Attached files
file | filename |
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EX-10.4 - Asgaard Media | v174667_ex10-4.htm |
EX-5.1 - Asgaard Media | v174667_ex5-1.htm |
EX-14.1 - Asgaard Media | v174667_ex14-1.htm |
EX-23.1 - Asgaard Media | v174667_ex23-1.htm |
EX-10.3 - Asgaard Media | v174667_ex10-3.htm |
EX-10.2 - Asgaard Media | v174667_ex10-2.htm |
EX-3.2 - Asgaard Media | v174667_ex3-2.htm |
EX-3.1 - Asgaard Media | v174667_ex3-1.htm |
EX-10.5 - Asgaard Media | v174667_ex10-5.htm |
EX-10.1 - Asgaard Media | v174667_ex10-1.htm |
EX-99.1 - Asgaard Media | v174667_ex99-1.htm |
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-1/A
Amendment
#1
File
#_______________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
ASGAARD
MEDIA
(Exact
name of registrant as specified in its charter)
Nevada
|
7812
|
26-1780115
|
||
(State or other jurisdiction of
|
(Primary Standard Industrial
|
(I.R.S. Employer Identification
|
||
incorporation or organization)
|
Classification Code Number)
|
Number)
|
Asgaard
Media
(702)
858-3456
2550
East Desert Inn Road, Suite 329
Las
Vegas, Nevada 89121
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Wm. Alan
Pezzuto
President
and Chief Executive Officer
Asgaard
Media
2550
East Desert Inn Road, 329
Las
Vegas, Nevada 89121
(702)
858-3456
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
Copies
to:
Davisson
& Associates, PA
Peder K.
Davisson, Esq.
4124
Quebec Avenue North, Suite 306
Minneapolis,
Minnesota 55427
Phone
(763) 355-5678
Fax (763)
355-5679
Approximate Date of Commencement of
Proposed Sale to the Public: As soon as practicable after the
effective date of this registration statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box: x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company
|
x
|
CALCULATION
OF REGISTRATION FEE
Title of each class of securities
to
be registered
|
Amount of
shares to
be registered
|
Proposed
maximum
offering price
per unit
|
Proposed
maximum
aggregate
offering price
|
Amount of
registration fee
|
||||||||||||
Common
Stock, $0.001 par Value per Share
|
10,000,000
|
$
|
2.50
|
$
|
25,000,000
|
$
|
1,395.00
|
|||||||||
Selling
Shareholders Common Stock
|
2,500,000
|
$
|
2.50
|
$
|
6,250,000
|
$
|
348.75
|
|||||||||
Total
Fee
|
$
|
1,743.75
|
Notes:
The offering price has been
estimated solely for the purpose of computing the amount of the registration fee
in accordance with Rule 457(o). Our common stock is not traded and any national
exchange and in accordance with Rule 457, the offering price was determined
by factors such as the
lack of liquidity (since there is no present market for Asgaard Media stock) and
the high level of risk, considering the lack of operating history for Asgaard
Media. The Company and selling shareholders may sell shares of our common stock
at a fixed price of $2.50 per share until our shares are quoted on the OTC
Bulletin Board; thereafter the selling shareholders may sell shares at
prevailing market prices or privately negotiated prices Assuming our shares are
quoted on the OTC Bulletin Board, the Company will continue to sell newly issued
shares at $2.50 per share until the earlier of (i) all the newly issued shares
offered hereunder are sold or (ii) until this offering terminates, whichever is
sooner. There can be no assurance that a market maker will agree to file the
necessary documents with the Financial Industry Regulatory Authority (“FINRA”),
which operates the OTC Electronic Bulletin Board, nor can there be any assurance
that such an application for quotation will be approved. We have agreed to bear
the expenses relating to the registration of the shares for the selling security
holders.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The date
of this Prospectus is ___________________, 2009
PROSPECTUS
12,500,000
Shares
$2.50
per share
Common
Stock
This is
our initial public offering. Our securities are not listed on any national
securities exchange or the Nasdaq Stock market.
Our
existing shareholders are offering for sale, 2,500,000 shares of common stock.
In addition, we are offering a total of 10,000,000 shares of our common stock in
a direct public offering, without any involvement of underwriters or
broker-dealers with a minimum offering of 20,000 shares. The offering price is
$2.50 per share. This offering of shares by the Company and the selling
shareholders will terminate 270 days from the effective date of this prospectus
on ________________, 2010, although we may close the offering on any date prior
if the offering is fully subscribed. In the event that 20,000 shares are not
sold within 270 days from the effective date of this prospectus, all money
received by us will be promptly returned to each subscriber without interest or
deduction of any kind. If 20,000 shares are sold within 270 days from the
effective date of this prospectus, all money received will be available to us
and there will be no refund. The funds will be maintained in a separate escrow
bank account at Washington Mutual Bank/Chase, 140 West Ontario Avenue, Suite
160, Corona, California 92882 (to Standard Transfer & Trust
Company, Inc.-Escrow Account fbo Asgaard Media, 2980 South Rainbow Boulevard,
Suite 220H, Las Vegas, Nevada 89164 ) until we receive $50,000 at which
time we will remove those funds and use the same as set forth in the Use of
Proceeds section of this prospectus. Unless we receive a minimum of $50,000
within 270 days from the effective date of this prospectus, ______________,
2010, on the 271 th day
from the effective date those funds received will be immediately refunded to the
investors, without interest or deduction.
Our officers
and directors will market our common stock and offer and sell the securities on
our behalf. This is a best efforts direct participation offering that will not
utilize broker-dealers. No officer or director will receive any compensation for
his role in selling shares in the offering.
The
selling shareholders have indicated that they do not plan to offer and sell
their shares prior to the Company selling the minimum required 20,000 common
shares set forth in the Company’s offering. However, there are no formal
agreements or contracts by and between the Company and any selling shareholder
to this effect.
This
investment involves a high degree of risk. You should purchase shares only
if you can afford a complete loss of your investment. See "Risk Factors"
starting on page 8 .
Offering Price
per Share
|
Offering
Expenses
|
Proceeds to
Asgaard Media
|
||||||||||
$
|
2.50
|
$
|
20,000.00
|
$
|
2.49
|
|||||||
Minimum
Offering:
|
$
|
50,000.00
|
$
|
20,000.00
|
$
|
30,000.00
|
||||||
Maximum
Offering:
|
$
|
25,000,000.00
|
$
|
20,000.00
|
$
|
24,980,000.00
|
(1) These
offering expenses do not include any underwriting discounts or commissions.
There are no underwriting discounts or commissions to be paid in connection with
this offering.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The
information in this prospectus is not complete and may be changed. Asgaard Media
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
The
date of this prospectus is _________, 2010.
2
TABLE
OF CONTENTS
PROSPECTUS SUMMARY
|
4
|
||
Asgaard Media
|
4
|
||
The Offering
|
6
|
||
Summary of Selected Financial
Data
|
6
|
||
RISK FACTORS
|
8
|
||
Risk Factors Relating to
Asgaard Media
|
8
|
||
Risk Factors Relating to the
Motion Picture Industry
|
12
|
||
Risk Factors Relating to This
Offering
|
13
|
||
FORWARD-LOOKING
STATEMENTS
|
18
|
||
USE OF PROCEEDS
|
18
|
||
DETERMINATION OF OFFERING
PRICE
|
20
|
||
DILUTION
|
20
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||
PLAN OF DISTRIBUTION; TERMS OF
THE OFFERING
|
21
|
||
General
|
21
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||
Company's Offering
|
22
|
||
Offering Period and
Expiration Date
|
23
|
||
Procedure for
Subscribing
|
23
|
||
Right to Reject
|
23
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||
Selling Shareholders
|
24
|
||
Section 15(g) of the Exchange
Act
|
29
|
||
Blue Sky Restrictions
|
30
|
||
DESCRIPTION OF BUSINESS
|
31
|
||
General
|
31
|
||
Motion Picture Industry
Overview
|
31
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||
Distribution of Motion
Pictures
|
32
|
||
Production
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35
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||
Distribution approach
|
35
|
||
Current Projects
|
36
|
||
Public Relations and
Promotion
|
39
|
||
Bonding Issues
|
40
|
||
Financing Strategy
|
41
|
||
Distribution
Arrangements
|
42
|
||
Competition
|
42
|
||
Intellectual Property
Rights
|
42
|
||
Censorship
|
44
|
||
Labor Laws
|
44
|
||
DESCRIPTION OF PROPERTY
|
45
|
||
Number of Total
Employees
|
45
|
||
Employment Agreements
|
45
|
||
Board Committees
|
45
|
||
Directors
|
45
|
||
Facilities
|
45
|
||
Intellectual properties
|
46
|
||
Off-Balance Sheet
Arrangements
|
46
|
||
MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND FINANCIAL DISCLOSURE OR
PLAN OF OPERATION
|
46
|
||
CHANGE IN DISAGREEMENTS WITH
ACCOUNTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
51
|
||
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
|
51
|
||
DIRECTOR, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS
|
51
|
||
Background of Directors,
Executive Officers, Promoters and Control Persons
|
52
|
||
Executive Compensation
|
53
|
||
Directors' Compensation
|
54
|
||
Stock Option Grants
|
54
|
||
Employment Agreements
|
55
|
||
Code of Ethics
|
55
|
||
Indemnification
|
55
|
||
MARKET FOR COMMON STOCK AND
RELATED SHAREHOLDER MATTERS
|
55
|
||
DESCRIPTION OF SECURITIES TO BE
REGISTERED
|
56
|
||
Common Stock
|
56
|
||
Dividend Policy
|
56
|
||
Preferred Stock
|
56
|
||
Market for Securities
|
57
|
||
Equity Compensation Plan
Information
|
57
|
||
Holders
|
57
|
||
Reports
|
57
|
||
Transfer Agent
|
57
|
||
AVAILABLE INFORMATION
|
57
|
||
INTERESTS OF NAMED EXPERTS AND
COUNSEL
|
58
|
||
TRANSACTIONS WITH RELATED
PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
|
58
|
||
LEGAL PROCEEDINGS
|
60
|
||
DISCLOSURE OF COMMISSION
POSITION ON INDEMNIFICATION
|
60
|
||
LEGAL MATTERS
|
61
|
3
PROSPECTUS
SUMMARY
The
following summary is supported by reference to the more detailed information and
the financial statements, including the notes thereto, appearing elsewhere in
this Prospectus. Each prospective investor is urged to read this Prospectus in
its entirety.
The
purchase of the securities offered through this prospectus involves a high
degree of risk. See section entitled "Risk Factors" on pages 8 -18.
As used
in this prospectus, unless the context otherwise requires, "we", "us", "our"
“the Company” or "Asgaard" refers to Asgaard Media, a Nevada corporation, "SEC"
refers to the United States Securities Exchange Commission, "Securities
Act" refers to the Securities Act of 1933, as amended, and "Exchange Act" refers
to the Securities Exchange Act of 1934, as amended.
Asgaard
Media
Asgaard
Media was incorporated in the State of Nevada on January 8, 2008. Asgaard’s year
end is December 31. We are a development stage enterprise. Our principal
office is located at 2550 East Desert Inn Road, Las Vegas, Nevada 89121.
Our telephone number is (702 858-3456 and our e-mail contact is info@asgaardmedia.com
. Our website can be viewed at www.asgaardmedia.com.
Our plan
of operation is to develop, finance and produce feature length motion pictures
with an estimated production budget of approximately $3,000,000 to $10,000,000
each, for domestic and foreign theatrical distribution and for licensing on
pay/cable, network and syndicated television, on video cassettes and discs and
in other media. To date, our business activities have been limited to
organizational matters, acquiring intellectual property rights, and
pre–production, and the preparation and filing of the registration statement of
which this prospectus is a part.
To date,
we recently commenced our planned principal operations by acquiring media rights
and screen plays for certain projects described herein and have begun
pre-production on two of our planned projects. However, other than our
intellectual property, we have no significant assets. In order to continue
as a going concern we must successfully accomplish the following
tasks:
|
·
|
Obtain capital through the sale
of our common stock through this
offering;
|
|
·
|
Produce feature length films from
our screenplays;
|
|
·
|
Enter into distribution
agreements to successfully market and distribute our properties;
and
|
|
·
|
Continue to acquire screenplays
and media rights in other
properties.
|
There can
be no guarantee or assurance that we will be able to successfully accomplish one
or all of these tasks in the future.
Investors
should be aware that our Auditors have issued a going concern opinion. This
means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next 12 months. Our auditor's opinion is based
on our suffering initial losses, having limited operations, and having limited
working capital. Our only other source for cash at this time is investments by
others in our Company. We must raise cash to implement our projects and begin
our operations.
To date
the we have been able to work within the funds that we have available some of
which have come from our investors and others of which have come from
direct capital contributions from our founder Wm. Alan Pezzuto. The
minimum cost we expect to incur over the next 12 months relate to our rent,
telephone, audit, edgarization and filing fees. We estimate these expenses to be
approximately $25,000. This would not, however, allow us to continue with
production activities and the Company’s actual operations would cease until we
were able to secure additional funding.
4
If and
when we are able to accomplish the above tasks, in order to achieve and maintain
profitability in the future we must produce commercially successful motion
picture films based upon the screenplays. Investors must be aware that we
do not have sufficient capital to independently finance our own productions. If
we are unable to secure additional financing we would be unable to produce any
films, in which case, we would be forced to suspend operations. We have no
plans, arrangements or contingencies in place in the event that we cease
operations, in which case investors would likely lose their entire
investment.
We have
no operating history on which to base an evaluation of our business and
prospects. Prospective purchasers of our stock should be aware of the
difficulties normally encountered by new film production companies and the high
rate of failure of such enterprises. These risks include without
limitation the high probability that we will be unable to produce a commercially
successful film. If we are unable to profit from the production of motion
pictures, our business will most likely fail and any investment made into our
common stock would be lost.
We
currently have no employees other than our four officers and directors. We
do not intend to hire any employees within the next 6 months. However, if we are
successful in raising capital through this offering, we intend to engage certain
independent contractors to assist us in the implementation of our business
plan. Our current President works on a part time basis for the
Company.
Potential
investors should be aware that our officers and directors own 7,200,000 shares,
representing 17.8% of the current issued and outstanding common shares of the
Company. Wm. Alan Pezzuto, prior to this offering owns 5,000,000,
Stephen Sallus owns 2,000,000, Alice M. Matano owns 100,000, Erin Giudice owns
100,000 shares of our common stock; and if and when, we are able to sell
all of the 10,000,000 offered shares, they would still own approximately 14.3%
of our issued and outstanding common stock. The 2,500,000 common shares
being registered under this registration statement are being registered please
refer to the section “ Selling
Securities Holders ” for a complete list of selling shareholders, their
pre and post offering ownership and percentages on Page 24 .
Further,
potential investors should also understand that in addition to the direct
ownership of the shares, that affiliates of the Company own an additional 52.44%
of our common stock giving the Company’s officers, directors and affiliates
collectively 70.24% ownership of our common stock prior to this offering. If all
existing shareholders sell the 2,500,000 and none of the existing officers or
directors purchase them, our officers and directors would still own 13.4% of our
the issued and outstanding common shares. Further, if all 10,000,000 shares that
are the subject of this offering are sold, and assuming none of those shares are
purchased by existing officers directors or affiliates and that do not sell any
of their current holdings, our current officers directors and affiliates would
hold 52.44% of the issued and outstanding shares.
Since
our inception on January 8, 2008 to September 30, 2009, we have not generated
any revenues and have a net loss of $621,722. In the event we raise at
least a minimum of $50,000 sought in this offering, we expect to be able to
continue our business for at least the next 12 months. Although no
assurances can be given that we will be successful in raising $25,000,000, it is
our hope that we will generate revenue from our film and television
projects within the first twelve months after raising $25,000,000 that we are
seeking through this offering. In the event we do not raise at least
$50,000, we will not be able to continue pursuit of our business plan.
Further, if the Company is only successful in raising the minimum of
$50,000, after deducting estimated offering expenses, there will only be $20,000
remaining, which may not allow the Company to successfully implement any
business plans, thereby resulting in a substantial or complete loss to
investors. In light of this, our independent auditors have expressed substantial
doubt about our ability to continue as a going concern in the independent
auditors' report to the financial statements included in the registration
statement, of which this prospectus is a part.
As of the
date of this prospectus, Asgaard has 40,537,000 shares of $0.001 par value
common stock issued and outstanding which is owned by sixty one (61)
shareholders. If the maximum 10,000,000 are subscribed to there will be
50,537,000 shares issued and outstanding.
5
The
Offering
Asgaard
Media is offering on a self-underwritten basis 10,000,000 shares of the common
stock at a price of $2.50 per share. Selling shareholders of our common
stock may offer 2,500,000 shares at the same price; and the Company will receive
none of the proceeds from the sale of these shares and the proceeds will go
directly to the selling shareholders. This is a fixed price at which the
selling security holders may sell their shares until our common stock is quoted
on the OTC Bulletin Board, at which time the selling shareholders may sell their
shares at prevailing market prices or privately negotiated prices. Assuming
our shares are quoted on the OTC Bulletin Board, the Company will continue to
sell newly issued shares at $2.50 per share until the earlier of (i) all the
newly issued shares offered hereunder are sold or (ii) until this offering
terminates, whichever is sooner. The proceeds from the
sale of the new shares to be issued in this offering will be payable to
"Standard Transfer & Trust Company, Inc. Escrow Account fbo Asgaard Media"
and will be deposited in a non-interest bearing bank account until the
depository bank determines the funds to be good. All subscription
agreements and checks are irrevocable and should be delivered to Standard
Transfer & Trust Company, Inc.. Failure to do so will result in checks
being returned to the investor who submitted the check.
The
offering shall terminate on the earlier of (i) the date when the sale of all
10,000,000 shares is completed (ii) the offering is terminated by action of the
Board of Directors, or (iii) up to 270 days from the date of this prospectus,
_______________, 2010. Notwithstanding the forgoing, selling shareholders may
sell their 2,500,000 shares under this registration statement as long as it is
effective, current and the offering remains open for the sale of the Company’s
10,000,000 shares. Thereafter, selling shareholders would need to find an
appropriate exemption from registration in order to sell their shares.
Assuming this registration statement is effective, the Company is under no
obligation to keep is current for the selling shareholders. Asgaard will
deliver stock certificates attributable to shares of common stock purchased
directly to the purchasers within 30 days of the close of the offering. In the
event that the Company does not raise the funds necessary to implement its
business plan during the offering period, but is successful in raising at least
$50,000, it intends to modify its business plan to produce industrial or
educational films, which may be produced for as little as $15,000,
Investors need to understand that the number and types of film projects
available to the Company are directly related to the funding it receives. If the
Company were to receive $200,000 it could still produce one feature film by
significantly amending its operating budget. If the funds received were
less than $200,000, the Company would need to pursue the production of
educational and industrial films until it was able to finance a feature film.
However, if the Company is only successful in raising the minimum of $50,000,
after deducting estimated offering expenses, there will only be $20,000
remaining, which may not allow the Company to successfully implement any
business plans thereby resulting in a substantial or complete loss to
investors.
The
offering price of the common stock has been arbitrarily determined and bears no
relationship to any objective criterion of value. The price does not bear
any relationship to our assets, book value, historical earnings or net
worth.
Asgaard
Media will apply the proceeds from the offering to pay for costs associated with
the reporting responsibilities of an SEC reporting company, computer hardware
& software, website development & maintenance, marketing, office
furniture, salaries (if any), office supplies, acquisition of screenplays and
general working capital.
Asgaard
Media’s Transfer Agent is Standard Transfer & Trust Company, Inc. 2980 South
Rainbow Boulevard, Suite 220H, Las Vegas, Nevada 89164. The Company’s
phone is (702 858-3456.
The
purchase of the common stock in this offering involves a high degree of risk.
The common stock offered in this prospectus is for investment purposes
only and currently no market for our common stock exists. Please refer to
"Risk Factors" on page 8 and "Dilution" on page 20 before making an
investment in our stock.
Summary
of Current Projects
Currently
we have three film projects and two television series for which we have acquired
the rights plan to produce if we are able to raise the funds that are the
subject of this offering. These projects and series were developed by our CEO,
Wm. Alan Pezzuto and were assigned to the Company. If we are unable to secure
all of the funds that are the subject of this offering, me may not be able to
produce them or may need to reduce our projected budgets. A reduction in
the budget associated with a project or the series would adversely affect the
quality of the product produced and would likewise have a negative impact on the
potential revenues to be derived, if any. The following is a brief description
of each of the film projects and the television series.
Mountains
of Trouble
The
story of a precocious eight year old girl who must learn an understanding of
responsibility and accountability while learning her place among her siblings
and society. It is a coming of age, action adventure film, with “buddy film”
aspects.
Taken
By Storm
This
is story about a 47 year old former special ops agent who had just settled down
and married. His plans of domestic peace are interrupted when he receives a
packet of false identification documents bearing his picture. Anthony Tempesta
has been called back on assignment in this action adventure filled with twists
and turns.
Widows
Walk
This
is the psychological thriller based around an almost thirty-five year old woman
who, having made seemingly bad decisions in the past, discovers she has room to
make many more worse decisions in the future.
Longshot
This
is a metaphysical psycho thriller. When Bergstrom Long, dies he finds that
passing over the road between heaven and hell doesn’t come with a map so he
returns to life to find directions, hopefully the right ones.
Community
Challenge
This
is a show that follows a community based reality experience created to get
through and benefit a community form natural disaster and
adversity.
Summary
of Selected Financial Information
The
following table sets forth summary financial data derived from Asgaard Media’s
financial statements. The data should be read in conjunction with the financial
statements and the related notes thereto, as well as the "Management's Discussion and Plan of
Operations" included elsewhere in this prospectus.
6
Financial
Data Summary
Statements of Operations Data
|
January 8,
2008 (Inception)
To
September 30,
2009
|
|||
Total
Revenues
|
$
|
0
|
||
General
and Administrative Expense Professional and Accounting
Fees
|
621,722
|
|||
Total
Expenses
|
621,722
|
|||
Net
Income (Loss)
|
$
|
(621,722
|
)
|
|
Per
Share Information Weighted average number of Common Shares
Outstanding:
|
40,528,834
|
|||
Net
Income (Loss) per Share
|
$
|
(0.015
|
)
|
Spetember
30,
2009
|
||||
Balance
Sheet Data
|
||||
Working
Capital
|
$
|
33,495
|
||
Total
Assets
|
$
|
33,495
|
||
Total
Liabilities
|
$
|
0
|
||
Stockholders’
Equity
|
$
|
33,495
|
7
RISK
FACTORS
An
investment in our common stock involves a high degree of risk and should be
considered a speculative investment. You should carefully consider the risks
described below and the other information in this prospectus. If any of the
following risks occur, our business, operating results and financial condition
could be seriously harmed. The trading price of our common stock could decline
due to any of these risks, and you could lose all or part of your
investment. We cannot assure any investor that we will successfully
address these risks. Prospective investors should carefully consider the
following risk factors:
Risk Factors Relating to
Asgaard Media
We have a limited history of
operations and unless we are able to successfully execute our business plan, our
business and operating results will suffer resulting in the complete failure of
our business. Our operations are subject to all of the risks inherent in
the establishment of a new business. The likelihood of our success must be
considered in light of the risks, problems, expenses and delays frequently
encountered in connection with the formation of a new business in general, as
well as the highly competitive environment in which the business is operating.
To address these risks, we must, among other things, continue to respond to
competitive developments, attract, retain and motivate qualified personnel,
commercialize products, and implement and successfully execute our marketing
strategy and advertising sales strategy. There can be no assurance that we will
be successful in addressing such risks.
The Company’s auditor has substantial
doubts as to Asgaard Media’s ability to continue as a going concern. Our
auditor's report on our December 31, 2008 financial statements expresses an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. The Company's founder and CEO contributed capital to the
Company totaling $246,202. These funds were not made in the form of loans or
stock purchases and as such were treated as contributions to capital.
There are no contractual rights or obligations with respect to these
funds. The contributions were made to advance the interests of the
Company. However, none of our officers or directors have any obligation to
continue to make such contributions in the future and may be unable or
unwilling to loan or advance any capital to Asgaard. As such, there can be no
assurances that the Company with have sufficient capital continue its current
operations or implement its business plan which would result in losses to
investors. See “December 31,
2008 Audited Financial Statements - Auditors Report."
Because
the Company has been issued an opinion by its auditors that substantial doubt
exists as to whether the company can continue as a going concern, it may be more
difficult for the company to attract investors. Asgaard Media incurred $621,722
in net loss for the period from inception to September30, 2009 and we have no
revenue. Our future is dependent upon our ability to obtain financing and upon
future profitable operations from the sale of our products. We may seek
additional funds through private placements of our common stock. Our financial
statements do not include any adjustments relating to the classification of
recorded assets, or the amounts of and classification of liabilities that might
be necessary in the event we cannot continue in existence.
We will incur increased costs and
demands upon management as a result of complying with the laws and regulations
affecting public companies, which could harm our operating results.
As a public company, we will incur significant additional legal,
accounting and other expenses that we did not incur as a private company,
including costs associated with public company reporting requirements. We also
will incurred and will incur costs associated with current corporate governance
requirements, including requirements under Section 404 and other provisions
of the Sarbanes-Oxley Act, as well as rules implemented by the Securities and
Exchange Commission, or SEC, and the exchange on which we list our shares of
common stock issued in this offering. The expenses incurred by public companies
for reporting and corporate governance purposes have increased dramatically in
recent years. We expect these rules and regulations to substantially increase
our legal and financial compliance costs and to make some activities more
time-consuming and costly. We are unable to currently estimate these costs with
any degree of certainty. We also expect these new rules and regulations may make
it more difficult and more expensive for us to obtain director and officer
liability insurance, and we may be required to accept reduced policy limits and
coverage or incur substantially higher costs to obtain the same or similar
coverage previously available. As a result, it may be more difficult for us to
attract and retain qualified individuals to serve on our board of directors or
as our executive officers. Currently we do not have a system of checks and
balances in place covering the our financial operations and investors will bear
the economic risk associated with the lack such oversight
We do not intend to use unionized
labor or seek to have any of our projects backed by completion bonds
. Our business plan is
based on our position as a low to mid budget film producer. As part of that plan
we intend to use only non-union talent and service providers. While the may save
costs it may also limit the availability of talent and service providers because
many “big name” actors and established service providers have significant
limitations on their ability to work on non-union film projects. As such our
projects will not have the draw and audience appeal that well known actors could
bring to a project.
Further,
we do not intend to use completion bonds to insure that our projects are
completed on time or on budget. Thus if a particular project is not completed on
time or on budget, there will be no third party oversight to “take control” of a
project. If we underestimate costs or timing our projects may not be
economically viable and/or we may not be able to complete them which could
result in losses to investors.
8
Because
we do not have an audit committee, shareholders will have to rely on the
directors, who are not independent, to perform these functions.
We do not
have an audit or compensation committee comprised of independent directors.
These functions are performed by the board of directors as a whole. The members
of the Board of Directors are not independent directors. Thus, there is a
potential conflict in that the board members are also engaged in management
and participates in decisions concerning management compensation and audit
issues that may affect management performance.
To date we have not generated
revenues from operations and we may have additional capital requirements to
continue our operations but they might not be available to us on favorable terms
or at all, and if unavailable our ability to run our business will be
impaired. As of the date of this Prospectus we have limited working
capital. As a result, it is impossible to expand our operations and we are
totally dependent upon this offering to sustain and grow our business. Although
this offering contemplates raising $25,000,000 there is no assurance that this
amount can be raised. Only $50,000 of the funds received will be held in escrow
and thereafter will have immediate use of all funds received. If we were to only
receive the minimum amount for this offering, will would not have sufficient
funding to even start a project. Assuming the sale of all 10,000,000 shares of
common stock, the proceeds will be utilized over the next twelve months as
specified in “ Use of
Proceeds .” If we are unable to generate sufficient revenues to cover
operating expenses or raise additional funds, we will unlikely establish or
maintain our business operations. We currently have no other plans or
arrangements to raise capital for our business except for this
offering.
Early failures would impair our
ability to attract additional capital. Our business model
contemplates success from our first productions. That is, we are anticipating
revenue from our productions to finance additional productions. In the event
that our early productions are not profitable, we will need to raise additional
capital from outside investment. There are no guarantees that we will be able to
raise such capital, or that if we are able to, that it will be on favorable
terms. Early failures are likely to make such additional financing more
“expensive” because investors are not likely to be willing to pay for “past
mistakes.”
We will not receive revenue from our
film production until production is completed and even if completed, there are
no assurances that we will receive any revenue. Upon completion of
this offering, we intend to develop several pre-production packages for feature
films that we intend to produce. The production and distribution of a
motion picture is a time consuming process. Pre-production on a picture
will generally extend for a minimum of two to three months or more.
Principal photography may extend for several weeks or more.
Post-production may extend from three to four months or more. Distribution and
exhibition of motion pictures generally may continue for years before any
revenue is realized or generated, if at all.
We will not be able to completely
diversify to mitigate the risks associated with the production of each film we
intend to produce. Particularly as produced by independent filmmakers,
each motion picture is a separate business venture with its own management,
employees and equipment and its own budgetary requirements. Although we are
attempting to minimize this by maintaining a slate of projects, there are
substantial risks associated with film production, including death or disability
of key personnel, other factors causing delays, destruction or malfunction of
sets or equipment, the inability of production personnel to comply with
budgetary or scheduling requirements and physical destruction or damage to the
film itself. Significant difficulties such as these may materially
increase the cost of production or may cause the entire project to be abandoned.
Because we intend to rely on the same personnel for more than one film project,
it will be impossible for us to completely diversify in a manner to mitigate
these potential risks.
9
Our film projects may not be accepted
by the market and our business may fail as a direct result of such lack of
market acceptance. The ultimate profitability of any motion picture
depends upon its audience appeal in relation to the cost of its production and
distribution. The audience appeal of a given motion picture depends, among other
things, on unpredictable critical reviews and changing public tastes and such
appeal cannot be anticipated with certainty. If certain segments of the viewing
public do not like, are willing to pay for, or otherwise approve of our
productions, our business may fail.
The premature abandonment of projects
may result in losses to investors and impair our overall results of
operations. The production or distribution of our film projects
may be abandoned at any stage if further expenditures do not appear commercially
feasible, with the resulting loss of some or all of the funds previously
expended on the development, production or distribution of the our film
projects, including funds expended in connection with the development of any
screenplays and the pre-production of the projects. In the event that we
determine that it is in the best interest interests of our shareholders to
abandon a project, it is unlikely that we will be able to recoup any of our
costs.
Cost overruns will affect our results
of operations and may cause the failure of our business. The costs of
producing motion pictures are often underestimated and may be increased by
factors beyond our control. Such factors may include weather conditions,
illness of technical and artistic personnel and requirements, labor disputes,
governmental regulations, equipment breakdowns and other production
disruptions. While we intend to engage production personnel who have
demonstrated abilities to complete films within assigned budgets, the risk of a
film running over budget is always significant and may have a substantial
adverse impact on our profitability.
We are dependent on our officers,
directors and employees for our success. Failure to retain such personnel
could adversely affect the Company. We may initiate a key-person insurance
policy for Wm. Alan Pezzuto; and may initiate key person life insurance on
additional officers and possibly other members of our management team, but as of
yet, have not secured such insurance. Our future operations will depend, in
part, on our ability to attract, employ and retain additional qualified
employees. No assurance can be given that we will be able to attract or retain
such personnel.
We rely on consultants and if we are
unable to retain these or other similarly qualified individuals, we may not be
able to carry out our business operations. We are dependent upon service
providers, particularly actors, editors, writers, and camera crews. Loss of
their services could adversely affect our business and our ability to maintain
our operations or develop new products. We have not entered into any employment
or non-competition agreements with these individuals and do not plan to in the
future. Our success will depend on our ability to attract and retain qualified
personnel. If we cannot attract and retain the necessary individuals our
operating results will suffer.
Costs associated with our business,
including production and input costs are not fixed and might increase, creating
uncertainty about our ability to meet our plan of operations. We have not
established long-term contracts with our consultants or other third party
suppliers we intend to rely on. The lack of long-term contracts could result in
an increase in what we pay these individuals for their services. An increase in
the production costs will reduce our margins and might make our projects
uneconomical leading to the failure of our business.
10
We are in development stage and have
conducted no market research on the viability of our products. There is no
guarantee that we will be able to sell enough of our products to generate a
profit and failure to become profitable will result in the failure of our
business. The market for our products is limited in scope and there is no
assurance that our products will generate market acceptance and result in sales.
We have developed the products with no limited market research and there is no
assurance that we will be able to respond to the rapidly evolving markets in the
entertainment industry. The inability to sell our products will result in the
failure of our business.
Our products may infringe on other
patented, trademarked or copyrighted products. Litigation arising out of
infringement or other commercial disputes could cause us to incur expenses and
impair our competitive advantage . We cannot be certain that our products
will not, infringe upon patents, trademarks, copyrights or other intellectual
property rights held by third parties. In addition, since we rely on third
parties to help us develop some of our products, we cannot ensure that
litigation will not arise from disputes involving these third parties. We may
incur substantial expenses in defending against prospective claims, regardless
of their merit. Successful claims against us may result in substantial monetary
liability, significantly impact our results of operations in one or more
quarters or materially disrupt the conduct of our business.
Our
success depends in part on our ability to obtain and enforce intellectual
property protection for our products, to preserve our trade secrets and to
operate without infringing the proprietary rights of third parties, as
previously stated. The validity and breadth of claims covered in our copyrights
and trademarks that we intend to file involve complex legal and factual
questions and, therefore, may be highly uncertain. No assurances can be given
that any future copyright, trademark or other applications will be issued, that
the scope of any future intellectual property protection will exclude
competitors or provide competitive advantages to the Company, that any of our
copyrights or trademarks will be held valid if subsequently challenged, that
others will not claim rights in, or ownership of, the potential copyrights or
trademarks or other proprietary rights held by us or that our intellectual
property will not infringe, or be alleged to infringe, the proprietary rights of
others. Furthermore, there can be no assurance that others have not developed or
will not develop similar products. In addition, whether or not additional
intellectual property protection is issued to the Company, others may hold or
receive intellectual protection covering products that were subsequently
developed by the Company; and no assurance can be given that others will not or
have not independently developed or otherwise acquired substantially equivalent
intellectual property.
The
Company’s success is dependent on current management, who may be unable to
devote sufficient time to the development of Asgaard Media’s business plan,
which could cause the business to fail.
Asgaard
Media is heavily dependent on the management experience of our officers,
directors and advisors, and in particular, the experience Wm. Alan Pezzuto
brings to the Company. There is currently no employment contract by and between
any officer/director/employee of the Company. If the Company lost either
officer/director, it would negatively impact and delay operations and there
is no assurance that suitable replacements could be found. Additionally, all of
our officers and directors are employed outside of Asgaard Media. Some of
them will only be able to devote a limited amount of time, to the development of
Asgaard’s business plan unless this offering is successful. If management is
required to spend additional time with their outside employment, they may not
have sufficient time to devote to Asgaard Media and we would be unable to
develop our business plan resulting in the business failure. See “Use of
Proceeds.”
11
Risks Relating to the Motion
Picture Industry
We face intense competition in the
market from larger more established companies that offer a wider array of
products. These competitors will make it difficult for us to offer competing
products and grow our business. In the production phase, competition will
affect our ability to obtain the services of preferred performers and other
creative personnel. We will be competing with the producers of other films
in arranging for distribution in the domestic theatrical marketplace and in
other markets and media. In the distribution phase, competition will limit
the availability of theaters required for the successful distribution of our
products. These products will be competing directly with other motion
pictures and indirectly with other forms of public entertainment. Companies that
are larger, better funded, and have longer operating histories dominate our
industry. We may not be able to compete successfully against our future
competitors and competition could have a material adverse effect on our
business, results of operations and financial condition. Our potential
competitors may develop superior products and services that achieve greater
market acceptance than ours. Accordingly, failure of our marketing campaign to
expand our distribution channels will result in the failure of the
business.
Industry changes may have a negative
impact on our operations. The entertainment business, in general and the
motion picture business in particular, are undergoing significant changes,
primarily due to technological developments. These developments have
resulted in the availability of alternative forms of leisure time entertainment,
including expanded pay and basic cable television, syndicated television, video
cassettes, video discs, digital video disks (DVDs) and video games. During
the last several years, revenues from licensing of motion pictures to network
television have decreased (and fewer films are now being licensed for any price
to network television), while revenues from pay television, DVDs and the
Internet have increased relative to network. The level of theatrical
success remains a critical factor in generating revenues in these ancillary
markets. It is impossible to accurately predict the effect that these and
other new technological developments may have on the motion picture industry (
See "BUSINESS-Motion
Picture Industry Overview"). These uncertainties as well as others outlined
herein may have a negative impact on our operations and could result in the
complete failure of our business.
Our success depends on our ability to
develop, maintain and increase our sales distribution channels. The inability to
establish distribution channels, may severely limit our growth prospects.
Our business success is completely dependent on our ability to develop, maintain
and expand our distribution channels. Revenues derived therefrom represent vital
funds for our continued operations. The loss or damage of any of our business
relationships and or revenues derived therefore will result in the inability to
market and produce our products.
Any disruptions or failures on the
distribution of our films may result in the failure of our business. The
profitable distribution of a motion picture depends in large part on the
availability of one or more capable and efficient distributors who are able to
arrange for appropriate advertising and promotion, proper release dates and
bookings in first-run and other theaters. We intend to enlist a public
relations firm to create additional publicity for our projects; however, no such
arrangement has yet been made. Presently, we have no distribution
arrangements and there can be no assurance that profitable distribution
arrangements will be obtained for our projects or that our projects can or will
be distributed profitably. The members of our board of directors have
extensive experience in self-distribution or “Four Walling,” however this, in
and of itself, cannot guarantee successful distribution. Any disruptions,
delays or failures in this aspect of our business could result in the failure of
our business.
12
Our success may be dependent on
foreign markets. Many films are released each year that are not
commercially successful and fail to recoup their production costs from United
States theatrical distribution. Foreign and ancillary markets have,
therefore, become increasingly important. As such we may rely on foreign
and ancillary markets for our revenue. Although both foreign and ancillary
markets have grown, neither provides a guarantee of revenue. Licensing of
a motion picture in the ancillary markets is particularly dependent upon
performance in theatrical distribution. Thus, if one of our motion
pictures is not an artistic or critical success or if, for any reason, it is not
well-received by the public, it may be a financial failure. There are no
assurances that all of our films will not be financial failures, resulting in a
complete failure of our business.
We
operate in a regulated industry and changes in regulations or violations of
regulations may result in increased costs or sanctions that could reduce our
revenues and profitability.
The
motion picture industry is subject to extensive and complex federal and state
laws and regulations related to safety, conduct of operations, payment for
services and payment for creative talent. If we fail to comply with the
laws and regulations that are directly applicable to our business, we could
suffer civil and/or criminal penalties or be subject to injunctions and delays
in production schedules orders.
Foreign distribution rules and
regulations may have an adverse impact on our operations. Foreign
distribution of a motion picture (i.e., outside the United States and Canada)
may require the use of various foreign distributors. Some foreign
countries may impose government regulations on the distribution of films.
Also revenues derived from the distribution of the Pictures in foreign
countries, if any, may be subject to currency controls and other restrictions
that may temporarily or permanently prevent the our ability to receive or
account for such revenue. To the extent that we have made the economic decision
to pursue a particular film project based upon foreign distribution, our
operations may suffer.
Risk Factors Relating to
This Offering
Our Business Plan sets forth the use
of proceeds assuming minimum proceeds of $6,500,000, however, the Company has
established a minimum offering of $50,000. If the Company were only to
receive between $50,000 and $200,000, we would need to amend our business plan
to produce educational or industrial films. If we were to receive at least
$200,000, we could produce one feature film by reducing the operating budget. To
the extent that quality suffers due to lack of funding. Our business may suffer
as well. The number and types of film projects available to the Company
are directly related to the amount and timing of funds that are available to the
Company. Investors face the risk that we may receive the minimum of
$50,000, believing that there will be enough additional funds following to allow
us to produce a feature film. If this were to happen we would not pursue
an industrial or educational film and would instead continue with preproduction
of our first feature film; and to the extent that we misjudged the timing or
amount of additional financing, funds may not then be available to allow us to
amend our business plan. If we did not receive additional funding and were
unable to amend our business plan because we continued with preproduction of a
feature film, investors funds could be lost because we were unable to complete a
project. Further, if the Company is only successful in raising the minimum
of $50,000, after deducting estimated offering expenses, there will only be
$20,000 remaining, which may not allow the Company to successfully implement any
business plans, thereby resulting in a substantial or complete loss to
investors.
Even if our projects are successful,
we may not be successful and our investors may still lose their
investment. A motion picture typically goes from the producer to
the distributor, who in turn, may send it to territorial sub-distributors, who
send it to theatrical exhibitors. The box office receipts generated by a
motion picture travel this same route in reverse. The exhibitor takes a
percentage and sends the balance to the sub-distributor, who takes a cut and
sends the balance to the distributor, who takes a cut and sends the balance to
the producer. The problem for the private investors with this system is
that such investors, who have had their money at risk for the longest time, are
at the tail end of the box office receipts chain. Thus, even if we are
successful in negotiating a distribution deal, we will still rely heavily on a
participation in the film's net profits, which means we will be last in line to
benefit from such a revenue stream, if any.
Our shares are not currently traded
on any stock market and there is no assurance that shares purchased pursuant to
this offering can be resold and if resold will be at prices at or above the
offering price. The offering price of $2.50 per share was arbitrarily
determined and bears no relationship to our earnings, book value, or any other
recognized criteria of value. At the present time there is no public market for
our common stock and we cannot predict the extent to which investor interest in
us will lead to the development of an active, liquid trading market. Investors
should not consider investing in this offering unless they can afford the
complete loss of their investment.
13
Our current shareholders are
simultaneously offering 2,500,000 of their own common shares through a secondary
offering in conjunction with the company’s 10,000,000 common share offering,
which may negatively impact the company’s success in the offering of its common
stock. Selling shareholders are offering a combined 2,500,000
common shares through this offering. There are no agreements in place to
prevent any of them from selling their common shares once they are
registered. If all of them offer and sell their shares before the
Company has reached its minimum threshold of 20,000 common shares it may prevent
the Company from ever obtaining the minimum requirement resulting in the
business failing.
Our officers and directors and
affiliates control a significant amount of our stock, allowing them to influence
the Company's future direction. Our directors, officers and affiliates
will directly own or control, assuming 10,000,000 Shares are sold, approximately
52.44% of the outstanding shares of Common Stock on an undiluted basis. As
a result, the directors, officers and affiliates will have absolute control over
all matters requiring shareholder approval, including the power to elect
directors and approve significant corporate transactions. This in turn will
influence the policies of the Company and may have the effect of delaying or
preventing a change in control. Please refer to “ Principal Shareholders ” on page 51
.
Investors in this offering will bear
a substantial risk of loss due to immediate and substantial dilution. The
present owners of each of the Company’s issued and outstanding securities
acquired such securities at a cost substantially less than that which the
investors in this offering will pay. Upon the sale of the shares offered
hereby, the investors in this offering will experience an immediate and
substantial “Dilution”. Therefore, the investors in this offering will
bear a substantial portion of the risk of loss. Additionally, sales of
securities of the Company in the future could result in further
“dilution.”
"Dilution"
represents the difference between the offering price of the common stock of the
Company and the net book value per share of common stock immediately after
completion of the offering. "Net Book Value" is the amount that results
from subtracting total liabilities of the Company from total assets. In
this offering, the level of dilution is relatively substantial as a result of
the low book value of the Company's issued and outstanding stock. The net
book value of the Company on September 30, 2009 was $33,495 or $0.00082 per
share. Assuming all shares offered herein are sold, and given effect to
the receipt of the maximum estimated proceeds of this offering from
shareholders, the net book value of the Company will be $25,033,405 or
$0.495534 per share. Therefore, the purchasers of the Common Stock
in this offering will suffer an immediate and substantial dilution of
approximately $2.00465 per share, while the present stockholders of the Company
will receive an immediate and substantial increase of $2.499173 per share
in the net tangible book value of the shares they hold. This will result
in an 80.19% dilution for purchasers of stock in this offering (assuming the
maximum offering 10,000,000 shares is obtained. Please refer to "Dilution" on page
15).
We will incur significant costs as a
result of operating as a reporting company, and our management will be required
to devote substantial time to compliance initiatives. Upon the
effectiveness of the registration statement of which this prospectus forms a
part, we will incur significant legal, accounting and other expenses as a
fully-reporting public company. Moreover, the Sarbanes-Oxley Act of 2002
(the "Sarbanes-Oxley Act"), as well as new rules subsequently implemented by the
SEC, have imposed various new requirements on public companies, including
requiring changes in corporate governance practices. Our management will
need to devote a substantial amount of time to these new compliance
initiatives. Moreover, these rules and regulations will increase our legal
and financial compliance costs and will make some activities more time-consuming
and costly.
14
The
Sarbanes-Oxley Act also requires, among other things, that we maintain effective
internal controls for financial reporting and disclosure controls and
procedures. In particular, we must perform system and process evaluation
and testing of our internal controls over financial reporting to allow
management and our independent registered public accounting firm to report on
the effectiveness of our internal controls over financial reporting, as required
by Section 404 of the Sarbanes-Oxley Act. Our testing, or the subsequent
testing by our independent registered public accounting firm, may reveal
deficiencies in our internal controls over financial reporting that are deemed
to be material weaknesses. Our compliance with Section 404 will require
that we incur substantial accounting expense and expend significant management
efforts. Moreover, if we are not able to comply with the requirements of
Section 404 in a timely manner, or if we or our independent registered public
accounting firm identifies deficiencies in our internal controls over financial
reporting that are deemed to be material weaknesses, the market price of our
stock could decline, and we could be subject to sanctions or investigations by
the SEC or other regulatory authorities, which would require additional
financial and management resources. Further, because we only have four
officers and directors, it will be difficult to establish and maintain
acceptable internal controls over financial reporting. Internal controls
are effected by an organization’s structure, work and authority flows, people
and management information systems and are designed to, among other things
direct and monitor an organization’s resources. They also play an integral role
in detecting fraud and protecting physical and intangible resources. To
the extent that we have a limited number of officers, directors and employees,
our ability to implement checks and balances in financial reporting as a
practical matter is severely limited.
Participation
is subject to risks of investing in micro-capitalization companies.
Asgaard
Media believes that certain micro capitalization companies have significant
potential for growth, although such companies generally have limited product
lines, markets, market shares and financial resources. The securities of
such companies, if traded in the public market, may trade less frequently and in
more limited volume than those of more established companies.
Additionally, in recent years, the stock market has experienced a high degree of
price and volume volatility for the securities of micro capitalization
companies. In particular, micro capitalization companies that trade in the
over-the-counter markets have experienced wide price fluctuations not
necessarily related to the operating performance of such companies.
The
Company is selling the shares offered in this prospectus without an underwriter
and may not be able to sell any of the shares offered herein.
The
common shares are being offered on our behalf by our officers, on a best-efforts
basis. No broker-dealer has been retained as an underwriter and no
broker-dealer is under any obligation to purchase any common shares. There are
no firm commitments to purchase any of the shares in this offering.
Consequently, there is no guarantee that the Company will be capable of
selling all, or any, of the common shares offered hereby. Assuming that we are
successful in self registration and are able to find a market maker to make a
market in our stock, of which there can be no assurance, our securities will
likely be subject to the penny stock rules, which apply generally to equity
securities with a price of less than $5.00 per share, other than securities
registered on certain national exchanges or quoted on the NASDAQ system. The
penny stock rules reduce the level of trading activity and the secondary market
for a security that becomes subject to the penny stock rules. Therefore,
investors in this Offering may find it more difficult to sell their
Shares.
15
Investors
cannot withdraw funds once invested and will not receive a refund.
Once the
minimum 20,000 shares are sold investors will not have the right to withdraw
invested funds. Subscription payments will be released from the escrow
account to Asgaard Media if the Subscription Agreements are in good order and
the investor is accepted as an investor by the Company. Therefore, once the
minimum shares are sold, investors will not have the use or right to return of
such funds during the remaining Offering period or thereafter.
Asgaard
Media does not plan to pay dividends in the foreseeable future, and, as a
result, stockholders will need to sell shares to realize a return on their
investment.
Asgaard
Media has not declared or paid any cash dividends on its capital stock since
inception. Asgaard Media intends to retain any future earnings to finance
the operation and expansion of its business and does not anticipate paying any
cash dividends in the foreseeable future. As a result, stockholders will
need to sell shares of common stock in order to realize a return on their
investment, if any. If no market develops for the common shares in the
future investors would lose their entire investment.
You
may not be able to sell your shares in our company because there is no public
market for our stock.
There is
no public market for our common stock. In the absence of being listed, no market
is available for investors in our common stock to sell their shares. We
cannot guarantee that a meaningful trading market will develop. If our
stock ever becomes tradable, of which we cannot guarantee success, the trading
price of our common stock could be subject to wide fluctuations in response to
various events or factors, many of which are beyond our control. In addition,
the stock market may experience extreme price and volume fluctuations, which,
without a direct relationship to the operating performance, may affect the
market price of our stock.
There
is currently no market for Asgaard Media’s common stock, but if a market for our
common stock does develop, our stock price may be volatile.
There is
currently no market for Asgaard Media’s common stock and there is no assurance
that a market will develop. If a market develops, it is anticipated that the
market price of Asgaard Media’s common stock will be subject to wide
fluctuations in response to several factors including:
|
q
|
The ability to complete the
development of Asgaard Media’s projects in order to provide them to the
public;
|
|
q
|
The ability to generate revenues
from sales;
|
|
q
|
The ability to generate brand
recognition of the Asgaard Media products and services and
acceptance by consumers;
|
|
q
|
Increased competition from
competitors who offer competing
services;
|
|
q
|
The Company’s financial condition
and results of operations;
and
|
|
q
|
The ability to continue to find
and develop new and screenplays and other intellectual property into
viable commercial projects.
|
16
The
trading in our shares will be regulated by the Securities and Exchange
Commission Rule 15g-9 which established the definition of a “penny
stock.”
The SEC
has adopted rules that regulate broker/dealer practices in connection with
transactions in penny stocks. The rules, in part, require broker/dealers to
provide penny stock investors with increased risk disclosure documents and make
a special written determination that a penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These heightened disclosure requirements may have the effect of reducing
the number of broker/dealers willing to make a market in our shares, reducing
the level of trading activity in any secondary market that may develop for our
shares, and accordingly, customers in our securities may find it difficult to
sell their securities, if at all.
The
shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), and rules of the
Commission. The Exchange Act and such penny stock rules generally impose
additional sales practice and disclosure requirements on broker-dealers who sell
our securities to persons other than certain accredited investors who are,
generally, institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000
jointly with spouse), or in transactions not recommended by the broker-dealer.
For transactions covered by the penny stock rules, a broker dealer must make
certain mandated disclosures in penny stock transactions, including the actual
sale or purchase price and actual bid and offer quotations, the compensation to
be received by the broker-dealer and certain associated persons, and deliver
certain disclosures required by the Commission. Consequently, the penny stock
rules may make it difficult for you to resell any shares you may purchase, if at
all.
While
Asgaard expects to apply for listing on the OTC Bulletin Board (OTCBB), we may
not be approved, and even if approved, shareholders may not have a market to
sell their shares, either in the near term or in the long term.
We can
provide no assurance to investors that our common stock will be traded on any
exchange or electronic quotation service. While we expect to apply to the OTC
Bulletin Board, we may not be approved to trade on the OTCBB, and we may not
meet the requirements for listing on the OTCBB. If we do not meet the
requirements of the OTCBB, our stock may then be traded on the "Pink Sheets,"
and the market for resale of our shares would decrease dramatically, if not be
eliminated.
Shares
eligible for future sale may adversely affect our stock price
All of
the presently outstanding shares of common stock, aggregating 40,537,000 shares
of common stock, are “restricted securities” as defined under Rule 144
promulgated under the Securities Act and may only be sold pursuant to an
effective registration statement or an exemption from registration, if
available. Rule 144, as amended, is an exemption that generally provides that a
person who has satisfied a one year holding period for such restricted
securities may sell, within any three month period (provided Asgaard is current
in its reporting obligations under the Exchange Act), subject to certain manner
of resale provisions, an amount of restricted securities which does not exceed
the greater of 1% of a company’s outstanding common stock or the average weekly
trading volume in such securities during the four calendar weeks prior to such
sale. At such time as these shares become unrestricted and available for sale,
the sale of these shares by this individual, whether pursuant to Rule 144 or
otherwise, may have an immediate negative effect upon the price of Asgaard’s
common stock in any market that might develop.
17
These
risk factors, individually or occurring together, would likely have a
substantial negative effect on Asgaard Media’s business and would likely cause
it to fail.
FORWARD-LOOKING
STATEMENTS
THE
FORWARD-LOOKING STATEMENTS ARE BASED UPON MANAGEMENT'S CURRENT VIEWS AND
ASSUMPTIONS REGARDING FUTURE EVENTS AND OPERATING PERFORMANCE, AND ARE
APPLICABLE ONLY AS OF THE DATES OF SUCH STATEMENTS. WE DO NOT HAVE ANY INTENTION
OR OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A
RESULT OF NEW INFORMATION, FUTURE EVENTS, CHANGES IN ASSUMPTIONS, OR
OTHERWISE.
This
prospectus contains forward-looking statements about Asgaard Media’s business,
financial condition and prospects that reflect the Company’s management’s
assumptions and beliefs based on information currently available. Asgaard can
give no assurance that the expectations indicated by such forward-looking
statements will be realized. If any of the Company’s assumptions should prove
incorrect, or if any of the risks and uncertainties underlying such expectations
should materialize, the actual results may differ materially from those
indicated by the forward-looking statements.
The key
factors that are not within the Company’s control and that may have a direct
bearing on operating results include, but are not limited to, acceptance of the
proposed merchandising concept that Asgaard expects to market, the Company’s
ability to establish a customer base, management’s ability to raise capital in
the future, the retention of key employees and changes in the regulation of the
industry in which the Company functions.
There may
be other risks and circumstances that management may be unable to predict. When
used in this prospectus, words such as, “believes,” “expects,” “intends,”
“plans,” “anticipates,” “estimates” and similar expressions are intended to
identify and qualify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.
USE
OF PROCEEDS
We are
offering a minimum of 20,000 shares and a maximum of 10,000,000 shares of our
common stock on a best efforts and self-underwritten basis. The offering price
per share is $2.50. There is no assurance that Asgaard Media will sell through
the direct offering the minimum 20,000 common shares nor the 10,000,000 as
anticipated.
The
following table below sets forth the uses of proceeds assuming the sale of 25%,
50%, 75% and 100% of the securities offered for sale in this offering by the
company. If the offering is fully subscribed the proceeds will be applied in the
manner described below. If less than the full numbers of shares are subscribed,
the proceeds will be applied in the order of priority listed. Although this
table sets forth the use of proceeds assuming minimum proceeds of $6,500,000,
the Company has established a minimum offering of $50,000. If the Company were
only to receive between $50,000 and $200,000, we would need to amend our
business plan to produce educational or industrial films, which can be produced
for as little as $15,000. If we were to receive at least $200,000, we could
produce one feature film by reducing the operating budget. The number and types
of film projects available to the Company are directly related to the amount and
timing of funds that are available to the Company. Investors face the risk that
we may receive the minimum of $50,000, believing that there will be enough funds
following to allow us to produce a feature film. If this were to happen we would
not pursue an industrial or educational film and would instead continue with
preproduction of our first feature film and to the extent that we misjudged the
timing or amount of additional financing, funds may not them be available to
allow us to amend our business plan. If we did not receive additional funding
and were unable to amend our business plan because we continued with
preproduction of a feature film, investors funds could be lost because we were
unable to complete a project. Further, if the Company is only successful in
raising the minimum of $50,000, after deducting estimated offering expenses,
there will only be $20,000 remaining, which may not allow the Company to
successfully implement any business plans, thereby resulting in a substantial or
complete loss to investors. The Company expects to apply the proceeds over a
period of approximately 24 months in the following order of priority. For
further discussion see “ Management’s Discussion and Plan of
Operation” on page 46 .
18
If 25% of
|
If 50% of
|
If 75% of
|
If 100% of
|
|||||||||||||
Shares are
|
Shares are
|
Shares are
|
Shares are
|
|||||||||||||
Sold
|
Sold
|
Sold
|
Sold
|
|||||||||||||
GROSS
PROCEEDS FROM THIS OFFERING
|
$
|
6,250,000
|
$
|
12,500,000
|
$
|
18,750,000
|
$
|
25,000,000
|
||||||||
Less:
OFFERING EXPENSES
|
||||||||||||||||
Legal,
Accounting and Professional Fees
|
$
|
16,500
|
$
|
16,500
|
$
|
16,500
|
$
|
16,500
|
||||||||
Blue
Sky Fees
|
$
|
500
|
$
|
1,000
|
$
|
2,000
|
$
|
2,500
|
||||||||
Edgar
Agent Fees
|
$
|
1,000
|
$
|
1,000
|
$
|
1,000
|
$
|
1,000
|
||||||||
Transfer
Agent Fees
|
$
|
3,000
|
$
|
6,000
|
$
|
9,000
|
$
|
12,000
|
||||||||
SUB-TOTAL
|
$
|
21,000
|
$
|
24,500
|
$
|
28,500
|
$
|
32,000
|
||||||||
NET
PROCEEDS FROM OFFERING
|
$
|
6,229,000
|
$
|
12,475,500
|
$
|
18,721,500
|
$
|
24,968,000
|
||||||||
Less:
USE OF NET PROCEEDS
|
||||||||||||||||
General
and Administrative Expense
|
300,000
|
300,000
|
300,000
|
300,000
|
||||||||||||
Salary
and Consulting Expenses
|
350,000
|
700,000
|
1,150,000
|
1,150,000
|
||||||||||||
Pre-Production
Expenses
|
150,000
|
560,000
|
750,000
|
750,000
|
||||||||||||
Production
Expense 1 st
Film
|
3,000,000
|
3,000,000
|
3,000,000
|
3,000,000
|
||||||||||||
Marketing
Expense 1 st
Film
|
500,000
|
1,000,000
|
2,000,000
|
2,300,000
|
||||||||||||
General
Working Capital
|
429,000
|
615,500
|
521,500
|
468,000
|
||||||||||||
Production
Expense 2 nd
Film
|
1,000,000
|
2,300,000
|
2,500,000
|
2,500,000
|
||||||||||||
Marketing
Expense 2 nd
Film
|
500,000
|
1,000,000
|
1,000,000
|
1,500,000
|
||||||||||||
Television
Production
|
0
|
3,000,000
|
3,000,000
|
3,000,000
|
||||||||||||
Production
Expense 3 rd
Film
|
0
|
0
|
3,000,000
|
8,000,000
|
||||||||||||
Marketing
Expense 3 rd
Film
|
0
|
0
|
1,500,000
|
2,000,000
|
||||||||||||
SUB-TOTAL
|
$
|
6,229,000
|
$
|
12,475,500
|
$
|
18,721,500
|
$
|
24,968,000
|
||||||||
TOTALS
|
$
|
6,250,000
|
$
|
12,500,000
|
$
|
18,750,000
|
$
|
25,000,000
|
The above
figures represent only estimated costs.
General Working
Capital. This may include, but not be limited to, printing costs,
postage, telephone services, overnight delivery services and other general
operating expenses.
Pre-Production
Expenses . This may include, but not be limited to, research, script
preparation, script breakdown, budget preparation, location scouting, costume
design, set construction.
Production Expenses .
This includes direct and indirect expense from the date of first principal
photography through project completion.
Marketing Expenses .
This may include, but not be limited to, advertising, promotion, and strategic
alliance development.
Salary and Consulting
Expenses . The Company anticipates meeting its staffing need through a
combination of outside third party service providers and salaried employees. All
of our officers and directors are employed outside of Asgaard Media. Some of
them will only be able to devote a limited amount of time, to the development of
Asgaard’s business plan unless this offering is successful. Although each
project will require varied staffing needs, the Company estimates that it will
require one or more staff producers, directors and editors as well as assistants
and support staff. At 25% of the proceeds the Company estimates its budgeted
payroll will cover up to 8 people; at 50% of the proceeds the Company estimates
its budgeted payroll will cover up to 15 people and at 75-100% of the proceeds
the Company estimates its budgeted payroll will cover to 20 to 22 people.
This budget does not include salaries for the Company’s officers and they do not
anticipate receiving any for the next 18 months. Nothwithstanding the
forgoing, if the Company finds itself in a financial position to pay its
officers salaries it may do so. However the amount and timing cannot be
determined with any certainty. This will be dependent on the Company’s
ability to receive advance distribution and product payments as well as its
ability to reduce project budgets consistent with quality expectations, none of
which can be assured. Ultimately although the Company is not currently
budgeting officer salaries, this may change at any time, and is in the sole and
absolute discretion of the Company’s board of directors.
19
Television Production
. This includes direct and indirect expense from research, script preparation,
script breakdown, budget preparation, location scouting, costume design, set
construction principal photography through project completion and includes
advertising, promotion and strategic alliance related to potential television
projects.
In the
case that the offering does not reach the maximum and the total proceeds are
less than those indicated in the table, Asgaard will have the discretion to
apply the available net proceeds to various indicated uses within the dollar
limits established in the table above.
DETERMINATION
OF OFFERING PRICE
There is
no established market for the Registrant's stock. Asgaard Media’s offering price
for shares sold pursuant to this offering is set at $2.50. This offering price
is not based on any objective measure of value and was completely
arbitrary.
DILUTION
“Dilution”
represents the difference between the offering price of the shares of Common
Stock and the net book value per share of common stock immediately after
completion of the offering. "Net book value" is the amount that results from
subtracting total liabilities from total assets. In this offering, the level of
dilution is increased as a result of the relatively low book value of Asgaard
Media’s issued and outstanding stock. This is due in part to shares of common
stock issued to the Company’s founders totaling 36,815,000 shares at $0.001 per
share and 3,722,000 shares that were issued for cash and services valued at
$0.10 per share versus the current offering price of $2.50 per share. Please
refer to the section titled “Transactions with Related Persons,
Promoters and Certain Control Persons” on page 58 , for more information.
The Company’s net book value on September 30, 2009 was 33,459. Assuming that all
of the 10,000,000 shares of common stock offered in this Prospectus are sold,
and in effect the Company receives the maximum proceeds of this offering from
shareholders, Asgaard Media’s net book value will be approximately $0.495350 per
share. Therefore, any investor will incur an immediate and substantial dilution
of approximately $2.004941 per share, while the Company’s present stockholders
will receive an increase of $2.004650 per share in the net tangible book value
of the shares that they hold. This will result in 80.15% dilution for purchasers
of stock in this offering.
In the
event that 75% of the offering or 18,750,000 shares is achieved, The Company’s
net book value will be approximately $0.390715 per share. Therefore, any
investor will incur an immediate and substantial dilution of approximately
$2.109285 per share while the present stockholders will receive an increase of
$2.108459 per share in the net tangible book value of the shares they hold. This
will result in a 84.34% dilution for purchasers of stock in this
offering.
In the
event that 50% of the offering or 12,500,000 shares is achieved, the Company’s
net book value will be approximately $0.275238 per share. Therefore, any
investor will incur an immediate and substantial dilution of approximately
$2.224762 per share while the present stockholders will receive an increase of
$2.223936 per share in the net tangible book value of the shares they hold. This
will result in a 88.96% dilution for purchasers of stock in this
offering.
In the
event that 25% of the maximum proceeds is raised through the sale of 6,250,000
shares, the Company’s net book value will be approximately $0.146002 per share.
Any investor will suffer an immediate and substantial dilution of approximately
$2.353998 per share while the present stockholders will receive an increase in
value of $2.353172 per share in the net tangible book value of the shares they
hold. This will result in a 94.13% dilution for purchasers of stock in this
offering.
20
The
following table illustrates the dilution to the purchasers of the common stock
in this offering. The table below includes an analysis of the dilution that will
occur if 25%, 50%, 75% of the shares are sold, as well as the dilution if all
shares are sold:
Dilution
Table
25% of
|
50% of
|
75% of
|
Maximum
|
|
||||||||||||
|
|
Offering
|
Offering
|
Offering
|
Offering
|
|||||||||||
Offering
Price Per Share
|
$
|
2.50
|
$
|
2.50
|
$
|
2.50
|
$
|
2.50
|
||||||||
Book
Value Per Share Before the Offering
|
$
|
0.000826
|
$
|
0.000826
|
$
|
0.000826
|
$
|
0.000826
|
||||||||
Book
Value Per Share After the Offering
|
$
|
0.146002
|
$
|
0.275238
|
$
|
0.390715
|
$
|
0.495350
|
||||||||
Net
Increase to Original Shareholders
|
$
|
2.353172
|
$
|
2.223936
|
$
|
2.108459
|
$
|
2.003824
|
||||||||
Decrease
in Investment to New Shareholders
|
$
|
2.353998
|
$
|
2.224762
|
$
|
2.109285
|
$
|
2.004650
|
||||||||
Dilution
to New Shareholders (%)
|
94.13
|
%
|
88.96
|
%
|
84.34
|
%
|
80.15
|
%
|
PLAN
OF DISTRIBUTION; TERMS OF THE OFFERING
The
Company’s offering consists of a maximum of 10,000,000 shares of common stock to
be sold by Asgaard Media at $2.50 per share. The selling shareholders offering
consists of 2,500,000 shares of our common stock that is to be sold at the same
price until the Company is listed on the OTCBB or similar market, and thereafter
at the prevailing market price or privately negotiated prices.
General
There has
been no market for our securities. Our common stock is not traded on any
exchange or on the over-the-counter market. After the effective date of the
registration statement relating to this prospectus, we hope to have a market
maker file an application with FINRA for our common stock to be eligible for
trading on the Over the Counter Bulletin Board (OTCBB). We do not yet have a
market maker who has agreed to file such application. There can be no guarantee
that the Company will ever be successful in obtaining a market for its common
stock in the future. If no market can be developed for our common stock any
investment made into the Company’s common stock would be lost in its
entirety.
The
Company is offering a minimum 20,000 and a maximum of 10,000,000 common shares
at $2.50 per share, this price will remain constant throughout the offering
regardless of current market prices. The selling shareholders are offering
2,500,000 common shares at $2.50 per share. The selling shareholders may
sell shares at prevailing market prices or privately negotiated prices once the
shares are quoted on the OTC Bulletin Board and thereafter. The selling
shareholders have indicated that they do not plan to offer and sell their shares
prior to the Company selling the minimum required 20,000 common shares set forth
in the Company’s offering. However, there are no formal agreements or contracts
by and between the Company and any selling shareholder to this
effect.
21
All
expenses of the registration statement including, but not limited to, legal,
accounting, printing and mailing fees are and will be borne by us. Any
commissions, discounts or other fees payable to brokers or dealers in connection
with any sale of the shares of common stock will be borne by the selling
security holders, the purchasers participating in such transaction, or
both.
Any
shares of common stock covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act, as amended, may be sold under
Rule 144 rather than pursuant to this prospectus.
Company’s Offering-Minimum
20,000 and a Maximum of 10,000,000 Common Shares Offered
Asgaard
Media is offering up to 10,000,000 shares of common stock in a direct public
offering, without any involvement of underwriters or broker-dealers with a
minimum requirement of 20,000 shares to be sold within 270 days from the
effective date of this registration statement. The offering price is $2.50 per
share. Funds from this offering will be placed in a separate bank account at
Washington Mutual Bank /Chase, 140 West Ontario Avenue, Suite 160, Corona,
California 92882 (funds should be directed to Standard Transfer & Trust
Company, Inc.-Escrow Account fbo Asgaard Media, 2980 South Rainbow Boulevard,
Suite 220H, Las Vegas, Nevada 89164) The funds will be maintained in the
separate bank until we receive $50,000 at which time we will remove those funds
and use the same as set forth in the Use of Proceeds section of this prospectus.
If we have not sold 20,000 shares and raised $50,000 within 270 days of the
effective date of our registration statement, all funds will be promptly
returned to you without a deduction of any kind. However, future actions by
creditors in the subscription period could delay us in refunding your money if
we are unable to raise the minimum $50,000 within the 270-day period. That is,
if creditors were to try to recover monies from the funds held in escrow,
investors could be required to await a judicial determination as to the
disposition of those funds. None of those funds would be available to the
Company to be used to defend creditor claims or to satisfy such claims. During
the 270-day period, no funds will be returned to you. You will only receive a
refund of your subscription if we do not raise $50,000 within the 270-day period
referred to above, at which time all funds received will be immediately returned
without interest or deduction, assuming that there are no intervening claims by
potential creditors, of which there can be no assurance. Sold securities are
deemed securities which have been paid for with collected funds prior to
expiration of 270 days after the effective date of this registration statement.
Further, even if the Company is successful in raising the minimum of $50,000,
after deducting estimated offering expenses, there will only be $20,000
remaining, which may not allow the Company to successfully implement any
business plans thereby resulting in a substantial or complete loss to investors.
Collected funds are deemed funds that have been paid by the drawee bank. Our
officers and directors will make the determination regarding whether the
offering conditions are satisfied. There are no finders involved in our
distribution.
We will
sell the shares in this offering through our officers and directors. They
will not receive any commission from the sale of any shares. They will not
register as a broker/dealers under Section 15 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), in reliance upon Rule 3a4-1. Rule 3a4-1
sets forth those conditions under which a person associated with an issuer may
participate in the offering of the issuer's securities and not be deemed to be a
broker/dealer. The conditions are that:
1. The
person is not statutorily disqualified, as that term is defined in Section
3(a)(39) of the Exchange Act, at the time of his participation;
and,
2. The
person is not compensated in connection with his participation by the payment of
commissions or other remuneration based either directly or indirectly on
transactions in securities; and,
3. The
person is not at the time of their participation, an associated person of a
broker/dealer; and,
4. The
person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1 of the
Exchange Act, in that he (A) primarily performs, or is intended primarily to
perform at the end of the offering, substantial duties for or on behalf of the
issuer otherwise than in connection with transactions in securities; and (B) is
not a broker or dealer, or an associated person of a broker or dealer, within
the preceding 12 months; and (C) do not participate in selling and offering of
securities for any issuer more than once every 12 months other than in reliance
on Paragraphs (a)(4)(i) or (a)(4)(iii) of Rule 3a4-1.
22
Our
officers and directors are not statutorily disqualified, are not being
compensated, and are not associated with a broker/dealer. They are and will
continue to be our officers and directors at the end of the offering and have
not been during the last 12 months and are currently not a broker/dealer or
associated with a broker/dealer. They have not during the last 12 months and
will not in the next 12 months offer or sell securities for another corporation.
Asgaard Media’s officers and directors may not purchase any securities in this
offering.
We intend
to distribute the prospectus to friends, relatives, and business associates of
our officers and directors and our officers and directors will not purchase any
shares in this offering and there will be no offers or sales to affiliates of
our officers and directors. Further, the shares will not be offered through any
media or through investment meetings. Our officers and Directors will personally
contact potential investors. The only means of communication will be verbal, by
telephone or personal contact. The only document to be delivered in connection
with the offering will be this prospectus. No communications or prospectus will
be delivered prior to the effective date of our registration
statement.
Offering
Period and Expiration Date
This
offering by the Company and the selling shareholders will start after the
registration statement is deemed effective by the Securities and Exchange
Commission and continue for a period of up to 270 days.
The
prospectus will not be provided or made available by the Company its officers
and/or directors to any potential purchaser(s) prior to effectiveness of this
registration statement.
Procedures
for Subscribing
If you
decide to subscribe for any shares in this offering, you must
1.
execute and deliver a subscription agreement; and
2.
deliver a check or certified funds to us for acceptance or
rejection.
The
subscription agreement requires you to disclose your name, address, telephone
number, tax identification or social security number, number of shares you are
purchasing, and the price you are paying for your shares.
All
checks for subscriptions must be made payable to Standard Transfer & Trust
Company, Inc. Escrow Account fbo Asgaard Media and sent to Asgaard Media C/O
Standard Transfer & Trust Company, Inc. at 2980 South Rainbow Boulevard,
Suite 220H, Las Vegas, Nevada 89164.
Interested
persons should not mail subscription agreements until they have been provided
with a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, and the Company will not accept subscriptions until a
prospectus meeting the requirements of Section 10 of the Securities Act of
1933, as amended has been provided to them
Right
to Reject Subscriptions
We have
the right to accept or reject subscriptions in whole or in part, for any reason
or for no reason. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours after
we receive them.
23
Separate
Account for Subscriptions
Subscriptions
will be placed in a separate escrow account at Washington Mutual Bank/Chase, 140
West Ontario Avenue, Suite 160, Corona, California 92882, held by Standard
Transfer & Trust Company, Inc.( 2980 South Rainbow Boulevard, Suite 220H,
Las Vegas, Nevada 89164), until we have received $50,000. Upon receipt of
$50,000, we will withdraw and use the funds. However, if the Company is only
successful in raising the minimum of $50,000, after deducting estimated offering
expenses, there will only be $20,000 remaining, which may not allow the Company
to successfully implement any business plans thereby resulting in a substantial
or complete loss to investors. If we do not receive the $50,000 within 270 days
of the effective date of this offering, all subscription proceeds received will
be promptly returned to each investor without interest or deduction. However,
future actions by creditors in the subscription period could delay us in
refunding your money if we are unable to raise the minimum $50,000 within the
270-day period. That is, if creditors were to try to recover monies from the
funds held in escrow, investors could be required to await a judicial
determination as to the disposition of those funds. None of those funds would be
available to the Company to be used to defend creditor claims or to satisfy such
claims. During the 270-day period, no funds will be returned to you. You will
only receive a refund of your subscription if we do not raise $50,000 within the
270-day period referred to above, at which time all funds received will be
immediately returned without interest or deduction, assuming that there are no
intervening claims by potential creditors, of which there can be no assurance.
Sold securities are deemed securities which have been paid for with collected
funds prior to expiration of 270 days after the effective date of this
registration statement. Further, even if the Company is successful in raising
the minimum of $50,000, after deducting estimated offering expenses, there will
only be $20,000 remaining, which may not allow the Company to successfully
implement any business plans thereby resulting in a substantial or complete loss
to investors.
Selling Security
Holders-Offering 2,500,000 Common Shares
2,500,000
shares are being offered by current shareholders, of which 160,000 shares are
held by officers and directors of the Company. The shares are being offered at
$2.50 per share until the Company is listed on the OTCBB or similar market,
and thereafter at the prevailing market price or privately negotiated
prices. The owners of
the shares to be sold by means of this prospectus are referred to as the
“selling shareholders.” Further selling shareholders may sell their shares under
this registration statement as long as it is effective, current and the offering
remains open for the sale of the 10,000,000 shares. Thereafter, selling
shareholders would need to find an appropriate exemption from registration in
order to sell their shares. Assuming this registration statement is effective,
the Company is under no obligation to keep is current for the selling
shareholders.
The
following table sets forth the shares beneficially owned, as of September 30,
2009, by the selling security holders prior to the offering contemplated by this
prospectus, the number of shares each selling security holder is offering by
this prospectus and the number of shares which each would
own beneficially if all such offered shares are
sold.
None of
the selling security holders is a registered broker-dealer or an affiliate of a
registered broker-dealer. Each of the selling security holders has acquired his,
her or its shares solely for investment and not with a view to or for resale or
distribution of such securities. The shares were offered and sold to the selling
security holders pursuant to the exemption from the registration under the
Securities Act. Some of the selling security holders are officers and directors
of our Company.
The
percentages below are calculated based on 50,537,000 shares of our common stock
issued and outstanding. We do not have any outstanding options, warrants or
other securities exercisable for or convertible into shares of our common
stock.
24
Name
|
Number of
Shares Held
Pre-Offering
|
Number
of Shares
Offered
|
Number of
Shares
Owned
Post-
Offering
|
Percentage
of Shares
Owned
Post-
Offering
|
||||||||||||
Minor
L. Pezzuto (3)(5)
|
2,500,000
|
175,000
|
2,325,000
|
4.60
|
%
|
|||||||||||
Christopher
Robert Baker (3)(6)
|
5,000,000
|
350,000
|
4,650,000
|
9.20
|
%
|
|||||||||||
MinorM.
Novorr (3)(7)
|
250,000
|
25,000
|
225,000
|
0.45
|
%
|
|||||||||||
Merlion
Entertainment, Ltd (3)(8)
|
5,000,000
|
350,000
|
4,650,000
|
9.20
|
%
|
|||||||||||
Barbara
Mitchell (3)(9)
|
2,000,000
|
140,000
|
1,860,000
|
3.68
|
%
|
|||||||||||
Stephen
J. Sallus (3)(10)
|
2,000,000
|
140,000
|
1,860,000
|
3.68
|
%
|
|||||||||||
Minor
E. Pezzuto (3)(11)
|
2,500,000
|
175,000
|
2,325,000
|
4.60
|
%
|
|||||||||||
Becky
Bristow (3)(12)
|
250,000
|
25,000
|
225,000
|
0.45
|
%
|
|||||||||||
Michael
Pass (3)(13)
|
300,000
|
21,000
|
279,000
|
0.55
|
%
|
|||||||||||
Alice
M. Matano (14)
|
100,000
|
10,000
|
90,000
|
0.18
|
%
|
|||||||||||
Erin
Giudice (15)
|
100,000
|
10,000
|
90,000
|
0.18
|
%
|
|||||||||||
Irving
& Sandy Sallus (3)(16)
|
22,500
|
3,000
|
19,500
|
0.04
|
%
|
|||||||||||
Anthony
A. Pezzuto (3)(17)
|
500,000
|
35,000
|
465,000
|
0.92
|
%
|
|||||||||||
Freedman
Matt (3)
|
22,500
|
3,000
|
19,500
|
0.04
|
%
|
|||||||||||
Melvin
William Winn (18)
|
2,000,000
|
140,000
|
1,860,000
|
3.68
|
%
|
|||||||||||
Kathryn
Perry or AM Snider (3)
|
1,000,000
|
70,000
|
930,000
|
1.84
|
%
|
|||||||||||
Whitney
D. Lund (3)(19)
|
100,000
|
10,000
|
90,000
|
0.18
|
%
|
|||||||||||
Douglas
Scheving (3)(20)
|
4,000,000
|
280,000
|
3,720,000
|
7.36
|
%
|
|||||||||||
Megan
Simpson (3)
|
400,000
|
30,000
|
370,000
|
0.73
|
%
|
|||||||||||
Blythe
C. Stewart (3)(21)
|
500,000
|
35,000
|
465,000
|
0.92
|
%
|
|||||||||||
Betzenhouser
Family Trust (3)(22)
|
1,500,000
|
105,000
|
1,395,000
|
2.76
|
%
|
|||||||||||
Janet
S. Gayler (3)
|
150,000
|
11,000
|
139,000
|
0.28
|
%
|
|||||||||||
John
V. Kopaunik (3)
|
100,000
|
7,000
|
93,000
|
0.18
|
%
|
|||||||||||
Kristian
De La Rossa (3)
|
25,000
|
3,000
|
22,000
|
0.04
|
%
|
|||||||||||
Neubert
Family Trust (3)(23)
|
1,500,000
|
105,000
|
1,395,000
|
2.76
|
%
|
|||||||||||
Peder
K. Davisson Revocable Trust (3)(24)
|
2,000,000
|
164,000
|
1,836,000
|
3.63
|
%
|
|||||||||||
Steven
W. Pepin (4)
|
250,000
|
25,000
|
225,000
|
0.45
|
%
|
|||||||||||
Jacqueline
Halliday (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Paul
Ray (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Claude
William Chappell IV (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Zeljko
Mileta (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Benedict
Dugger (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Gara
& Michelle Bain (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Robert
Lalich (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
The
Horton Family Living Trust (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Dominic
Tavares (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Michele
Li Sheppard (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Kevin
Peck (4)
|
20,000
|
4,000
|
16,000
|
0.03
|
%
|
|||||||||||
Alice
M. DePrisco (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
John
A. DePrisco (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Kathryn
J. Dechene (4)
|
20,000
|
4,000
|
16,000
|
0.03
|
%
|
|||||||||||
Francis
Rutherford (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Salvatore
Alphonso DePrisco (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Marilyn
Joyce Piperno (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Robert
Jason Pesheck (4)
|
50,000
|
5,000
|
45,000
|
0.09
|
%
|
|||||||||||
Jeff
Perkowitz (4)
|
10,000
|
2,000
|
8,000
|
0.02
|
%
|
|||||||||||
Trent
Julian (3)(25)
|
50,000
|
5,000
|
45,000
|
0.09
|
%
|
|||||||||||
Emad
Elouri (3)(26)
|
22,500
|
3,000
|
19,500
|
0.04
|
%
|
|||||||||||
TOTAL
|
34,392,500
|
2,500,000
|
31,892,500
|
63.11
|
%
|
25
Notes:
|
1.
|
This chart assumes the sale of
all 10,000,000 shares of Company stock offered in this
prospectus.
|
|
2.
|
The named party beneficially owns
and has sole voting and investment power over all shares or rights to
these shares, unless otherwise shown in the table. The numbers in this
table assume that none of the selling stockholders sells shares of common
stock not being offered pursuant to this prospectus or purchases
additional shares of common stock, and assumes that all shares offered are
sold.
|
|
3.
|
The Company issued 36,815,000
shares upon its organization as founders’ shares valued at $0.001 per
share, 2,214,000 of which are being offered for sale by selling
shareholders. There are no formal agreements or other terms with respect
to these shares. No proceeds from the sale of these shares will be
received by the Company. These shares are being registered as part of this
offering, and have no other rights associated with them other than those
attributed to the Company’s common stock
generally.
|
|
4.
|
From the period of June 1,
2008 through January 20, 2009, the Company conducted an offering of its
common stock to certain qualified investors. The offering was conducted in
accordance with exemptions from registration pursuant to Rule 506 of
Regulation D under the Securities Act of 1933, as amended. Pursuant to the
terms of the offering, the Company offered up to 5,000,000 shares of its
Common Stock, par value $0.0001 per share, at a purchase price of $0.10
per share, to “accredited investors” only as defined in Rule 501(a) of
Regulation D of the Securities. As of the close of the offering on January
20, 2010, the Company had sold approximately 722,000 shares of its common
stock to approximately 35 accredited investors, and had raised an
aggregate of $72,200.
|
|
5.
|
Minor L Pezzuto is the minor
daughter of Wm. Alan Pezzuto, Barbara Mitchell has sole has sole voting
and dispositive control over these shares and holds them as Custodian
under the Uniform Gifts to Minors
Act.
|
|
6.
|
The Company issued 5,000,000
shares as founders’ shares valued at $0.001 per share to Christopher Baker
for pre incorporation music soundtrack consulting and preproduction
services related to the Company’s Community Challenge project in reliance
on the exemption from registration requirements of the Securities Act of
1933, as amended, provided under Section 4(2) as the issuance of the stock
did not involve a public offering of
securities.
|
|
7.
|
Minor M. Novorr is the niece of
Wm. Alan Pezzuto, Barbara Mitchell has sole has sole voting and
dispositive control over these shares and holds them as Custodian under
the Uniform Gifts to Minors
Act.
|
|
8.
|
Douglas Scheving is the
controlling officer and shareholder of Merlion Entertainment, Ltd. and
holds sole voting and dispositive control over the shares. The Company
issued 5,000,000 shares as founders’ shares valued at $0.001 per share to
Merlion Entertainment, Ltd for pre incorporation services involving
negotiation with talent, site location and agency services related to the
procurement of government matching grants in reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) as the issuance of the stock did not involve a
public offering of
securities.
|
|
9.
|
Barbara Mitchell is the
mother-in-law of Wm. Alan
Pezzuto.
|
10.
|
Stephen Sallus received
1,222,500 founders’ shares valued at $0.001 per share for
pre-incorporation services related to script procurement and
organizational issues. He subsequently gifted 22,500 shares to his mother
and father. Mr. Sallus also received 800,000 shares valued at $0.10 per
share for ongoing services related to production, financial consulting and
strategic partnerships with vendors. There is no formal agreement between
the Company and Mr. Sallus with respect to the provision of these
services. Shares were issued in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2)as the issuance of the stock did not involve a
public offering of
securities.
|
11.
|
Minor M Pezzuto is the minor
daughter of Wm. Alan Pezzuto, Barbara Mitchell has sole has sole voting
and dispositive control over these shares and holds them as Custodian
under the Uniform Gifts to Minors
Act.
|
12.
|
The Company issued 250,000
shares as founders’ shares valued at $0.001 per share to Becky Bristow for
pre incorporation animation consulting services and design work on the
Company’s website in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under
Section 4(2)as the issuance of the stock did not involve a public offering
of securities.
|
13.
|
The Company issued 250,000
shares as founders’ shares valued at $0.001 per share to Michael Pass for
pre incorporation editing services related to the Company’s Community
Challenge project in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, , provided under
Section 4(2) as the issuance of the stock did not involve a public
offering of
securities.
|
26
14.
|
The Company issued 100,000
shares valued at $0.10 per share to Alice M. Matano for accounting
services upon reliance on the exemption from registration requirements of
the Securities Act of 1933, as amended, provided under Section 4(2)
promulgated thereunder as the issuance of the stock did not involve a
public offering of securities. At the time of issuance Ms. Matano was an
officer of the Company and had a preexisting relationship with Mr.
Pezzuto.
|
15.
|
The Company issued 100,000
shares valued at $0.10 per share to Erin Giudice for services to the
Company as its corporate Secretary in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of securities. At the time of the
issuance Ms. Giudice was an officer of the Company and had a preexisting
relationship with Mr.
Pezzuto.
|
16.
|
Irving and Sandy Sallus are the
parents of Stephen Sallus.
|
17.
|
Anthony Pezzuto is the adult son
of Wm. Alan Pezzuto.
|
18.
|
The Company issued 2,000,000
shares valued at $0.10 per share to Melvin William Winn for script
consulting and Canadian pre-production services for our Mountains of
Trouble project in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under
Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
|
19.
|
The Company issued 100,000
shares as founders’ shares valued at $0.001 per share to Whitney Lund for
pre-incorporation organizational and consulting services upon reliance on
the exemption from registration requirements of the Securities Act of
1933, as amended, , provided under Section 4(2) as the issuance of the
stock did not involve a public offering of securities. Mr. Lund is a
principal of our Transfer Agent, Standard Transfer & Trust Company,
Inc.
|
20.
|
The Company issued 4,000,000
shares as founders’ shares valued at $0.001 per share to Douglas Scheving
for pre incorporation services involving negotiation with talent, site
location and agency services related to the procurement of government
matching grants; and in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under
Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
|
21.
|
Blythe C. Stewart is the adult
daughter of Wm. Alan
Pezzuto.
|
22.
|
Robert Walker holds sole
voting and dispositive control over the Betzenhouser Family Trust. The
Company issued 1,500,000 shares as founders’ shares valued at $0.001 per
share to the Betzenhouser Family Trust for pre incorporation services
involving research and script development for the Company’s Between
Purgatory and Perdition Project in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) as the issuance of the stock did not involve a
public offering of
securities.
|
23.
|
Dennis Desender holds sole
voting and dispositive control over the Neubert Family Trust. The Company
issued 1,500,000 shares as founders’ shares valued at $0.001 per share to
the Neubert Family Trust for pre incorporation services involving
negotiation of real-estate rights and non-traditional financing for the
Company’s Community Challenge Project in upon reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) as the issuance of the stock did not involve a
public offering of
securities.
|
24.
|
Peder K. Davisson holds sole
voting and dispositive control over the Peder K. Davisson Revocable Trust.
The Company issued 2,000,000 shares as founders’ shares valued at $0.001
per share to the Peder K. Davisson Revocable Trust in consideration for
professional legal services rendered for pre-incorporation services and as
fixed fee for legal services not related to this registration statement.
These shares were issued in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under
Section 4(2) as the issuance of the stock did not involve a public
offering of securities. Mr. Davisson, through his law firm, Davisson &
Associates, PA, issued the legal opinion that is part of this registration
statement.
|
25.
|
The Company issued 100,000
shares as founders’ shares valued at $0.001 per share to Trent Julian for
pre incorporation production services related to the Company’s Community
Challenge project in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended. Mr. Julian
subsequently gifted 50,000 shares to his four children in equal shares as
part of his estate plan and the certificates were issued in August 2009.
The issuance was made in accordance with the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under
Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
|
26.
|
The Company issued 22,500
shares as founders’ shares valued at $0.001 per share to Emad Elouri for
pre incorporation services related to the Company’s Community Challenge
project in reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) as the
issuance of the stock did not involve a public offering of
securities
|
27
These
shares may be sold by one or more of the following methods, without
limitations.
· A block trade in
which a broker or dealer so engaged will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;
· Purchase by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this prospectus;
· Ordinary brokerage
transactions and transactions in which the broker solicits
purchasers
· Face to face
transactions between sellers and purchasers without a
broker/dealer.
In
competing sales, brokers or dealers engaged by the selling shareholders may
arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither, we nor the selling stockholders can
presently estimate the amount of such compensation.
The
selling shareholders and any broker/dealers who act in connection with the sale
of the shares will be deemed to be “underwriters” within the meaning of the
Securities Acts of 1933, and any commissions received by them and any profit on
any resale of the shares as a principal might be deemed to be underwriting
discounts and commissions under the Securities Act.
If any
selling shareholders enters into an agreement to sell his or her shares to a
broker/dealer as principal and the broker/dealer is acting as an underwriter, we
will file a post-effective amendment to the registration statement, of which
this prospectus is a part, identifying the broker/dealer, providing required
information concerning the plan of distribution, and otherwise revising the
disclosures in this prospectus as needed. We will also file the agreement
between the selling shareholder and the broker/dealer as an exhibit to the
post-effective amendment to the registration statement.
We have
advised the selling shareholders that they and any securities broker/dealers or
others who will be deemed to be statutory underwriters will be subject to the
prospectus delivery requirements under the Securities Act of 1933. We have
advised each selling shareholder that in the event of a “distribution” of the
shares owned by the selling shareholder, such selling shareholder, any
“affiliated purchasers,” and any broker/dealer or other person who participates
in the distribution may be subject to Rule 102 of Regulation M under the
Securities Exchange Act of 1934 (“1934 Act”) until their participation in that
distribution is complete. Rule 102 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class,
as is the subject of the distribution. A “distribution” is defined in Rule 102
as an offering of securities “that is distinguished from ordinary trading
transaction by the magnitude of the offering and the presence of special selling
efforts and selling methods.” We have advised the selling shareholders that Rule
101 of Regulation M under the 1934 Act prohibits any “stabilizing bid” or
“stabilizing purchase” for purpose of pegging, fixing or stabilizing the price
of the common stock in connection with this offering.
To our
knowledge, no selling shareholder is affiliated with a
broker/dealer.
28
The
shares of common stock owned by the selling shareholders may be offered and sold
by means of this prospectus from time to time as market conditions permit. If
and when our common stock becomes quoted on the OTC Bulletin Board or listed on
the securities exchange, the shares owned by the selling shareholders may be
sold in public market or in private transactions for cash at prices to be
determined at that time. We will not receive any proceeds from the sale of the
shares by the selling shareholders.
We may
require the selling security holders to suspend the sales of the securities
offered by this prospectus upon the occurrence of any event that makes any
statement in this prospectus, or the related registration statement, untrue in
any material respect, or that requires the changing of statements in these
documents in order to make those statements not misleading. We will file a
post-effective amendment to this registration statement to reflect any material
changes to this prospectus.
Section
15(g) of the Exchange Act
Our
shares are "penny stocks" covered by Section 15(g) of the Exchange Act, and
Rules 15g-1 through 15g-6 and Rule 15g-9 promulgated thereunder. They impose
additional sales practice requirements on broker/dealers who sell our securities
to persons other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to
brokers-dealers, they do not apply to us.
Rule
15g-1 exempts a number of specific transactions from the scope of the penny
stock rules.
Rule
15g-2 declares unlawful broker/dealer transactions in penny stocks unless the
broker/dealer has first provided to the customer a standardized disclosure
document.
Rule
15g-3 provides that it is unlawful for a broker/dealer to engage in a penny
stock transaction unless the broker/dealer first discloses and subsequently
confirms to the customer current quotation prices or similar market information
concerning the penny stock in question.
Rule
15g-4 prohibits broker/dealers from completing penny stock transactions for a
customer unless the broker/dealer first discloses to the customer the amount of
compensation or other remuneration received as a result of the penny stock
transaction.
Rule
15g-5 requires that a broker/dealer executing a penny stock transaction, other
than one exempt under Rule 15g-1, disclose to its customer, at the time of or
prior to the transaction, information about the sales persons
compensation.
Rule
15g-6 requires broker/dealers selling penny stocks to provide their customers
with monthly account statements.
Rule
15g-9 requires broker/dealers to approve the transaction for the customer's
account; obtain a written agreement from the customer setting forth the identity
and quantity of the stock being purchased; obtain from the customer information
regarding his investment experience; make a determination that the investment is
suitable for the investor; deliver to the customer a written statement for the
basis for the suitability determination, notify the customer of his rights and
remedies in cases of fraud in penny stock transactions; and, the FINRA's toll
free telephone number and the central number of the North American
Administrators Association, for information on the disciplinary history of
broker/dealers and their associated persons. The application of the penny stock
rules may affect your ability to resell your shares.
29
FINRA has
adopted rules that require that in recommending an investment to a customer, a
broker/dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. These
FINRA requirements make it more difficult for broker/dealers to recommend that
their customers buy our common stock, which may have the effect of reducing the
level of trading activity and liquidity of our common stock. Further, many
brokers charge higher transactional fees for penny stock transactions. As a
result, fewer broker/dealers may be willing to make a market in our common
stock, reducing a stockholder's ability to resell shares of our common
stock.
Again,
the foregoing rules apply to broker/dealers. They do not apply to us in any
manner whatsoever. Since our shares are covered by Section 15(g) of the Exchange
Act, which imposes additional sales practice requirements on broker/dealers,
many broker/dealers may not want to make a market in our shares or conduct any
transactions in our shares. As such, your ability to dispose of your shares may
be adversely affected.
Blue
Sky Restrictions on Resale
If a
selling security holder wants to sell shares of our common stock under this
registration statement in the United States, the selling security holders will
also need to comply with state securities laws, also known as “Blue Sky laws”
with regard to secondary sales. All states offer a variety of exemption from
registration for secondary sales. Many states, for example, have an exemption
for secondary trading of securities registered under Section 12(g) of the
Securities Exchange Act of 1934 or for securities of issuers that publish
continuous disclosure of financial and non-financial information in a recognized
securities manual, such as Standard & Poor’s. The broker for a selling
security holder will be able to advise a selling security holder which states
our common stock is exempt from registration with that state for secondary
sales.
Any
person who purchases shares of our common stock from a selling security holder
under this registration statement who then wants to sell such shares will also
have to comply with Blue Sky laws regarding secondary sales.
When the
registration statement becomes effective, and a selling security holder
indicates in which state(s) he desires to sell his shares, we will be able to
identify whether it will need to register or will rely on an exemption there
from.
30
DESCRIPTION
OF BUSINESS
General
We
were incorporated on January 8, 2008, under the laws of the State of Nevada. We
are a development stage independent motion picture producer having our principal
office located at 2550 East Desert Inn Road, Suite 329, Las Vegas, Nevada
89121.Our phone number is (702 858-3456 and our e-mail is info@asgaardmedia.com.
Our website is at www.asgaard
media.com.
Our
plan of operation is to engage in the business of developing, producing,
marketing and distributing low-budget feature-length films and television
programs. To date, our business activities have been limited to organizational
and pre-production activities. These including research and acquisition of media
and all ancillary rights to three feature films and one television series. We
have conducted initial photography and prepared “B” roll material for each of
our planned projects. B-roll is film and/or images used in the production
of a program other than the primary footage/images. In addition we have
developed our website and the prepared and filed our securities registration
statement, of which this prospectus is a part. We currently have no employees
except for our officers and directors. We intend to utilize independent
contractors and consultants from time to time to assist in developing, producing
and promoting our motion pictures and television properties. Independent
contractors are generally paid on a commission, hourly or job-related basis,
depending on the services being performed.
We have
no plans, arrangements, commitments, or understandings to engage in a merger or
acquisition with another company.
Motion
Picture Industry Overview
The
theatrical motion picture industry in the United States has changed
substantially over the last three decades and continues to evolve rapidly
Historically, the “major studios” financed, produced and distributed the vast
majority of American-made motion pictures During the most recent decade, many of
the motion pictures released have been produced by “independent producers” even
though some of the production financing for such pictures and distribution funds
have been provided by the major studio/distributors.
The
following general description is a simplified overview of the complex process of
producing and distributing motion pictures and is intended to be an aid to
investors in understanding the motion picture business. This overview does not
describe what will necessarily occur in the case of any of our particular motion
pictures.
Production of Motion
Pictures
During
the filmmaking process, which may take approximately 12 to 24 months from the
start of the development phase to theatrical release, a film progresses through
several stages. The four general stages of motion picture production are
development, pre-production, principal photography and post-production. A brief
summary of each of the four general movie production stages follows: See “Film
Scheduling” 2 nd Ed
Ralph S. Singleton and “Hollywood Creative Guide” 5 th Ed,
2007 E. Fleeks.
Development
In the
development stage, underlying literary material for a motion picture project is
acquired, either outright, through an option to acquire such rights or by
engaging a writer to create original literary material. If the literary material
is not in script form, a writer must be engaged to create a script. The script
must be sufficiently detailed to provide the production company and others
participating in the financing of a motion picture with enough information to
estimate the cost of producing the motion picture. Projects in development do
not always become completed motion pictures.
31
Pre-Production
During
the pre-production stage, the production company usually selects a director,
actors and actresses, prepares a budget and secures the necessary financing. In
cases involving unique or desired talent, commitments must be made to keep
performers available for the picture. Some pre-production activities may occur
during development.
Principal
Photography
Principal
photography is the process of filming a motion picture and is the most costly
stage of the production of a motion picture. Principal photography may take up
to twelve weeks to complete for some projects. Bad weather at locations, the
illness of a cast or crew member, disputes with local authorities or labor
unions, a director's or producer's decision to re-shoot scenes for artistic
reasons and other often unpredictable events can seriously delay the scheduled
completion of principal photography and substantially increase its
costs.
Post-Production
During
the post-production stage, the editing of the raw footage and the scoring and
mixing of dialogue, music and sound effects tracks take place, and master
printing elements are prepared.
Distribution
of Motion Pictures
Motion
picture revenue is derived from the worldwide licensing of a motion picture: (a)
for theatrical exhibition; (b) for non-theatrical exhibition (viewing in
airplanes, hotels, military bases and other facilities); (c) to pay television
systems for delivery to television receivers by means of cable, over-the-air and
satellite delivery systems; (d) to commercial television networks; (e) to local
commercial television stations and (f) for reproduction on video cassettes (and
video discs) for home video use. Revenue may also be derived from licensing
“ancillary rights” to a motion picture for the creation of books, published
music, soundtrack albums and merchandise.
32
Expenses
incurred in distributing a motion picture are substantial and vary depending on
many factors. These factors include the initial response by the public to the
motion picture, the nature of its advertising campaign, the pattern of its
release (e.g., the number of theaters booked and the length of time that a
motion picture is in release).
33
An Example Film
Budget
Although
every picture's budget is unique to that picture, the following sample
$1,000,000 budget shows some of the costs involved in producing a motion
picture:
Minimum
(1)
|
Maximum
|
|||||||
Screenplay
rights
|
$
|
5,500
|
$
|
9,700
|
||||
Producer's
Unit
|
$
|
31,500
|
$
|
55,125
|
||||
Director's
Unit
|
$
|
26,000
|
$
|
45,500
|
||||
Cast
|
$
|
46,388
|
$
|
81,179
|
||||
Above-the-Line
Total
|
$
|
109,388
|
$
|
191,504
|
||||
Production
Staff
|
$
|
52,050
|
$
|
91,088
|
||||
Extra
Talent
|
$
|
31,125
|
$
|
54,468
|
||||
Set
Design
|
$
|
6,000
|
$
|
10,500
|
||||
Set
Construction
|
$
|
5,000
|
$
|
8,750
|
||||
Set
Operations
|
$
|
27,300
|
$
|
47,775
|
||||
Set
Dressing
|
$
|
15,180
|
$
|
26,565
|
||||
Property
|
$
|
6,400
|
$
|
11,200
|
||||
Wardrobe
|
$
|
11,920
|
$
|
20,860
|
||||
Makeup/Hairdressing
|
$
|
7,870
|
$
|
13,772
|
||||
Electrical
|
$
|
28,920
|
$
|
50,610
|
||||
Camera
|
$
|
29,250
|
$
|
51,187
|
||||
Production
Sound
|
$
|
13,670
|
$
|
23,922
|
||||
Transportation
|
$
|
33,000
|
$
|
57,750
|
||||
Location
Expenses
|
$
|
51,450
|
$
|
90,037
|
||||
Vehicles/Animals
|
$
|
5,000
|
$
|
8,750
|
||||
Film/Lab
|
$
|
54,140
|
$
|
94,745
|
||||
Video
|
$
|
5,000
|
$
|
8,750
|
||||
Production
Period Total
|
$
|
383,275
|
$
|
670,729
|
||||
Film
Editing
|
$
|
42,500
|
$
|
74,375
|
||||
Music
|
$
|
5,000
|
$
|
8,750
|
||||
Post
Production Sound
|
$
|
40,000
|
$
|
70,000
|
||||
Post
Production Film Lab
|
$
|
14,750
|
$
|
25,812
|
||||
Optical
Effects
|
$
|
3,000
|
$
|
5,250
|
||||
Titles
|
$
|
8,000
|
$
|
14,000
|
||||
Post
Production Total
|
$
|
113,250
|
$
|
198,187
|
||||
Publicity
|
$
|
2,000
|
$
|
3,500
|
||||
Insurance
|
$
|
25,000
|
$
|
43,750
|
||||
General
Expenses(2)
|
$
|
54,500
|
$
|
95,375
|
||||
Contingencies
|
$
|
36,974
|
$
|
64,704
|
||||
Completion
Bond
|
$
|
18,487
|
$
|
32,352
|
||||
Other
Total
|
$
|
136,961
|
$
|
239,681
|
||||
Total
Above the Line
|
$
|
109,388
|
$
|
191,504
|
||||
Total
Below the Line
|
$
|
633,486
|
$
|
1,108,597
|
||||
Total
|
$
|
742,874
|
$
|
1,300,101
|
34
Notes To
Budget
1. The
difference between the Minimum and Maximum columns in most instances represent
the approximate dollar amount in each budget category which has been or will be
deferred and is exemplary of a lowest feasible cost versus "best case" cost
while remaining within the Company's budgetary objectives.
2. Includes
packaging costs (expenses associated with obtaining commitments from a director,
actors or other key personnel to be involved in the production of the Picture)
and Production Company overhead (the pro rata costs of secretarial services,
office rent, utilities and supplies associated with the Picture).
Production
The
Company plans to produce its pictures at the lowest possible cost consistent
with the quality that it seeks to achieve. The Company will attempt to avoid the
substantial overhead associated with major production companies by maintaining a
small permanent staff. The Company does not own production facilities or
equipment, but will adopt the practice of renting production facilities and
equipment and engaging free-lance production staff, only as necessary, on a
picture-by-picture basis.
The
Company expects the total production period for a Company-produced motion
picture to generally continue for as long as six months and in some instances,
even longer. Multiple projects may run concurrently. The following table
represents the Producers' estimates of the time periods associated with each
phase in the financing, production and distribution of a
picture:
Financing period
|
8 weeks
|
Pre-Production
|
8 weeks
|
Principal Photography
|
6 weeks
|
10 weeks
|
|
Sneak Previews
|
35th week
|
Premiere
|
40th week
|
Limited opening
|
41st week
|
Distribution Approach
From a business perspective,
the primary goal of the Company's film ventures is to maximize the revenues to
it and to its investors; however, there can be no assurance that this goal will
be achieved or that increased revenues will equate to a higher return on
investment. The ultimate commercial success of any motion picture is dependent
on its distribution. The Company believes that the most important initial
objective in achieving this goal is to maximize proceeds from the United States
theatrical release of its pictures, since it considers such theatrical
performance to be the single most important determinant of a picture's
performance in the subsequent markets of home Video/DVD/Podcasts, pay cable and
free broadcast television and foreign
35
The
Company plans to approach prospective distributors with a completed or nearly
completed film, thus potentially maximizing its bargaining position with respect
to negotiating the terms of the distribution arrangements.
The
producers believe they have designed films to be attractive to distributors
since elements of the films were specifically conceived to appeal to some of the
most important segments of the movie-going public, i.e., the 18 to 35 year
olds.
It is
not possible to predict, with certainty, the nature of the distribution
arrangements, if any, that we may secure for our motion pictures or television
series.
To the
extent that we engage in foreign distribution of our films, we will be subject
to all of the additional risks of doing business abroad including, but not
limited to, government censorship, currency fluctuations, exchange controls,
greater risk of "piracy" copying, and licensing or qualification
fees.
Current
Projects
The
Company is currently developing five (5) properties described below, all of
which are in various phases of pre-production. The Company has exclusive
production and licensing rights to four of these properties and is working on
agreements with respect to the other two. Besides selecting movie genres which
are believed to be in demand and “recession-resistant,” the Company has
developed screenplays capitalizing on character-driven, relationship-oriented
stories.
Our
current projects are: Mountains of Trouble WGAw Reg. # 1000937, Taken By Storm
WGAw Reg. # 1000935, Longshot®, Community Challenge® WGAw Reg. # 1283196, and
Widow’s Walk WGAw Reg. # 83754. We are in the process of entering into an
agreement to acquire all media and ancillary rights to a screenplay – The
Killer’s Psalm and are completing a screenplay under the working title – Between
Purgatory and Perdition. The following are brief descriptions of the story lines
of six of our planned projects:
36
Mountains of
Trouble
This film
addresses the admiration of and rivalry between brothers and sisters, younger
children and older, boys and girls, as we see these children go from pushing
each other to the limits of what they have been taught is right and wrong, to
banding together against what they have been taught, in order to try to preserve
a higher right. All the while, it also looks at the age old question of "What's
a parent to do?"
Mountains
of Trouble is the story of a precocious eight year old, Amanda, who must not
only endure what she is certain to be the most trying time of her life
(childhood), but must also determine who she is as the fourth of five children.
Watch as she struggles to learn right from wrong and the lesson, "that just
because you’re an adult doesn’t always make you right." See her discover that
for every decision we make and every road we travel, there is a toll to pay. We
see and feel Amanda struggling to prove that girls can be as good as boys at
anything, including doing the wrong thing, and we share the consequences with
her.
From the
very beginning of the film, the forces of good and evil are at work. Don Stoll
and Steven Breen, two ruthless land developers, do everything within their power
to further their own cause, regardless of the price the rest of the residents,
both people and animals of the area, must pay. As Amanda, going about the task
of being a little girl, is inadvertently sucked into this adult world of lying
and cheating, she begins to realize that some prices are too high to pay, and
that not only isn’t money everything, but sometimes it buys the sort of misery
you can’t live with.
While
her parents are busy and Amanda is exploring areas not meant for exploration by
anyone, let alone eight-year old girls, she finds herself face to face with a
caged female mountain lion and her two cubs. After deciding the animals
shouldn’t be caged, she tries to let them go free. As the female mountain lion
leaves the cage and the cubs are left behind, Amanda realizes the possibly
disastrous results of her behavior, and attempts to rectify the situation by
adopting the “kittens” on the spot. The kittens keep growing, as do her
problems, and she is forced to employ the help of her brothers and
sisters.
In
addition to learning adult size lessons about right and wrong, Amanda finds out
how important listening to everyone and everything is, and that no matter who or
what you are, you need to be heard.
37
Taken By
Storm
This film
is about Anthony Tempesta, the first-born son of Italian immigrant parents who,
twenty years ago he had been the hottest chopper pilot in the service. Ten years
ago he found himself working for the agency. Seven years ago, his star was still
rising and he was training mercs for covert operations with Uncle Sam’s
blessings…Then he married some Officer’s Club Bimbo and decked a know it all
senator on a “fact finding mission.”
Tempesta,
had planned on retiring and starting a private investigating company at the age
of forty-two after twenty-five years of government service. Between the Bimbo
and the incident with the senator, those plans as well as most of his
connections seemed like nothing more than the smoke and mirrors of a cheap
parlor magician until…
He heard
the knocking at the door through the haze of an almost perpetual hang over. As
he answered the door, the courier handed him a large manila envelope and a pen.
As he looked at the plain-faced man in his early twenties, he asked, “Who’s
suing me now?” The man just looked at him for a moment and answered, “I don’t
know dude, but I need my pen back and you need a shower.” Tony grunted as he
closed the door.
As he
tore open the envelope and looked at the contents spilling onto the table, he
sobered up from the shock of seeing two sets of ID, with only one set of
pictures, all of his PI licenses, gun permits and security clearances. A smaller
off-white envelope was included. As he opened it, a small plastic card fell out.
Looking at it he wondered…who lit the fire and was holding the mirror this
time.
Filled
with more twists and turns than an epileptic python, this action adventure is
designed to be a modern day combination of Peter Gunn, Mike Hammer and Tiger
Mann.
Widow’s
Walk
Kathy
McMasters is closer to her thirtieth birthday than her twenty-ninth. She has
completed her MBA with honors and helped build a company that now has a
multi-million dollar balance sheet and a multi-national clientele. She on the
other hand is not a partner or vice-president as promised, but rather the
“Executive Assistant” to the President/Founder of the company. In short, she is
tired of working too many hours for too little money.
After
an especially trying week, while attending a corporate function on board the
President’s yacht, Kathy is introduced to Brian Clark, an attorney and old
school mate of the president and the next head of corporate counsel. The
realization that Brian will be a quarter of a million dollar a year vice
president is more than Kathy can handle at a rational level and she decides to
do whatever it takes to get ahead. As she is sitting and watching
television, she sees the show “This Week in Medicine”. Her plan begins to take
shape and is facilitated by the advances of Brian.
As she
and Brian are involved in an intense whirlwind relationship, Kathy guides and
directs the activities so that he proposes to her in under a month. Kathy
explains that she has an inoperable brain tumor and has only two or three years
to live. Brian suggests a second opinion and she tells him she has had a second
and a third opinion. Brian tells her that if they have two minutes or two
hundred years, he wants to spend them with her.
They
buy a house and live together and then Brian takes Kathy to meet a friend’s
younger brother Ric. Much to Kathys’ surprise and delight, Ric is not only a law
student, but he is putting himself through school as a yacht salesman. The
couple purchases a 60 foot sailboat from him.
During
one of their weekends onboard their sailboat, the couple spend a romantic
evening drifting on the current, drinking champagne and making love. Asleep from
the effects of the champagne and love making, the two sleep peacefully on deck
under the stars. Kathy awakes to the light slapping of the water against the
hull of the sailboat, wraps the anchor line around Brian’s feet and releases the
anchor, sending Brian to continue his sleep...with the
fishes.
After
the investigation determines the death to be an alcohol related boating accident
and the grieving Kathy inherits “a substantial amount of money”, she decides she
must get away for a while and moves to the opposite coast.
One
day, about six months later as she is walking along the docks, Kathy meets Colin
Jensen an older gentleman and fellow sailing enthusiast. he two enjoy a
friendly conversation and Colin is surprised to learn that he and Kathy are both
entered in a local sailboat race. The two have dinner and talk about sailing.
They find that sailing isn’t the only thing they have in common, they have both
lost a spouse.
After
a short but passionate romance that has the entire community talking, Colin and
Kathy are married. The couple spend several blissful months until one weekend
they are competing in a local “Couples Regatta” and, as Colin and Kathy are
getting ready to raise their flying jib, with Colin manning the jib and Kathy
manning the lines, a line gets wrapped around Colin’s neck and he is yanked
overboard and slammed into the hull. As he is being drug alongside the boat and
Kathy is “trying” frantically to help him, the harbor patrol comes to their aid.
To the horror of all, Colin is dead. As Kathy returns from spreading his ashes,
we see the grieving widow sobbing gently...as the sobbing subsides it turns to
an almost hysterical laughter.
Almost
one year to the day from the time she left, Kathy returns to her former
home. As word gets around that she is back, some of her old sailing crowd
begins to get together with her. Ric has passed the bar exam and, with the
financial backing of some friends, started a small firm.
While
at a party, Ric introduces Kathy to Tom and Terri, two climbing friends of his.
Along with being his friends they are clients. Kathy spends some time with them
at the party and finds that they are trying to raise the money to start several
rehab facilities. Given her current financial situation, Kathy becomes a 50%
partner with them. The rehab centers turn a huge profit due to both government
funding and insurance companies.
In
addition to the common interest of the business, Tom, Terri and Ric teach Kathy
to climb. Much to his surprise, Ric finds himself and Kathy becoming not only
professionally but casually involved physically. One day he asks about the
tumor and tells her how impressed he is by her continual courage. She explains
that it is only the courage to accept the things you can’t change and she thinks
that is part of why she is so glad to be involved with the rehab centers...these
people have things that can be changed for the positive. Ric throws in the fact
that while a noble cause, it is also quite profitable. She replies that profit
only has value if you’re around to use it and she probably won’t be for long.
Ric feels that he just put his foot in his mouth and they change the
topic.
Several
weekends later while Tom is continuing to teach Kathy about proper placement of
climbing protection, he falls. It appears that Tom is seriously injured and
Kathy makes the determination to cut him away rather than risk being pulled off
the mountain herself. There is some question as to this being a good decision
and Kathy is charged with murder.
Longshot
Bergstom
“Barry” Long, Sometimes Iceberg never Berggie is a 47 year old excess in all
things moderation is for monks type of a guy. Married with 3 kids, he is just as
apt to miss the soccer game or dance recital due to a hot tip on a horse race as
he is to remember the over the top birthday present or show up with the
unexpected candy and flowers.
During
a “near death” experience Barry is given the chance to work at making things
better (not necessarily right). The “reapers” with whom he makes the deal can’t
promise Heaven or Hell or even an amount of time he may or may not have, but
only the chance for a possible “Do Over” in his own life while making other
peoples’ lives better.
Longshot
is about how and why we make decisions, how they may affect others and what and
why we might modify given the opportunity.
Community
Challenge®
Community
Challenge® is a reality show. The show is designed to be a cross between Extreme
Makeover®, American Idol®, Survivor®, and Habitat for Humanity®, our goal is to
go into areas devastated by natural disasters and, via the community building
experience, help get the area back on its feet. This will be accomplished by
working with local economic and redevelopment authorities, local religious and
non-profit organizations and the families themselves. Once the primary needs are
identified, we will contact the families affected by the disaster (flood,
hurricane, fire, etc.) and assist them in the rebuilding and healing
process.
38
The
first region selected is Orange County, Texas, an area devastated by hurricane
Rita and overlooked due to the racial and political insignificance of the area
in the shadow of hurricane Katrina.
Community
Challenge - Texas is in the process of contacting the approximately 11,000
families effected by hurricane Rita in order to determine how many want to
return home. An interview process will take place with the number of individuals
being considered, narrowed down to approximately 1500 families. This number will
be further reduced to approximately 500 who will then begin the “Game” portion.
All contestant families will receive room and board as well as payment for work
done for the duration of their tenure in the game.
These
people will all, regardless of age, race, gender, etc., be given the opportunity
to help rebuild their community. A community needs 83-year-old grandmothers that
are caring for their grandchildren, daycare providers, clerical and retail
providers as much as they need 23-year-old guys that can swing a hammer. During
the first 4-6 weeks of preparing the property for building, the 500 families
(community) will determine, based upon work ethic and compatibility, who stays
and who goes. This will bring the number to 200.
At the
200 family level, we will divide the families into 25 teams lead by a contractor
and designer. Each team will be given the same basic set of structural plans but
with the ability to add their own ideas and changes (non-structural) so long as
remaining within time and budget restraints. Additionally, all of the final 200
families will be involved in classes, teaching them such topics as fiscal
responsibility, basic wealth building, nutrition and health, etc. in order to
help assure a better chance of maintaining a long term successful community.
Success with various tests and challenges will assure a family immunity through
the next vote.
Each
week, we will focus on several of the teams, their progress and interaction
culminating in the “voting off” of several of the team members. Both the
community members and the television audience via the ability to phone in and
vote will do this voting.
Ultimately,
the game will award 50 families one year of free rent in one of the 2500 sq. ft.
town homes they help to build. Another 45 families will receive two years free
rent, four families will be given ownership of a town home and the grand prize
winner will receive a new single family home. We have begun
pre-production on this project and the trailers can be viewed on our website at
www.asgardmedia.com
.
The
cost of producing Community Challenge is expected to vary with each
season. In the case of Community
Challenge Texas , we have a preliminary budget of approximately 32
million dollars to do the project as we would like. However, this
could be scaled down to a budget of under five hundred thousand dollars and
although we believe the potential for profit would exist, we do not believe
that, the public impact and long term effects of the show on the community would
be as substantial. We intend to seek sponsorship as well as state and
federal monies allotted for natural disasters, although we may not be successful
in procuring these monies. The Company intends to fund the Community
Challenge project as its first television series by a combination of investment
funds received in this offering and through sponsorship and government funding,
the specific amounts of which are not known at this time.
Public
Relations and Promotion
During
pre-production and production, the Company will enlist a public relations firm
to expand on the initial foundation of interest and generate further publicity
about the films and the filmmakers. Such “buzz,” or general awareness, can
increase the perceived value of the motion pictures to potential distributors.
There is presently no arrangement or understanding with any such firm and the
Company has no affiliated firms.
39
The
Company currently has no full-time employees. The Company may hire two employees
in the next 12 months to assist in marketing, secretarial and administrative
duties. The Company intends to utilize the services of other necessary personnel
on a project-by-project basis.
Bonding
Issues
As an
independent production facility our board of directors has determined that if it
is possible to find a reasonably priced completion bond company that does not
require working with the studios or unions, we will use reasonable efforts to
facilitate them. However, most bonding companies require the use of unions at
the very least. This is likely to undermine our financial structure as an
independent film company just as it has the profitability of many of the studios
and other North American businesses.
In the
case of an average independent production (“indie”), there is a shooting
schedule of 18-28 days, this is the time during which 90% of principle
photography is accomplished. (Film Independent, please see www.filmindependent.org
for function and clarity) Due to the nature of independent film production, it
is not uncommon to be several days behind schedule by the end of the first week
and be “scrambling” to find “Pick-up” time. In the case of a studio or large
budget production with union/guild restrictions this would be of major
importance. However, with an indie, although important, it is not as dramatic an
event, because they typically use off hour editing and non-union personnel; and
are therefore, not over taxed by the connected regulations/agreements. Both the
talent and the production team have the flexibility to work together for the
common good of getting the project completed and making a profit.
With a
completion bond, the bonding company determines at what point they are going to
“take control” of a project based upon the project being on time and on budget.
We do not believe it is advisable to put a project in risk of being taken over
if the production is running 15% overtime (which is about 3 days into a 21 day
shoot). For example, when a sunny shoot is necessary and the rain isn’t going to
stop for another 2 days, the production company may not be certain it is even
behind until day 6. Depending upon how the bonding company is determining “on
time on budget” status, the production company may have lost its project before
it ever got out of the truck or the rain stopped.
Management’s
philosophy is that independent films are produced based upon the strength of the
project in the minds of the production team and the investors, not on star power
or box office projections. If this belief in the project is taken away by
anyone, it is the producer’s job/mandate to fix it or fail.
40
Financing
Strategy
We
will not be able to execute on our business plan on our own without at least
$6,500,000 the proceeds of this offering. In the event that the Company
does not raise the funds necessary to implement its business plan during the
offering period, but is successful in raising at least $50,000, it intends to
modify its business plan to produce industrial or educational films, which may
be produced for as little as $15,000, However, investors need to
understand that the number and types of film projects available to the Company
are directly related to the funding it receives. If the Company were to receive
$200,000 it could still produce one feature film by significantly amending its
operating budget. If the funds received were less than $200,000, the
Company would need to pursue the production of educational and industrial films
until it was able to finance a feature film. Primary responsibility for the
overall planning, financing and production of each motion picture will rest with
our management. Further, if the Company is only successful in raising the
minimum of $50,000, after deducting estimated offering expenses, there will only
be $20,000 remaining, which may not allow the Company to successfully implement
any business plans thereby resulting in a substantial or complete loss to
investors.
Whenever
possible we will attempt to make arrangements with providers of goods and
services to defer payment until a later stage in the production and financing
cycle. Once a film package has been assembled, there are various
methods of obtaining the funds needed to complete the production of a motion
picture. Examples of financing alternatives include the assignment of
our rights in a film to a joint venture or a
co-producer. Alternatively, we may form a limited liability company
or partnership where we will be the managing member or the general partner. We
may also obtain favorable pre-release sales or pre-licensing commitments from
various end-users such as independent domestic distributors, foreign
distributors, cable networks, and video distributors. Further we will seek
additional revenue from sponsors and product placement in our productions as an
additional source of financing and revenue. These various techniques, which are
commonly used in the industry, can be combined to finance a project without a
major studio financial commitment. We may, at management’s
discretion, sell shares of our capital stock or exchange shares for services, to
finance the production of films.
By
virtue of using Canada as our primary shooting location, we may be able to
obtain financial support from the Canadian federal and provincial
governments. By filming in Canada, we hope to be able to borrow
against tax credits obtained through Canadian federal and provincial production
services tax credits. These tax credits would enable to us to recover
27% to 33% of eligible labor costs, or approximately 13.5% to 16.5% of our total
production budget. Canadian banks commonly allow producers to borrow
against such tax credits in producing motion pictures (Film BC & CACO annual
reports 2005-2008) We may also be able to access foreign government
financing through international co-productions with treaty countries, although
there can be no assurances that we will be able to do so).
We may
use any one or a combination of these or other techniques to finance our films.
We anticipate that any financing method will permit us to maintain control over
the production. There can be no assurance that we will be able to successfully
arrange for such additional financing and to the extent we are unsuccessful, our
production activities may be adversely affected.
41
Distribution
Arrangements
Effective
distribution is critical to the economic success of a feature film, particularly
when made by an independent production company. We have not as yet negotiated
any distribution agreements.
We intend
to release our films in the United States through existing distribution
companies, primarily independent distributors. We will retain the right for
ourselves to market the films on a jurisdiction-by-jurisdiction basis throughout
the rest of the world and to market television and other uses
separately. In many instances, depending upon the nature of
distribution terms available, it may be advantageous or necessary for us to
license all, or substantially all, distribution rights through one major
distributor.
To the
extent that we may engage in foreign distribution of our films, we will be
subject to all of the additional risks of doing business abroad including, but
not limited to, government censorship, currency fluctuations, exchange controls,
greater risk of "piracy" copying, and licensing or qualification
fees.
It is not
possible to predict, with certainty, the nature of the distribution
arrangements, if any, that we may secure for our motion pictures.
Competition
The
motion picture industry is intensely competitive. Competition comes from
companies within the same business and companies in other entertainment media
that create alternative forms of entertainment. The industry is
currently evolving in such a way that certain multinational multimedia firms
will be able to dominate this space because of their control over key film,
magazine, and television content, as well as key network and cable
outlets. These organizations have numerous competitive advantages,
such as the ability to acquire financing for their projects and to make
favorable arrangements for the distribution of completed films. All
of our competitors will likely be organizations of substantially larger size and
capacity, with far greater financial and personnel resources and longer
operating histories, and may be better able to acquire properties, personnel and
financing, and enter into more favorable distribution agreements. Our success
will depend on public taste, which is both unpredictable and susceptible to
rapid change.
As an
independent film production company, we most likely will not have the backing of
a major studio for production and distribution support. Consequently, we may not
be able to complete a motion picture.
In order
to be competitive, we intend to create independent motion pictures that may
appeal to a wide range of public taste both in the United States and
abroad. Moreover, by producing our films in Canada we believe that we
will be able to significantly reduce production costs, and thereby offer our
films to distributors at competitive pricing. Investors must
be aware that at this time we have not produced any film and may not ever be
successful in doing so in the future.
Intellectual
Property Rights
Rights to
motion pictures are granted legal protection under the copyright laws of the
United States and most foreign countries, including Canada. These
laws provide substantial civil and criminal penalties for unauthorized
duplication and exhibition of motion pictures. Motion pictures, musical works,
sound recordings, artwork, and still photography are separately subject to
copyright under most copyright laws. We plan to take appropriate and reasonable
measures to secure, protect, and maintain copyright protection for all of our
pictures under the laws of the applicable jurisdictions. Motion picture piracy
is an industry-wide problem. The motion picture industry trade
association provides a piracy hotline and investigates all piracy reports. The
results of such investigations may warrant legal action, by the owner of the
rights, and, depending on the scope of the piracy, investigation by the Federal
Bureau of Investigation and/or the Royal Canadian Mounted Police with the
possibility of criminal prosecution.
42
Under the
copyright laws of Canada and the United States, copyright in a motion picture is
automatically secured when the work is created and "fixed" in a copy. We intend
to register our films for copyright with both the Canadian Copyright Office and
the United States Copyright Office. Both offices will register claims
to copyright and issue certificates of registration but neither will "grant" or
"issue" copyrights. Only the expression (camera work, dialogue,
sounds, etc.) fixed in a motion picture can be protected under copyright.
Copyright in both Canada and the United States does not cover the idea or
concept behind the work or any characters portrayed in the
work. Registration with the appropriate office establishes a public
record of the copyright claim.
Ordinarily,
a number of individuals contribute authorship to a motion picture, including the
writer, director, producer, camera operator, editor, and others. Under the laws
of both the United States, and Canada, these individuals are not always
considered the "authors," however, because a motion picture is frequently a
"work made for hire." In the case of a work made for hire, the employer, not the
individuals who actually created the work, is considered the author for
copyright purposes. We intend all of our films to be works made for
hire in which we will be the authors and thereby own the copyright to our
films.
Canada's
copyright law is distinguished from that of the United States by recognizing the
moral rights of authors. Moral rights refer to the rights of authors
to have their names associated with their work, and the right to not have their
work distorted, mutilated or otherwise modified, or used in association with a
product, service, cause or institution in a way that is prejudicial to their
honor or reputation. Moral rights cannot be sold or transferred, but
they can be waived. We intend that all individuals who contribute to
the creation of any of our motion pictures will be required to waive any such
moral rights that they may have in the motion picture.
For
copyright purposes, publication of a motion picture takes place when one or more
copies are distributed to the public by sale, rental, lease or lending, or when
an offering is made to distribute copies to a group of persons (wholesalers,
retailers, broadcasters, motion picture distributors, and the like) for purposes
of further distribution or public performance. A work that is created (fixed in
tangible form for the first time) on or after January 1, 1978, is automatically
protected from the moment of its creation and is ordinarily given a term
enduring for the author's life plus an additional 70 years after the author's
death. For works made for hire, the duration of copyright will be 95 years from
publication or 120 years from creation, whichever is shorter.
Although
we plan to copyright all of our film properties and projects, there is no
practical protection from films being copied by others without payment to us,
especially overseas. We may lose an indeterminate amount of revenue as a result
of motion picture piracy. Being a small company, with limited resources, it will
be difficult, if not impossible, to pursue our various
remedies.
43
Motion
picture piracy is an international as well as a domestic problem. It is
extensive in many parts of the world. In addition to the Motion Picture
Association of America, the Motion Picture Export Association, the American Film
Marketing Association, and the American Film Export Association monitor the
progress and efforts made by various countries to limit or prevent piracy. In
the past, these various trade associations have enacted voluntary embargoes of
motion picture exports to certain countries in order to pressure the governments
of those countries to become more aggressive in preventing motion picture
piracy. The United States government has publicly considered trade sanctions
against specific countries that do not prevent copyright infringement of
American motion pictures. There can be no assurance that voluntary industry
embargoes or United States government trade sanctions will be enacted. If
enacted, such actions may impact the revenue that we realize from the
international exploitation of our motion pictures. If not enacted or if other
measures are not taken, the motion picture industry, including us, may lose an
indeterminate amount of revenue as a result of motion picture piracy.(Motion
Picture Academy of America, United Drive-In Theater Owners Association and
National Association of Theater Owners annual reports 2007, 2008)
Censorship
An
industry trade association, the Motion Picture Association of America, assigns
ratings for age group suitability for domestic theatrical distribution of motion
pictures under the auspices of its Code and Rating Administration. The film
distributor generally submits its film to the Code and Rating Administration for
a rating. We plan to follow the practice of submitting our motion pictures for
ratings.
Television
networks and stations in the United States as well as some foreign governments
may impose additional restrictions on the content of a motion picture that may
wholly or partially restrict exhibition on television or in a particular
territory.
Theatrical
distribution of motion pictures, in a number of states and certain
jurisdictions, is subject to provisions of trade practice laws passed in those
jurisdictions. These laws generally seek to eliminate the practice known as
"blind bidding" and prohibit the licensing of films unless theater owners are
invited to attend screenings of the film first. In certain instances, these laws
also prohibit payment of advances and guarantees to film distributors by
exhibitors.
There can
be no assurance that current and future restrictions on the content of our films
may not limit or affect our ability to exhibit our pictures in certain
jurisdictions and media.
Labor
Laws
We are
aware that the cost of producing and distributing filmed entertainment has
increased substantially in recent years. This is due, among other things, to the
increasing demands of creative talent as well as industry-wide collective
bargaining agreements. Many of the screenplay writers, performers,
directors and technical personnel in the entertainment industry who will be
involved in our productions are members of guilds or unions that bargain
collectively on an industry-wide basis. We have found that actions by these
guilds or unions can result in increased costs of production and can
occasionally disrupt production operations. If such actions impede
our ability to operate or produce a motion picture, it may substantially harm
our ability to earn revenue and result in our business to fail.(Screen Actors
Guild Codified Agreement)
We will
use non-unionized talent whenever possible to reduce our costs of
production. Notwithstanding, many individuals associated with our
productions, including actors, writers and directors, will be members of guilds
or unions, that bargain collectively with producers on an industry-wide basis
from time to time. Our operations will be dependent upon our compliance with the
provisions of collective bargaining agreements governing relationships with
these guilds and unions. Strikes or other work stoppages by members
of these unions could delay or disrupt our activities. The extent to
which the existence of collective bargaining agreements may affect us in the
future is not currently
44
Description
of Property
We are
presently using office space in Corona, California, provided at no cost by our
President. If we are able to sell all of the offered shares, we may
lease office space in the Greater Los Angeles, California area.
Number
of Total Employees
Asgaard
Media is currently in the development stage. During the development stage,
we plan to rely exclusively on the services of Wm. Alan Pezzuto, Alice Matano,
Erin Giudice and Stephen Sallus, our officers and directors, to set up our
business operations. They currently work for us on a part-time basis and
whose time and efforts are being provided to Asgaard without cash
compensation. Mr. Pezzuto and Mr. Sallus expect to devote approximately 25 hours
per week to our business. Ms. Matano and Ms. Giudice expect to devote 5
hours per week to our business. Messers Pezzuto and Sallus are prepared to
dedicate additional time to our operations, as needed. There are no other
full- or part-time employees. We believe that our operations are currently
on a small scale that is manageable by these individuals. There are no other
full- or part-time employees.
The film
production professionals we plan to utilize will be considered independent
contractors. We do not intend to enter into any employment agreements with
any of these professionals. Thus, these persons are not intended to be
employees of our company.
Employment
Agreements
There are
currently no employment agreements and none are anticipated to be entered into
within the next twelve months.
Board
Committees
Asgaard
has not yet implemented any board committees as of the date of this
prospectus.
Directors
The
maximum number of directors Asgaard is authorized to have is five (5). However,
in no event may Asgaard have less than one director. Although the Company
anticipates appointing additional directors, it has not identified any such
person. Asgaard currently has four directors.
Facilities
Asgaard
uses an administrative office located at 2550 East Desert Inn Road, Suite 329,
Las Vegas, Nevada 89121. Office space is currently being provided free of charge
at this location by our President. Currently, there are no proposed programs for
the renovation, improvement or development of the facilities currently
use.
45
The
Company’s management does not currently have policies regarding the
acquisition or sale of real estate assets primarily for possible capital gain or
primarily for income. The Company does not presently hold any investments or
interests in real estate, investments in real estate mortgages or securities of
or interests in persons primarily engaged in real estate
activities.
Intellectual
Properties
Our
Company’s CEO, contributed all right title and interest he held along with all
ancillary rights in the following original works written by Wm. Alan Pezzuto:
Mountains of Trouble WGAw Reg. # 1000937, Taken By Storm WGAw Reg. # 1000935,
Longshot®, Community Challenge® WGAw Reg. # 1283196 and Widow’s Walk WGAw Reg. #
837547. We have not placed any value on these properties due to the additional
difficulty and expense of securing appraisals to comply with the American
Institute of Certified Public Accountants Statement of Position
00-2.
WGAw is
the acronym for the ”Writers Guild of America west”. This is the
guild which represents any/all aspects of writers including but not limited to
registration of materials and collective bargaining of/for
contracts. Please visit their website at www.wga.org for
further information. Registration with the WGAw is not the same as
maintaining a U.S. registered copyright. Under U.S. copyright law,
all literary works receive copyright protection when a work is complete,
registration simply established a definitive date of a work and gives the holder
of the copyright the right to, among other things, collect attorneys fees in the
prosecution of infringement claims. Registration with the WGAw does
not afford the registrant with a right to collect attorney’s fees but it does
establish an objective date of a literary work. The Company has not sought
copyright protection on its screen plays at this point because a screen play
tends to be revised many times and is generally not complete until production is
complete. Once production is completed on each of its projects, the
Company intends to file for copyright protection.
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND FINANCIAL DISCLOSURE OR PLAN
OF OPERATION
This
section of the prospectus includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this prospectus. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
Overview
We are a
development stage company and although we have started operations, we have not
generated or realized any revenues from our business operations. Our
auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business
for the next months 12. Our auditor's opinion is based on our suffering initial
losses, having limited operations, and having limited working capital. Our only
other source for cash at this time is investments by others in our Company. We
must raise cash to implement our projects and begin our operations.
We have
only three officers and four directors who are responsible for our managerial
and organizational structure which will include preparation of disclosure and
accounting controls under the Sarbanes Oxley Act of 2002. If they are unable to
perform all of their duties adequately any investment made into the Company may
be lost in its entirety.
46
Limited
Operation History; Need for Additional Capital
Asgaard
Media was incorporated on January 8, 2008. As of September 30, 2009,
we generated no revenues and incurred $621,722 in operating expenses.
Since our incorporation, we have raised capital through private sales of
our common equity and contributions of capital from our
President. Since its incorporation Asgaard has financed its
operations through initial limited capitalization and limiting its activities to
pre-production. We will need additional capital to produce our
projects.
Liquidity
and Capital Resources
The
realization of revenues in the next twelve months is important to the execution
of the plan of operations. However, we cannot guarantee that we will
be able to generate such growth. If we cannot produce sufficient cash
flow or raise sufficient proceeds through the sale of our common shares over the
next twelve months we will not be able to continue as a going concern and our
business will fail.
We must
raise cash to implement our business plan. The minimum amount of funds raised
from the offering that we feel will allow us to implement our business strategy
is $6,500,000. If we can raise the maximum amount of the offering ($25,000,000),
we believe the Company will be able to accelerate the implementation of its
business strategy by hiring more experienced marketing and creative
consultants. The Company cannot provide any guarantee it will be able
to sell any of its common shares through this proposed offering.
Capital
Contribution by Management
Since our
incorporation, we have raised capital through private sales of our common equity
in the amount of $72,200 and capital contributions from our President, Wm. Alan
Pezzuto. During the nine months ended September 30, 2009, Mr. Pezzuto
contributed capital to the company in the amount of $246,202. To date, those
funds have assisted in acquiring an interest in the locations to be used in part
for the shooting of Mountains of Trouble pre-production of Community Challenge
and Between Purgatory and Perdition.
Plan
of Operation
For the
past 18 months Asgaard Media has been developing various entertainment
properties ranging from reality television with a purpose through feature films
with a story. At this time it is not possible for the Company to predict, with
any degree of accuracy, what priority a particular project will receive if less
than all of the proceeds are received in this offering. The project
priority will be based upon the amount of funds received, the length of time it
takes to receive funds and the time of year they are received. For example, our
Mountains of Trouble project was originally optioned to a studio who budgeted
approximately 25 - 30 million dollars. This was for a feature film
presentation with some joint marketing efforts and a fairly well known actor for
the main character. This never came to fruition and our management
feels they can produce this project for 3-5 million dollars. The time of year
also makes a difference in our priority. Since Mountains of Trouble has winter
footage, the cost would be much higher so shoot in the summer, requiring an
entire cast and crew to locate in a winter environment in order to
shoot.
We
have spent approximately 2000 man-hours on our Community Challenge project over
the past year. Having been conceptualized in late 2007, we spent much of 2008
laying the groundwork for the first season which we are planning to shoot
beginning in the fall of 2010. This season will feature the area of Southern
Texas (Orange County) that was devastated by Hurricane Rita and then, as they
were cleaning the final trees from their roofs, were hit by Hurricane Ike which,
while less publicized due to the lack of political value, was far worse on the
region then Rita.
Asgaard
Media was able to have a team on the ground in Orange County, Texas just hours
after their being struck by Ike and was able to capture the heart wrenching
reality that is these peoples life.
47
In an
area that has lost over 80% of its homes and residents due to these two
disasters, we look forward to going in and providing both homes and jobs to
several hundred people. The trailer for this project is currently available on
our website at www.asgaardmedia.com
. To date we have spent approximately $86,700 on this project which has included
multiple research production trips to the region. We have been able to not only
fully develop the series, but also to interview numerous victims, interface with
local government and civic organizations in order to determine the most
effective manner in which to assist the area. We have also captured footage of
the initial damage caused by hurricane RITA as well as by having a production
crew on the ground just hours after the more powerful hurricane IKE reached
landfall been able to document the continuing battle between man and
nature.
We have
also been rewriting our Mountains of Trouble script. Originally optioned by
SABAN Entertainment in the 1990s’, it has been revamped by the award winning
Canadian writer/director team of Francis Testa (from Chicken Soup for the Soul)
and Geoff Browne (from Call it Karma) in order to accommodate the changes having
taken place over the past 10 years This feature film revolves around an eight
year old girl trying to understand not just her place in the family but in her
version of social responsibility. To date we have spent approximately $ 63,500
on this project. These funds have allowed us to not only have the script revamp
for a more contemporary feel, we have been able to research potential locations
as well as probable tax, funding and staffing opportunities in both the U.S. and
Canada. This project has been relatively research intensive with regard to
regulatory issues given it revolves around both children and non-domestic
animals.
Between Purgatory and
Perdition , has been in pre-development since the summer of 2008. This
story follows the personal journey of several First Nations/Native Americans as
they battle the stereotype addictions of drugs and alcohol that to this day are
a greater threat to the ultimate survival of their culture than European
colonization. Asgaard Media has been fortune in that representatives from
various tribes in both the US and Canada who have assisted us in our research.
This is an inspirational film focusing on a theme we all experience but at
different levels. To date we have spent approximately $ 52,000 on this project.
Since beginning this project in 2008 we have been able to establish dialogue
with several tribes with regard to being able to address the tragically real
issues of drug and alcohol abuse and it associated problems and violence within
the Native American community. This at a time when secret/sacred aspects of
these people is under attack not only due to hundreds of years of ignorance and
prejudice, but also from the more recent envy, brought about by Indian casinos
and tax breaks/shelters in a time of national economic distress.
Additional
alliances’ have been being worked on over the past year including establishing
liaisons with Film B.C. and various Canadian and US film commissions. In
April/May of 2009, in anticipation of hard production needs, Asgaard Media
entered into a an agreement with Canadian Film Producer Elohim Entertainment,
Ltd and their newly acquired subsidiary Independent Productions Co-op wherein
they would assist with the staffing of several of our
projects.
Notwithstanding
the fact that we have begun operations and are in pre-production on three
projects, our ability to fully commence operations is entirely dependent upon
the proceeds to be raised in this offering. Depending on the outcome of this
offering, the Company plans to choose one of the following
courses:
48
Plan 1: 25% of Offering Sold.
If only 25% of the offering is sold or $6,250,000 is raised in this
offering, Asgaard will immediately begin to implement the aforementioned plans
to generate business sufficient enough to maintain ongoing operations. This
entails continuing pre-production and beginning production on our first and
second feature films in order to continue this process Asgaard to use
approximately $4,000,000 of the monies allocated toward production, $150,000
allocated to pre-production, $1,000,000 allocated to marketing, and $350,000
allocated to salaries and consulting expenses.
The
Company has budgeted $300,000 for general and administrative expenses, which is
expected to consist of administrative working spaces, computers, computer
peripherals, software, storage cabinets, fax machine, telephone equipment,
printing costs, postage, telephone services, overnight delivery services and
other general operating expenses.
Asgaard has
allocated $429,000 for general working capital to cover any shortfalls in the
categories listed above and to take advantage of any business opportunity that
presents itself, including acquisition of intellectual property
rights.
The
Company believes it will be able to execute the business plan adequately and
commence operations as a going concern if 25% of this offering is realized.
Asgaard does not, however, expect to generate revenue in the first six months of
operation from the date the first funds are received from this
offering.
Any line
item amounts not expended to their fullest extent shall be held in reserve as
working capital, subject to reallocation to other line items expenditures as
required for ongoing operations.
Plan 2: 50% of the Offering.
In the event 50% of the offering is raised, management will supplement its
activities addressed in Plan 1, as delineated above. The Company does not
believe it will generate revenues in the first six months of operation from the
date the first funds are received. The Company expects to continue to
substantially increase its production activities for its second feature film,
produce a television production, increase consumer awareness by utilizing the
increased allocation for sales and marketing to $2,000,000 for each of its first
two feature films, a key factor in developing new business
revenues.
The
allocation for $300,000 for general and administrative expenses remains
constant.
The
allocation for working capital increases to $651,500, salaries and consulting
expenses increases to $700,000 in anticipation of increasing costs due to the
increase in production activity.
The
allocation for pre-production expenses increases to $560,000 for our television
project and for our third feature film.
Any line
item amounts not expended to their fullest extent shall be held in reserve as
working capital, subject to reallocation to other line items expenditures as
required for ongoing operations.
Plan 3: 75% of the Offering.
In the event 75% of the maximum offering is raised, management will supplement
its activities addressed in Plans 1 and 2, as delineated above. The Company does
not believe it will generate revenues in the first six months of operation from
the date the first funds are received. The Company expects to continue to
substantially increase its production activities by utilizing the increased
allocation for sales and marketing to $4,500,000 for each of its feature films,
the first is increased by $1,000,000 the second remains constant and $1,500,000
is allocated to sales and marketing for our third feature film, a key factor in
developing new business revenues.
49
The
allocation for $300,000 for general and administrative expenses remains
constant.
The
allocation for working capital decreases to $521,500, due to increases in
salaries and consulting expenses increases to $1,150,000, increases in
pre-production expenses to $750,000 and the increases in sales and marketing
expenses set forth above.
The
allocation for pre-production expenses increases to $750,000 for our television
project and for our third feature film.
Any line
item amounts not expended to their fullest extent shall be held in reserve as
working capital, subject to reallocation to other line items expenditures as
required for ongoing operation.
Plan 4:100% of the Offering.
In the event the maximum amount of $25,000,000 is raised, the Company still does
not expect to generate revenue in the first six months of operation from the
date the first funds are received from trust. Under Plan 4, management will
supplement the activities addressed in Plan 3, as delineated above.
The
allocation for $300,000 for general and administrative expenses, $1,150,000 for
salaries and consulting expenses, $750 for pre-production costs, $3,000,000 for
production costs for our first feature film, $2,500,000 production costs for our
second feature film, and $3,000,000 production costs for our television
production all remain constant.
The
allocation for marketing expenses for our second film increases to $1,500,000,
production expense for our 3 rd feature
film increases to $8,000,000 and marketing expense for our third feature film
increases to $2,000,000. This increase in expenses related to our third feature
film reflects significant improvements to the project from shooting in Super-16
film to 35mm film and enhanced special effects and set expenses.
The
decrease in general working capital to $468,000 results from anticipated
increases in other costs related to our second and third feature
films.
Any line
item amounts not expended to their fullest extent shall be held in reserve as
working capital, subject to reallocation to other line items expenditures as
required for ongoing operations.
Asgaard’s
ability to commence operations is entirely dependent upon the proceeds to be
raised in this offering. If Asgaard does not raise at least $6,500,000 of the
offering amount, it will be unable to establish a base of operations, without
which it will be unable to begin to generate any revenues. The realization of
sales revenues in the next 12 months is important in the execution of the plan
of operations. However, the Company cannot guarantee that it will generate such
growth. If Asgaard does not produce sufficient cash flow to support
Asgaard operations over the next 12 months, Asgaard may need to raise
additional capital by issuing capital stock in exchange for cash in order to
continue as a going concern. There are no formal or informal agreements to
attain such financing. Asgaard cannot assure any investor that, if needed,
sufficient financing can be obtained or, if obtained, that it will be on
reasonable terms. Without realization of additional capital, it would be
unlikely for operations to continue.
50
Asgaard
management does not anticipate the need to hire employees over the next 12
months with the possible exception of secretarial support should business
develop of a sufficient nature to necessitate such expenditure. Currently, the
Company believes the services provided by its officers and directors appears
sufficient at this time. Asgaard believes that its operations are currently on a
small scale that is manageable by these individuals at the present
time.
Asgaard
has not paid for expenses on behalf of any director. Our management does not
expect to incur research costs in the next twelve months; we currently do not
own any significant plants or equipment that we would seek to sell in the near
future; and we do not have any off-balance sheet arrangements.
Additionally, we believe that this fact shall not materially
change.
CHANGE
IN DISAGREEMENTS WITH ACCOUNTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Asgaard
Media has no disagreements with its accountants regarding accounting or
financial disclosure matters.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table provides the names and addresses of each person known to Asgaard
Media to own more than 5% of the outstanding common stock as of September 30,
2009, and by the Officers and Directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
Title of Class
|
Name and Address
of Beneficial Owner
|
|
Amount of
Beneficial
Ownership
|
|
|
Percent
of Class*
|
||||
Common
Stock
|
Wm.
Alan Pezzuto
2550
East Desert Inn Road, Suite 329
Las
Vegas, Nevada 89121
|
5,000,000
|
(1)
|
12.33
|
%
|
|||||
Common
Stock
|
Stephen
J. Sallus
2878
Via Victoria
Palos
Verdes Est., CA 90274
|
2,022,500
|
(2)
|
4.99
|
%
|
|||||
Common
Stock
|
Erin
Giudice
1240
East Ontario, Suite 102-301
Corona,
CA 92881
|
100,000
|
0.25
|
%
|
||||||
Common
Stock
|
Alice
M. Matano
1240
East Ontario, Suite 102-301
Corona,
CA 92881
|
100,000
|
0.025
|
%
|
||||||
Common
Stock
|
Barbara
Mitchell
13780
Calle De Los Pinos
Lake
Elsinore, CA 92530
|
7,250,000
|
(3)
|
17.89
|
%
|
|||||
Common
Stock
|
Christopher
Baker
c/o
NROP
PO
Box 4151
Dana
Point, CA 92629
|
5,000,000
|
12.33
|
%
|
||||||
Common
Stock
|
Douglas
Scheving
808
Nelson St.
Vancouver,
BC U6Z 2H2, Canada
|
4,000,000
|
(4)
|
9.87
|
%
|
|||||
Common
Stock
|
Merlion
Entertainment, Ltd.
808
Nelson St.
Vancouver,
BC U6Z 2H2, Canada
|
5,000,000
|
12.33
|
%
|
*The
percent of class is based on 40,537,000 shares of common stock issued and
outstanding as of September 30, 2009.
(1)
|
The shares presented in this
table exclude 5,000,000 shares beneficially owned by Mr. Pezzuto’s minor
children and held by their grandmother, Barbara Mitchell as custodian
under the Uniform Gift to Minors Act. See Note
3.
|
(2)
|
The shares presented in this
table include 22,500 shares held by Stephen Sallus’ parents, Sandy and
Irving Sallus which Stephen Sallus may be deemed to beneficially
own.
|
(3)
|
The shares held by Barbara
Mitchell directly are 2,000,000, The balance of 5,250,000 are held by her
as custodian under the Uniform Gift to Minors Act for her grandchildren
for which she maintains full voting and dispository control as follows:
2,500,000 held for the benefit of Minor L Pezzuto; 2,500,000 held for the
benefit of Minor M. Pezzuto; and 250,000 for the benefit of Minor Novorr.
Ms. Mitchell has no pecuniary interest in those 5,250,000 shares held by
her as custodian and disclaims beneficial ownership of the
same.
|
(4)
|
Excludes 5,000,000 owned by
Merlion Entertainment, Ltd., a company for which Mr. Scheving serves as
Chief Executive Officer. Mr. Scheving. Mr. Scheving has voting and
dispository control over these
shares.
|
DIRECTOR,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors
are elected by the stockholders to a term of one year and serves until his or
her successor is elected and qualified. Each of the officers is appointed
by the Board of Directors to a term of one year and serves until her or her
successor is duly elected and qualified, or until he or she is removed from
office. The Board of Directors has no nominating, auditing or
compensation committees.
51
Background
of Directors, Executive Officers, Promoters and Control Persons
Wm. Alan Pezzuto-Chairman of the
Board of Directors, President, Chief Executive Officer and Director, Age
51: Mr. Pezzuto has been President of the Company since its
inception. During the past five years Mr. Pezzuto has served as
the President of Pezzuto Construction and as the President Chief Executive
Officer Asgaard Media. He began a career in photography at the age of
thirteen, when he submitted a proposal to document the opening of the new
library in Williamstown, New Jersey and the city council, under the impression
that the bid had been submitted by an actual company was left with no option but
to honor their agreement when he showed up the morning of the event and they had
no-one else to document the event. As a still photographer, his
career ranged from the field of photojournalism through three years as the staff
photographer for United Concerts and Artists, where he went on the road and
photo-documented such groups as “Crosby, Stills and Nash”, “America”, “Tears for
Fears”, “The Eagles” and “Howard Jones”, just to name a few. In 1990, after
working in various positions within the movie industry, Pezzuto ventured off on
his first independent production, “ OUTSIDE
THE INNER CIRCLE”, a documentary-instructional for the music industry.
Comments and critiques may be found in Songwriters Musepaper, March 1991 page
11, Billboard Magazine and R & R Magazines October, 12, 1990, LA Times
January, 11 1991 and a number of others.
During
1994 he co-founded Cougar Creek Productions, which he took to market in 1996
with a public offering (SEC file #24-3556). From 1996 until 2000 he was
responsible for optioning and developing a number of projects with Saban
Entertainment, Momentum Entertainment and Fox. Mr. Pezzuto divested himself of
his Cougar Creek holdings in 2000.
Mr.
Pezzuto and several other individuals had founded Pezzuto & Associates, a
business and legal consulting firm, in 1986 focused on advising various Peoples
Republic of China organizations and their US counterparts.
Upon
his return to the U.S. late in 2000, Mr. Pezzuto went back into both
entertainment and real estate development, and by 2003 had teamed up with long
time friend and Emmy winner James G. Williams to form “Reel Magic Productions”
in order to provide live magic to the casino industry as well as in-house
broadcast programming. Reel Magic Productions contracted with
Harrah’s Casino Group to provide entertainment to approximately half of their 43
casinos through the world when in August of 2005, Hurricane Katrina
devastated the South Eastern United Stated and destroyed several Harrah’s
properties. Within 6 months all contracts were cancelled using the “Acts of God”
clause and Harrah’s went to a central booking company. Pezzuto & Williams
determined that the profitability would be diminished to such an extent as to
not continue with the live entertainment and went on to co-write “Gotchya” (WGAw
3 999541), “True Abductions” which later became “Worlds Around Us”
(WGAw # 1014717) and several others, which were in pre-production at the time of
Mr. Williams death on the 27 th of
August, 2006.
In 2007
Pezzuto Produced and Directed for UFC/IFC which split apart in the spring of
2007 at which time he stayed with the IFC branch producing their new promotional
DVDs’ and later the live broadcast of the fights in Marksville,
Louisiana.
Stephen J. Sallus- Director, Age
52: Mr. Sallus served with Shulman Video where he was involved with every
aspect of video engineering and production (both studio and field). Later, he
went to the newly formed Health Television Network as an engineer and producer.
Mr. Sallus expanded his involvement with video and “digital” entertainment;
working with both Hoffman Video and Shoreline Video he designed and built
everything from large-scale private theaters to production
trucks. Through his continual work with both the studios and
networks, Mr. Sallus recognized a two-fold niche market where his talents as
both an independent financial consultant and a film and video consultant could
be of service. First, the ability to raise money for everything from independent
films to production trucks was in high demand. Second, a person that understood
the changing face of the industry from film to digital or a hi-bred thereof
would be of use. In 1992 he founded S.J.S. &
Associates (“SJS”) a group dedicated to the furtherance of film and video via
both funding and good business direction based upon what he and his partners had
learned over the preceding 10+ years. Mr. Sallus has been employed by SJS since
its inception through the present. Through SJS, he has helped in the founding of
such film groups as New Line Cinema and Momentum Films and has assisted in
raising over two hundred and fifty million dollars ($250,000,000) in investment
capital for their clients.
52
Erin Giudice, Secretary and Director, Age 46 : Ms Giudice has been
employed with the County of Orange in California since 1987. From 2008-2009 she
has served in the area of homeland security. From 2002 until the present she has
served as a lieutenant. From 1987-1989 and 2001-2004 she served in Jail
operations. She served 10 years court operations from 1989-1999. From
2001-present, Ms. Giudice collateral responsibilities include press information.
Her associations and memberships include positions as the Director of the
Harbormaster and Port Captain Association and Newport Sea Base. She also serves
as an ex-officio member of Newport Oceanic Sailing Association and is a
member of the maritime domestic nuclear preparedness committee. Ms Giudice
received an Associate’s degree in psychology in 1984 and A Bachelor of Science
in the Administration of Justice in 2003.
Alice M. Matano-Treasurer, Chief
Financial Officer and Director, Age 46: Since 1992 Ms.
Matano has served as the President and Chief Executive Officer of Matano
Enterprises, Inc., a firm providing bookkeeping and accounting services for
small to medium sized businesses. Ms. Matano is licensed as an enrolled agent
for the United States Internal Revenue Service since 1994; and prior to that
worked in the area of fixed assets and capital budgeting / finance.
There are
no familial relationships among our officers or directors. None of
our directors or officers are a director in any other reporting
companies. Pezzuto Construction and Wm. Alan Pezzuto filed bankruptcy
on in December 2008, by filing a Petition under Chapter 7 of the U.S. Bankruptcy
Code with the Bankruptcy Court in the Central District of California, he is
currently waiting disposition of this matter. None of the remainder of our
directors or officers have been affiliated with any company that has filed for
bankruptcy within the last five years. The Company is not aware of
any proceedings to which any of the Company’s officers or directors, or any
associate of any such officer or director, is a party adverse to the
Company.
Each
director of the Company serves for a term of one year or until the successor is
elected at the Company's annual shareholders' meeting and is qualified, subject
to removal by the Company's shareholders. Each officer serves, at the
pleasure of the board of directors, for a term of one year and until the
successor is elected at the annual meeting of the board of directors and is
qualified.
Executive
Compensation
The
following table sets forth certain information regarding executive officers and
directors of Asgaard Media as of the date of this prospectus:
Summary Compensation
Table
Name and
Principal Position
|
Fiscal
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Other Annual
Compensation
|
|
|
Restricted
Stock
Award(s)
|
|
|
Securities
Underlying
Options/
SARs
|
|
|
LTIP
Payouts
|
|
|
All Other
Compensation
|
|||||||||
Wm.
Alan Pezzuto
President,
Chief
Executive
Officer and
Director
|
2008
|
0
|
0
|
0
|
15,622.50
|
0
|
0
|
0
|
||||||||||||||||||||||
Alice
Matano*
Treasurer,
Chief
Financial
Officer and
Director
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||
Erin
Giudice**
Secretary
and Director
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||
Stephen
J. Sallus***
Director
|
2008
|
0
|
0
|
0
|
$
|
81,222.5
|
0
|
0
|
0
|
53
Notes:
1.
|
Ms. Matano and Ms. Giudice
have obligations to entities other than Asgaard Media. We expect
them to spend approximately 5 hours per week on our business affairs. Mr.
Sallus has obligations to entities other than Asgaard Media and we expect
him to spend approximately 25 hours per week on our business affairs. As
of the date of this prospectus, Asgaard Media is not engaged in any
transactions, either directly or indirectly, with any persons or
organizations considered
promoters.
|
2.
|
There has been no cash payment
paid to the executive officers for services rendered in all capacities to
us for the period ended September 30, 2009. On January 1, 2009 Ms Giudice
and Ms. Matano were each granted Restricted Stock of 100,000 shares each
valued at $10,000 or $0.10 per share based on our most recent offering
price for our common stock at that time. Otherwise as detailed above,
there has been no compensation awarded to, earned by, or paid to the
executive officers by any person for services rendered in all capacities
to us for the fiscal period ending December 31, 2008 or the period ended
September 30, 20009 . No compensation is anticipated within the
next six months to any officer or director of the
Company.
|
On
February 12, 2008, we issued 15,622,500 shares of common stock to Wm. Alan
Pezzuto, our CEO and 1,222,500 shares of common stock to Stephen J. Sallus, a
member of our board of directors, as founders’ shares valued at $0.001 per share
or $15,622,500 and $1,222.50 respectively. These shares were issued for
pre-incorporation services. In June 2008, we issued 800,000 shares of
our common stock to Stephen J. Sallus in exchange for services to be performed
in the future and valued at $80,000 based on our most recent offering
price. On January 1, 2009 Ms Giudice and Ms. Matano were each granted
common stock in the amount of 100,000 shares each valued at $10,000
or $0.10 per share based on our most recent offering price for our common stock
at that time in exchange services to be performed over the next 12
months.
*Ms. Matano will perform services related to the shares issued by the Company on
an ongoing basis over the next twelve months. The services that are to be
provided by Ms. Matano in exchange for her shares of the Company’s common stock
will include accounting services.
** Ms.
Giudice will perform services related to the shares issued by the Company on an
ongoing basis over the next twelve months. The services that are to be provided
by Ms. Giudice in exchange for her shares of the Company’s common stock will
include administrative support.
***
Mr. Sallus was granted 1,222,500 founders’ shares valued at $0.001 per share, or
an aggregate of $1,222.50 for pre-incorporation services related to script
procurement and organizational issues. He was subsequently granted
800,000 shares valued at $0.10 per share or an aggregate of $80,000 for which
Mr. Sallus will perform services on an ongoing basis over the next twenty four
months. The services that are to be provided by Mr. Sallus in exchange for his
800,000 shares of the Company’s common stock will include, evaluating potential
screenplays, establishing industry contacts in the areas of film production and
distribution, as well as, recruiting creative talent and securing financing for
our planned feature length films.
There
are no formal agreements with any party who has received shares for services to
be rendered.
Directors'
Compensation
Directors
are not entitled to receive compensation for services rendered to Asgaard Media
or for each meeting attended except for reimbursement of out-of-pocket expenses.
There are no formal or informal arrangements or agreements to compensate
directors for services provided as a director.
Stock
Option Grants
Asgaard
Media did not grant any stock options to the executive officer during the most
recent fiscal period ended December 31, 2008 or for the period ended September
30, 2009. Asgaard Media has also not granted any stock options to the Executive
Officers since incorporation on January 8, 2008.
54
Employment
Agreements
There are
no employment agreements
Code
of Ethics
The
Company’s Board of Directors has approved a Code of Ethics for management
relating to financial disclosures and filings related to future reporting
requirements. A copy of the Code of Ethics will be made available to you by
contacting the Company at 2550 East Desert Inn Road, Suite 329, Las Vegas,
Nevada 89121.
Indemnification
Under our
Articles of Incorporation and Bylaws, we may indemnify an officer or director
who is made a party to any proceeding, including a lawsuit, because of his
position, if they acted in good faith and in a manner he reasonably believed to
be in our best interest. We may advance expenses incurred in defending a
proceeding. To the extent that the officer or director is successful on the
merits in a proceeding as to which he is to be indemnified, we must
indemnify him against all expenses incurred, including attorney's fees. With
respect to a derivative action, indemnity may be made only for expenses actually
and reasonably incurred in defending the proceeding, and if the officer or
director is judged liable, only by a court order. The indemnification is
intended to be to the fullest extent permitted by the laws of the State of
Nevada.
Regarding
indemnification for liabilities arising under the Securities Act which may be
permitted to directors or officers under Nevada law, we are informed that, in
the opinion of the Securities and Exchange Commission, indemnification is
against public policy, as expressed in the Securities Act and is, therefore,
unenforceable.
MARKET
FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS
As of the
date of this prospectus, there is no public market in Asgaard Media common
stock. This prospectus is a step toward creating a public market for Asgaard
stock, which may enhance the liquidity of Asgaard shares. However, there can be
no assurance that a meaningful trading market will develop. Asgaard Media
and its management make no representation about the present or future value of
Asgaard common stock.
As of the
date of this prospectus;
1. There
are no outstanding options or warrants to purchase, or other instruments
convertible into, common equity of Asgaard Media;
2. There
are currently 40,537,000 shares of Asgaard Media’s common stock held by sixty
one (61) shareholders, including of its officer and director Wm. Alan
Pezzuto-5,000,000 common shares, its officer and director Alice Matano - 100,000 common shares, its
officer and director Erin Giudice - 100,000 common shares and
its director Stephen Sallus – 2,000,000. All of these shares are
subject to the restrictions set forth in Rule 144 under the Securities
Act;
55
3. Other
than the stock registered under this Registration Statement of which this
Prospectus is a part, there is no stock that has been proposed to be publicly
offered resulting in dilution to current shareholders.
At the
present time, the Company is not classified as a “shell company” under Rule 405
of the Securities Act.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
Common
Stock
We are
authorized to issue 200,000,000 shares of common stock, par value $.001 per
share (“Common Stock”). As of September 30, 2009, we had 40,537,000 shares of
Common Stock outstanding.
The
holders of the shares of Common Stock have equal ratable rights to dividends
from funds legally available therefore, when, as and if declared by the Board of
Directors and are entitled to share ratably in all of the assets of the Company
available for distribution to holders of Common Stock upon the liquidation,
dissolution or winding up of the affairs of the Company. Holders of shares of
Common Stock do not have preemptive, subscription or conversion
rights.
Holders
of shares of Common Stock are entitled to one vote per share on all matters
which shareholders are entitled to vote upon at all meetings of shareholders.
The holders of shares of Common Stock do not have cumulative voting rights,
which mean that the holders of more than 50% of our outstanding voting
securities can elect all of the directors of the Company.
Our
common stock does not have preemptive rights, meaning that our common
shareholders' ownership interest would be diluted if additional shares of common
stock are subsequently issued and the existing shareholders are not granted the
right, in the discretion of the Board of Directors, to maintain their percentage
ownership interest in Asgaard Media. This lack of protection from dilution to
minority shareholders could allow our Board of Directors to issue additional
shares of our common stock to persons friendly with our existing management,
thus preventing any change in control of Asgaard Media.
Dividend
Policy
The
payment by us of dividends, if any, in the future rests within the discretion of
our Board of Directors and will depend, among other things, upon our earnings,
capital requirements and financial condition, as well as other relevant factors.
We have not paid any dividends since our inception and we do not intend to pay
any cash dividends in the foreseeable future, but intends to retain all
earnings, if any, for use in our business.
Preferred
Stock
Asgaard
Media has no preferred stock authorized.
56
Market
for Securities
There is
currently no public trading market for our common stock.
As of
September 30, 2009, we had 40,537,000 shares of common stock issued and
outstanding and approximately sixty one (61) stockholders of record of our
common stock. This prospectus relates to the sale of 10,000,000 shares of
our common stock by the Company and 2,500,000 shares to be sold by our selling
shareholders. Shares are being offered at $2.50 per share. This is a fixed
price at which the selling security holders may sell their shares until our
common stock is quoted on the OTC Bulletin Board, at which time the selling
shareholders may sell their shares at prevailing market prices or privately
negotiated prices. Assuming our shares are quoted on the OTC Bulletin
Board, the Company will continue to sell newly issued shares at $2.50 per share
until the earlier of (i) all the newly issued shares offered hereunder are sold
or (ii) until this offering terminates, whichever is sooner.
Equity
Compensation Plan Information
The
Company has no plans for establishing an equity compensation plan, but reserves
the right to do so at some time in the future.
Holders
As of the
date of this prospectus, Asgaard Media has 40,537,000 shares of $0.001 par value
common stock issued and outstanding held by Sixty One (61) shareholders of
record.
Reports
After
this offering, Asgaard Media will furnish its shareholders with annual financial
reports certified by Asgaard Media's independent accountants, and may in Asgaard
Media's discretion, furnish unaudited quarterly financial reports.
After
this offering, Asgaard Media will file periodic and current reports with the
Securities and Exchange Commission as required to maintain the fully reporting
status.
Transfer
Agent
We use
Standard Transfer & Trust Company, Inc. as our transfer agent. Our transfer
agent’s address is 2980 South Rainbow Boulevard, Suite 220H, Las Vegas,
Nevada 89164
AVAILABLE
INFORMATION
We have
not previously been required to comply with the reporting requirements of the
Securities Exchange Act. We have filed with the SEC a registration statement on
Form S-1 to register the securities offered by this prospectus. For future
information about us and the securities offered under this prospectus, you may
refer to the registration statement and to the exhibits filed as a part of the
registration statement.
In
addition, after the effective date of this prospectus, we will be required to
file annual, quarterly, and current reports, or other information with the SEC
as provided by the Securities Exchange Act. You may read and copy any reports,
statements or other information we file at the SEC's public reference facility
maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room. Our SEC filings are also available to
the public through the SEC Internet site at http\\www.sec.gov.
57
INTERESTS
OF NAMED EXPERTS AND COUNSEL
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Peder K.
Davisson, our counsel served as interim secretary of the board prior to the
appointment of Erin Giudice. Mr. Davisson was not compensated for
that position other than for legal fees his firm earned in the course of the
performance of his secretarial duties. No other such person connected
with the registrant or any of its parents or subsidiaries as a promoter,
managing or principal underwriter, voting trustee, director, officer, or
employee.
Peder K.
Davisson of Minneapolis, Minnesota, an independent legal counsel, has provided
an opinion on the validity of Asgaard Media’s issuance of common stock and is
presented as an exhibit to this filing.
The
financial statements included in this Prospectus and in the Registration
Statement have been audited by Gruber & Company, LLC, of St. Louis, Missouri
to the extent and for the period set forth in their report (which contains an
explanatory paragraph regarding Asgaard Media’s ability to continue as a going
concern) appearing elsewhere herein and in the Registration Statement, and are
included in reliance upon such report given upon the authority of said firm as
experts in auditing and accounting.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
58
During
the period nine months ended September 30, 2009, the Company issued a total of
402,000 common shares of 202,000 shares were issued for cash totaling $20,200 to
non-related parties and 200,000 shares were issued for services by related
parties totaling $20,000. Of those 200,000 shares issued for
services, 100,000 were issued to Erin Giudice and 100,000 were issued to Alice
Matano. Please refer to Executive Compensation of Page 55. During the
nine months ended September 30, 2009, the Company's founder and CEO contributed
capital to the Company totaling $246,202 in the form of cash. This contribution
was not made for the purchase of any of the Company’s securities. It was not a
loan and Mr. Pezzuto does not seek to have it returned as such.
During
the period ended December 31, 2008, the Company issued a total of 40,135,000
common shares of which 36,815,000 shares were issued to Founders with a deemed
value totaling $36,815. While, 520,000 shares were issued for cash totaling
$52,000 and 2,800,000 shares were issued for services totaling $280,000,
following the issuance of founders’ shares. Stephen Sallus received 800,000
shares valued at $0.10 per share for ongoing services related to production,
financial consulting and strategic partnerships with vendors. The Company
also issued 2,000,000 shares valued at $0.10 per share to Melvin
William Winn for script consulting and Canadian pre-production services for our
Mountains of Trouble project There is no formal agreement between the Company
and Messers. Sallus or Winn with respect to the provision of these services. The
2,800,000 shares mentioned above were issued to Messers Sallus and Winn in
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2) as the issuance of the stock
did not involve a public offering of securities.
We
have not entered into any other transactions or agreements with related persons,
promoters or control persons that require disclosure to our
shareholders.
The
Following Table sets forth holders of the shares that were issued as founders’
shares at a deemed value of $0.001 per share. These shares were issued in
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2) as the issuance of the stock
did not involve a public offering of securities. See Page 74, Recent Sales of
Unregistered Securities
Name of Founder
|
Shares Issued
as Founders
Stock
|
Deemed
Value of
Shares on
Receipt
|
||||||
Anthony
A. Pezzuto (2)
|
500,000
|
$
|
0.001
|
|||||
Avery
Julian
|
12,500
|
$
|
0.001
|
|||||
Barbara
Mitchell (3)
|
2,000,000
|
$
|
0.001
|
|||||
Becky
Bristow (1)
|
250,000
|
$
|
0.001
|
|||||
Betzenhouser
Family Trust (1)
|
1,500,000
|
$
|
0.001
|
|||||
Blythe
C. Stewart (4)
|
500,000
|
$
|
0.001
|
|||||
Christopher
Baker (1)
|
5,000,000
|
$
|
0.001
|
|||||
Douglas
Scheving (1)
|
4,000,000
|
$
|
0.001
|
|||||
Elizabeth
A. Pezzuto (5)
|
200,000
|
$
|
0.001
|
|||||
Emad
Elouri (1)
|
22,500
|
$
|
0.001
|
|||||
Irving
& Sandy Sallus (6)
|
22,500
|
$
|
0.001
|
|||||
Isabelle
Pezzuto (7)
|
200,000
|
$
|
0.001
|
|||||
Jacques
Stewart Potter Jr.
|
100,000
|
$
|
0.001
|
|||||
Jaidyn
Julian
|
12,500
|
$
|
0.001
|
|||||
Janet
S. Gayler
|
150,000
|
$
|
0.001
|
|||||
Minor
M. Novorr (8)
|
250,000
|
$
|
0.001
|
|||||
John
V. Kopaunik
|
100,000
|
$
|
0.001
|
|||||
McKinley
Julian
|
12,500
|
$
|
0.001
|
|||||
Trent
Julian (1)
|
50,000
|
$
|
0.001
|
|||||
Kathryn
Perry or AM Snider
|
1,000,000
|
$
|
0.001
|
|||||
Kristalyn
Julian
|
12,500
|
$
|
0.001
|
|||||
Kristian
De La Rossa
|
25,000
|
$
|
0.001
|
|||||
M.A
Thomson
|
150,000
|
$
|
0.001
|
|||||
Madison
Grace Stewart
|
100,000
|
$
|
0.001
|
|||||
Matt
Freedman
|
22,500
|
$
|
0.001
|
|||||
Matt
Savoie
|
22,500
|
$
|
0.001
|
|||||
Megan
Simpson
|
400,000
|
$
|
0.001
|
|||||
Merlion
Entertainment, Ltd (1)
|
5,000,000
|
$
|
0.001
|
|||||
Michael
Pass (1)
|
300,000
|
$
|
0.001
|
|||||
Minor
L. Pezzuto (9)
|
2,500,000
|
$
|
0.001
|
|||||
Minor
M. Pezzuto (10)
|
2,500,000
|
$
|
0.001
|
|||||
Neubert
Family Trust (1)
|
1,500,000
|
$
|
0.001
|
|||||
Peder
K. Davisson Revocable Trust (1)(11)
|
2,000,000
|
$
|
0.001
|
|||||
Stephen
J. Sallus (1)
(12)
|
1,200,000
|
$
|
0.001
|
|||||
Whitney
D. Lund (1)
(13)
|
100,000
|
$
|
0.001
|
|||||
Wm.
Alan Pezzuto (14)
|
5,000,000
|
$
|
0.001
|
|||||
Zachary
Thomas Stewart
|
100,000
|
$
|
0.001
|
59
1.Shareholders
provided certain services to the Company See Selling Shareholders for
a description of those services provided.
2.
Anthony Pezzuto is the adult son of Wm. Alan Pezzuto.
3.
Barbara Mitchell is the mother-in-law of Wm. Alan Pezzuto.
4. Blythe
C. Stewart is the adult daughter of Wm. Alan Pezzuto.
5.Elizabeth
A Pezzuto is the granddaughter of Wm. Alan Pezzuto.
6.Irving
and Sandy Sallus are the parents of Stephen Sallus.
7.Isabelle
Pezzuto is the granddaughter of Wm. Alan Pezzuto.
8.Minor
M. Novorr is the minor niece of Wm. Alan Pezzuto, Barbara Mitchell has sole has
sole voting and dispositive control over these shares and holds them as
Custodian under the Uniform Gifts to Minors Act.
9. Minor
L. Pezzuto is the minor daughter of Wm. Alan Pezzuto, Barbara Mitchell has sole
has sole voting and dispositive control over these shares and holds them as
Custodian under the Uniform Gifts to Minors Act.
10. Minor
M..Pezzuto is the minor daughter of Wm. Alan Pezzuto, Barbara Mitchell has sole
has sole voting and dispositive control over these shares and holds them as
Custodian under the Uniform Gifts to Minors Act.
11.Peder
K. Davisson is Counsel to the Company, he holds sole voting and dispositive
control over the Peder K. Davisson Revocable Trust. These shares were issued in
consideration for professional legal services rendered for pre-incorporation
services and as fixed fee for legal services not related to this registration
statement.
12.Stephen
Sallus is a Director of the Company.
13.Whitney
Lund is a principal of our transfer agent, Standard Transfer & Trust Co.,
Inc.
14.Wm.
Alan Pezzuto is a director of the Company and its President.
LEGAL
PROCEEDINGS
Asgaard
Media is not currently a party to any legal proceedings. Asgaard’s agent for
service of process in Nevada is: Wm. Alan Pezzuto. The address
is 4754 East Flamingo, Suite 347, Las Vegas,
Nevada 89121.
Asgaard’s
officers and directors have not been convicted in a criminal proceeding nor have
they been permanently or temporarily enjoined, barred, suspended or otherwise
limited from involvement in any type of business, securities or banking
activities.
None of
our officers or directors have been convicted of violating any federal or state
securities or commodities law.
There are
no known pending legal or administrative proceedings against
Asgaard.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
Our
By-laws provide for the elimination of the personal liability of our officers,
directors, corporate employees and agents to the fullest extent permitted by the
provisions of Nevada law. Under such provisions, the director, officer,
corporate employee or agent who in her capacity as such is made or threatened to
be made, party to any suit or proceeding, shall be indemnified if it is
determined that such director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of our
Company. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and persons controlling our
Company pursuant to the foregoing provision, or otherwise, we have
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.
60
EXPERTS
Our
financial statements for the period from inception to June 30, 2008, included in
this prospectus, have been audited by Gruber & Company, LLC, of St. Louis,
Missouri 121 Civic Center Drive Suite, 225, Lake Saint Louis Missouri
63367. Its telephone number is (636) 561-5639, as set forth in their
report included in this prospectus. The financials included herein for the
period ended September 30, 2009 have been reviewed by Gruber & Company, LLC.
Their report is given upon their authority as experts in accounting and
auditing.
LEGAL
MATTERS
Davisson
& Associates, PA, has acted as our legal counsel in providing an opinion for
this filing.
ASGAARD
MEDIA
(A
DEVELOPMENT STAGE COMPANY)
AUDITED
FINANCIAL STATEMENTS
FOR
THE PERIOD OF
JANUARY
8, 2008 (DATE OF INCEPTION)
TO
SEPTEMBER 30, 2009
61
Asgaard
Media
(A
Developmental Stage Company)
Balance
Sheets
UNAUDITED
|
||||||||
|
September 30,
|
December 31,
|
||||||
2009
|
2008
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
& Equivalents
|
$ | 33,495 | $ | 3,608 | ||||
Total
Current Assets
|
33,495 | 3,608 | ||||||
Total
Assets
|
$ | 33,495 | $ | 3,608 | ||||
Liabilities & Stockholders' Equity
(Deficit)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable and Accrued Expenses
|
$ | - | $ | - | ||||
Total
Current Liabilities
|
- | - | ||||||
Commitments
& Contingencies
|
- | - | ||||||
Stockholders'
Equity (Deficit)
|
||||||||
Common
Stock, $0.001 par value, 200,000,000 shares
|
||||||||
authorized;
40,537,000 and 40,135,000 shares issued and outstanding,
respectively
|
40,537 | 40,135 | ||||||
Additional
Paid-in Capital
|
614,680 | 328,680 | ||||||
Deficit
Accumulated During the Developmental Stage
|
(621,722 | ) | (365,207 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
33,495 | 3,608 | ||||||
Total
Liabilities & Stockholders' Equity (Deficit)
|
$ | 33,495 | $ | 3,608 |
62
Asgaard
Media
(A
Developmental Stage Company)
Statement
of Operations
UNAUDITED
|
||||||||||||
For the Nine
Months Ended
|
January 8, 2008
(Date of
Inception)
to
|
January 8, 2008
(Date of
Inception)
to
|
||||||||||
September 30,
|
September 30,
|
September 30,
|
||||||||||
2009
|
2008
|
2009
|
||||||||||
Operating
Expenses
|
||||||||||||
General
and Administrative
|
$ | 256,515 | $ | 316,815 | $ | 621,722 | ||||||
Total
Operating Expenses
|
256,515 | 316,815 | 621,722 | |||||||||
Net
Income (Loss) Before Income Taxes
|
(256,515 | ) | (316,815 | ) | (621,722 | ) | ||||||
Provision
for Income Taxes
|
- | - | - | |||||||||
Net
Income (Loss)
|
$ | (256,515 | ) | $ | (316,815 | ) | $ | (621,722 | ) | |||
Net
Income per Share
|
||||||||||||
Basic
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||
Diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||
Number
of Shares Used in Per Share Calculations
|
||||||||||||
Basic
|
40,528,834 | 32,021,425 | ||||||||||
Diluted
|
40,528,834 | 32,021,425 |
The
accompanying notes are an integral part of these financial
statements
Asgaard
Media
(A
Developmental Stage Company)
Statement
of Stockholders' Equity (Deficit)
Common Stock
|
||||||||||||||||||||
Number of
Shares
|
Par Value
($0.001)
Amount
|
Additional
Paid-
In-Capital
|
Deficit
Accumulated
During the
Developmental
Stage
|
Total
Stockholders'
Equity (Deficit)
|
||||||||||||||||
Balance
at January 8, 2008 (Date of Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Common
Stock Issued to Founders
|
36,815,000 | 36,815 | - | - | 36,815 | |||||||||||||||
Common
Stock Issued to Investors for Cash
|
520,000 | 520 | 51,480 | - | 52,000 | |||||||||||||||
Common
Stock Issued for Services
|
2,800,000 | 2,800 | 277,200 | - | 280,000 | |||||||||||||||
Net
Loss
|
- | - | - | (365,207 | ) | (365,207 | ) | |||||||||||||
Balance
at December 31, 2008
|
40,135,000 | $ | 40,135 | $ | 328,680 | $ | (365,207 | ) | $ | 3,608 | ||||||||||
Common
Stock Issued to Investors for Cash
|
202,000 | 202 | 19,998 | - | 20,200 | |||||||||||||||
Common
Stock Issued for Services
|
200,000 | 200 | 19,800 | - | 20,000 | |||||||||||||||
Contributed
Capital
|
- | - | 246,202 | - | 246,202 | |||||||||||||||
Net
Loss
|
- | - | - | (256,515 | ) | (256,515 | ) | |||||||||||||
Balance
at September 30, 2009 (UNAUDITED)
|
40,537,000 | $ | 40,537 | $ | 614,680 | $ | (621,722 | ) | $ | 33,495 |
63
Asgaard
Media
(A
Developmental Stage Company)
Statement
of Cash Flows
UNAUDITED
|
||||||||||||
For the Nine
Months Ended
|
January 8,
2008
(Date of
Inception) to
|
January 8,
2008
(Date of
Inception) to
|
||||||||||
September 30,
|
September 30,
|
September 30,
|
||||||||||
|
2009
|
2008
|
2009
|
|||||||||
Cash Flows from Operating
Activities
|
||||||||||||
Net
Income (Loss)
|
$ | (256,515 | ) | $ | (316,815 | ) | $ | (621,722 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Stock
Based Compensation
|
20,000 | 316,815 | 336,815 | |||||||||
Net
Cash Used in Operating Activities
|
(236,515 | ) | - | (284,907 | ) | |||||||
Cash Flows from Financing
Activities
|
||||||||||||
Common
Stock Issued for Cash
|
20,200 | 27,000 | 72,200 | |||||||||
Contributed
Capital
|
246,202 | - | 246,202 | |||||||||
Net
Cash Provided by Financing Activities
|
266,402 | 27,000 | 318,402 | |||||||||
Net
Increase (Decrease) in Cash
|
29,887 | 27,000 | 33,495 | |||||||||
Cash
Beginning of Period
|
3,608 | - | - | |||||||||
Cash
End of Period
|
$ | 33,495 | $ | 27,000 | $ | 33,495 | ||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||||||
Cash
Paid during the period for interest
|
$ | - | $ | - | $ | - | ||||||
Cash
Paid during the period for income taxes
|
- | - | - |
The
accompanying notes are an integral part of these financial
statements
64
Note
1 – Organization, Business & Operations
Organization
Asgaard
Media was incorporated in Nevada on January 8, 2008. The Company was formed to
develop, finance, produce and arrange for the distribution of motion
pictures. The Company pictures will be low/mid budget theatrical
features, which require lower revenues to recoup the Company's investment than
higher budgeted films.
Note
2 - Going Concern and Management's Plans
The
Company's financial statements are prepared using accounting principles
generally accepted in the United States of America (GAAP) applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company is in the
developmental stage and has not yet established an ongoing source of revenue
sufficient to cover its operating costs and allow it to continue as a going
concern. In addition, as of September 30, 2009, the Company has an accumulated
deficit totaling $621,722. The Company’s current business plan requires
additional funding beyond its anticipated cash flows from operations. These and
other factors raise substantial doubt about the Company's ability to continue as
a going concern.
In order
to continue as a going concern, develop a reliable source of revenues, and
achieve a profitable level of operations, the Company will need, among other
things, additional capital resources. Management's plan to continue as a going
concern includes raising additional capital through sales of common and/or
preferred stock. However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan as described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
Note
3 - Summary of Significant Accounting Policies
Cash
and cash equivalents
The
Company considers all liquid investments with a maturity of three months or less
from the date of purchase that are readily convertible into cash to be cash
equivalents.
Inventories
Inventories
are stated at the lower of cost or market. Cost is computed on a
weighted-average basis, which approximates the first-in, first-out method;
market is based upon estimated replacement costs.
Use
of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates
Property
& equipment
Plant and
equipment are stated at cost. Expenditures that increase the useful lives or
capacities of the plant and equipment are capitalized. Expenditures for repairs
and maintenance are charged to income as incurred.
65
Impairment
of long-lived assets
Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
the Results of Operations for a Disposal of a Segment of a Business." The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal.
Basic
and Diluted Net Income per Share
Basic
earnings per share is calculated using the weighted-average number of common
shares outstanding during the period without consideration of the dilutive
effect of stock warrants and convertible notes. Diluted earnings per share is
calculated using the weighted-average number of common shares outstanding during
the period after consideration of the dilutive effect of stock warrants and
convertible notes.
Stock-based
compensation
In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No.
123(R), Share-Based Payment. This pronouncement amends SFAS No. 123, Accounting
for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees. SFAS No. 123(R) requires that companies account for
awards of equity instruments issued to employees under the fair value method of
accounting and recognize such amounts in their statements of operations. Under
SFAS No. 123(R), we are required to measure compensation cost for all
stock-based awards at fair value on the date of grant and recognize compensation
expense in our consolidated statements of operations over the service period
that the awards are expected to vest.
The
Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123(R) and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.
Fair
value of financial instruments
Statement
of financial accounting standard No. 107, Disclosures about Fair Value of
Financial Instruments, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
Revenue
recognition
Sales of
products and related costs of products sold are recognized when (i) persuasive
evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price
is fixed or determinable and (iv) collectability is reasonably assured. These
terms are typically met upon shipment of inks and tattoo equipment to the
customer.
Shipping
and Handling
In
accordance with Emerging Issues Task Force (EITF) Issue No. 00-10, Accounting
for Shipping and Handling Fees and Costs, we include shipping fees billed to
customers in net revenues and do not bill customers for handling.
Allowance
for doubtful accounts
We
provide an allowance for estimated uncollectible accounts receivable balances
based on historical experience and the aging of the related accounts
receivable.
66
Advertising
The
Company expenses advertising costs as incurred. There were no advertising costs
for the periods ended September 30, 2009 and 2008.
Income
Taxes
The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes.” Deferred taxes are provided on the liability method whereby
deferred tax assets are recognized for deductible temporary differences, and
deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.
Research
and development costs
Expenditures
for research & development are expensed as incurred. Such costs are required
to be expensed until the point that technological feasibility is established.
The Company incurred no research and development costs for the periods ended
September 30, 2009 and 2008.
Reclassifications
Certain
items in the prior year financial statements have been reclassified for
comparative purposes to conform to the presentation in the current period’s
presentation. These reclassifications have no effect on the previously reported
income (loss).
Recently
Issued Accounting Pronouncements
In May
2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS No. 165”). SFAS No.
165 was issued in order to establish principles and requirements for reviewing
and reporting subsequent events and requires disclosure of the date through
which subsequent events are evaluated and whether the date corresponds with the
time at which the financial statements were available for issue (as defined) or
were issued. SFAS No. 165 is effective for interim reporting periods ending
after June 15, 2009. The adoption of SFAS No. 165 did not impact our results of
operations, cash flows or financial positions. We have evaluated events and
transactions that occurred after June 30, 2009 through October 12, 2009, the
date we issued these financial statements.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 162, The Hierarchy of Generally
Accepted Accounting Principles. SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles that are
presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days following the Securities and
Exchange Commission’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. The Company does not believe SFAS No.
162 will have a material impact on its financial statements.
In March
2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and
Hedging Activities, an amendment of previously issued FASB Statement No. 133.
SFAS No. 161 changes the disclosure requirements for derivative instruments and
hedging activities. Entities are required to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS No. 133 and
its related interpretations and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash flows. SFAS No. 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged. The Company does not expect the adoption of SFAS No. 161
to have a material impact on its financial condition or results of
operations.
In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations. SFAS No.
141(R) retains the fundamental requirements in SFAS No. 141, Business
Combinations, that the acquisition method of accounting be used for all business
combinations and for an acquirer to be identified for each business combination.
SFAS No. 141(R) requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in SFAS No. 141(R). In addition, SFAS No. 141(R) requires
acquisition costs and restructuring costs that the acquirer expected but was not
obligated to incur to be recognized separately from the business combination,
therefore, expensed instead of part of the purchase price allocation. SFAS No.
141(R) will be applied prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. Early adoption is prohibited.
The Company expects to apply SFAS No. 141(R) to any business combinations with
an acquisition date on or after January 1, 2009.
In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment to ARB No. 51. SFAS No. 160
changes the accounting and reporting for minority interests, which will be
recharacterized as noncontrolling interests and classified as a component of
equity. SFAS No. 160 is effective for fiscal years, and interim periods within
those fiscal years, beginning on or after December 15, 2008. Early adoption is
prohibited. The Company does not expect the adoption of SFAS No. 160 to have a
material impact on its financial condition or results of
operations.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS No. 159 permits an entity to irrevocably
elect fair value on a contract-by-contract basis as the initial and subsequent
measurement attribute for many financial assets and liabilities and certain
other items including insurance contracts. Entities electing the fair value
option would be required to recognize changes in fair value in earnings and to
expense upfront cost and fees associated with the item for which the fair value
option is elected. SFAS No. 159 is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of SFAS No. 157, Fair Value Measurements. The Company
does not expect the adoption of SFAS No. 159 to have a material impact on its
financial condition or results of operations.
Note
4 – Income Taxes
Income
taxes are accounted for in accordance with SFAS 109, Accounting for Income
Taxes, using the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and tax credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the year in which those
temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized an income in the period that includes the enactment date
As of
September 30, 2009, the Company has a net loss carryforward equal to
approximately $620,000. The deferred tax asset related to this carryforward has
been reserved in full due to the uncertainty of realization.
Note
5 - Stockholders’ Equity
Common
Stock
The
Company is authorized to issue 200,000,000 shares of $0.001 par common stock. At
September 30, 2009, there were 40,537,000 shares issued and outstanding. During
the nine months ended September 30, 2009, the Company issued a total of 402,000
common shares of which 202,000 shares were issued for cash totaling $20,200 and
200,000 shares were issued for services totaling $20,000. In addition, during
the nine months ended September 30, 2009, the Company's founder and CEO
contributed capital to the Company totaling $246,202.
During
the period ended December 31, 2008; the Company issued a total of 40,135,000
common shares of which 36,815,000 shares were issued for to Founders totaling
$36,815; 520,000 shares were issued for cash totaling $52,000 and 2,800,000
shares were issued for services totaling $280,000.
68
Note
6 - Commitments and Contingencies
Lease
The
Company maintains its office at 1353 Old Temescal Road, Suite 129, Corona,
California 92881.
Legal
The
Company is not party to any lawsuit or threatened litigation.
Note
7 - Subsequent Events
There
were no subsequent events.
TABLE
OF CONTENTS
Page
|
|
INDEPENDENT
AUDITOR’S REPORT
|
F-1
|
FINANCIAL
STATEMENTS
|
|
Balance
Sheet
|
F-2
|
Statement
of Operations
|
F-3
|
Statement
of Cash Flows
|
F-5
|
Statement
of Stockholders’ Equity
|
F-4
|
Notes
to Financial Statements
|
F-6
|
69
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE
BOARD OF ASGAARD MEDIA
We have
audited the accompanying balance sheet of Asgaard Media, (a Development Stage
Enterprise) as of December 31, 2008, and the related statement of operations,
stockholders equity and cash flows for the period then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform our audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Asgaard Media, (a Development Stage
Enterprise) at December 31, 2008 and the results of its’ operations and its’
stockholders equity and cash flows for the period then ended in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company's viability is dependent upon its
ability to obtain future financing and the success of its future operations.
These factors raise substantial doubt as to the Company's ability to continue as
a going concern. Management's plan in regard to these matters is described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Gruber
& Company, LLC Saint Louis, Missouri
July
16, 2009
Asgaard
Media
(A
Developmental Stage Company)
Balance
Sheet
December 31,
|
||||
2008
|
||||
Assets
|
||||
Current
Assets
|
||||
Cash
& Equivalents
|
$ | 3,608 | ||
Total
Current Assets
|
3,608 | |||
Total
Assets
|
$ | 3,608 | ||
Liabilities & Stockholders' Equity
(Deficit)
|
||||
Current
Liabilities
|
||||
Accounts
Payable and Accrued Expenses
|
$ | - | ||
Total
Current Liabilities
|
- | |||
Commitments
& Contingencies
|
- | |||
Stockholders'
Equity (Deficit)
|
||||
Common
Stock, $0.001 par value, 100,000,000 shares authorized; 40,135,000 shares
issued and outstanding
|
40,135 | |||
Additional
Paid-in Capital
|
328,680 | |||
Deficit
Accumulated During the Developmental Stage
|
(365,207 | ) | ||
Total
Stockholders' Equity (Deficit)
|
3,608 | |||
Total
Liabilities & Stockholders' Equity (Deficit)
|
$ | 3,608 |
F-2
Asgaard
Media
(A
Developmental Stage Company)
Statement
of Operations
January 8,
2008
(Date of
Inception)
to
|
||||
December 31,
|
||||
2008
|
||||
Operating
Expenses
|
||||
General
and Administrative
|
$ | 365,207 | ||
Total
Operating Expenses
|
365,207 | |||
Net
Income (Loss) Before Income Taxes
|
(365,207 | ) | ||
Provision
for Income Taxes
|
- | |||
Net
Income (Loss)
|
$ | (365,207 | ) | |
Net
Income per Share
|
||||
Basic
|
$ | (0.01 | ) | |
Diluted
|
$ | (0.01 | ) | |
Number
of Shares Used in Per Share Calculations
|
||||
Basic
|
34,860,798 | |||
Diluted
|
34,860,798 |
The
accompanying notes are an integral part of these financial
statements
F-3
Asgaard
Media
(A
Developmental Stage Company)
Statement
of Stockholders' Equity (Deficit)
Common Stock
|
||||||||||||||||||||
Number of
Shares
|
Par Value
($0.001)
Amount
|
Additional Paid-
In-Capital
|
Deficit
Accumulated
During the
Developmental
Stage
|
Total
Stockholders'
Equity (Deficit)
|
||||||||||||||||
Balance
at January 8, 2008 (Date of Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Common
Stock Issued to Founders
|
36,815,000 | 36,815 | - | - | 36,815 | |||||||||||||||
Common
Stock Issued to Investors for Cash
|
520,000 | 520 | 51,480 | - | 52,000 | |||||||||||||||
Common
Stock Issued for Services
|
2,800,000 | 2,800 | 277,200 | - | 280,000 | |||||||||||||||
Net
Loss
|
- | - | - | (365,207 | ) | (365,207 | ) | |||||||||||||
Balance
at December 31, 2008
|
40,135,000 | $ | 40,135 | $ | 328,680 | $ | (365,207 | ) | $ | 3,608 |
The
accompanying notes are an integral part of these financial
statements
Asgaard
Media
(A
Developmental Stage Company)
Statement
of Cash Flows
January 8, 2008
(Date of
Inception) to
|
||||
December 31,
|
||||
2008
|
||||
Cash Flows from Operating
Activities
|
||||
Net
Income (Loss)
|
$ | (365,207 | ) | |
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
Stock
Based Compensation
|
316,815 | |||
Net
Cash Used in Operating Activities
|
(48,392 | ) | ||
Cash Flows from Financing
Activities
|
||||
Common
Stock Issued for Cash
|
52,000 | |||
Net
Cash Provided by Financing Activities
|
52,000 | |||
Net
Increase (Decrease) in Cash
|
3,608 | |||
Cash
Beginning of Period
|
- | |||
Cash
End of Year
|
$ | 3,608 | ||
Supplemental
Disclosure of Cash Flow Information:
|
||||
Cash
Paid during the period for interest
|
$ | - | ||
Cash
Paid during the period for income taxes
|
- |
The
accompanying notes are an integral part of these financial
statements
F-5
Note
1 – Organization, Business & Operations
Organization
Asgaard
Media was incorporated in Nevada on January 8, 2008. The Company was formed to
develop, finance, produce and arrange for the distribution of motion
pictures. The Company pictures will be low/mid budget theatrical
features, which require lower revenues to recoup the Company's investment than
higher budgeted films.
Note
2 - Going Concern and Management's Plans
The
Company's financial statements are prepared using accounting principles
generally accepted in the United States of America (GAAP) applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company is in the
developmental stage and has not yet established an ongoing source of revenue
sufficient to cover its operating costs and allow it to continue as a going
concern. In addition, as of December 31, 2008, the Company has an accumulated
deficit and net losses totaling $365,207. The Company’s current business plan
requires additional funding beyond its anticipated cash flows from operations.
These and other factors raise substantial doubt about the Company's ability to
continue as a going concern.
In order
to continue as a going concern, develop a reliable source of revenues, and
achieve a profitable level of operations, the Company will need, among other
things, additional capital resources. Management's plan to continue as a going
concern includes raising additional capital through sales of common and/or
preferred stock. However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan as described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
Note
3 - Summary of Significant Accounting Policies
Cash
and cash equivalents
The
Company considers all liquid investments with a maturity of three months or less
from the date of purchase that are readily convertible into cash to be cash
equivalents.
Inventories
Inventories
are stated at the lower of cost or market. Cost is computed on a
weighted-average basis, which approximates the first-in, first-out method;
market is based upon estimated replacement costs.
Use
of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates
Property
& equipment
Plant and
equipment are stated at cost. Expenditures that increase the useful lives or
capacities of the plant and equipment are capitalized. Expenditures for repairs
and maintenance are charged to income as incurred.
Impairment
of long-lived assets
Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
the Results of Operations for a Disposal of a Segment of a Business." The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal.
Basic
and Diluted Net Income per Share
Basic
earnings per share is calculated using the weighted-average number of common
shares outstanding during the period without consideration of the dilutive
effect of stock warrants and convertible notes. Diluted earnings per share is
calculated using the weighted-average number of common shares outstanding during
the period after consideration of the dilutive effect of stock warrants and
convertible notes.
Stock-based
compensation
In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No.
123(R), Share-Based Payment. This pronouncement amends SFAS No. 123, Accounting
for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees. SFAS No. 123(R) requires that companies account for
awards of equity instruments issued to employees under the fair value method of
accounting and recognize such amounts in their statements of operations. Under
SFAS No. 123(R), we are required to measure compensation cost for all
stock-based awards at fair value on the date of grant and recognize compensation
expense in our consolidated statements of operations over the service period
that the awards are expected to vest.
The
Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123(R) and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.
Fair
value of financial instruments
Statement
of financial accounting standard No. 107, Disclosures about Fair Value of
Financial Instruments, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
Revenue
recognition
Sales of
products and related costs of products sold are recognized when (i) persuasive
evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price
is fixed or determinable and (iv) collectability is reasonably assured. These
terms are typically met upon shipment of inks and tattoo equipment to the
customer.
Shipping
and Handling
In
accordance with Emerging Issues Task Force (EITF) Issue No. 00-10, Accounting
for Shipping and Handling Fees and Costs, we include shipping fees billed to
customers in net revenues and do not bill customers for handling.
Allowance
for doubtful accounts
We
provide an allowance for estimated uncollectible accounts receivable balances
based on historical experience and the aging of the related accounts
receivable.
Advertising
The
Company expenses advertising costs as incurred. There were no advertising costs
for the period ended December 31, 2008.
Income
Taxes
The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes.” Deferred taxes are provided on the liability method whereby
deferred tax assets are recognized for deductible temporary differences, and
deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.
Research
and development costs
Expenditures
for research & development are expensed as incurred. Such costs are required
to be expensed until the point that technological feasibility is established.
The Company incurred no research and development costs for the period ended
December 31, 2008.
Reclassifications
Certain
items in the prior year financial statements have been reclassified for
comparative purposes to conform to the presentation in the current period’s
presentation. These reclassifications have no effect on the previously reported
income (loss).
F-8
Recently
Issued Accounting Pronouncements
In May
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 162, The Hierarchy of Generally
Accepted Accounting Principles. SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles that are
presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days following the Securities and
Exchange Commission’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. The Company does not believe SFAS No.
162 will have a material impact on its financial statements.
In March
2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133. SFAS No. 161 changes
the disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under Statement No. 133 and its related
interpretations and (c) how derivative instruments and related hedged items
affect an entity’s financial position, financial performance and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The Company is currently evaluating the impact SFAS No. 161 may have
on its financial statements.
In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations. SFAS No.
141(R) retains the fundamental requirements in SFAS No. 141, Business
Combinations, that the acquisition method of accounting be used for all business
combinations and for an acquirer to be identified for each business combination.
SFAS No. 141(R) requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in SFAS No. 141(R). In addition, SFAS No. 141(R) requires
acquisition costs and restructuring costs that the acquirer expected but was not
obligated to incur to be recognized separately from the business combination,
therefore, expensed instead of part of the purchase price allocation. SFAS No.
141(R) will be applied prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. Early adoption is prohibited.
The Company expects to adopt SFAS No. 141(R) to any business combinations with
an acquisition date on or after January 1, 2009.
In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment to ARB No. 51. SFAS No. 160
changes the accounting and reporting for minority interests, which will be
recharacterized as noncontrolling interests and classified as a component of
equity. SFAS No. 160 is effective for fiscal years, and interim periods within
those fiscal years, beginning on or after December 15, 2008. Early adoption is
prohibited. The Company is currently evaluating the impact SFAS No. 160 may have
on its financial statements.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS No. 159 permits an entity to irrevocably
elect fair value on a contract-by-contract basis as the initial and subsequent
measurement attribute for many financial assets and liabilities and certain
other items including insurance contracts. Entities electing the fair value
option would be required to recognize changes in fair value in earnings and to
expense upfront cost and fees associated with the item for which the fair value
option is elected. SFAS No. 159 is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of SFAS No. 157, Fair Value Measurements. The Company
does not expect the adoption of SFAS No. 159 to have a material impact on its
financial condition or results of operations.
Note
4 – Income Taxes
Income
taxes are accounted for in accordance with SFAS 109, Accounting for Income
Taxes, using the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and tax credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the year in which those
temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized an income in the period that includes the enactment date
The
Company has a net loss carryforward equal to approximately $365,000. The
deferred tax asset related to this carryforward has been reserved in full due to
the uncertainty of realization.
Note
5 - Stockholders’ Equity
Common
Stock
The
Company is authorized to issue 200,000,000 shares of $0.001 par common stock. At
December 31, 2008, there were 40,135,000 shares issued and
outstanding.
During
the period ended December 31, 2008, the Company issued a total of 40,135,000
common shares of which 36,815,000 shares were issued to Founders totaling
$36,815; 520,000 shares were issued for cash totaling $52,000; and 2,800,000
shares were issued for services totaling $280,000.
Note
6 - Commitments and Contingencies
Lease
The
Company maintains its office at 2550 East Desert Inn Road, Las Vegas, Nevada
89121.
Legal
The
Company is not party to any lawsuit or threatened litigation.
Note
7 - Subsequent Events
Equity
Subsequent
to December 31, 2008, the Company issued 402,000 common shares of which 202,000
shares were issued for cash totaling $20,200 and 200,000 shares were issued for
services totaling $20,000.
F-10
Asgaard
Media
12,500,000
Shares
$2.50
Per Share
Common
Stock
PROSPECTUS
, 2009
Dealer Prospectus Delivery
Obligation
Prior to
the expiration of ninety days after the effective date of this registration
statement or prior to the expiration of ninety days after the first date upon
which the security was bona fide offered to the public after such effective
date, whichever is later, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
70
PART
II—INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Our
Articles of Incorporation and Bylaws provide that we shall indemnify our
officers or directors against expenses incurred in connection with the defense
of any action in which they are made parties by reason of being our officers or
directors, except in relation to matters as which such director or officer shall
be adjudged in such action to be liable for negligence or misconduct in the
performance of her duty. One of our officers or directors could take the
position that this duty on our behalf to indemnify the director or officer may
include the duty to indemnify the officer or director for the violation of
securities laws.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), may be permitted to our directors, officers and
controlling persons pursuant to our Certificate of Formation, Bylaws, Nevada
laws or otherwise, we have been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by one of our directors, officers, or
control persons, and the successful defense of any action, suit or proceeding)
is asserted by such director, officer or control person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
estimated expenses of the offering, all of which are to be paid by the
registrant, are as follows:
Accounting,
Legal and Professional Fees
|
$ | 16,500 | ||
Edgar
Filing Fees
|
$ | 2,743 | ||
Blue
Sky Qualification Fees
|
$ | 2,500 | ||
Transfer
Agent Fees
|
$ | 12,000 | ||
TOTAL
|
$ | 33,743 |
71
RECENT
SALES OF UNREGISTERED SECURITIES
Since
Inception, Asgaard Media issued the following unregistered securities in private
transactions without registering the securities under the Securities
Act:
Founders’
Stock
On
February 12, 2008 the Company issued 36,815,000 shares of its common stock as
founder’s stock at a deemed value of $0.001 per share. Shares were
issued in reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) as the offer and
issuance of the stock did not involve a public offering of securities. These
shares were issued for pre-incorporation services in recognition of the
recipient’s contributions to the Company at par value or $0.001 per share and
were made to give the recipients an incentive to assist the Company in pursuing
its business objectives in the future, although they have no obligation to do
so. At the issue date, the Company’s shares were not publicly
traded, therefore there was no established market price, and there were no bid
or asked price, and there had been no initial public offering upon which to
determine “fair market value.” Since none of the foregoing
measurements were available to determine “fair market value,” the Company’s
Board of Directors determined, based on good faith, that the fair market value
of the services on the measurement date was $0.001 per share.
The
Company issued 15,622,500 shares as founders’ shares valued at $0.001 per share,
or an aggregate of $15,622.50, to our CEO, Wm. Alan Pezzuto for pre
incorporation services related to the establishment of the Company, evaluation
of various opportunities and development of its business plan. As part of his
estate planning, Mr. Pezzuto subsequently gifted 10,622,500 shares to family
members and friends and the certificates were issued in August
2009. Shares were issued in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
The
Company issued 5,000,000 shares as founders’ shares valued at $0.001 per share,
or an aggregate of $5,000, to Christopher Baker for pre incorporation music
soundtrack consulting and preproduction services related to the Company’s
Community Challenge project. . Shares were issued in
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2) as the issuance of the stock
did not involve a public offering of securities.
The
Company issued 5,000,000 shares as founders’ shares valued at $0.001 per share,
or an aggregate of $5,000 to Merlion Entertainment, Ltd for pre incorporation
services involving negotiation with talent, site location and agency services
related to the procurement of government matching grants.
. Shares were issued in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
The
Company issued 4,000,000 shares as founders’ shares valued at $0.001 per share,
or an aggregate of $4,000, to Douglas Scheving for pre incorporation
services involving negotiation with talent, site location and agency services
related to the procurement of government matching
grants. . Shares were issued in reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) as the issuance of the stock did not
involve a public offering of securities.
The
Company issued 2,000,000 shares as founders’ shares valued at $0.001 per share,
or an aggregate of $2,000 to the Peder K. Davisson Revocable Trust in
consideration for professional legal services rendered for pre-incorporation
services and as fixed fee for legal services not related to this registration
statement. . Shares were issued in reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) as the issuance of the stock did not involve a
public offering of securities.
Stephen
Sallus received 1,222,500 founders’ shares valued at $0.001 per share, or an
aggregate of $1,222.50, for pre-incorporation services related to script
procurement and organizational issues. Mr. Sallus subsequently gifted 22,500
shares to his parents Irving and Sandy Sallus and the certificates were issued
in August 2009. Shares were issued in reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) as the issuance of the stock did not involve a
public offering of securities.
The
Company issued 250,000 shares as founders’ shares valued at $0.001 per share, or
an aggregate of $250, to Becky Bristow for pre incorporation animation
consulting services and design work on the Company’s website.
. Shares were issued in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
The
Company issued 300,000 shares as founders’ shares valued at $0.001 per share, or
an aggregate of $300 to Michael Pass for pre incorporation editing services
related to the Company’s Community Challenge project. . Shares
were issued in reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) as the issuance
of the stock did not involve a public offering of
securities.
72
The
Company issued 1,500,000 shares as founders’ shares valued at $0.001 per share,
or $1,500, to the Betzenhouser Family Trust for pre incorporation services
involving research and script development for the Company’s Between Purgatory
and Perdition Project. Shares were issued in reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) as the issuance of the stock did not
involve a public offering of securities. . Shares were issued
in reliance on the exemption from registration requirements of the Securities
Act of 1933, as amended, provided under Section 4(2) as the issuance of the
stock did not involve a public offering of securities.
The
Company issued 1,500,000 shares as founders’ shares valued at $0.001 per share,
or $1,500 to the Neubert Family Trust for pre incorporation services involving
negotiation of real-estate rights and non-traditional financing for the
Company’s Community Challenge Project. . Shares were
issued in reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) as the issuance
of the stock did not involve a public offering of securities.
The
Company issued 100,000 shares as founders’ shares valued at $0.001 per share, or
an aggregate of $1,000, to Trent Julian for pre incorporation production
services related to the Company’s Community Challenge project. Mr. Julian
subsequently gifted 50,000 shares to his four children in equal shares as part
of his estate plan and the certificates were issued in August
2009.
The
Company issued 100,000 shares as founders’ shares valued at $0.001 per share or
an aggregate of $100, to Whitney Lund for pre-incorporation organizational and
consulting services. . Shares were issued in reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) as the issuance of the stock did not
involve a public offering of securities.
The
Company issued 150,000 shares as founders’ shares valued at $0.001 per share, or
an aggregate of $150 to MA Thompson for pre-incorporation services related to
script procurement. . Shares were issued in reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) as the issuance of the stock did not
involve a public offering of securities.
The
Company issued 25,000 as founders’ shares valued at $0.001 per share, or $25, ot
Kristian De La Rossa for pre incorporation services related corporate marketing.
. Shares were issued in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
The
Company issued 22,500 as founders’ shares valued at $0.001 per share to Matt
Savoie for pre incorporation services related to corporate marketing.
. Shares were issued in reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) as the issuance of the stock did not involve a public
offering of securities.
The
Company issued 22,500 shares as founders’ shares valued at $0.001 per share to
Emad Elouri for pre incorporation services related to the Company’s Community
Challenge project. . Shares were issued in reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) as the issuance of the stock did not
involve a public offering of securities.
Private
Placement under Rule 506.
Pursuant
to a private placement, from June 1, 2008 to January 20, 2009, the Company
offered and sold 722,000 shares of its common stock for cash of $72,200, or
$0.10 per share, to accredited investors who had a pre-existing relationship the
Company’s officers and/or directors. under Rule 506 promulgated under Regulation
D of the Securities Act of 1933, as amended.
Issuances
for Services
On
June 30, 2008 the Company issued 2,000,000 shares of its common stock for
services to Melvin William Winn at a deemed value of $200,000 for script
consulting and Canadian pre-production services for our Mountains of Trouble
project. This valuation was based on the most recent offering price of its
common stock. Shares were issued in reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2). There is no formal agreement between the Company and Mr. Winn with respect
to the provision of these services.
On
June 30, 2008 the Company issued 800,000 shares of its common stock for services
to Stephen Sallus at a deemed value of $80,000 ongoing services
related to production, financial consulting and strategic partnerships with
vendors. There is no formal agreement between the Company and Mr. Sallus with
respect to the provision of these services. This valuation was based
on the most recent offering price of its common stock. Shares were issued in
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2).
On
January 1, 2009 the Company issued 200,000 of which 100,000 were to retain the
services of Erin Giudice a Director and Secretary of the Company and 100,000 of
which were to retain the services of Alice Matano a Director and Chief Financial
Officer of the Company at a deemed value of $0.10 per share or an
aggregate of $20,000. This valuation was based on the most recent offering price
of its common stock. Shares were issued in reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2), as the offer and issuance of the stock
did not involve a public offering of securities.
With
respect to issuances under Section 4(2), at the time of issuance, each purchaser
of our common stock was 1) in possession of all available material information
about the Company; 2) had a pre-existing family or business relationship with
the Company’s officers and/or directors; there was no general advertising or
solicitation; and 3) the shares bear restrictive legends. On the basis of these
facts, Asgaard claims that the issuance of stock to these qualifies for the
exemption from registration contained in Section 4(2) of the Securities Act of
1933. The Company believes that the exemption from registration for these sales
under Section 4(2) was available because:
73
Index
of Exhibits
Exhibit No.
|
Description
|
|
3.1
|
Articles
of Incorporation and Articles of Amendment for Asgaard
Media
|
|
3.2
|
Bylaws
of Asgaard Media
|
|
5.1
|
Opinion
and Consent of Davisson & Associates, PA
|
|
10.1
|
Assignment
of Screenplay – Widow’s Walk
|
|
10.2
|
Assignment
of Screenplay – Taken By Storm
|
|
10.3
|
Assignment
of Screenplay – Longshot
|
|
10.4
|
Assignment
of Screenplay – Mountains of Trouble
|
|
10.5
|
Assignment
of Screenplay – Community Challenge
|
|
14.1
|
Code
of Ethics
|
|
23.1
|
Consent
of Gruber & Company, LLC
|
|
99.1
|
Form
of Subscription Agreement for Common
Stock.
|
UNDERTAKINGS
The
registrant hereby undertakes:
To file,
during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to:
(i)
|
Include
any prospectus required by Section 10(a)(3) of the Securities
Act;
|
(ii)
|
Reflect
in the prospectus any facts or events arising after the effective date of
the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement;
|
(iii)
|
Include
any additional or changed material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration
statement.
|
For
determining liability under the Securities Act, to treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide
offering.
To
file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
74
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a Director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
For
determining any liability under the Securities Act, to treat the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by
the registrant under Rule 424(b)(1), or (4) or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective.
For
determining any liability under the Securities Act, to treat each post-effective
amendment that contains a form of prospectus as a new registration statement for
the securities offered in the registration statement, and that offering of the
securities at that time as the initial bona fide offering of those
securities.
For
determining liability of the undersigned registrant under the Securities Act to
purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(iv)
|
Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required
to be filed pursuant to
Rule 424;
|
(v)
|
Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned
registrant;
|
(vi)
|
The portion of any other free
writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by
or on behalf of the undersigned registrant;
and
|
(vii)
|
Any other communication that is
an offer in the offering made by the undersigned registrant to the
purchaser.
|
Each
prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of
the date it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of
sale prior to such first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first
use.
75
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Corona, State of
California, on February 11, 2010.
Asgaard
Media
|
|
By:
|
/s/
Wm. Alan Pezzuto
|
Wm.
Alan Pezzuto
|
|
President
and Chief Executive Officer
|
|
(Principal
Executive Officer)
|
By:
|
/s/
Alice Matano
|
Alice
Matano
|
|
Chief
Financial Officer
|
|
(Principal
Financial Officer and Principal Accounting
Officer)
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed below by the following persons in the capacities indicated on
February 11, 2010:
Signature
|
Title
|
|
/s/
Wm. Alan Pezzuto
|
||
Wm.
Alan Pezzuto
|
President,
Principal Executive Officer,
|
|
Director
|
||
/s/
Alice Matano
|
Principal
Financial Officer, and
|
|
Alice
Matano
|
Principal
Accounting Officer
|
|
Director
|
||
/s/
Erin Giudice
|
Secretary,
and
|
|
Erin
Giudice
|
Director
|
76