Attached files
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ASI ENTERTAINMENT, INC.
CENTRAL INDEX KEY: 1067873
STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY
EQUIPMENT, NEC [3728]
IRS NUMBER: 522101695
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0630
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
A-B
SEC FILE NUMBER: 000-27881
FILM NUMBER: 544289
BUSINESS ADDRESS:
STREET 1: 954 LEXINGTON AVE.
STREET 2: SUITE 242
CITY: NEW YORK
STATE: NY
ZIP: 10021
BUSINESS PHONE: 210 775 2468
MAIL ADDRESS:
STREET 1: Level 1, 45 EXHIBITION STREET
STREET 2:
CITY: MELBOURNE
STATE: VICTORIA, AUSTRALIA
ZIP: 3000
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2010
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-27881
ASI ENTERTAINMENT, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 522101695
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Level 1, 45 Exhibition Street
Melbourne, Victoria, 3000, Australia
(Address of principal executive officers)
+61 3 9016 3021
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant 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.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 75,918,137
ASI ENTERTAINMENT, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2010
INDEX
PART I. FINANCIAL INFORMATION.................................................2
ITEM 1. Financial Statements..................................................2
PART 1: FINANCIAL INFORMATION.................................................7
ITEM 2. Management's Discussion and Analysis or Plan of Operation.............7
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk............8
ITEM 4. Controls and Procedures...............................................9
PART II. OTHER INFORMATION...................................................10
ITEM 1. Legal Proceedings....................................................10
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds..........10
ITEM 3. Defaults upon Senior Securities......................................10
ITEM 4. Submission of Matters to a Vote of Security Holders..................10
ITEM 5. Other Information....................................................10
ITEM 6. Exhibits and Reports on Form 8-K.....................................10
SIGNATURES...................................................................11
CERTIFICATIONS...............................................................12
- 1 -
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ASI ENTERTAINMENT, INC. AND SUBSIDIARIES
BALANCE SHEET
MARCH 31, 2010
ASSETS MARCH 31, 2010 June 30, 2009
(UNAUDITED) (AUDITED - RESTATED)
CURRENT ASSETS
Cash and cash equivalents 12,548 231
Related receivables 0 0
-------------- --------------
Total Current Assets 12,548 231
-------------- --------------
NON CURRENT ASSETS
Property and equipment 0 0
Related investments 0 0
-------------- --------------
Total Non Current Assets 0 0
-------------- --------------
TOTAL ASSETS 12,548 231
============== ==============
LIABILITIES AND SHARHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses 20,751 50,512
Related party payables 238,440 127,160
Unearned license fees 0 34,623
Due to related parties 81,916 81,916
Sundry Creditors 146,895 146,895
Stock subscription payable 0 0
-------------- --------------
Total Liabilities 488,002 441,106
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred stock $0.0001 par value, 20,000,000 shares $ 0 $ 0
authorized, non issued and outstanding
Common stock, $0.0001 par value, 100,000,000 shares authorized, $ 7,592 $ 6,992
75,918,137 shares issued and outstanding
Additional paid-in capital $ 8,119,550 $ 8,000,150
Treasury stock - par value (50,000 shares) $ ( 5) $ ( 5)
Accumulated deficit $ (8,602,591) $ (8,448,012)
Accumulated other comprehensive loss $ 0 $ 0
-------------- --------------
Total Stockholders' Equity $ (475,454) $ (440,875)
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,548 $ 231
============== ==============
See accompanying notes to unaudited financial statements.
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ASI ENTERTAINMENT, INC. AND SUBSIDIARIES
STATEMENT OF INCOME AND COMPREHENSIVE INCOME
AS OF MARCH 31, 2010
(UNAUDITED)
Three Three Nine Nine
months months months months
ending ending ending ending
Mar 31, 2010 Mar 31, 2009 Mar 31, 2010 Mar 31, 2009
REVENUE 9,623 12,500 34,623 37,500
Interest Received 0 0 0 0
Cost of Sales 0 0 0 0
-------------- -------------- -------------- --------------
Gross Profit 9,623 12,500 34,623 37,500
-------------- -------------- -------------- --------------
EXPENSES:
Accounting and auditing 1,400 1,400 10,400 11,200
Banking 224 184 692 716
Capital raising costs 0 60,753 0 60,753
Consulting fees 0 0 20,000 0
Corporate administration 1,482 1,194 3,163 2,958
Corporate promotion 1,183 0 1,450 434
Directors fees 0 0 30,000 0
Engineering 6,604 0 16,604 305
Officers management fee 34,481 14,354 99,189 47,570
Office expenses, rent, utilities 802 463 2,545 1,220
Patent attorney (3,802) 12,460 5,000 15,490
Travel 63 57 158 157
--------------- --------------- --------------- ---------------
Total Expenses 42,437 90,865 189,201 140,803
--------------- --------------- --------------- ---------------
Net Profit/(Loss) $ (32,814) $ (78,365) $ (154,578) $ (103,303)
============== ============== ============== ==============
Foreign Currency Translation $ 0 $ 0 $ 0 $ 0
Gain/(Loss), net-of-tax
--------------- --------------- --------------- ---------------
Comprehensive Profit/(Loss) $ (32,814) $ (78,365) $ (154,578) $ (103,303)
=============== =============== =============== ===============
Weighted average number of shares 74,668,137 60,737,479 73,168,137 59,563,067
outstanding during the period
=============== =============== =============== ===============
Net Profit/(Loss) per common share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
and equivalents
=============== =============== =============== ===============
See accompanying notes to unaudited financial statements.
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ASI ENTERTAINMENT, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
AS OF MARCH 31, 2010
(UNAUDITED)
Nine Nine
months months
ending ending
Mar 31, 2010 Mar 31, 2009
Cash flows from operating activities:
Net Profit/(Loss) (154,578) (103,303)
-------------- --------------
Adj. To reconcile net loss to net cash provided by operating
activities:
Depreciation 0 0
Compensatory stock issuances - directors 30,000 0
Compensatory stock issuances - consultants 30,000 0
Compensatory investment transfer 0 60,753
Changes in operating assets and liabilities:
(Increase)/decrease in:
Other Receivables 0 (29,353)
Increase/(decrease) in:
Accounts payable and accrued expenses (29,762) 6,728
Related party payables 111,280 40,498
Loans and Advances 0 0
Unearned licence fees (34,623) (37,500)
-------------- --------------
Total adjustments to reconcile net loss to cash provided by operating 106,895 41,126
activities:
-------------- --------------
Net cash used in operating activities (47,683) (62,177)
-------------- --------------
Net Cash flow from investing activities:
-------------- --------------
Net cash provided by (used in) investing activities 0 0
-------------- --------------
Cash flow from financing activities:
Increase/(decrease) in amount due to related parties 0 (7,792)
Equity for debt swap 0 0
Proceeds from issuance of common stock, net 60,000 70,753
Funds received pending issue of shares 0 0
-------------- --------------
Net cash from financing activities 60,000 62,961
-------------- --------------
Effect of exchange rate changes on cash 0 0
Net increase/(decrease) in cash 12,317 784
-------------- --------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 231 640
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 12,548 1,424
============== ==============
See accompanying notes to unaudited financial statements.
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Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements of the Company have been
prepared in accordance with Generally Accepted Accounting Principles used in
the United States and with the rules and regulations of the United States
Securities and Exchange Commission for the interim financial information.
Accordingly, they do not include all the information and footnotes necessary
for a comprehensive presentation of financial position and results of
operations.
The functional currency of the company is the United States dollar. The
unaudited financial statements are expressed in United States dollars. It is
management's opinion that any material adjustments (consisting of normal
recurring adjustments) have been made which are necessary for a fair financial
statement presentation. The results for the interim period are not necessarily
indicative of the results to be expected for the year.
For further information, refer to the financial statements and footnotes
included in the Company's Form 10-K for the year ended June 30, 2009.
Per Share Data
Net loss per common share is computed by dividing net loss by the weighted
average common shares outstanding during the period as defined by Financial
Accounting Standards, No. 128, "Earnings per Share".
Revenue recognition
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned less estimated future doubtful accounts. The
Company considers revenue realized or realizable and earned when all of the
following criteria are met: (i) persuasive evidence of an arrangement exists,
(ii) the product has been shipped or the services have been rendered to the
customer, (iii) the sales price is fixed or determinable, and (iv)
collectability is reasonably assured.
Revenue is recognized on an accrual basis as earned under contract or license
agreements. License fees are taken up in the period they become due. Revenue
from ongoing royalties is taken up on an accrual basis in the period it is
earned and invoiced.
In accordance with US GAAP, license fees from the agreements the Company has
with Edwin Chan was taken up on an accrual basis over the term of the
agreement. The agreement expired on March 10, 2010.
- 5 -
ASI ENTERTAINMENT, INC. AND SUBSIDIARIES
NOTES TO BALANCE SHEET
AS OF MARCH 31, 2010
(UNAUDITED)
Note 2. Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As such, they do not include
adjustments relating to the recoverability of recorded asset amounts and
classification of recorded assets and liabilities. The Company had accumulated
losses of approximately $8,602,591 at March 31, 2010 and will be required to
make significant expenditure in connection with development of the SafeCell
intellectual property and in seeking other investments along with general and
administrative expenses. The Company's ability to continue its operations is
dependant upon its raising of capital through debt or equity financing in order
to meet its working needs.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern, and if substantial additional funding is not
acquired or alternative sources developed, management will be required to
curtail its operations.
The Company may raise additional capital by the sale of its equity securities,
through an offering of debt securities, or from borrowing from a financial
institution. The Company does not have a policy on the amount of borrowing or
debt that the Company can incur. Management believes that actions presently
being taken to obtain additional funding provides the additional opportunity
for the Company to continue as a going concern.
Note 3. Issuance of common stock
During the three month period ended March 31, 2010, the Company issued
2,500,000 shares of common stock and as a result has taken up Common Stock of
$250 and Additional Paid-In Capital of $49,750.
- 6 -
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This quarterly report on form 10-Q includes "forward-looking statements" as
defined by the Securities and Exchange Commission. These statements may
involve known and unknown risks, uncertainties and other factors which may
cause actual results, performance or achievements to be materially different
from future results, performance or achievements expressed or implied by any
forward- looking statements. Forward-looking statements, which involve
assumptions and describe future plans, strategies and expectations, are
generally identifiable by use of the words "may," "will," "could", "should,"
"expect," "anticipate," "estimate," "believe," "intend" or "project" or the
negative of these words or other variations on these words or comparable
terminology. These forward-looking statements are based on assumptions that
may be incorrect. Actual results could differ materially from those expressed
or implied by the forward-looking statements as a result of various factors.
The company undertakes no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur in the future.
The following discussion should be read in conjunction with the accompanying
financial statements for the three-month period ended March 31, 2010 and the
Form 10-K for the fiscal year ended June 30, 2009.
RESULTS AND PLAN OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2010 COMPARED TO THREE MONTHS ENDED MARCH 31, 2009
Revenue and Gross profit in the three month period ended March 31, 2010 was
$9,623. In the corresponding three month period ended March 31, 2009 revenue
and gross profit was $12,500.
The Company had a net loss of $32,814 in the three month period ended March 31,
2010 compared to a net loss of $78,365 in the three month period ended March
31, 2009. Expenses decreased from $90,864 in the three months ended March 31,
2009 to $42,437 in the three months ended March 31, 2010 because of decreased
capital raising and patent attorney costs, but after increased management fees
and engineering costs.
There was no foreign currency translation gain or loss for the three months
ended March 31, 2010 or for the three month period ended March 31, 2009. As a
result, the Company recorded a comprehensive loss of $32,814 for the three
month period ended March 31, 2010 compared to a comprehensive loss of $78,365
for the three month period ended March 31, 2009.
NINE MONTHS ENDED MARCH 31, 2010 COMPARED TO NINE MONTHS ENDED MARCH 31, 2009
Revenue and Gross profit in the nine month period ended March 31, 2010 was
$34,623. In the corresponding nine month period ended March 31, 2009 revenue
and gross profit were also $37,500.
The Company had a net loss of $154,578 in the nine month period ended March 31,
2010 compared to a net loss of $103,303 in the nine month period ended March
31, 2009. Expenses increased from $140,803 in the nine months ended March 31,
2009 to $189,201 in the nine months ended March 31, 2010 because of consulting
fees, directors fees, engineering costs and increased management fees.
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There was no foreign currency translation gain or loss for the nine months
ended March 31, 2010 or for the nine month period ended March 31, 2009. As a
result, the Company recorded a comprehensive loss of $154,578 for the nine
month period ended March 31, 2010 compared to a comprehensive loss of $103,303
for the nine month period ended March 31, 2009
LIQUIDITY AND CAPITAL RESOURCES
The Company has used the proceeds from the sale of the securities and operating
revenue for payment of operating costs to date. The Company's cash and cash
equivalents increased from $231 at July 1, 2009, to $12,548 at March 31, 2010.
The Company incurred a net loss of $154,578 from operating activities for the
period July 1, 2009 to March 31, 2010 primarily due to consulting fees,
directors fees and management fees.
The Company's revenue of $34,623 in the nine months ending March 31, 2010
resulted from the allocation of revenue from the Chan licensing agreement
previously taken up as unearned license fees and hence no funds were received
by the Company. Similarly, in the nine month period ending March 31, 2009, the
Company's revenue of $37,500 resulted from the allocation of revenue from the
Chan licensing agreement previously taken up as unearned license fees.
The cash flow of the Company from financing activities for the nine months
ending March 31, 2010 was from the issuance of common stock.
The Company's plan for the SafeCell intellectual property will require funding
for the completion of the patent application, then further funding for
marketing to set up license and royalty agreements.
The Company may raise additional capital by the sale of its equity securities,
through an offering of debt securities, or from borrowing from a financial
institution. The Company does not have a policy on the amount of borrowing or
debt that the Company can incur.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
- 8 -
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
Our management, including the Company's Chief Executive Officer/Principal
Financial Officer, and the Company's President, have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined In Rule 13a- 15(e) and 15d-15e under the Securities
Exchange Act of 1934 (the "Exchange Act") as of the end of the period covered
by this Quarterly Report on Form 10-Q. Based upon that evaluation, our
management concluded that our disclosure controls and procedures as of the end
of the period covered by this report were not effective such that the
information required to be disclosed by us in the reports filed under the
Securities Exchange Act of 1934 is (i) recorded, processed, summarized and
reported within the time periods specified in SEC's rules and forms and (ii)
accumulated and communicated to our management to allow timely decisions
regarding disclosure. A controls system cannot provide absolute assurance
however, that the effectiveness of the controls system are met and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud if any, within a company have been detected.
Management has determined that, as of December, 31, 2009, there were material
weaknesses in both the design and effectiveness of our internal control over
financial reporting. As a result, our management has concluded that our
internal control over financial reporting was not effective as of December 31,
2009. A material weakness is a deficiency, or a combination of deficiencies, in
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis.
The deficiencies in our internal controls over financial reporting and our
disclosure controls and procedures are related to lack of appropriate
experience and knowledge of U.S. GAAP and SEC reporting requirements of our
management and a lack of segregation of duties due to the size of the company.
The company plans to take steps to rectify these weaknesses in the future.
(b) Changes in internal controls.
The Company's management including the Chief Executive Officer/Principal
Financial Officer, and President, evaluated whether any changes in our internal
controls over financial reporting, occurred during the quarter ended December
31 2009. Based on that evaluation, our management concluded that no change
occurred in the Company's internal controls over financial reporting during the
quarter ended December 31, 2009 that has materially affected, or is reasonably
likely to materially affect, the Company's internal controls over financial
reporting.
- 9 -
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended March 31, 2010, the Company has issued 2,500,000
shares of common stock that were not registered under the Securities Act of
1933, as noted in "Note 3. Issuance of common stock" in the Financial
Statements above. The offer, sale and issuance of these securities was made in
reliance upon the exemption from the registration requirements of the
Securities Act provided for by Section 4(2) thereof for transactions not
involving a public offering. Appropriate legends have been affixed to the
securities issued in these transactions. The purchasers of the securities had
adequate access, through business or other relationships, to information about
the Company. The funds received from the issue of securities will be used for
working capital.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following report on Form 8-K was filed during the last quarter:
(1) 8-K filed January 25, 2010 reporting:
(1) The Company has received notification from IP Australia, the patent
office of the Australian Government, that the company's SafeCell patent
has been granted and that the patent was sealed on January 14, 2010; the
term of the patent is 20 years from July 27, 2006.
- 10 -
SIGNATURES
In accordance with the Exchange Act, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.
ASI ENTERTAINMENT, INC.
SIGNATURE TITLE DATE
By: /s/
Richard Lukso Director 05/11/2010
By: /s/
Ronald J. Chapman Director 05/11/2010
By: /s/
Philip A. Shiels Director 05/11/2010
By: /s/
Graham O. Chappell Director 05/11/2010
- 11 -
