancescouldthereforedeprivestockholdersofbenefitsthatcouldresultfromsuchanattempt,suchastherealizationofapremiumoverthemarketpricefortheirsharesinatenderofferorthetemporaryincreaseinmarketpricethatsuchanattemptcouldcause.Moreover,theissuanceofsuchadditionalsharesofpreferred

268、stocktopersonsfriendlytoourBoardofDirectorscouldmakeitmoredifficulttoremoveincumbentmanagersanddirectorsfromofficeevenifsuchchangeweretobefavorabletostockholdersgenerally.19There is currently a very limited public market for shares of our common stock and there can be no assurance that an active pub

269、lic market will ever develop.Failure to develop or maintain a trading market could negatively affect the value of our common stock and make it difficult or impossible for you to sell yourshares.Thereiscurrentlyaverylimitedpublicmarketforsharesofourcommonstockandtherecanbenoassurancethatanactivemarke

270、twillneverdevelop.OurcommonstockiscurrentlyquotedontheOTCPinkunderthesymbol“LIVX.”EachoftheOTCMarkets(ofwhichOTCPinkisapartof)isathinlytradedmarketandlackstheliquidityofcertainotherpublicmarketswithwhichsomeinvestorsmayhavemoreexperience.Wemaynoteverbeabletosatisfythelistingrequirementsforourcommons

271、tocktobelistedonanationalsecuritiesexchange,whichisoftenamorewidely-tradedandliquidmarket.Some,butnotall,ofthefactorswhichmaydelayorpreventthelistingofourcommonstockonamorewidely-tradedandliquidmarketincludethefollowing:ourstockholdersequitymaybeinsufficient;themarketvalueofouroutstandingsecuritiesm

272、aybetoolow;ournetincomefromoperationsmaybetoolow;ourcommonstockmaynotbesufficientlywidelyheld;wemaynotbeabletosecuremarketmakersforourcommonstock;andwemayfailtomeettherulesandrequirementsmandatedbytheseveralexchangesandmarketstohaveourcommonstocklisted.Shouldwefailtosatisfytheinitiallistingstandards

273、ofthenationalexchanges,orourcommonstockisotherwiserejectedforlisting,andremainsquotedontheOTCMarketsorissuspendedfromtheOTCMarkets,thetradingpriceofourcommonstockcouldsufferandthetradingmarketforourcommonstockmaybelessliquidandourcommonstockpricemaybesubjecttoincreasedvolatility.Our common stock is

274、subject to the“penny stock”rules of the SEC and the trading market in the securities is limited,which makes transactions in the stockcumbersome and may reduce the value of an investment in the stock.Rule15g-9undertheExchangeAct,establishesthedefinitionofa“pennystock,”forthepurposesrelevanttous,asany

275、equitysecuritythathasamarketpriceoflessthan$5.00pershareorwithanexercisepriceoflessthan$5.00pershare,subjecttocertainexceptions.Foranytransactioninvolvingapennystock,unlessexempt,therulesrequire:(a)thatabrokerordealerapproveapersonsaccountfortransactionsinpennystocks;and(b)thebrokerordealerreceivefr

276、omtheinvestorawrittenagreementtothetransaction,settingforththeidentityandquantityofthepennystocktobepurchased.Inordertoapproveapersonsaccountfortransactionsinpennystocks,thebrokerordealermust:(a)obtainfinancialinformationandinvestmentexperienceobjectivesofthepersonand(b)makeareasonabledeterminationt

277、hatthetransactionsinpennystocksaresuitableforthatpersonandthepersonhassufficientknowledgeandexperienceinfinancialmatterstobecapableofevaluatingtherisksoftransactionsinpennystocks.Thebrokerordealermustalsodeliver,priortoanytransactioninapennystock,adisclosurescheduleprescribedbytheSECrelatingtothepen

278、nystockmarket,which,inhighlightform:(a)setsforththebasisonwhichthebrokerordealermadethesuitabilitydetermination;and(b)confirmsthatthebrokerordealerreceivedasigned,writtenagreementfromtheinvestorpriortothetransaction.Generally,brokersmaybelesswillingtoexecutetransactionsinsecuritiessubjecttothe“penny

279、stock”rules.Thismaymakeitmoredifficultforinvestorstodisposeofourcommonstockandcauseadeclineinthemarketvalueofourcommonstock.Disclosurealsohastobemadeabouttherisksofinvestinginpennystocksinbothpublicofferingsandinsecondarytradingandaboutthecommissionspayabletoboththebrokerordealerandtheregisteredrepr

280、esentative,currentquotationsforthesecuritiesandtherightsandremediesavailabletoaninvestorincasesoffraudinpennystocktransactions.Finally,monthlystatementshavetobesentdisclosingrecentpriceinformationforthepennystockheldintheaccountandinformationonthelimitedmarketinpennystocks.Our stock may be traded in

281、frequently and in low volumes,so you may be unable to sell your shares at or near the quoted bid prices if you need to sell yourshares.UntilourcommonstockislistedonanationalsecuritiesexchangesuchastheNewYorkStockExchangeortheNasdaqStockMarket,weexpectourcommonstocktoremaineligibleforquotationontheOT

282、CPink.Inthosevenues,however,thesharesofourcommonstockmaytradeinfrequentlyandinlowvolumes,meaningthatthenumberofpersonsinterestedinpurchasingoursharesofcommonstockatornearbidpricesatanygiventimemayberelativelysmallornon-existent.Aninvestormayfinditdifficulttoobtainaccuratequotationsastothemarketvalue

283、ofourcommonstockortosellhisorhersharesatornearbidpricesoratall.Inaddition,ifwefailtomeetthecriteriasetforthinSECregulations,variousrequirementswouldbeimposedbylawonbroker-dealerswhoselloursecuritiestopersonsotherthanestablishedcustomersandaccreditedinvestors.Consequently,suchregulationsmaydeterbroke

284、r-dealersfromrecommendingorsellingourcommonstock,whichmayfurtheraffecttheliquidityofourcommonstock.Thiswouldalsomakeitmoredifficultforustoraisecapital.We have no plans to pay dividends on our common stock,which could affect its market price.Wecurrentlyintendtoretainanyfutureearningstofinancethegrowt

285、h,developmentandexpansionofourbusinessand/ortorepayexistingindebtedness.Accordingly,wedonotintendtodeclareorpayanydividendsonourcommonstockfortheforeseeablefuture.Thedeclaration,paymentandamountoffuturedividends,ifany,willbeatthesolediscretionoftheboardofdirectorsaftertakingintoaccountvariousfactors

286、,includingourfinancialcondition,resultsofoperations,cashflowfromoperations,currentandanticipatedcapitalrequirementsandexpansionplans,theincometaxlawsthenineffectandtherequirementsofNevadalaw.Accordingly,holdersofcommonstockwillnotreceivecashpaymentsontheirinvestmentandthemarketpricemaybeadverselyaff

287、ected.20Being a public company is expensive and administratively burdensome.Asapublicreportingcompany,wearesubjecttotheinformationandreportingrequirementsoftheSecuritiesAct,theExchangeActandotherfederalsecuritieslaws,rulesandregulationsrelatedthereto,includingcompliancewiththeSarbanes-OxleyActof2002

288、(the“Sarbanes-OxleyAct”).ComplyingwiththeselawsandregulationsrequiresthetimeandattentionofourBoardofDirectorsandmanagement,andincreasesourexpenses.Amongotherthings,wearerequiredto:maintainandevaluateasystemofinternalcontrolsoverfinancialreportingincompliancewiththerequirementsofSection404oftheSarban

289、es-OxleyActandtherelatedrulesandregulationsoftheSECandthePublicCompanyAccountingOversightBoard;maintainpoliciesrelatingtodisclosurecontrolsandprocedures;prepareanddistributeperiodicreportsincompliancewithourobligationsunderfederalsecuritieslaws;instituteamorecomprehensivecompliancefunction,including

290、withrespecttocorporategovernance;andinvolve,toagreaterdegree,ouroutsidelegalcounselandaccountantsintheaboveactivities.Thecostsofpreparingandfilingannualandquarterlyreports,proxystatementsandotherinformationwiththeSECandfurnishingauditedreportstostockholdersisexpensiveandmuchgreaterthanthatofaprivate

291、ly-heldcompany,andcompliancewiththeserulesandregulationsmayrequireustohireadditionalfinancialreporting,internalcontrolsandotherfinancepersonnel,andwillinvolveamaterialincreaseinregulatory,legalandaccountingexpensesandtheattentionofmanagement.Therecanbenoassurancethatwewillbeabletocomplywiththeapplic

292、ableregulationsinatimelymanner,ifatall.Inaddition,beingapubliccompanymakesitmoreexpensiveforustoobtaindirectorandofficerliabilityinsurance.Inthefuture,wemayberequiredtoacceptreducedcoverageorincursubstantiallyhighercoststoobtainthiscoverage.Thesefactorscouldalsomakeitmoredifficultforustoattractandre

293、tainqualifiedexecutivesandmembersofourBoardofDirectors,particularlydirectorswillingtoserveonanauditcommitteewhichweexpecttoestablish.Any failure to maintain effective internal control over our financial reporting could materially adversely affect us.Section404oftheSarbanes-OxleyActrequiresustoinclud

294、einourAnnualReportsonForm10-Kanassessmentbymanagementoftheeffectivenessofourinternalcontroloverfinancialreporting.Inaddition,atsuchtime,ifany,aswearenolongera“smallerreportingcompany,”ourindependentregisteredpublicaccountingfirmwillhavetoattesttoandreportonmanagementsassessmentoftheeffectivenessofsu

295、chinternalcontroloverfinancialreporting.BaseduponthelastevaluationconductedasofMarch31,2016,ourmanagementatthetimeconcludedthatourdisclosurecontrolsandprocedureswereineffectiveasofsuchdatetoensurethatinformationrequiredtobedisclosedinthereportsthatwefileorsubmitundertheExchangeAct,isrecorded,process

296、ed,summarizedandreportedwithinthetimeperiodsspecifiedinSECrulesandforms.Whileourmanagementbelievesthatourcontrolenvironmentissubstantiallyimproved,wecontinueatthepresenttimenottohaveanauditcommittee,sufficientseparationofaccountingpersonnelorsufficientpersonneltomakedisclosurecontrolsandproceduresef

297、fective.Whileweintendtodiligentlyandthoroughlydocument,review,testandimproveourinternalcontroloverfinancialreportinginordertoensurecompliancewithSection404,managementmaynotbeabletoconcludethatourinternalcontroloverfinancialreportingiseffective.Furthermore,evenifmanagementweretoreachsuchaconclusion,i

298、fourindependentregisteredpublicaccountingfirmisnotsatisfiedwiththeadequacyofourinternalcontroloverfinancialreporting,oriftheindependentauditorsinterprettherequirements,rulesorregulationsdifferentlythanwedo,thentheymaydeclinetoattesttomanagementsassessmentormayissueareportthatisqualified.Anyoftheseev

299、entscouldresultinalossofinvestorconfidenceinthereliabilityofourfinancialstatements,whichinturncouldnegativelyaffectthepriceofourcommonstock.Inparticular,wemustperformsystemandprocessevaluationandtestingofourinternalcontroloverfinancialreportingtoallowmanagementand(ifrequiredinfuture)ourindependentre

300、gisteredpublicaccountingfirmtoreportontheeffectivenessofourinternalcontroloverfinancialreporting,asrequiredbySection404.OurcompliancewithSection404mayrequirethatweincursubstantialaccountingexpenseandexpendsignificantmanagementefforts.Wecurrentlydonothaveaninternalauditgrouporanauditcommittee,andwewi

301、llneedtoretaintheservicesofadditionalaccountingandfinancialstafforconsultantswithappropriate public company experience and technical accounting knowledge to satisfy the ongoing requirements of Section 404.We intend to review theeffectivenessofourinternalcontrolsandproceduresandmakeanychangesmanageme

302、ntdeterminesappropriate,includingtoachievecompliancewithSection404bythedateonwhichwearerequiredtosocomply.21Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.Therehavebeenchanginglaws,regulations,andstandardsrelatingtocorpora

303、tegovernanceandpublicdisclosure,includingtheSarbanes-OxleyAct,theDodd-FrankAct,regulationspromulgatedbytheSECandrulespromulgatedbytheOTCMarketsandthenationalsecuritiesexchanges.Theseneworchangedlaws,regulations,andstandardsaresubjecttovaryinginterpretationsinmanycasesduetotheirlackofspecificity,and,

304、asaresult,theirapplicationinpracticemayevolveovertimeasnewguidanceisprovidedbyregulatoryandgoverningbodies,whichcouldresultincontinuinguncertaintyregardingcompliancemattersandhighercostsnecessitatedbyongoingrevisionstodisclosureandgovernancepractices.Asaresult,oureffortstocomplywithevolvinglaws,regu

305、lations,andstandardsarelikelytocontinuetoresultinincreasedgeneralandadministrativeexpensesandadiversionofmanagementtimeandattentionfromrevenue-generatingactivitiestocomplianceactivities.OurBoardofDirectors,ChiefExecutiveOfficerandInterimPrincipalFinancialOfficercouldfaceanincreasedriskofpersonalliab

306、ilityinconnectionwiththeperformanceoftheirduties.Asaresult,wemayhavedifficultyattractingandretainingqualifiedboardmembersandexecutiveofficers,whichcouldharmourbusiness.Ifoureffortstocomplywithneworchangedlaws,regulations,andstandardsdifferfromtheactivitiesintendedbyregulatoryorgoverningbodies,wecoul

307、dbesubjecttoliabilityunderapplicablelawsorourreputationmaybeharmed,whichcouldmateriallyadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.*The risks above do not necessarily comprise of all those associated with an investment in our Company.This Annual Report contains forward lookin

308、gstatements that involve unknown risks,uncertainties and other factors that may cause our actual results,financial condition,performance or achievements to bematerially different from any future results,performance or achievements expressed or implied by such forward looking statements.Factors that

309、might cause sucha difference include,but are not limited to,those set out above.ITEM 1B.UNRESOLVED STAFF COMMENTS None.ITEM 2.PROPERTIES DuringthefiscalyearendedMarch31,2016,wesubleasedofficespacefromTrinadManagementLLCfornocosttous.Managementestimatessuchamountstobeimmaterial.Weanticipatecontinuing

310、tosubleasesuchspaceatnocosttousfortheforeseeablefuture.Webelievethatsuchpropertyisingoodconditionandissuitablefortheconductofourbusiness.Wecurrentlyhavenopolicywithrespecttoinvestmentsorinterestsinrealestate,realestatemortgagesorsecuritiesof,orinterestsin,personsprimarilyengagedinrealestateactivitie

311、s.ITEM 3.LEGAL PROCEEDINGS Fromtimetotime,wemaybecomeinvolvedinvariouslawsuitsandlegalproceedingswhichariseintheordinarycourseofbusiness.However,litigationissubjecttoinherentuncertainties,andanadverseresultintheseorothermattersmayarisefromtimetotimethatmayharmbusiness.Ajudicialreviewclaim(casenumber

312、CO/738/2015)wasfiledintheHighCourtbyOCLonFebruary16,2015.TheclaimwasalegalchallengetothedecisionbytheLondonBoroughofCamdenCouncil(the“Council”)tograntplanningpermissionreference2014/2621onJanuary6,2015fortheredevelopmentoftheformerHope&Anchorpublichouseas8residentialunits.Thisistheneighboringpropert

313、ytotheKOKOandthegroundsofchallengerelatetolegalflawsinthewaythattheCouncilassessednoiseandheritageimpactsoftheproposeddevelopmentaspartofitsdecision.ThereliefsoughtisaHighCourtordertoquashtheplanningpermissionthathasbeengranted.WhilsttheCouncildefendedtheclaim,theapplicantplayednoactiveroleintheproc

314、eedings.Judicialreviewisatwostageprocess,wherethecaseisfirstconsideredbyajudgeonthepaperstodecidewhetheritshouldgetpermissiontoproceedtoasubstantivehearing.ThecasewasbroughtbecausetheCouncilhasgrantedaplanningpermissionforamultipleoccupancyresidentialdevelopmentadjacenttoKOKO.OCLbelievedthattheCounc

315、ildidnotproperlyseektounderstandandconsiderthepotentialforconflictbetweenthevenueandnewresidentsbeinginsuchcloseproximitytoeachotherandwithoutrequiringadequatesoundinsulationmeasurestobeinplacetoensurethatthepartiescanco-existpeacefully.Thegrantofthepermissioninitscurrentformwouldhaveleftthevenuepot

316、entiallyvulnerabletocomplaints,whichinturncouldhaveadverseconsequencesforKOKOspremiseslicense.Ifsuccessful,theplanningpermissionwillbequashed.TheCourtultimatelyfoundinfavorofOCLonalltheabovegroundsandquashedtheplanningcommissionsgrantofplanningpermission.Thisclaimisnolongerpending.OnMay20,2016,Mr.Ol

317、iverBengoughfiledaPetitionforRelief(the“Petition”)intheHighCourtofJustice,ChanceryDivision(the“Court”)againstOCHL,OCL,KoKoUKandMr.Ellin(collectively,the“Respondents”).InconnectionwiththePetition,effectiveasofMay20,2016,MintGroupterminatedtheManagementServicesAgreementwithOCLpursuanttowhichMintGroups

318、ervedasacontractedserviceprovidertoKOKO,anightclubandlivemusicvenue“KOKO”inCamden,LondonownedbyKoKoUK.ThePetitionerclaimscertainbreachesofdutybyMr.EllininconnectionwiththecorporateoperationsoftheRespondents,aswellasa“deterioration”oftherelationshipbetweentheparties.ThePetitionerfurtherclaimsthathisi

319、nterestshavebeenunfairlyprejudicedbytheconductoftheRespondentsandthebreakdownoftrustandconfidencebetweenhimselfandMr.Ellin.Inconnectionwithsuchtermination,wedemandedtheresignationofMr.Bengough(asignificantshareholderofMintGroup)fromtheboardofOCHLduetowhatwestronglybelievetobeperformanceandmanagement

320、concernsonbehalfofMintGroupanditsnon-paymentofcertainfunds.OCHLwasformedbyOCLsstockholdersforthesolepurposeofacquiringalloftheregisteredandcontributedcapitalofOCL,isa50%-ownedsubsidiaryoftheCompanyandistheparentofOCL.22Amongotherthings,thePetitionerisseekinganorderbytheCourtforthesalebyKOKOUKofitssh

321、aresinOCHLtothePetitioneratafairmarketvaluetobedeterminedbytheCourtoranindependentthirdpartyvaluationwithadiscounttoreflectthelossesclaimedtobesufferedbythePetitioner.ThePetitionerisfurtherseeking,ifrequired,anorderterminatingMr.EllinsdirectorshipofOCHLandOCL,permissiontobringaderivativeactionagains

322、tMr.EllinallegingbreachesofcertaindutiessetforthinthePetition,fortheCourttosetasidetheSeniorNoteandJuniorNote(aseachdefinedbelow)oralternativelysuchpartofthosenoteswhichthePetitionerallegesareexpensesforwhichRespondentsOCLandOCHLshouldnotbeliableandfortheCourttodeclarethatOCLandOCHLhavenoliabilityfo

323、rsuchexpensestous,JJAToranyotherpersonconnectedwithMr.Ellin.Aspartoftheinitialhearing,theCourtgrantedPetitionersrequestforinterimrelieftoallowthePetitionertocontinuerunningOCLsbusinessasitwasconductedpriortothefilingofthePetition,subjecttoMr.Ellinsapprovalofanyexpendituresexceeding$15,000inamount(th

324、e“InterimInjunction”).ThisinterimreliefwasgrantedpendingafinaldecisionontheInterimInjunctionatthenexthearing.AspartoftheMergerconsummatedonApril28,2014,OCHLandOCLbecameadditionalpromisorsunder2promissorynotes,apromissorynote,datedasofApril28,2014(the“SeniorNote”),issuedinfavorofJJAT,andapromissoryno

325、te,datedasofApril28,2014(the“JuniorNote”),issuedinourfavor.PursuanttotheSeniorNote,OCHLandOCLarejointlyliablefortheprincipalamountof$1,376,124andinterestat8%perannum.PursuanttotheJuniorNote,OCHLandOCLarejointlyliabletousforaprincipalamountof$494,750andinterestat8%perannum.IntheeventtheCourtdeniesthe

326、Petitionersreliefsummarizedabove,arequestwasmadebythePetitionerforanorderbytheCourtforthe“windingup”ofOCLandOCHLbasedupondeadlockofitsboardandmembers.TheRespondentshaveretainedUKcounselinthismatterandcategoricallydenyallallegationsinthePetitionandintendtoaggressivelydefendthisaction,torefutethealleg

327、ationssetforththereinandtofileasubstantivecounter-complaintinanswertothePetition.A2-dayhearinghasbeensetbytheCourtforJuly28and29,2016,consistingofaproceduralhearingonthePetitionandtoruleontheInterimInjunction.ITEM 4.MINE SAFETY DISCLOSURES NotApplicable.23PART II ITEM 5.MARKET FOR REGISTRANTS COMMON

328、 EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES Market InformationOurcommonstockhasbeenquotedontheOTCPinkunderthesymbol“LIVX”sinceJuly24,2015.Priortothat,ourcommonstockwaseligiblefortradingonOTCBBunderthesymbol“LTNR,”butatradingmarketdidnotdevelop.Therehasbeenminimalrepo

329、rtedtradingtodateinourcommonstock.Thereisalimitedpublicmarketforourshares.TradinginstocksquotedontheOTCPinkisoftenthinandischaracterizedbywidefluctuationsintradingpricesduetomanyfactorsthatmaybeunrelatedtoacompanysoperationsorbusinessprospects.Wecannotassureyouthattherewillbeamarketinthefutureforour

330、commonstock.Thefollowingtablesetsforth,fortheperiodsindicated,theclosing/lastpricesofourcommonstockfortheperiodsindicated,asreportedbytheOTCMarkets.Thequotationsreflectinter-dealerprices,withoutretailmark-up,mark-downorcommissionandmaynotrepresentactualtransactions.Fiscal Year Ended March 31,2015Hig

331、h Low1stQuarterEndedJune30,2014(1)$n/a$n/a2ndQuarterEndedSeptember30,2014(1)$n/a$n/a3rdQuarterEndedDecember31,2014(1)$n/a$n/a4thQuarterEndedMarch31,2015(1)$n/a$n/aFiscal Year Ended March 31,2016 High Low 1stQuarterEndedJune30,2015(1)$n/a$n/a2ndQuarterEndedSeptember30,2015$5.95$4.703rdQuarterEndedDec

332、ember31,2015$8.90$5.454thQuarterEndedMarch31,2016$10.00$5.00(1)Noactualtradeswerereportedduringtheperiodsindicated.Number of HoldersAs of July 11,2016,there were approximately 109 holders of record of our common stock and 45,792,138 shares of our common stock issued andoutstanding.DividendsWehavenev

333、erdeclaredorpaidanycashdividendsonourcommonstock.Wecurrentlyintendtoretainfutureearnings,ifany,tofinanceourbusinessoperations.Asaresult,wedonotanticipatepayinganycashdividendsintheforeseeablefuture.Recent Sales of Unregistered SecuritiesOtherthanassetforthbelowandasdisclosedinourQuarterlyReportsonForm10-QandourCurrentReportsonForm8-K,therehavebeennoothersalesorissuancesofunregisteredsecuritiessinc